Human Resource Management

Unit-4
-By Prof. Shweta Chandwani
 What Is Performance Management?
▪ What Is Performance Management?

▪ Performance management is a set of processes and systems aimed at developing employees, so they perform
their job to the best of their ability. The goal is to help employees build on skills that enable them to perform
better in their roles, reach their potential, and boost their success while also accomplishing the strategic goals
of the organization.

▪ Key Elements:
• Performance management is intended to help people perform to the best of their abilities in
alignment with the organization's goals.
• It focuses on accountability and transparency and fosters a clear understanding of
expectations.
• Rather than just annual performance reviews, performance management provides ongoing
feedback to employees.
▪ Effective performance management helps organizations ensure that employees understand their roles,
receive constructive feedback, and have the support they need to achieve their goals and business
objectives.
 Purpose of performance management system
▪ To help align individual and team goals with the overall strategic objectives of the organization.

▪ To ensure that everyone is working toward common goals, promoting organizational coherence.

▪ To improve the performance of employees and teams.

▪ To facilitate regular communication and feedback between employees and their managers or peers. Constructive
feedback can motivate employees to perform better and correct any performance issues.

▪ To Recognize and reward employees for their achievements and contributions to motivate and keep them engaged.

▪ To help identify areas where employees may require additional training or support. This enables targeted development
plans to address these needs.

▪ To guide in succession planning by identifying high-potential employees who could take on leadership roles in the future.

▪ To identify trends, strengths, and areas for improvement across the organization.

▪ By offering opportunities for skill development and career growth, performance management systems can contribute to
employee retention and the development of a skilled and motivated workforce.
 Components of performance management system
Any effective performance management system includes the following components:

1. Performance Planning: Performance planning is the first crucial component of any performance management process
which forms the basis of performance appraisals.

Planning means setting performance expectations and goals for groups and individuals to channel their efforts toward
achieving organizational objectives. Getting employees involved in the planning process helps them understand the goals of
the organization, what needs to be done, why it needs to be done, and the level of effort or responsibility required.

2. Performance Appraisal: The appraisals are normally performed twice in a year in an organization in the form of mid
reviews and annual reviews which is held in the end of the financial year.

In this process, the appraisee first offers the self filled up ratings in the self appraisal form and also describes his/her
achievements over a period of time in quantifiable terms. After the self appraisal, the final ratings are provided by the
appraiser for the quantifiable and measurable achievements of the employee being appraised.

The entire process of review seeks an active participation of both the employee and the appraiser for analyzing the causes of
loopholes in the performance and how it can be overcome. This has been discussed in the performance feedback section.
 • Components of an effective performance management system
3. Feedback: Feedback and counselling is given a lot of importance in the performance management process.

This is the stage in which the employee acquires awareness from the appraiser about the areas of improvements and also
information on whether the employee is contributing the expected levels of performance or not.

The employee receives an open and a very transparent feedback and along with this the training and development needs of
the employee is also identified.

The appraiser adopts all the possible steps to ensure that the employee meets the expected outcomes for an organization
through effective personal counseling and guidance, mentoring and representing the employee in training programmes
which develop the competencies and improve the overall productivity.

4. Rewarding: This is a very vital component as it will determine the work motivation of an employee. During this stage, an
employee is publicly recognized for good performance and is rewarded.

This stage is very sensitive for an employee as this may have a direct influence on the self esteem and achievement
orientation. Any contributions duly recognized by an organization helps an employee in coping up with the failures
successfully and satisfies the need for affection.
 • Components of an effective performance management system
5. Performance Improvement Plans: In this stage, fresh set of goals are established for an employee and new
deadline is provided for accomplishing those objectives.

The employee is clearly communicated about the areas in which the employee is expected to improve and a
stipulated deadline is also assigned within which the employee must show this improvement. This plan is jointly
developed by the appraisee and the appraiser and is mutually approved.

6. Potential Appraisal: Potential appraisal is a future – oriented appraisal whose main objective is to
identify and evaluate the potential of the employees to assume higher positions and responsibilities in
the organizational hierarchy.
 Performance Appraisal
▪ Performance appraisals are also called annual reviews, performance reviews or evaluations, or employee
appraisals. Companies use performance appraisals to determine which employees have contributed the most to
the company's growth, review progress, and reward high-achieving workers.

▪ Difference between Performance Management and Performance Appraisal

▪ Performance Management:
1. Dynamic, continuous process
2. Improves Organisational effectiveness
3. Strategic Goals

▪ Performance Appraisal:
• Periodic (usually annual) event
• Formal Review (All details are shared, feedback is given regarding your target achievement)
• Last step in the performance management process
 Appraisal Process

1. Defining Performance 2. Communicating

3. Assessing Performance
Standards Expectation

4. Comparing Actual
5. Appraisal Discussion 6. Post appraisal strategy
Performance with Standards
 Appraisal Process
1. Defining Performance Standards:

▪ The fundamental step of an employee appraisal process is defining performance standards against which an employee’s
performance is measured. Managers set standards according to the skills and competencies required for a particular
position. This also helps establish an organization’s long-term goals and objectives. The standards should be clear,
to-the-point and easy to understand to avoid confusion.

2. Communicating Expectations:

▪ Once performance standards have been established, the next step is communicating these standards to employees. This
gives them a clear picture of what’s expected of them and ensures the organization and its workforce are on the same
page and working toward the same goals. However, communication is a two-way process. Managers must take into
account any feedback or questions employees might have on the standards communicated to them and make necessary
adjustments.

3. Assessing Performance:

▪ Central to an employee appraisal process is assessment and review of an employee’s performance over a set period of
time. Supervising managers use a combination of observation, statistics and written or oral reports to evaluate an
employee, keeping aside personal feelings and bias. Check-ins and meetings are held with precise, targeted questions
that offer an insight into employee pain points, motivations and goals.
 Appraisal Process
4. Comparing actual Performance With Standards:

▪ The next step in a performance appraisal process is comparing an employee’s performance with a set of predetermined
standards. It tells managers where an employee stands, highlighting achievements as well as gaps between actual and
expected performance. This step sets the base for the rest of the evaluation process.

5. Appraisal Discussion:
▪ The fifth step in an employee appraisal process revolves around results. Managers discuss the outcome of the entire
appraisal process with their employees and offer actionable feedback. Constructive criticism helps employees identify
their strengths and weaknesses, work on their problem areas and improve future performance. Positive feedback boosts
confidence.
6. Post-Appraisal Strategy:
▪ Performance appraisal doesn’t end with employee evaluation. For long-term growth, an organization must devise an
appropriate strategy and take the necessary actions based on appraisal outcome. Such actions may include rewarding
high-performing employees, training underperformers and identifying factors that hamper employee performance.
▪ Performance appraisal is a continuous process involving thorough planning, monitoring and review. When executed
effectively, it builds trust, promotes transparency and boosts employee morale.
 Methods of Appraisal
▪ Performance appraisal methods are used to evaluate and assess an employee's job performance over a specific period.
They vary in their approach, depending on the organization's goals and the level of objectivity or subjectivity required.
Here are some common methods of appraisal:
1. Traditional Methods
• Ranking Method:
• Employees are ranked from best to worst, based on their overall performance.
• Useful for comparing employees directly, but it can create unhealthy competition.
• Paired Comparison Method:
• Each employee is compared to every other employee in pairs, and a ranking is created based on the number of times
an employee is considered better.
• Time-consuming but helps in making more accurate rankings.
• Graphic Rating Scale:
• Lists various traits (e.g., quality of work, reliability) and rates employees on a numerical scale.
• Simple to use but can be subjective depending on the interpretation of traits.
• Critical Incident Method:
• Focuses on specific incidents where an employee’s behavior was particularly effective or ineffective.
• Provides detailed feedback but can become cumbersome to track consistently.
 Methods of Appraisal
• Forced Distribution Method:
• Employees are placed into predetermined performance categories, such as top 20%, middle 60%, and bottom 20%.
• Helps in identifying high and low performers but can create a forced curve, even if performance levels are more
balanced.
2. Modern Methods
• 360-Degree Feedback:
• Gathers feedback from multiple sources, including peers, subordinates, and supervisors.
• Provides a comprehensive view of performance but can be time-consuming to implement.
• Management by Objectives (MBO):
• Employees and managers set specific, measurable goals together, and performance is evaluated based on achieving
these objectives.
• Enhances alignment but requires ongoing communication.
• Behaviorally Anchored Rating Scales (BARS):
• Combines qualitative and quantitative assessments by defining specific behaviors that correspond to different
performance levels.
• Reduces subjectivity but can be complex to develop.
 Methods of Appraisal
3. Development-Focused Methods
• Self-Assessment:
• Employees evaluate their own performance, strengths, and areas for improvement.
• Encourages self-reflection but may lack objectivity.
• Peer Review:
• Colleagues provide feedback on each other's performance.
• Promotes collaboration but can be biased based on relationships.
• Continuous Feedback Systems:
• Involves ongoing conversations and feedback throughout the year rather than a single annual review.
• Supports real-time development but requires a culture of open communication.
4. Technology-Driven Methods
• Performance Management Software:
• Tools and platforms that facilitate performance tracking, feedback, and appraisals.
• Can automate processes but may lack personal touch if not implemented thoughtfully.
• Data Analytics:
• Uses data to assess performance metrics and trends, helping to inform decisions and identify high performers.
• Provides objective insights but requires careful interpretation.
 Methods of Appraisal
▪ Choosing the Right Method:
• The choice of appraisal method should align with organizational goals, culture, and the specific needs of employees.
• A combination of methods may be beneficial to balance quantitative and qualitative insights and ensure comprehensive
evaluations.
 What is compensation?
▪ Compensation is the remuneration awarded to the employees for their work or contribution made to the business. The
contribution can be as time, knowledge or commitment to the company or projects they are handling. Compensation comprises
monetary and non-monetary benefits that an employee gets for their services in the organisation.

▪ Compensation is the cash and non-cash payments you provide employees. It can be grouped into three main categories:

1. Direct Financial Compensation: It includes amount that an employee receives in the worm of wages, salaries, bonuses, incentive
and commission. Within direct compensation, there are two subcategories of base pay and variable pay. Wages or an annual
salary tend to fall under the category of base pay. This is because they are reasonably consistent. Whereas bonuses and
commission fall under variable pay.

2. Indirect Financial Compensation: These are benefits that consist of financial rewards that are not included in the direct financial
compensation. This form of compensation includes a wide variety of rewards and benefits received indirectly by the employee. It
includes employer sponsored health insurance, employee’s retirement plan, stock option, profit sharing, company paid-gym
membership, travel allowance and many more.

3. Non-Financial Compensation: Compensation doesn’t have to have a monetary value. You can be offered various perks that offer
no financial gain but are still valuable. Things such as time off, flexible working hours, recognition and awards cannot be given a
monetary value. However, they are still considered compensation.

Bear in mind that some organizations may view the indirect compensation they offer as non-financial compensation, especially if they
don’t have the practice of sharing the monetary value of their packages with the employees calculating the monetary value of their
packages for each individual employee
 Importance of Compensation
▪ Compensation is one of the most important aspects of running a business that can make or break a business. Having a
good compensation plan can help organizations to flourish and compete in their respective markets.

▪ Some of the benefits of providing the right compensation package to your employees are:

1. It helps you attract top talent through competitive compensation packages

2. It helps employees understand exactly how valued they are within the company
3. It motivates employees to perform better at work
4. It raises the morale and cooperation level among the employees
5. It elevates employee satisfaction for a job well done.
6. It helps an organisation to stay competitive in the market and run its business
7. It helps in retaining talented employee.
8. It encourages employees to perform better and achieve specified standards
 Types Of Compensation

Direct Compensation: Indirect Compensation:

• Base Salary • Health Care Benefits

• Bonuses • Retirement Benefits
• Commission • Paid Time Off (PTO)
• Overtime Pay • Life and Disability Insurance
• Allowances • Tuition Reimbursement
• Profit Sharing • Employee Assistance Programs
• Increments • Transportation
• Wellness Program
• Childcare assistance
• Flexible Work Arrangements .
• Stock Options and Equity Grants
• Recognition and Awards
• Career Development Opportunities
 Types Of Compensation
Direct Compensation:
Direct compensation refers to the monetary rewards that employees receive for their work. These payments are typically included in
the employment contract and have a direct impact on an employee's take-home pay. Direct compensation can be further categorized
into the following types:
a) Base Salary/Wages: This is the fixed amount of money an employee earns on a regular basis, such as an hourly wage or an annual
salary. It is the core component of an employee's compensation and is typically based on factors like job role, experience, and
market rates.
b) Bonuses: Bonuses are one-time or periodic payments made to employees as a reward for achieving specific performance goals,
such as sales targets or project completion. They can be performance-based, sign-on bonuses, or retention bonuses.
c) Commissions: Commission-based compensation is common in sales roles. Employees receive a percentage of the sales they
generate, providing a direct incentive for high performance.
d) Overtime Pay: Employees who work beyond their regular hours may receive additional compensation, usually at a higher hourly
rate than their standard wage.
e) Allowances: These are specific payments given to employees to cover certain expenses related to their job. Common allowances
include housing allowance, transportation allowance and meal allowance.
f) Profit Sharing: Some organizations share a portion of their profits with employees, which can vary based on company
performance. Profit sharing can be distributed as cash bonuses or contributions to retirement plans.
g) Increments: Periodic salary increases are provided to employees to keep their compensation competitive with the market, account
for inflation, or reward them for tenure and performance. These increases may be annual or tied to performance reviews.
 Types Of Compensation
Indirect Compensation:
▪ Indirect compensation, also known as employee benefits or fringe benefits, encompasses non-monetary rewards and
perks provided to employees in addition to their direct compensation. These benefits are designed to enhance the overall
work experience, employee well-being, and work-life balance. Indirect compensation includes various types:
a) Healthcare Benefits: This includes medical, dental, and vision insurance coverage provided by the employer. It helps
employees access medical services and reduce their healthcare expenses.
b) Retirement Benefits: Employer-sponsored retirement plans to allow employees to save for their retirement with
potential employer contributions or matching funds.
c) Paid Time Off (PTO): PTO includes vacation days, sick leave, and holidays, allowing employees to take time off while still
receiving their regular pay.
d) Life and Disability Insurance: Employers may offer life insurance and disability insurance coverage to provide financial
protection in case of unexpected events.
e) Tuition Reimbursement: Some companies offer to reimburse employees for educational expenses, promoting
continuous learning and skill development.
f) Employee Assistance Programs (EAPs): EAPs provide confidential counseling and support services to employees facing
personal or work-related challenges.
 Types Of Compensation
g) Transportation and Commuting Benefits: Employers may offer subsidies for public transportation, parking, or carpooling
to help employees with their commuting expenses.
h) Wellness Programs: Wellness initiatives, such as gym memberships, on-site fitness facilities, or wellness challenges,
promote employee health and well-being.
i) Childcare Assistance: Some companies offer childcare services or subsidies to help employees with their childcare needs.
j) Flexible Work Arrangements: Providing options like telecommuting, flextime, or compressed workweeks can enhance
work-life balance.
k) Stock Options and Equity: Employees may receive stock options or equity as part of their compensation package,
allowing them to purchase company stock at a discounted price or receive shares over time.
l) Recognition and Awards: Employee recognition programs, awards, and certificates acknowledge and reward
outstanding performance, fostering motivation and a positive work environment.
m) Career Development Opportunities: Support for ongoing education, training, and professional growth, such as tuition
reimbursement, mentoring programs, and skill development workshops.
▪ Understanding and effectively managing both direct and indirect compensation is essential for employers to attract and
retain talent while promoting employee satisfaction and engagement. Compensation packages should align with
organizational goals and market competitiveness to ensure a motivated and productive workforce.
 Mandatory Benefits in India
▪ The employment benefits that are considered a must-offer to keep employees motivated at the workplace are given
below.
1. Health Insurance – As a part of the health insurance benefits policy, employers are mandated to provide medical
insurance to their employees. Generally, this policy covers the employee, spouse, and kids. Employers can also offer
extensive plans to cover an employee’s parents as well.
2. Gratuity – As per the payment of the Gratuity Act 1972, every employee is entitled to gratuity. Gratuity is a sum of
money paid by an employer to an employee for services rendered in the company. The gratuity amount is equal to
one-fourth of the last-drawn basic salary of an employee for each completed six-month period.
• Completion of a minimum of five years of service – In case an employee resigns after working for a minimum of five years
with a company.
• Employee retirement - If an employee retires, the gratuity is factored into the retirement plans given by the company
• Employee death - In the event of the death of an employee.
• Employee disability – In case of an employee suffering any disability due to prolonged illness or accident.
 Mandatory Benefits in India
3. Employee's Provident Fund (EPF) - The employee’s provident fund in India is governed by the Employees' Provident Fund
and Miscellaneous Provision Act, 1952.
• Employee contribution: As per the Act, employees should determine 12% of employees’ Basic pay + Dearness allowance
to EPF. Employees may also choose to contribute 24% of the EPF.
• Employer contribution: Employer contribution is designated as 12% of the employee’s Basic pay + Dearness allowance,
out of which 8.33% goes to the employee pensions scheme (EPS), and the remaining 3.67% goes to the employee
provident fund (EPF) account.
4. Leaves and holidays – Leaves and holidays include benefits of paid time off for employees for annual holidays, maternity
leaves, and sick leaves.
5. Workplace security – The service laws of organizations must provide a healthy workplace for employees. Companies must
ensure the protection of employees from all kinds of harassment, such as sexual harassment of women (covered under the
Sexual Harassment of Women at Workplace Act 2013).
• In India, sexual harassment is punishable under the IPC, organizations must create a policy to prevent it.
• It is mandatory for the companies to set up an internal complaint committee in all offices to deal with such acts.
 Compensation Management
▪ Compensation management is the process of managing, analyzing, and determining the salary, incentives, and benefits
each employee receives. Compensation management is a crucial part of any talent management and retention strategy.
Creative compensation includes monetary and non-monetary benefits companies can employ to boost engagement and
productivity, reduce attrition, and attract top talent. Compensation managers aim to attract, retain, and engage
employees by offering broad and competitive compensation plans within the company budget.

▪ Armstrong stated that compensation management is an integral part of the human resources management approach to
productivity improvement in the organization. It deals with the design, implementation and maintenance of
compensation systems that are geared to the improvement of the organizational, team and individual performance.

▪ Compensation management ensures that people get paid a fair salary based on:
• Work performance
• Position
• Responsibilities
• Experience
• Job market
• Company budget
 Components of Compensation Plan
Compensation in Human Resources (HR) refers to the total rewards that employees receive in exchange for their work. This
can include various forms of financial and non-financial benefits. Here are some key components of compensation in HR:
1. Direct Financial Compensation:
•Base Salary: The fixed payment employees receive regularly for their work.
•Bonuses: Performance-related payments, including annual bonuses or spot bonuses for exceptional work.
•Commission: A percentage of sales paid to employees in sales positions.
2. Indirect Financial Compensation: Non-cash perks, such as:
•Health Insurance: Coverage for medical expenses, often including dental and vision.
•Retirement Plans: Employer-sponsored retirement savings plans, like 401(k) matching.
•Paid Time Off (PTO): Vacation days, sick leave, and holidays.
•Life and Disability Insurance: Financial protection for employees in case of unexpected events.
•Flexible Spending Accounts (FSAs) or Health Savings Accounts (HSAs): Pre-tax accounts for medical expenses.
 Components of Compensation Plan
3. Work-Life Balance Benefits:
▪ Flexible Work Arrangements: Options such as remote work, flexible hours, or compressed workweeks.
▪ Wellness Programs: Initiatives promoting health, such as gym memberships or mental health resources.
4. Equity-Based Compensation:
▪ Stock Options: The right to purchase company stock at a predetermined price, aligning employee interests with
company performance.
▪ Restricted Stock Units (RSUs): Company shares granted to employees, subject to vesting requirements.
5. Other Unique Benefits:
▪ Professional Development: Funding for training, conferences, or tuition reimbursement.
▪ Employee Assistance Programs (EAPs): Services providing support for personal issues, including counseling.
 Compensation Strategies
1. Market-Based Compensation: Researching and analyzing industry standards to ensure compensation is competitive with
the market.
2. Pay-for-Performance: Linking compensation to employee performance through bonuses, merit pay, or
performance-based raises.
3. Internal Equity: Ensuring fairness in compensation across the organization by evaluating job roles and responsibilities.
4. Total Rewards Approach: Emphasizing the overall value of the compensation package, including both monetary and
non-monetary benefits.
5. Employee Engagement and Involvement: Involving employees in discussions about compensation and benefits to
understand their preferences and needs.
6. Regular Compensation Reviews: Conducting periodic assessments of compensation structures to ensure they remain
competitive and aligned with organizational goals.
7. Transparency in Compensation: Communicating openly about salary ranges, benefits, and how compensation decisions
are made to build trust and accountability.
8. Flexibility and Customization: Offering flexible benefits packages that allow employees to choose the options that best fit
their individual needs and lifestyles.
 Importance of Effective Compensation Strategies
▪ Importance of Effective Compensation Strategies:

1. Attracting Talent: Competitive compensation packages are essential for attracting skilled candidates.
2. Retaining Employees: Fair and equitable compensation helps retain top talent and reduces turnover.
3. Enhancing Motivation and Performance: Properly structured compensation plans can motivate employees
to perform at their best.
4. Supporting Organizational Goals: Aligning compensation with organizational objectives helps drive
performance and achieve business goals.
Implementing effective compensation benefits and strategies is crucial for HRM success, fostering a positive
work environment and promoting employee satisfaction.
 Compensation Benefits
▪ Here’s a overview of common compensation benefits:
1. Health and Wellness Benefits
• Health Insurance: Coverage for medical, dental, and vision expenses. Employers may offer various plans, including HMOs,
PPOs, and high-deductible plans.
• Wellness Programs: Initiatives that promote physical and mental health, such as gym memberships, wellness challenges,
or mental health support.
2. Retirement Benefits
• 401(k) Plans: Employer-sponsored retirement savings plans allowing employees to contribute a portion of their salary,
often with matching contributions.
• Pension Plans: Defined benefit plans providing employees with fixed payments after retirement based on salary and years
of service.
3. Paid Time Off (PTO)
• Vacation Days: Paid time off for vacations or personal time.
• Sick Leave: Paid leave for health-related issues.
• Holidays: Paid days off for recognized holidays.
• Parental Leave: Paid or unpaid leave for new parents following the birth or adoption of a child.
 Compensation Benefits
4. Disability and Life Insurance
• Short-Term and Long-Term Disability Insurance: Provides income replacement if an employee is unable to work due to a
non-work-related injury or illness.
• Life Insurance: Financial protection for employees’ beneficiaries in the event of the employee's death.
5. Flexible Work Arrangements
• Remote Work: Options to work from home or other locations.
• Flexible Hours: Adjustments to work hours to accommodate personal commitments.
• Compressed Workweeks: The ability to complete a full-time workload in fewer days.
6. Equity-Based Compensation
• Stock Options: Employees can purchase company stock at a fixed price, typically as an incentive for long-term
commitment.
• Restricted Stock Units (RSUs): Shares granted to employees that vest over time, aligning their interests with the
company's performance.
 Compensation Benefits
7. Training and Development
• Professional Development Opportunities: Funding for courses, workshops, or conferences to enhance employees’ skills.
• Tuition Reimbursement: Financial assistance for employees pursuing higher education related to their job.
8. Other Perks and Benefits
• Commuter Benefits: Subsidies or reimbursements for transportation costs, including public transit or parking.
• Employee Assistance Programs (EAPs): Confidential services providing counseling and support for personal issues.
• Bonuses and Incentives: Performance-based financial rewards, such as annual bonuses, signing bonuses, or referral
bonuses.
9. Work-Life Balance Initiatives
• Childcare Assistance: On-site childcare or subsidies for childcare costs.
• Family Leave: Additional leave for caregiving responsibilities beyond standard parental leave.
▪ 10. Recognition and Rewards Programs
• Employee Recognition Programs: Initiatives to acknowledge and reward outstanding performance, including awards or
public recognition.
 Legal and ethical considerations in HR management
▪ Human resource management (HRM) involves dealing with employees' legal and ethical concerns while managing an
organization's workforce. The legal and ethical considerations in HRM are critical to ensure compliance with laws and
regulations and maintain ethical standards. Here are some of the key legal and ethical considerations in HR management:
▪ Legal considerations:
1. Equal Employment Opportunity (EEO): EEO is a legal requirement that prohibits discrimination in all aspects of
employment, including recruitment, hiring, promotion, training, and compensation, based on protected characteristics
such as race, color, religion, sex, national origin, age, and disability. Employers must comply with EEO regulations to avoid
lawsuits, fines, and other legal consequences.
2. Fair Labor Standards Act (FLSA): FLSA sets minimum wage, overtime pay, child labor standards, and record-keeping
requirements for employees. Employers must comply with FLSA regulations to avoid lawsuits, penalties, and other legal
consequences.
3. Family and Medical Leave Act (FMLA): FMLA requires covered employers to provide eligible employees with
job-protected leave for qualified medical and family reasons. Employers must comply with FMLA regulations to avoid
lawsuits, penalties, and other legal consequences.
4. Occupational Safety and Health Act (OSHA): OSHA sets safety and health standards for workplaces and requires
employers to provide a safe and healthy work environment for employees. Employers must comply with OSHA regulations
to avoid lawsuits, fines, and other legal consequences.
 Legal and ethical considerations in HR management
▪ Ethical considerations:
1. Confidentiality: HR managers have access to sensitive and confidential information about employees, such as their
personal and health information. HR managers must maintain confidentiality and ensure that this information is protected
from unauthorized access or disclosure.
2. Diversity and inclusion: HR managers should promote diversity and inclusion in the workplace by creating a culture that
values differences and respects all employees' rights.
3. Ethical leadership: HR managers should model ethical behavior and ensure that the organization's leaders and employees
follow ethical standards.
4. Whistleblowing: HR managers should create a culture that encourages employees to report ethical violations without fear
of retaliation.
▪ In conclusion, HR managers should be aware of the legal and ethical considerations in HRM to ensure compliance with
laws and regulations and maintain ethical standards in the workplace. By doing so, they can create a positive and
productive work environment for employees and contribute to the organization's success.