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SPU DISTANCE LEARNING COURSE LEARNING MATERIAL

HRM 501: HUMAN RESOURCE MANAGEMENT
MASTERS PROGRAM

[Dr. Mugambi Hellen Nkirote (PhD)]

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 SPU Distance & E - Learning Program
© 2017

HRM 501: HUMAN RESOURCE MANAGEMENT

ST. PAUL’S UNIVERSITY
MASTERS PROGRAM

Course lecturer: Dr. Mugambi Hellen Nkirote (PhD)

Course purpose

This course is mandatory for all MBA students as knowledge of the basic concepts and
framework of HRM is essential for effective execution of strategies. It is designed to help
learners to understand and appreciate the strategic role of Human Resource Management
(HRM) in an organization. It provides a critical analysis of the concept, practices and outcomes
of the best human resource management practices hence the learner will gain an understanding
of the role that HRM has to play in effective business administration.

Learning outcome

At the end of the course the graduates will be able to:

1. Identify and consider the role of human resource management in organizations.

2. Assess how the main tasks of HR managers are interrelated with each other and related
to corporate strategy

3. Develop the knowledge, skills and concepts needed to resolve actual human resource
management problems or issues.

4. Design an effective human resource management system

5. Synthesize, compare, and critically analyze key concepts, theories and practices in the
domains of; Employee resourcing, Human resource development, Employee relations,
Reward management and performance management
6. Evaluate how each of these functions can contribute and add value to the organisation

Course content

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Meaning and definition of human resource management, Evolution of human resource
management, Nature of human resource management, Roles of human resource management
department, Functions of Human Resource Managers, Human resource management verses
personnel management, Models of Human Resource Management, employee resourcing
performance management, employee relations, maintenance of employees, employee stress,
counselling, grievance handling, human resource training and development, career development
and management, wage and salary administration, employee motivation, emerging issues in
HRM

Teaching Methodology

 Instructional notes
 Case studies
 Assignment
 Direct studies on topical issues
Instructional material/resources

 Instructional material/ hand outs

 Case studies
 Library
 Journals, instructional reports, government publications/ magazines
Course evaluation

 Term paper 20%

 Trimester assignments/Cat 20%
 End of the trimester examination 60%
 Total 100%
Recommended Texts

1. John M. Ivancerich, (2010). Human Resource Management. (11th ed.) USA, McGraw-
Hill
2. Armstrong M. (2013) Armstrong’s Handbook on Performance Management. UK. Kogan
page Ltd

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 3. Raymond A. Noe, John R. Hollenbeck & Patrick M. Wright. (2003). Human Resource
Management. NewYork, McGraw-Hill
4. Gary, D. (2005). Human Resource Management. (10thed.), New Jersey. Pearson Prentice
Hall.

5. Cole. G.A (2007). Personnel and Human Resource Management. (5 th Ed.). U.K Biddles
Ltd
6. Michael Armstrong (2007). Human Resource Management Practice. 10 th Edition, Great
Britain, Kogan Page Limited
7. Tytherleigh, M.Y., Webb. C., Cooper, C.L. and Ricketts, C. (2005). Occupational stress
in UK Higher Education Institutions: a comparative study of all staff categories. Higher
Education Research & Development, Vol 24:1, pp 41–61.

E-Books

1. Managing Human resource in the 21st Century

2. Employer's guide to Recruitment: How to Get the Right Man (or Woman) for the Job
3. HR2025: Human Resource Management in the Future. Book 1 – Work, People and HR in
2025 by Perry Timms
4. European Journal of Training and Development
5. Employee Counselling Today

1.

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 TABLE OF CONTENT
WEEK MAIN TOPIC SUB-TOPICS
WEEK 1 INTRODUCTION TO HUMAN  Meaning and definition of human
RESOURCE MANAGEMENT
resource management
 Evolution of human resource
management
 Nature of human resource
management

WEEK 2 HRM IN ORGANIZATION  Roles of human resource

management department
 Functions of Human Resource
Managers
 Human resource management
verses personnel management
 Models of Human Resource
Management

WEEK 3 EMPLOYEE RESOURCING (I)  Human resource planning

 Recruiting

WEEK 4 EMPLOYEE RESOURCING (II)  Employee Selection

 Placement
 Orientation and Socialization
 Matching jobs and Skills
WEEK 5 PERFORMANCE  Concept of Performance
MANAGEMENT management
 Employee Training and
Development

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  Performance Appraisal

WEEK 6 CAREER MANAGEMENT  Career Planning & Development

 Organizational Development

WEEK 7 THEORIES OF MOTIVATION  Theories explained

 Significance of motivation theories
 Strategies of motivating employees

WEEK 8 EMPLOYEE MAINTENANCE  Employee Health and Safety

AND RETENTION  Employee Welfare

WEEK 9 EMPLOYEE RELATION  Significance of employee relations

 Parties to employee relations
 Employee unions
 Role of Trade Union
 Collective Bargaining
 Collective agreement

WEEK 10 REWARD MANAGEMENT  Job evaluation

 Compensation system
 Factors that influence salary and
wage structure
 Employee Benefits

WEEK 11 GRIEVANCE AND  Sources of grievances

GRIEVANCE RESOLUTION  Dispute Handling Procedure
 Employee participation and
involvement

WEEK 12 EMPLOYEE COUNSELLING  Meaning and need of employee

AND STRESS MANAGEMENT counselling
 Areas of employee counselling

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  Meaning and sources of employee
stress
 Dealing with employee stress

WEEK 13 CURRENT ISSUES IN HUMAN  Ethical Issues in Human Resource

RESOURCE MANAGEMENT Management etc.

WEEK 14 EXAMINATION
WEEK 15 EXAMINATION

ABBREVIATIONS

CB: Collective Bargaining

CBA: Collective Bargaining Agreement

GM: General Manager

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HRM: Human Resource Management

HRP: Human Resource Planning

NTL: National Training Institute

OD: Organizational Development

PM: Performance Management

RCGR: Research Centre for Group Dynamics

SHRM: Strategic Human Resource Management

TU: Trade Union

TOPIC ONE

INTRODUCTION

 Meaning and definition of human resource management

 Evolution of human resource management
 Nature of human resource management

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Objective

By the end of this chapter, the learner should have a clear understanding of the meaning of
HRM, and be able to explain the evolution and nature of HRM as a discipline.

Introduction

Human Resource Management (usually referred to as HRM) involves everything related to the
employer-employee relationship and is about supporting and managing the organization’s people
and associated processes. It’s seen as a core business function essential to the organization’s
effective operation.

Larger organisations in the public and private sector have their own designated HR department,
opening up a broad range of companies and sectors to applicants. Recent years have seen
increasing numbers of companies outsource key elements of their HR functions. So,
opportunities within HR consultancies also exist.

HR has great scope for specialism and development within a particular HR function (e.g.
development, equality and diversity, recruitment and selection, etc.) and with specialism come
extra responsibility and remuneration.
We have often heard this;
 "Our people are our greatest asset"
 "Nothing is more important than our employees"
The human element plays a major part in the success of every business. Effective human
resource management has become more important in recent times.
Reasons include:

 Most businesses now provide services rather than produce goods – people are the critical
resource in the quality and customer service level of any service business
 Competitiveness requires a business to be efficient and productive – this is difficult
unless the workforce is well motivated, has the right skills and is effectively organized
 The move towards fewer layers of management hierarchy (flatter organisational
structures) has placed greater emphasis on delegation and communication

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Therefore, for a business is to be successful and achieve its objectives, it needs to manage its
human resources effectively.

Evolution of Human Resource Management

In the competitive environment of open economy human resource management with the
increased modern trends becoming significant factor for the efficient running of organization
Human resource management emerged from personnel management and personnel management
emerged from manpower planning. The consideration of changes taking place in managing
human resource led to adaptation of strategic HRM the consideration of strategy and HRM
system jointly led to the emergence of strategic human resource management SHRM which is
crucial for achieving a corporation’s long term goal. This section attempts to bring the historical
evolution of HRM and changing roles of HR professional from time to time in order to
considered employees as an important assets which helps in attaining goals of the organization.
The section finally draws attention to the fact that SHRM and not PM or HRM are people
considered for modern industrialization that is to be used for creating and sustaining competitive

American writers Terrey and Franklin (1996) mentioned about the 6 M’s of management, these
are Men and women, Material, Money, Market and Method. But among these, men and women -
the only living being- do the effective coordination and utilization of these human and non-
human resources. All the activities of any enterprise are initiated and

Human resource gained more attention as the workforce considered to be an important resource
to gain competitive advantage of organization and also it helpful in utilizing the resources of an
organization to a optimum extent in order to achieve organizational goal.

Managing human resource is a complex process. As Harzing and Ruysseveldt said a better way
to understand the philosophy of human resource management demands a thorough understanding
about the evolution of the concept itself from the ancestral concept personnel management. In
1990 due to liberalized government policies of various countries the human resource started
floating from one country to another this led to diversification of workforce and cross culture
took place as a result employees from one nation migrating to another nation and bringing their

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culture with them this led to mixed organization culture so the HR professional has to play major
role in coordinating the workforce of different culture in an organization.

Approaches towards recruitment of staff focused to geocentric from ethnocentric and polycentric
which is more efficient because workforce will be selected based on talent regardless of
nationality. Method of recruiting also changed towards efficient policies like using of head
hunters, cross national advertising, E- recruitment.

Evolution of Personnel Management

Evolution of Personnel management started in 19th century at that time there was a boom in
industrialization which leads to increase in franchising and influence of trade unions and
harshness of industrial condition called for the better of industrial condition. There was no
department as such for taking care of above problem only welfare officers came into being to
take care of above situation. These welfare officers were only women’s who take care of
protectionism of women and girls because they feel it as worthy if women employee are sick
they visit their home give food accommodation give moral welfare. As the role of women
increasing like they were getting employed in modern industries where their work is packing
assembly or other routine job so the quality required by these women employee increased so
these welfare officer who were women their responsibility also increased that is to recruitment
training development.

But ambiguity has been increased due to increase in production and also increased in
paternalistic behavior relationship between employer and employee and also aiming at moral
protection of women and girls and also side by side the aim of achieving economies of scale is
also increased like achieving higher output by minimizing cost by resolving grievances control
of sickness these leads to mixed aim of achieving organizational objective in order to achieve but
at that time there was only a handful of welfare officer was their they wanted to improve the
condition of working of women in 1900 there were only few welfare officer was their but in
1913 number of welfare officer has been increased to take care of the situation.

The exact growth of personnel management started during First World War because the number
of munitions manufactured at a large scale so the number of employees needed to manufacture

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increased on the other hand the welfare officer also increased by 1300 to take care of employees
it also sought the supply of labor to munitions factories as the supply of welfare officer made
mandatory by government.

During war women recruited at a large scale to fill the gap of men who left the factories to joint
war which in turn leads to dispute labour union to employ unskilled women. The title labour
manager or employment manager came in the year 1920 in engineering industry and other
industries where the factories was very huge to handle absence, recruitment, queries over
business and so on.

Companies started merger and acquisition as strategy to grow in the mid of 19th century due to
large number of employees employed they created their own specialist personnel department to
unify the different policies and manage absence and recruitment with the objective of improving
productivity. But this department is mainly concerned with hourly paid workers. As personnel
management exist only in the emerging companies like plastic, chemicals and multiple retail. But
during 1930’s the economy started to grow at a rapid pace due to this big corporation came in to
existence they feel to improve the value of employee benefits like different kinds of allowances
as a measure of retaining motivating employee.

Second World War increased the importance of having personnel department because of
producing large war materials the ministry of labour and national services insisted to combine
both personnel department and welfare officer work on a full time basis. Again in second world
war the number of women employees is more to fill the gap left by men who join the battle field
again re-training proper recruitment taken place government saw the there is a huge need to have
personnel department to take care of all employees in well manner.

As the industrial revolution take place simultaneously the factory system came in to being that
leads increase in working rules and regulation to large number to employees increase in the
hierarchical structure also increased in working hours but decrease in pay bad working condition,
social distance between employee and employer has increased, increased bureaucratization all
these factor results in increasing monotony boredom job displacement impersonality due to these
factor personnel management got higher attention.

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As in the Second World War the term employment manager started to take care of women
employees the combination of both welfare officers and employment manager leads to personnel
management. Though in the war times the productivity increased due to number of employment
policies undertaken but the role of personnel management during war time was small that to
implement the rules demanded to produce large scale goods but it was not focusing on other
aspect of managing human resource that is by motivation, promotion, increasing morale,
performance appraisal etc but the role of negotiation of union has gain important role.

But there is an increasing in the bargaining between employer and unions during pre-world war.
During there is an enormous growth in an engineering industry but in 1950,s and 60,s there was
an enormous growth in other type of industry which leads to the increasing the role of personnel
management at same time large companies wanted to develop their own employment policies
which suites to their company which leads to improve emerging new aspect in personnel
management.

The bargaining power of unions has increases which resulted in unnecessary official and
unofficial strikes which were damaging the economy particularly manufacturing industry in UK
the strikes were in huge number and it became famous in maintain poor industrial relation and
the number of working days lost due to strike which resulted in closer of number of factories.
The situation becoming worse and worse it was critical for both employers and unions due to this
reason personnel manager was blaming for lacking of negotiation skill to resolve these situation
and plan for industrial relationship strategies because of these deficiencies personnel
management was not given high priority these leads to management to think something higher
profile which have all the skill to negotiate to motivate.

In the year mid of 1960’s organization started giving much importance to employ the personnel
specialist to perform different activities in order to make the employees as a whole package to
perform in the organization. the world is becoming global village and labour started moving
from one country to another this resulted in managing the workforce diversity this become the
challenge for the personnel management to manage these workforce diversity.

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In the year 1960 Even the domestic rules and regulation was increased towards employability the
new legislation was introduced towards employment, training, and redundancy payments, equal
pay opportunities, employment protection. The year 1960 was high inflation so there was a
regulation on wages paid by the employer personnel manager has to understand this new aspect
of regulation regarding inflation to develop policies to implement new measures which aligned
with employee’s satisfaction level.

Improvement in selection training appraisal and new management techniques has been expanded
to improve the performance of the employees which demands to improve the profile of personnel
management.

Personnel management perform different function such as

 Collective bargaining role
 Implementation of legislation role
 Bureaucratic role
 Social conscience of the business role
 growing performance improvement role

Rising Role of HRM

The role of HRM has gain more important in the year 1980. There was a complete shift from
post war collectivism and towards individualism and changes in structure of economy. Some
people thought that HRM was evolved to solve union problem as there is a demand to take care
of employees of an organization as a whole it performs different function.

During 1990,s the success of large Japanese corporation in export market like automobiles and
electronic goods took surprise to many western companies but studies says that the success of
these Japanese firm is due to effective management of workforce the studies also shows that the
workforce of Japanese firm are more productive and efficient than western firm. The key to
success of Japanese companies like Toyota Matsushita are the practice adopted for efficient
management of workforce as these companies started opening its manufacturing plant in western
countries the practice of these companies also started practiced by western companies. The
practice include are:

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  Strict and rigorous selection and recruitment
 High level of training, especially induction training and on the job training
 Team working
 Multitasking
 Better management-worker communications
 Use of quality circles and an emphasis on right first time quality
 Encouragement of employee suggestions and innovation
 Single status symbols such as common canteens and corporate uniforms

The reason of above practice is create an organization atmosphere where workers can grow and
identify their own success and goal which match with organization.

Management practice
 Control
 Commitment
 Job design
 Focused on the individual
 Focused on the team
 Performance management
 Measured standards for minimum performance
 Higher “stretch” objectives
 Management structure
 Top down and hierarchical. Emphasis on management symbols
 Flat organization structure. Minimum status differentials
 Compensation
 Individual pay linked to job evaluation
 Pay linked to skills and mastery
 Employment
 Employees viewed as variable cost
 Assurances that participation will not result in job losses
 Employee voice
 Employee input allowed on a narrow agenda.

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  Employee participation enacted on a wide range of issues
 Labour management relations
 Adversarial labour relations
 Mutuality with joint planning and problem solving

Rise of Strategic Human Resource Management

Strategic human resource management is a branch of human resource management. SHRM

means combination of strategy and HRM. It also refers to linking of human resources with
strategic goals and objectives to achieve goals of an organization it also helps in improving the
performance of innovation flexibility and competitive advantage. In an organization SHRM
means accepting and involving the HR function as a strategic partner in the formulation and
implementation of the company’s strategies through HR activities.

Features of Strategic Human Resource Management

 Linkage of HR policy with organizational strategy in order to achieve organizational

goals and objective
 Linkage of individual HR intervention so that they are mutually supportive.

Reason for Strategic Human Resource Management

 Globalization and internationalization of market integration

 Increased technological change
 Cross culture issues
 Increased competition
 Increasing new concept

Importance of Human Resource Management

An organisation cannot build a good team of working professionals without good Human
Resources. The key functions of the Human Resources Management (HRM) team include
recruiting people, training them, performance appraisals, motivating employees as well as
workplace communication, workplace safety, and much more.

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Recruitment and selection

This is one of the major responsibilities of the human resource team. The HR managers come up
with plans and strategies for hiring the right kind of people. They design the criteria which is best
suited for a specific job description. Their other tasks related to recruitment include formulating
the obligations of an employee and the scope of tasks assigned to him or her. Based on these two
factors, the contract of an employee with the company is prepared. After attracting a pool of
potential applicants, selection is done to pick the most suitable candidate for the job. Typically,
they determine the most effective methods for recruiting applicants, including assessing which
applicant tracking systems are best suited for the organization's needs.

Training and Development

HR training and development specialists coordinate new employee orientation, an essential step
in forging a strong employer-employee relationship. The training and development area of HR
also provides training that supports the company's fair employment practices and employee
development to prepare aspiring leaders for supervisory and management roles.

When needed, they also provide training to the existing employees according to the requirements
of the organisation. Thus, the staff members get the opportunity to sharpen their existing skills or
develop specialised skills which in turn, will help them to take up some new roles.

Performance Appraisals

HRM encourages the people working in an organisation, to work according to their potential and
gives them suggestions that can help them to bring about improvement in it. The team
communicates with the staff individually from time to time and provides all the necessary
information regarding their performances and also defines their respective roles. This is
beneficial as it enables them to form an outline of their anticipated goals in much clearer terms
and thereby, helps them execute the goals with best possible efforts. Performance appraisals,
when taken on a regular basis, and viewed positively, motivate the employees.

Maintaining Work Atmosphere

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This is a vital aspect of HRM because the performance of an individual in an organisation is
largely driven by the work atmosphere or work culture that prevails at the workplace. A good
working condition is one of the benefits that the employees can expect from an efficient human
resource team. A safe, clean and healthy environment can bring out the best in an employee. A
friendly atmosphere gives the staff members’ job satisfaction as well.

Managing Disputes

In an organisation, there are several issues on which disputes may arise between the employees
and the employers. You can say conflicts are almost inevitable. In such a scenario, it is the
human resource department which acts as a consultant and mediator to sort out those issues in an
effective manner. They first hear the grievances of the employees. Then they come up with
suitable solutions to sort them out. In other words, they take timely action and prevent things
from going out of hands.

Developing Public Relations

The responsibility of establishing good public relations lies with the HRM to a great extent. They
organise business meetings, seminars and various official gatherings on behalf of the company in
order to build up relationships with other business sectors. Sometimes, the HR department plays
an active role in preparing the business and marketing plans for the organisation too.

It can therefore be concluded, any organisation, without a proper setup for HRM is bound to
suffer from serious problems while managing its regular activities. For this reason, today,
companies must put a lot of effort and energy into setting up a strong and effective HRM

Activity

1. What would you say will be the future of HRM?

2. Analyze he role played by HRM department in an existing organization of your
choice

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 TOPIC TWO

HRM IN ORGANIZATION

 Roles of human resource management department

 Human resource management verses personnel management
 Models of Human Resource Management
 Functions of Human Resource Managers
Objective
By the end of this topic, the learner will be able to appreciate the roles of human resource
managers, demonstrate a clear understanding of the difference between HRM and personnel
management, evaluate models of HRM and appreciate functions of HRM in an organization

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Role of Human Resources Management Department

The Human Resources Department also covers five key roles.

Executive role – in this role the HR department are viewed as the specialists in the areas that
encompass Human Resources or people management.

Audit role – in this capacity the HR department will check other departments and the
organisation as a whole to ensure all HR policies such as Health & Safety, Training, and Staff
Appraisal etc. are being carried out in accordance with the company’s HR policy.

Facilitator role – in this role, the HR department help or facilitate other departments to achieve
the goals or standards as laid out in the HR policies of the organisation. This will involve training
being delivered for issues that arise in the areas relating to people management.
Consultancy role – the HR department will advise managers on how to tackle specific managing
people issues professionally.

Service role – in this capacity the HR department is an information provider to raise awareness
and inform departments and functional areas on changes in policy.

Definitions of Personnel Management and Human Resource Management

Many management students and layman, think that the two terms are synonymous but, the fact is
that the modern HRM has completely replaced PM.

In early centuries, when Human Resource Management (HRM) was not prevalent, then the
staffing and payroll of the employees were taken care of, by the Personnel Management (PM). It
is popularly known as Traditional Personnel Management. Human Resource Management has
been emerged as an extension over the Traditional Personnel Management.

Definition of Personnel Management

Personnel Management is a part of management that deals with the recruitment, hiring, staffing,
development and compensation of the workforce and their relation with the organization in order

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to achieve the organizational objectives. The main functions of the personnel management are
divided into two categories:

 Operative Functions: The activities that are concerned with procurement, development,
compensation, job evaluation, employee welfare, utilization, maintenance and collective
bargaining.
 Managerial Function: Planning, Organizing, Directing, Motivation, Control and
Coordination are the basic managerial activities performed by Personnel Management.

From the last two decades, as the development in technology has taken place and the humans are
replaced by machines. Similarly, this branch of management has also been superseded by Human
Resource Management.

Example of Personnel Management Duties

Peter works for a company in personnel management department. Peter engages in planning
and job analysis to determine his organization's current and future labor needs. He recruits
employees with knowledge, skills and abilities that the organization needs. Peter and his
coworkers will also help develop current employees through employee appraisal and training.
He'll help ensure a safe and healthy workplace by making sure the organization complies with
all occupational health and safety regulations.

He also helps develop a compensation system, including pay and fringe benefits. Peter also
helps develop policies that ensure his organization complies with federal and state employment
laws. Finally, Peter and the personnel department are often the primary intermediaries between
employees and the organization. They manage many aspects of the employee-employer
relationship, such as handling employee grievances.

Definition of Human Resource Management

Human Resource Management is that specialized and organized branch of management which is
concerned with the acquisition, maintenance, development, utilization and coordination of
people at work, in such a manner that they will give their best to the enterprise. It refers to a

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systematic function of planning for the human resource needs and demands, selection, training,
compensation and performance appraisal, to meet those requirements.

Human Resource Management is a continuous process of ensuring the availability of eligible and
willing workforce i.e. putting the right man at the right job. In a nutshell, it is an art of utilizing
the human resources of an organization, in the most efficient and effective way. HRM covers a
broad spectrum of activities which includes:

 Employment
 Recruitment and Selection
 Training and Development
 Employee Services
 Salary and Wages
 Industrial Relations
 Health and safety
 Education
 Working conditions
 Appraisal and Assessment

Example of Human Resource Management activities

Helen works in human resource management department. Helen ensures that the company is
appropriately staffed, which includes job analysis, planning, recruiting and selection. Helen and
her fellow resource managers also develop training and education programs to keep employees
up-to-date on the skills and knowledge they need. Human resource management develops
compensation plans just like personnel management.

Helen also makes sure that the company maintains a safe and healthy work environment. She
develops personnel policies that ensure compliance with various employment and labor laws.
Employee relations are another key responsibility. If employees have general questions or
concerns about the organization, they go to Helen and the human resources department.

Key Differences between Personnel Management and Human Resource Management

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The following are the major differences between Personnel Management and Human Resource
Management
1. The part of management that deals with the work force within the enterprise is known as
Personnel Management.
The branch of management, which focuses on the best possible use of the enterprise’s
manpower, is known as Human Resource Management.
2. Personnel Management treats workers as tools or machines
Human Resource Management treats it as an important asset of the organization.
3. Human Resource Management is the advanced version of Personnel Management.
4. Decision Making is generally slow in Personnel Management
But the same is comparatively fast in Human Resource Management.
5. In Personnel Management there is a piecemeal distribution of initiatives.
Integrated distribution of initiatives is there in Human Resource Management.
6. In Personnel Management, the basis of job design is the division of work
In the case of Human Resource Management, employees are divided into groups or teams
for performing any task.
7. In PM, the negotiations are based on collective bargaining with the union leader.
Conversely, in HRM, there is no need for collective bargaining as individual contracts
exist with each employee.
8. In PM, the pay is based on job evaluation.

In HRM, the basis of pay is performance evaluation. Comparison Chart

BASIS FOR PERSONNEL HUMAN RESOURCE

COMPARISON MANAGEMENT MANAGEMENT

Meaning The aspect of management that is The branch of management that

concerned with the work force focuses on the most effective use of
and their relationship with the the manpower of an entity, to achieve
entity is known as Personnel the organizational goals is known as
Management. Human Resource Management.

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 BASIS FOR PERSONNEL HUMAN RESOURCE
COMPARISON MANAGEMENT MANAGEMENT

Approach Traditional Modern

Treatment of Machines or Tools Asset

manpower

Type of function Routine function Strategic function

Basis of Pay Job Evaluation Performance Evaluation

Management Role Transactional Transformational

Communication Indirect Direct

Labor Collective Bargaining Contracts Individual Contracts

Management

Initiatives Piecemeal Integrated

Management Procedure Business needs

Actions

Decision Making Slow Fast

Conclusion

Human Resource Management has come up as an extension over Personnel Management, which
eradicated the shortcomings of the Personnel Management. It is quite essential in this era of
intense competition where every organization have to put their manpower and their needs first.

Nowadays, it is actually very challenging to retain and maintain good employees for a long time
as they are fully aware of their rights and any organization cannot treat them like machines. So,

24
HRM has been evolved to unite the organization with their employees for the attainment of a
common goal.

Human Resource Management Models

Soft and Hard HRM

Human resource management (HRM) has frequently been described as a concept with two
distinct forms: soft and hard. The soft model emphasizes individuals and their self-direction and
places commitment, trust, and self-regulated behaviour at the center of any strategic approach to
people. In contrast, the hard model stresses the rationalism of strategic fit and places emphasis on
performance management and an instrumental approach to the management of individuals.

The two broad approaches to HRM which are explained further below

1. "Hard" HR
2. "Soft" HR
However, it is important to remember that, in reality, these two approaches are somewhat
academic in nature. In real businesses, an HR department or manager would be likely to adopt
elements of both soft and hard HR, and in many cases would not be interested in the slightest in
the distinction!

The key features of the hard and soft approach to HR can be summarized as follows:

Hard HRM

Treats employees simply as a resource of the business (like machinery & buildings)

Strong link with corporate business planning – what resources do we need, how do we get them
and how much will they cost

Focus of HRM: identify workforce needs of the business and recruit & manage accordingly
(hiring, moving and firing)

Key features

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  Short-term changes in employee numbers (recruitment, redundancy)
 Minimal communication, from the top down
 Pay – enough to recruit and retain enough staff (e.g. minimum wage)
 Little empowerment or delegation
 Appraisal systems focused on making judgements (good and bad) about staff
 Taller organisational structures
 Suits autocratic leadership style

Soft HRM
Treats employees as the most important resource in the business and a source of competitive
advantage
Employees are treated as individuals and their needs are planned accordingly
Focus of HRM: concentrate on the needs of employees – their roles, rewards, motivation etc.

Key features
 Strategic focus on longer-term workforce planning
 Strong and regular two-way communication
 Competitive pay structure, with suitable performance-related rewards (e.g. profit share,
share options)
 Employees are empowered and encouraged to seek delegation and take responsibility
 Appraisal systems focused on identifying and addressing training and other employee
development needs
 Flatter organisational structures
 Suits democratic leadership style

Which is best? Soft or Hard HRM?

Which of the two approaches is better? The answer is – it depends

The "hard" approach to HR might be expected to result in a more cost-effective workforce where
decision-making is quicker and focused on senior managers. However, such an approach pays
relatively little attention to the needs of employees and a business adopting a genuinely "hard"

26
approach might expect to suffer from higher absenteeism and staff turnover and less successful
recruitment.

The "soft" approach will certainly appeal to the "touchy-feely" amongst us who like to see
people being treated nicely! And you can also make a good business case for an approach that
rewards employee performance and motivates staff more effectively. However, the danger of
taking too "soft" an approach is that when all the employee benefits are added up, the cost of the
workforce leaves a business at a competitive disadvantage.

Functions of Human Resource Management

The role of human resource management is to plan, develop, and administer policies and
programmes designed to make expeditious use of an organization’s human resources. It is that
part of management which is concerned with the people at work and with their relationship
within an enterprise.

Its objectives are:

1. Effective utilisation of human resources;

2. Desirable working relationships among all members of the organisation; and
3. Maximum individual development.

The major functional areas in human resource management are

1. Planning,
2. Staffing,
3. Employee development, and
4. Employee maintenance.

These four areas and their related functions share the common objective of an adequate number
of competent employees with the skills, abilities, knowledge, and experience needed for further
organisational goals. Although each human resource function can be assigned to one of the four
areas of personnel responsibility, some functions serve a variety of purposes. E.g

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  Performance appraisal measures serve to stimulate and guide employee development as
well as salary administration purposes.
 The compensation function facilitates retention of employees and also serves to attract
potential employees to the organisation.

A Brief Description of Usual Human Resource Functions

Human Resource Planning

In the human resource planning function, the number and type of employees needed to
accomplish organisational goals are determined. Research is an important part of this function
because planning requires the collection and analysis of information in order to forecast human
resources supplies and to predict future human resources needs. The basic human resource
planning strategy is staffing and employee development.

Job Analysis
Job analysis is the process of describing the nature of a job and specifying the human
requirements, such as skills, and experience needed to perform it. The end product of the job
analysis process is the job description. A job description spells out work duties and activities of
employees. Job descriptions are a vital source of information to employees, managers, and
personnel people because job content has a great influence on personnel programmes and
practices.

Staffing

Staffing emphasizes the recruitment and selection of the human resources for an organisation.
Human resources planning and recruiting precede the actual selection of people for positions in
an organisation. Recruiting is the personnel function that attracts qualified applicants to fill job
vacancies. In the selection function, the most qualified applicants are selected for hiring from
among those attracted to the organisation by the recruiting function. On selection, human
resource functionaries are involved in developing and administering methods that enable
managers to decide which applicants to select and which to reject for the given jobs.

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Orientation

Orientation is the first step toward helping new employees to adjust himself to the new job and
the employer. It is a method to acquaint new employees with particular aspects of their new job,
including pay and benefit programmes, working hours, and company rules and expectations.

Training and Development

The training and development function gives employees the skills and knowledge to perform
their jobs effectively. In addition to providing training for new or inexperienced employees,
organisations often provide training programmes for experienced employees whose jobs are
undergoing change. Large organisations often have development programmes which prepare
employees for higher level responsibilities within the organisation. Training and development
programmes provide useful means of assuring that employees are capable of performing their
jobs.

Performance Appraisal

Performance appraisal function monitors employee performance to ensure that it is at acceptable

levels. Human resource professionals are usually responsible for developing and administering
performance appraisal systems, although the actual appraisal of employee performance is the
responsibility of supervisors and managers. Besides providing a basis for pay, promotion, and
disciplinary action, performance appraisal information is essential for employee development
since knowledge of results (feedback) is necessary to motivate and guide performance
improvements.

Career Planning

Career planning has developed partly as a result of the desire of many employees to grow in their
jobs and to advance in their career. Career planning activities include assessing an individual
employee’s potential for growth and advancement in the organisation.

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Compensation

Human resource personnel provide a rational method for determining how much employees
should be paid for performing certain jobs. Pay is obviously related to the maintenance of human
resources. Since compensation is a major cost to many organisations, it is a major consideration
in human resource planning. Compensation affects staffing in that people are generally attracted
to organisations offering a higher level of pay in exchange for the work performed. It is related to
employee development in that it provides an important incentive in motivating employees to
higher levels of job performance and to higher paying jobs in the organisation.

Benefits

Benefits are another form of compensation to employees other than direct pay for work
performed. As such, the human resource function of administering employee benefits shares
many characteristics of the compensation function. Benefits include both the legally required
items and those offered at employer’s discretion. The cost of benefits has risen to such a point
that they have become a major consideration in human resources planning. However, benefits are
primarily related to the maintenance area, since they provide for many basic employee needs.

Labour Relations

The term “labour relations” refers to interaction with employees who are represented by a trade
union. Unions are organisation of employees who join together to obtain more voice in decisions
affecting wages, benefits, working conditions, and other aspects of employment. With regard to
labour relations, the personnel responsibility primarily involves negotiating with the unions
regarding wages, service conditions, and resolving disputes and grievances.

Record-keeping
The oldest and most basic personnel function is employee record-keeping. This function involves
recording, maintaining, and retrieving employee related information for a variety of purposes.
Records which must be maintained include application forms, health and medical records,
employment history (jobs held, promotions, transfers, lay-offs), seniority lists, earnings and

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hours of work, absences, turnover, tardiness, and other employee data. Complete and up-to-date
employee records are essential for most personnel functions. More than ever employees today
have a great interest in their personnel records. They want to know what is in them, why certain
statements have been made, and why records may or may not have been updated.

Personnel records provide the following:

1. A store of up-to-date and accurate information about the company’s employees.

2. A guide to the action to be taken regarding an employee, particularly by comparing him
with other employees.
3. A guide when recruiting a new employee, e.g. by showing the rates of pay received by
comparable employees.
4. A historical record of previous action taken regarding employees.
5. The raw material for statistics which check and guide personnel policies.
6. The means to comply with certain statutory requirements.

Personnel Research

All personnel people engage in some form of research activities. In a good research approach,
the object is to get facts and information about personnel specifics in order to develop and
maintain a programme that works. It is impossible to run a personnel programme without some
pre-planning and post-reviewing. For that matter, any survey is, in a sense, research. There is a
wide scope for research in the areas of recruitment, employee turnover, terminations, training,
and so on. Through a well-designed attitude survey, employee opinions can be gathered on
wages, promotions, welfare services, working conditions, job security, leadership, industrial
relations, and the like. In spite of its importance, however, in most companies, research is the
most neglected area because personnel people are too busy putting out fires. Research is not done
to put out fires but to prevent them.

Research is not the sole responsibility of any one particular group or department in an
organisation. The initial responsibility is that of the human resource department, which however

31
should be assisted by line supervisors and executives at all levels of management. The assistance
that can be rendered by trade unions and other organisations should not be ignored, but should be
properly made use of.

Apart from the above, the HR function involves managing change, technology, innovation, and
diversity. It is no longer confined to the culture or ethos of any single organisation; its keynote is
a cross-fertilization of ideas from different organisations. Periodic social audits of HR functions
are considered essential.

HR professionals have an all-encompassing role. They are required to have a thorough

knowledge of the organisation and its intricacies and complexities. The ultimate goal of every
HR person should be to develop a linkage between the employee and the organisation because
the employee’s commitment to the organisation is crucial. The first and foremost role of HR
functionary is to impart continuous education to employees about the changes and challenges
facing the country in general and their organisation in particular. The employees should know
about their balance sheet, sales progress, diversification plans, restructuring plans, sharp price
movements, turnover and all such details. The HR professionals should impart education to all
employees through small booklets, video films, and lectures.

Activity

1. Examine the primary responsibilities of a human resource manager.

2. Make a critical comparison of the models of HRM

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 TOPIC THREE

EMPLOYEE RESOURCING

Part I (Human Resource Planning and Employee Recruiting)

Objective

At the end of this topic, the learner will be able to:

 Appreciate the importance of HRP and be in a position to develop a recruitment tool for
an organization
 Conduct a job analysis and produce a job description from the job analysis.
 Evaluate the procedures and practices used for recruiting and selecting suitable
employees.
 Identify the human resources needs of an organization or department.

Introduction

We will turn to the methods managers use to find the right candidate for the job. Note that in
some books you will find the authors using manpower planning to mean human resource

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planning. Do not get confused for it is the same. However, in our case we are going to use human
resource planning because it has broader concern on employment of people than the traditional
quantitative approaches of manpower planning.

Definition of Human Resource Planning

Human resource planning is the process of ensuring that the organization has the right number of
people, the right type of people at the right time doing the right job. There are many definition of
manpower planning as there are authors of human resource books. Let us now look at some of
the definitions from various authors.

1. Michael Armstrong (2001) defines human resource planning as the process that
“determines the human resource required by the organization to achieve its strategic
goals.
2. Saleemi N.A (1997) “human resource planning involves an accurate determination of the
present and the future manpower needs of the enterprise and exploration of the source to
meet the same”.
3. Gary Dessler (2005) “personnel planning is the process of deciding what position the
firm will have to fill, and how to fill them”.
From the above definitions, we can therefore make a conclusion that human resource planning is
concerned with making sure that the organization balances the demand for labour and supply of
labour to achieve the organization goals effectively and efficiently. The questions that the human
resource manager tries to answer are how many people? And what sort of people does the
organization require.

It involves the comparison of an organization’s current human resources with likely future needs
and consequently the establishment of programmes for hiring, training, redeploying and possible
discarding employees. Effective HRP should result in the right people doing the right things in
the right place at precisely the right time.

HRP is seen as a strategy for the acquisition, utilization improvement and retention of an
enterprise’s human resources. HRP is therefore a strategic process.

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HRP is the process for ensuring that the HR requirements of an organization are identified and
plans are made for satisfying those requirements. It addresses HR needs in both qualitative and
quantitative terms i.e., how many people and what sort of people.

HRP is also known as workforce planning or personnel planning. HRP is the process of
matching the supply of people – internally (existing employees) – and externally (those to be
hired or searched for) – with the openings the organization expects to have over a given period
time frame.

The context of HRP is dominated by:-

 The state of demand for the organization’s goods or services

 The supply of people in the labour market
 The time-scale involved.
Human resource planning should be an integral part of business planning. This is because the
business strategic plans should define projected changes in the scale and types of activities
carried out by the organization. The core competences the organization needs to achieve it goals
and therefore its skills, knowledge and ability requirements.

Nature of Human Resource Planning

Below is the salient feature of human resource planning as described by Saleemi (1997)

1. Human resource planning involves forecasts or projection of the future manpower needs
so that adequate and timely provisions may be made to meet those needs. It is future
oriented.
2. The basic purpose of human resource planning is to determine the right number and the
right type of people for effectively accomplishing the tasks and goals of the organization.
3. Planning for human resource is the primary responsibility of the management to ensure
proper utilization of the present and the future manpower. Human resource planning is
complementary to organization planning.
4. Human resource planning is a continuing or never-ending process because the demand
and supply of manpower are subject to frequent change. It is a dynamic activity.

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 5. It represents a system approach to personnel in which the emphasis is on the
interrelationships among various personnel policies and programmes.
6. Human resource planning includes an inventory of the current manpower in order to
determine its status and to identify untapped talents available in the programmes.
7. Human resource planning has two aspects; qualitative and quantitative.
8. It results in the development of policies, programmes and procedures for the acquisition,
development, preservation and utilization of the organization human assets.
9. Human resource planning is an integral part of corporate planning.

Need and Objective of Human Resource Planning

Organization need human resource planning so has to avoid both surpluses and shortages thereby
operating effectively and efficiently. Human resource planning ensures growth and expansion
and growth of the organization. It is not possible to do away with human resource planning
because it is the integral part of the organization corporate plan. It forms a sound basis for the
selection and training of manpower. Human resource planning is important for both the
organization and the economy. At the national level human resource planning ensures than the
country’ human resource are properly utilized

The objective of human resource planning includes the following.

a) To ensure the necessary personnel are available for performing different tasks in the
organization efficiently.
b) To ensure optimum use of the current manpower.
c) To forecast future knowledge, skills and ability requirement.
d) To provide control measures so that human resources are available they are required.
e) To promote the development of existing personnel.
Purpose of Human Resource Planning

 HRP can help management in making decisions in the following areas:

 Recruitment
 Avoidance of redundancies
 Training-numbers and categories
 Management development

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 Estimates of labour costs
 Productivity bargaining
 Accommodation requirements

Benefits of Human Resource Planning

1. Reduces labour costs.

2. Facilitates internal succession of managerial personnel in the event of unforeseen
turnover.
3. Enables personnel to be developed so as to make the optimum utilization of the current
manpower.
4. Possible to formulate management succession plans.
5. Enables the management to identify the gap and fill it in time.
6. Helps in growth and diversification of business.
7. It is useful for economic development.
We can therefore conclude that, systematic planning for human resource requirements is an
essential part of the overall business planning and no organization can do without it. Human
resource forms the intellectual capital of the organization. It is the human in the organization
who thinks and manipulates all other resources to achieve the organizational goals.

The Process of Human Resource Planning

The process of human resource planning is one of the crucial, complex and continuing
managerial functions. This is because it embraces organization development, management
development, career planning and succession planning of an organization. The steps of human
resource planning include:

1. Current assessment
For an existing organization, it is only logical to begin human resource planning by assessing the
current manpower in the organization. This you do by preparing a human resource inventory
using the information from the application forms filled by the employees at the time of
recruitment into the organization. This inventory will allow you as a manager, to know the
talents and skills that are currently available in the organization. You are also required to look at

37
the job analysis so that you would determine what human behaviour each job requires. After this
you compare the skills available and the skills required to see if there is any gap to be filled. As a
manager you should look at job specification and job description and see if the manpower you
have in the organization has the requisite skills to handle the responsibilities successfully.

2. Future assessment
You remember we said that human resource planning is an integral part of strategic corporate
plans. Corporate plans are strategic such that they spell out future activities. Therefore, human
resource planning also estimates the future personnel requirements. The estimate depends on the
nature and the type of growth of the organizational unit, nature of the product produced the rate
of growth of the organization. Further, budgets and financial statements also helps the personnel
department in establishing the workload in the organization. This workload determines the
demand for future employees.

3. Development of future programme

After assessing the future requirement for human resource, you are required to develop plans for
that future. For example if the assessment shows that you are likely to have shortage of
manpower in future, plans are made to make sure that in that future adequate human resource are
available. This can be done by highlighting the major areas where there is overstaffing and plans
are made to transfer them in the shortage areas. However they may require some training to have
the required skills. Or on a sharp contrast, if you estimate surpluses in almost all the departments,
its solutions might include attrition, early retirement, demotions, layoffs, termination of
employees, or opening up new branches or diversification of production. The most difficult
situation that may face a manager is surplus of employees.

4. Career development
Career development is part and parcel of the organization plans. No organization can afford
to ignore this. Career development is important because it prepares managers to deal with the
dynamic environment. The job the employees usually perform may require advanced
techniques. This is very common which uses technology more often. If career development is
not done, the employees’ capability may become obsolete. Career development is of value to
the organization because it ensures that the needed capabilities are available now and in the
future. This in turn enables the organization to attract and retain talented employees. Career

38
 development does not necessarily mean that one has to be taken for training, but one can also
be developed by being assigned challenging tasks. We are going to deal with development in
the later chapters.

Determination of Human Resource Requirements

A critical decision facing organizations before procurement is done is the determination of the
number and type of personnel that should be provided to the organization. HRP seeks to ensure
that a certain desired number of people with the correct skills will be available at some specified
time in future.

The determination of HR requirements therefore involves: -

i. HR Demand forecasting
ii. HR supply forecasting
iii. HR actions
Manpower Forecasting
Manpower forecasting may have three ranges i.e. short range, intermediate range and long range.
A short range forecast usually grows out of normal budgetary processes, covering two year
period whereas intermediate range forecasts range between 2-5 years. Long range forecasts goes
beyond 5 years
The demand for services and products in terms of authorized expansion, technological changes,
and new legislation necessitates short range manpower forecasting internal changes in terms of
expansion or contraction coupled with the working budget and modified efficiently or
productivity force the personnel department to go in to short range manpower forecasting.
Essentially there are 3 organizational approaches to manpower forecasting. This can be labelled
under top-down approaches or bottom-up approaches. When the headquarters can forecast the
demand for the entire market, it is called top-down approach. On the other hand, where the units
can forecast their own demand, it is called bottom-up approach. There are three top-down
approaches and one bottom-up approach.

Long Range Factors

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Though specific numbers are difficult to develop in forecasts, encompassing 2-5 years or more,
those responsible for HRP, must consider the following: -

o The firms long range business plans

o Demographic trends
o Economic factors
o Technological trends
o Social trends
1. The firms Long Range Business Plans

Such plans may be to expand the firms operations by moving into new product lines. This would
require estimates of the needed number of employees and skills of the anticipated growth.

If plans call for more efforts in the international market in future, then decisions must be made
regarding the utilization of the host country’s nationals. Long-range plans may also call for
reduction in labour due to elimination or product LINES OR PLANTS. Relocation of a
company may also have HRP implications.

2. Demographic trends

Demographic trends in a country can determine future demand patterns of labour by

organizations. Fluctuations in population affect the labour supply available in various categories
– education, size, age characteristics, gender characteristics, diseases, birth & death rates.

3. Economic Trends

Movement from prosperity to recession and back to prosperity poses considerable problems for
HR Managers. During prosperity demand for jobs by firms is likely to increase. The reverse
happens during a recession.

4. Technological Trends

Advances in technology have definite effect on the nature and mixture of jobs available. For
instance, advances in I.T, resulted in a decrease in the number of bookkeepers and an increase in

40
demand for computer programmers. It has been noted that the current level of technology for
building robots will enable the replacement of 2/3 of the factory workforce.

5. Social Trends

Changes in custom and civil rights would influence labour projections. Mobility of personnel
due to family commitments also affects demand for labour.

Short Range Factors

The short factors to be considered in demand forecasting include:-

o Production schedules/budgets.
o Affirmative action plans.
o Relocation/plant closings.
1. Production Schedules/Budgets

Specific sales forecasts for the coming year must be translated into a work programme for the
various sections of an enterprise. Some plans must be made concerning the amount of work that
each segment of the organization is expected to accomplish during some coming period.

2. Affirmative Action Planning

An organization may be forced to hire certain categories of employees – minority tribes or

females. This must be reflected in the HRP.

3. Relocation/Plant Closings

Recession in the economy may lead to temporary closures or relocations. This may lead to
reduction in the labour force. Poor company development and expansion strategy also may lead
to relocations and closures.

1. Forecasting Demand
Demand forecasting is the process of estimating the future numbers of people and the likely
skills and competences they will need. The ideal basis of the forecast is an annual budget and a
long term business plans, translated into activity level of each function and departments or

41
 decisions on downsizing. Details are required of any plans or projects which would results in the
demand for additional employees or different skills.
 Projected turnover – resignations/terminations
 Quality and skills of your employees – in relation to the changing needs of the organization
 Decisions to upgrade the quality of products or services that enter into the market.
 Technological and other changes resulting in increased productivity.
 The financial resources available to the department
Whichever method one uses, managerial judgment will play a big role. Judgment is thus needed
to modify the forecast based on factors – such as projected turnover, or a desire to enter new
markets.

Techniques used in forecasting Demand

The most common personnel planning approaches involves the use of the simple techniques like
ratio analysis or trend analysis to estimate staffing needs based on the sales projections and
historical sales to personnel relationships. The usual process is to forecast revenue first, and then
estimate the size of the staff required to achieve this sales volume.
The methods of demand forecasting involve the following 4 steps: -

i. Select from among the leading indicators, those most likely to be relevant in the particular
situation at hand.
ii. Establish the nature of historical relationships between the leading indicators selected and
the labour demand
iii. Obtain forecasts or projections of the leading indicators
iv. Forecast demand (make estimates using data from steps (ii) & (iii). This helps identify the
gap between the current and needed workforce.
Let us now discuss some of the techniques human resource manager use to forecast the demand
for human resource.
a) Trend analysis
This means you study variations in your firm’s employment levels over the last few years. One
way that you can do is by counting the number of employees at the end of each year for the last
five years, in relation to the level of production. The purpose is to see tend which might continue
even into the future years. For example, in many big business houses, sales levels are related to

42
employment needs, so that the personnel planner can develop a tale or graph showing past
relations between sales and employment. Thus, here a firm may forecast the employee needs
based on the sales and production budgets. While forecasting the employee needs, a personnel
manager considers the past productivity of the existing employees and the expected increase in
productivity to match the needs for expected productivity gains.

However, trend analysis can provide an initial estimate, but employment levels rarely depend
just on the passage of time. Other factors like changes in technology, changes in sales volume
and productivity, can also affect staffing needs.
b) Ratio analysis
Ratio analysis means making analysis on the ratio between some casual factors, (e.g. sales), and
the number of employees required, (e.g. salesmen). For example if you require 10 employees to
produce 1000 tons, it means for you to produce 1500 tons you would require 5 additional
employees. The assumption here is that the productivity of every employee remains the same.
c) The scatter plot
A scatter plots shows graphically how two variables such as a measure of business activity and
your firms staffing levels are related. If they are, then you can forecast the level of business
activity. You should also be able to estimate your personnel requirement.
However there are several limitations associated with this technique. They include:
1. They focus exclusively on projected sales volume and historical sales/personnel
relationships, and generally assume that the firm’s existing structure and activities will
continue into the future.
2. They generally do not consider the impact the company’s initiatives may have on future
staffing levels.
3. They tend to support outdated compensation plans that reward managers for managing
ever larger staffs, and will not uncover managers who will continue to expand their staff
irrespective of the company’s strategic needs.
4. They tend to “bake in” the non-productive ideas that increases the staffs are investable.
5. They tend to validate and institutionalize the existing planning processes and ways of
doing things, even in the face of rapid change.
d) Use of computer

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This is the determination of future staff needs by projecting sales, volume of production, ad
personnel required to maintain this volume of output, using software package. Typical data
needed include direct labour hours required to produce one unit of product (a measure of
productivity), and three sale projections- minimum, maximum and probable- for the product line
in question. Based on such data, a typical program generates figures on average staff levels
required to meet product demands, as well as separate computerized forecasts for direct labor
(such as assembly workers), indirect staff ( such as secretaries), and exempt staff (such as
executives)
Whichever methods you use, managerial judgment will play a big role. It is rare that any
historical trend, ratio, or relationship will simply continue unchanged into the future. You
therefore have to modify the forecast based on the factor such as projected turnover or a desire to
enter new markets you believe would be important.
e) Managerial Judgment

Under the managerial estimates method, managers make estimates of future staff needs based
primarily on past experience. These estimates can be made by top-level managers and passed on
to other managers. The managers simply, sit, think about their future workloads, and decide how
many people they need. It may be a top-down or bottom-up process. The forecasts made one
man reviewed and agreed with departmental managers.

The best way to managerial estimates is by se of both top-down and bottom-up processes. The
two forecasts are reviewed by a HR planning committee and approved. This is known as the
right-angle method.

f) Ratio-Trend Analysis

This is carried out by studying past ratios between the number of direct workers and indirect
workers (support) in a manufacturing plant and forecasting future ratios. The number of direct
workers needed, can be used to determine the number of indirect workers needed.

This means making forecast based on the ratio between (i) Same causal factor (e.g. sales volume)
and ii) number of employees required. Ratio analysis assumes that productivity remains about
the same.

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 g) Work study Technique

These can be used when it is possible to apply work measurement to calculate how long
operations should take and the number of people required. This starts from a company’s
production budget. Work-study techniques for direct workers can be combined with ratio-trend
analysis to calculate the number of indirect workers needed.

h) Modelling

Mathematical modelling techniques using computers and spreadsheets can help in the
preparation of demand and supply forecasts. Employers also use computer programs to forecast
personnel requirements. Typically data needed include direct labour hours needed to produce
one unit of the product and three sales projections – minimum, maximum and probable. Based
on such data a typical programme generates figures on average staff levels required to meet
production demands, as well as separate computerized forecasts for direct labour and indirect
staff, plus the exempt staff, method also known as modelling.

i) Time Series and Analysis

Past staffing levels (instead of workload indicators) are sued to project future HR requirements.
Past staffing levels are examined to isolate seasonal and cyclical variations, long-term trends and
random movements. Long-term trends are then extrapolated or projected. Here one studies a
company’s employment level over the last 5 years or so to predict future needs. Trend analysis
is valuable as an initial estimate, but employment levels rarely depend solely on the passage of
time.

j) Productivity Ratio

Historical data are used to examine past levels of a productivity index.

P = Workload

Number of people

Where constant, or systematic, relationships are found human resource requirements could be
computed by dividing predicted workloads by P.

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 k) Regression Analysis

Past levels of various workload indicators, such as sales, production levels and value added are
examined for statistical relationships with staffing levels. Where sufficiently strong relationships
are found, a regression model is derived. Forecasted levels of the related indicator are entered
into the resulting model and used to calculate the associated level of HR requirements.

l) Delphi Technique

With this method, each member of a panel of experts makes an independent estimate of what the
future demand will be, along with any underlying assumptions. An intermediary then presents
each experts forecast and assumptions to the others and allows the experts to revise their
positions if they desire. This continues until some consensus is reached.

2. Human Resource Supply Analysis

In assessing the supply of labour available to the organization there are two major areas to be
reviewed.

i) The existing workforce (the internal labour market)

ii) The supply of potential employees (the external labour market)
Supply forecasting measures the number of people likely to be available from within and from
outside the organization, having allowed for absenteeism, internal movements and promotions,
wastage and changes in hours and other conditions of work.

The supply analysis covers: -

 Existing human resources

 Potential losses to existing resources through employee wastage
 Potential changes to existing resources through internal promotions
 Effect of changing conditions of work and absenteeism
 Sources of supply from within the organization
 Sources of supply from outside the organization – national and local labour markets
A typical analysis of supply will focus on the following: -

 Existing staff:

46
Numbers, categories, skills, performance, flexibility, and promotability

A detailed analysis is needed to provide inventories of skills and potential, and knowledge of the
number of promotable people available. An analysis of employees by age helps to identify
problems arising from a sudden rush of retirements, a block in promotion prospects or a
preponderance of older employees.

Length of service analysis will provide survival rates, which are a necessary tool for use by
planners in predicting future resources.

The analysis of current resources should look at the existing ratios between different categories
of employees – mangers and tam leaders, skilled to semi-skilled, direct to indirect, office staff to
production. Recent movements in these ratios should be studies to provide guidance on trends
and to highlight areas where raid changes may result in supply problems.

 Potential staff:
Location, categories, skills, trainability, attitudes and competition

 Less Leavers:
Retirement, wastage rates, redundancies and dismissals

Sources of Labour Supply

Internal labour market sources include the output from established schemes or management
development programmes and the reservoirs of skill and potential that already exists within the
organization. But the availability people from the local and national labor markets are also a vital
factor when preparing plans.

It is necessary to identify at an early stage any categories of employees where there might be
difficulties in recruiting the numbers required so that action can be taken in good time to prepare
a recruiting campaign, or to develop training or re-training programmes to convert available staff
to meet the company’s needs.

The Factors That Can Have an Important Bearing on The Supply of Manpower Are: -

1. Local Labour Market

47
 Population densities within reach of the company
 Current and future competition for employees from other employers
 Local unemployment levels
 Traditional pattern of employment locally, and the availability of people with the required
qualifications and skills
 The output from the local educational system and training establishments.
 The attractiveness of the area as a place to live
 The attractiveness of the company as a place to work
 The availability of part-time employees
 Local housing, shopping and transport facilities.

2. National Labour Supply

 Demographic trends in the number of school-leavers and the size of the working population.
 National demands for special categories of employees – graduates, professional staff,
technologists, technicians, and skilled workers.
 The output of the universities, professional institutions and other educational and training
establishments
 The effect f changing educational patterns
 The impact of national training initiatives
 Impact of government employment regulations

Reconciling Demand and Supply for labour

Internal labour market sources include the output from established schemes or management
development programmes and the reservoirs of skill and potential that already exists within the
organization. But the availability people from the local and national labour markets are also a
vital factor when preparing plans.

It is necessary to identify at an early stage any categories of employees where there might be
difficulties in recruiting the numbers required so that action can be taken in good time to prepare
a recruiting campaign, or to develop training or re-training programmes to convert available staff
to meet the company’s needs.

48
Below are different scenarios and the action that can be taken to balance demand for, and supply
of manpower

 If Demand Exceeds Supply

a) Increase external supply by altering recruitment and selection criteria, altering

recruitment and selection practices, and change terms and conditions of employments.

b) Increase internal supply by training and developing existing employees, altering

internal movement patterns, improve retention, as well as reducing absenteeism.

c) Reduce demand by redesigning work, using existing staff differently, subcontracting

work, relocate work and automating work processes

 If supply Exceeds demands

a) Decrease supply by encouraging early retirement, compulsory or voluntary

redundancy, assisting career change and alternative employment as well as
encouraging sabbaticals.

b) Discourage Retention by offering short-term and par-time contracts.

c) Increase demand by increasing market for products and services as well as

diversification.

Human Resource Action

Action plans are derived from the broad resourcing strategies and the more detailed analysis of
demand and supply factors. Action pans should be made in the following areas: -

i) An overall plan as required to deal with shortages arising if there are demographic pressures
ii) A human resource development plan
iii) A recruitment plan
iv) A retention plan
v) A plan to achieve greater flexibility
vi) A productivity plan

49
vii) A downsizing plan

Common Pitfalls of Human Resource Planning

Unfortunately HRP is not always successful. The following are some of the common pitfalls

 The identify crisis – HR planners work in an environment characterized by ambiguous

regulations, company politics and diverse management style. HR planners spend so much
time looking for something meaningful to do while the organisation questions the reason for
their existence
 Sponsorship of top Management – for HRP to work, it must have the support of at least one
influential senior executive. If this is missing the process may fail
 Size of the initial effort – many HRP programmes fail because of an overcomplicated initial
effort. A good programme should start slow and gradually expand. An accurate skills
inventory and replacement chart is a good place to start.
 Coordination with the Management and HR functions – HRP must be coordinated with the
other management and HR functions. Unfortunately, HRP tends to become absorbed in their
own function and fail to interact with others
 Integration with organizational plans – HRP must be derived from organisation plans. If this
does not happen, the process is doomed to fail
 Quantitative Vs Qualitative approaches – a strictly quantitative approach HRP is numbers
game – in, out, up, down and across, while a strictly qualitative approach focuses on
concerns for promotability and for career development. A balanced approach is one that may
yield better results
 Non – involvement of operating managers – HRP is strictly not a HR department function.
Successful HRP requires a coordinated effort on the parts of operating managers and the HR
personnel
 The technique trap – there is sometimes a tendency to adopt one or more of the HRP methods
not for what they can do, but rather because everyone is using them. Pre occupation with the
‘in thing’ can be a major shortage.

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HRP Limiting Factors

HR planning can be difficult and often in accurate. The chief reasons are:

1. Type of industry – some depend on new product development in an extremely competitive

environment; others may depend on political decisions which are impossible to forecast,
while others work on a tendering basis

2. Opposition or scepticism among members of management; all must be convinced of the

value of HRP if it is to be a success
3. Resistance to the changes expressed in the plan. Forecasts of labour structure, with their
effects on skills and status, may be regarded as a threat
4. The difficulty of forecasting social and economic changes accurately, especially in an era of
high unemployment
5. The need to have very complete and accurate employee records, to be used to detect trends in
employee movement. Such may be unreliable in times of high unemployment
6. Rapid growth of new technologies
7. The plan may indicate recruitment and training, which although desirable, may not be
possible due to cash flow constraints
8. Human resource planning involves forecasting the demand for and supply of human
resource. Therefore it cannot be an accurate process.
9. Labour absenteeism, labour turnover, seasonal employment, technological changes an d
market fluctuations are the uncertainties which serve as constraints to human resource
planning.
10. In some companies, human resource planning is used as a numbers game. There is much
focus on the quantitative aspect to ensure the flow of people in and out of the organization.
Such exclusive focus overlooks the important dimension that is the quality of manpower.

Employee Recruitment
Definition of Terms
a) Recruitment

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This means discovering applicants for the present or future jobs in an enterprise. This process
brings the job seekers and job givers in contact with one another. The organization tends to
attract a pool of potential employees and inducing them to apply for the vacant position in the
organization.
b) Selection
Section the process of examining the applicants with regard to their suitability for the given job
or jobs, and choosing the best from the suitable candidates and rejecting the others. Thus you
will notice that this process is negative in nature in the sense that rejection of candidate is
involved.
c) Placement
Placement is the determination of the job for which a selected candidate is best suited and
assigning that job to him. The ideal situation is the right man for the right job. A proper
placement of a worker reduces employee turnover, absenteeism accident rates, etc., and improves
moral motivation work etc.
d) Induction
Induction is introducing employee to the job and to the organization. The primary purpose of
induction is to sell the company to the new employee so that he may feel proud of his association
with the company. This is also known as orientation or indoctrination.
The interrelationship of the above four terms
The above four steps are taken in the order given before a person starts his training for the job
which he is assigned. First there is the recruitment, the selection through thorough scrutiny of all
applicants, then a particular job is assign to a particular person who has passed all selection tests
and interviews, and finally the person is introduced to his job and his new organization so that he
may understand the working environment.

The process of recruitment

Before you think of inviting people to apply for the job you have to decide what type of persons
are to be invited and what their characteristics should be. This calls for the careful job analysis
which gives job specifications and job descriptions. You recall we have tackled job analysis in
detail in the previous chapter. Therefore, I would recommend that you go through the same if at
all you may have forgotten.

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Significance of the Recruitment Process

Recruitment enables organizations to receive a large pool of job applicants from where short
listing and selection of the right candidates can be done. Recruitment is an activity used by
organizations to fill job vacancies with qualified individuals and hence the attainment of
organizational goals.

Failure to generate adequate numbers of reasonably qualified job candidates can be costly to an
organization in the following ways: -

 It may greatly complicate the selection process e.g. by leading in extreme cases, to the
lowering of the set hiring standards. Lower qualities hires mean an extra expenditure on
employee development and supervision to attain satisfactory levels of performance.
 When recruitment fails to meet organizational needs for talent, a typical response is to rise
they pay level but this may however distort traditional wage and salary relationships in the
organization. A rise in pay level will be needed to attract highly skilled manpower that will
be stimulated and encouraged to apply for an organization vacant position.
 Lack of qualified candidates may lead to added costs through re-advertisement

Factors Influencing the Need for Recruitment

1. Expansion and growth of organizations

2. Separations; voluntary quits, death, retirement, retrenchment
3. Mergers and take over – this may call for a need for critical skills absent in the
organization especially the top position
4. Setting up a new enterprise
5. Changes in technology and methods of operation – new computers machines etc
6. Restructuring or reengineering
7. Introduction of new products or services
Recruitment
Sources of Recruitment
The sources of recruitment can be broadly classified as follows:

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 a) Internal sources
This includes personnel already on the payroll of an organization – its workforce. It is the best
place to source someone to fill a vacancy but only for organizations that have been effective in
recruiting and selecting employees in the past.

Recruitment is a costly business. If the position can be filled in any other way other than direct
recruitment, then it will be worthwhile for the organization to pursue such possibilities.

Instead of spending lots of money recruiting a candidate externally, a company can fill a vacancy
in a number of ways:

 Job Sharing: The job can be arranged so that the tasks are shared out among two or maybe
three people. This is done on a part-time/job sharing basis. This pattern is suitable for
mothers who have returned to work after having a family and who want to combine looking
after their families with a career.
 Overtime: This is a method used to resource peaks in production or demand. Employees
work a set amount of hours over their usual contractual hours and usually get paid a higher
premium than their normal hourly rate – sometimes “time and a half or double time”
 Secondment: This operates by staff being temporarily transferred to work in another section
or department. This can be on both a full time or part time basis.
 Sub-contract: By sub-contracting certain jobs and duties, employers avoid on-costs like
national insurance contributions, tax and sick pay. Many large employers use sub-
contracting on a regular basis. Sub-contracting is also known as outsourcing.
 Use of a recruitment agency: This is an option, which many companies use to fill temporary
or permanent positions. It is also used by companies to cover maternity or long-term sick
leave.
Whenever a vacancy occurs, someone from within the organization is upgrade, transferred,
promoted or sometimes even demoted.

Advantages

1. Better motivation of employees because their capabilities are considered and opportunities
offered for promotion.

54
2. Better utilization of employees because the company can often make better use of their
abilities in a different job
3. The employer is in a better position to evaluate those presently employed than the outside
candidates
4. It is more reliable because a present employee is known more thoroughly than an external
candidate
5. It promotes loyalty among employees for it gives them a sense of job security and
opportunities for advancement
6. A present employee is more likely to stay with the company than an external candidate
7. It is quicker and cheaper than external sources
8. Since those employed are fully aware of and well acquainted with the organizations polices
and operating procedures, they require little training and even induction
9. More accurate data and available concerning current employees thus reducing the chances of
making a wrong decision
10. Full utilization of the abilities of the organizations employees improves the organization’s
return on its investment – this takes into consideration that organizations have a sizable
investment in their workforce
Disadvantages

i) Leads to inbreeding and discourages new blood, from joining an organization

ii) Infighting for promotions can become overly intense and have a negative effect on the
morale and performance of people who are not promoted
iii) There are possibilities that internal sources may “dry up” and it may be difficult to find the
required person from within an organization
iv) As promotion is mostly based on seniority, the danger is that really capable people may not
be chosen for promotion the likes and dislikes of the management may also play an important
role in selection of personnel
v) It seldom contributes new ideas or innovations that may be very important for progress in a
competitive economy
vi) Internal sources should only be used if the vacancy to be filled is within the capacity of
present employees and if adequate employee records have been maintained and an
opportunity is provided in advance for employees to prepare themselves for promotion.

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vii) If an organization promotions from within, it needs a strong employee and management
development programme to ensure its people can handle larger responsibilities.

b) External sources
External sources of personnel include: -

 New entrants – to the labour market e.g. fresh college graduates, school leavers
 The unemployed already in the labour market with a wide range of skills and abilities
 Retired experienced persons
 Employed persons from other organizations
Advantages

 The pool of talent is much larger than that available from internal sources. The best selection
can be made
 External sources provide personnel having skills and training and education as required by
the hiring organization
 Employees hired from outside can bring new insights and perspectives to the organization
 It is cheaper to hire technical, skilled or managerial people from outside rather than training
and developing them internally – in case of immediate demand for the talent.
Disadvantages

 Attracting, contacting and evaluating potential employees is more difficult

 Employees hired from outside need a longer adjustment or orientation period
 Recruiting externally may cause morale problems among employees within the organisation
and who feel qualified to do the job
 Method may be expensive and time consuming
 There is uncertainty due to changes in demand and supply of labour in the labour market

Recruitment Methods
Internal Methods
 Job Posting and Bidding

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This is an internal method of recruitment in which notices of available jobs are posted in central
locations throughout the organization and employees are given a specified length of time to
apply for the available jobs. Other methods used in publicizing jobs include memos to
supervisors and listings in employee publications.

Normally the job notice specifies the job title, rates of pay and necessary qualifications. A
successful job posting and bidding programme requires the development of specific
implementation policies.

External Recruitment
External recruiting is needed in organizations that are growing rapidly or have a large demand
for technical, skilled or managerial employees. The pool of talent in the external sources is much
larger than anywhere else.

The following are some of the methods used for external recruitment.

i) Recommendations by present employees, also termed, employee referrals are used especially
to fill low cadre vacancies-the semi-skilled and unskilled jobs.
ii) Unsolicited Applications-These are job applications received from candidates without a
vacancy existing in the company. The candidates may send their details to the company as a
general enquiry.
iii) Direct Link-Happens where an organization has an established relationship with a training
school or university. The institutions liase with the recruiting organization and provide
details of suitable candidates. The organization may be involved with the institution through
provision of education material or even scholarships.
iv) Campus Recruiting: Such activities are co-coordinated by the university placement centre.
Organizations send some recruiters to the campus and the most promising recruits are then
invited to visit the office or plant before a final employment decision is made. A related
method of tapping the products of institution of higher learning is through Co-operating work
programmes.
v) Co-operative Work Programmes: Through these programmes, students may work part-time
and go to school part-time, or they may go to school and work at different times of the year.

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 Such programmes are attractive as they offer opportunities for both a formal education and
work experience.
vi) Internet. This newest recruitment source offers an inexpensive way to advertise available
positions to a national and global audience. The Internet has various advantages, including a
vast pool of potential candidates, extensive search capabilities, reduced paperwork, and the
ability to update information as often as necessary.
vii) Retiree job Banks. Company retires who are already familiar with the company’s culture are
a great resource for filling short-term and part-time positions
viii) Professional Recruiting Firms: These are Human Resource consultants who provide
employee recruitment services. They include Manpower Services, Hawkins and Associates
and so on.
ix) Temporary Help Agencies & Employee Leasing Companies: One of the fastest growing areas
of recruitment is temporary help hired through employment agencies. The agency pays the
salary and benefits of the temporary help; the organization pays the employment agency an
agreed-upon figure for the services of the temporary help.
x) Government Employment Agencies: These recruit on behalf of the government and include
the TSC and the Public Service Commission.
xi) Employment Agencies: These are brokers who bring employers and employees together.
They specialize in specific e.g. accountants, technicians etc. Professional bodies may also be
found here offering placement services for its members e.g. ICPAK, IPM etc
xii) Executive Search Firms/Head Hunters: These employment agencies seek candidates for high
salaried positions e.g. CEO’s. They believe that the best candidates are not those who
respond to adverts or look for new jobs in other ways but those who are successful in their
present jobs and are not thinking of moving elsewhere.
xiii) Hiring at the Gate: This is suitable when employing casual labourers who present
themselves at the firm’s gates waiting for an employment opportunity.
xiv) Advertising: This is one of the most widely used methods of recruitment. Person
specification and job descriptions form the basis of every job advert. Advertising is a
crucial part of the recruitment process.
Activity
 Analyse the context of HRM

58
  What is your opinion about HRP in organizations
 Critically analyse the strategies of reconciling supply and demand of employees

TOPIC FOUR
EMPLOYEE RESOURCING
Part II
Objective
By the end of this topic the leaner will gain insight on the following:

Employee Selection

Placement

Orientation and Socialization

Matching jobs and Skills
Employee Selection
Selection of begins after the completion of recruitment process .i.e. after an adequate number of
application have been secured through sources of recruitment. Selection involves a careful
selection and testing of candidates who have put in there applications for any job in the
enterprise. This is because not all applicants are suitable for employment and also not all people
can actually be employed. Selection is a negative function, unlike recruitment, because it tries to
weed out the applicants whom it is not able to employ due to lack of suitability or otherwise. The
diagram below shows the stages of selection.

Application

Interview by personnel department

Tests

Interview by line supervisor

59 medical checkup
Reference/

Actually hired
Selection Procedure

There can be no standard procedure to select different kinds of personnel. Selection differs from
job to job, and from enterprise to enterprise. Broadly the section procedure consists of several
steps, important among which are as follows:

1. Receipt and scrutiny of applications.

2. Preliminary interview
3. Filling in of blank application forms
4. Tests
5. Interviews
6. Check of references
7. Preliminary and find selection
8. Medical examination
9. Placement

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 percepton of applicants

preliminary interview

application form

tests

interviews

investigaion of previous
history

preliminary selecton in
personnel department

find selection by
foreman or s/visor

medical test

placement

Selection Tests
A test is sample of an aspect of an individual’s behaviour, performance or attitudes. It can also
be a systematic procedure for comparing the behaviour of two or more persons. The basic
assumption underlying the use of tests in personnel selection is that the individual are different in
their job-related abilities and that these skills can be accurately and adequately measured. Tests
seem to eliminate the possibility of prejudice on the part of the interviewers or supervisor.
Potential ability only will govern selection decisions. The other major advantage is that the tests
may uncover qualifications and talents that would not be detected by interviews or by listing of
education and job experiences.
Types of Selection tests
The various tests used in selection can be put in four categories.
1. Achievement or intelligence tests
These are also called proficiency tests. These measures the knowledge and skills which is
acquired as a results of training program and on the job experience. These measures what the

61
applicants can do. They are of two type; a) tests for measuring job knowledge, and b) work
sample tests.

2. Aptitude or potential Ability Tests

These tests measure the latent ability of a candidate to learn a new job or skills. Through these
tests you can detect peculiarity or defect in a person’s sensory or intellectual capacity. These
focus attention on particular types of talent such as learning, reasoning and mechanical or
musical aptitude. They are of three types; a) mental tests, b) Mechanical Aptitude tests and c)
psychomotor or skill tests.

3. Personality Tests

These discover clues to an individual’s value system, his emotion reactions, maturity and his
characteristic mood. This test helps in assessing the person’s motivation, his ability to adjust
himself to the stresses of everyday life and his capacity to inter-personal relations and for
projecting an impressive image of himself. They are expressed in terms of the relative
significance of such traits of a person as self-confidence, ambition, tact, emotional, optimism,
decisiveness, sociability, impulsiveness, sympathy, integrity and stability. They are given to
predict potential performance and success for supervisory or managerial jobs. They are basically
of three types; a) Objective tests, b) projective tests, and c) situation tests.

4. Interest Tests

These tests are done to discover a person’s areas of interest and to identify the kind of work that
will satisfy him. The interest tests are used for vocational guidance, and are assessed in form of
answers to a well prepared questionnaire

Limitation of selection tests

You should not conclude that 100% prediction of an individual’s on-the-job success can be make
through the above tests. These tests, at best, reveal those candidates who have scored above the
pre-determined cut off points are likely to be more successful than those who have scored below
the cut-off points. Tests are useful when the numbers of candidates to be selected is large. If the
tests are not properly constructed they serve no purpose.

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Precautions when using selection tests

The following precaution should be taken if tests are to be useful in selecting the bests
candidates.

a) Norms should be developed as a source of reference on all tests used in selection and on a
representative sample of people on a given job in the same organization. Norms
developed elsewhere should not be blindly used because company differ in their
requirements, organization culture, structure and philosophy.

b) Some ‘warm up’ should be provided to candidate either by giving samples of tests, and/
answering queries before the tests begins.

c) Tests should first be validated for a given organization and then administered for
selection of personnel to the organization.

d) Each tests used should be assigned a weightage in the selection.

e) Tests scoring, administration and interpretation should be done by persons having

technical competence and training in testing.

Characteristics of a good test

a. Relevance
b. Consistence
c. Suitability
d. Standardization
Advantages of selection tests

a. They assess the suitability of a candidate

b. Facts of able to be verified. (i.e. what he claims he knows)
c. Objective assessed (reason for your judgment)
d. Establishment of standards. (for job performance)
Disadvantages of selection tests

a. Unreliable

63
 b. Liable to use
c. Unfair to some
d. Fear of exposure – good people may keep away from interview

Activity: Explain in details the above advantage and disadvantages of selection tests

Interviews
What we are going to discuss now is the post application interview and not the preliminary
interview.
Meaning and Purpose of Interview
An interview is a formal consultation to evaluate the aptitude, training etc of a prospective
employee. It is a face to face observational and personal appraisal method to evaluate a candidate
for any job. An employment interview should serve three purposes; obtaining information,
giving information and motivation. It should provide an appraisal of personality by obtaining
relevant information about the prospective employee’s background, training work history,
education and interests. The candidate should be given information about the company, the
specific jobs and the personnel policies. It should also help in establishing a friendly relationship
between the employer and the applicant and motivate the satisfactory applicant to want to work
for the company or the organization.

Kinds of interviews
1. Informal interview:
This may take place anywhere. The employer or a manager in a personnel department, may
ask a few questions, such as name, place birth, previous experience, etc. it is not planned and
is used widely when the labour market is tight and the organization needs workers badly. It is
conducted in an informal setting which includes the house of the manager.
2. Formal interview
This is held in a more formal atmosphere in the employment office by the employment
officer with the help of well-structured questions. The time and the place of the interview are
stipulated by the employment office
3. Patterned interview

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 This is a formal interview carefully planned. The interviewer has a plan of action worked out
in relation to time to be devoted to each candidate, types of information to be sought,
information to be given, the modality of interview and so on. He may use the plan with some
amount of flexibility.
4. Stress interview
This is designed to test the candidate and his conduct and behavior by putting him under
conditions of stress and strain. This is very useful to test the behavior of individual under
disagreeable and trying situations.
5. Systematic, in-depth interview
This is designed to intensively examine the candidate’s background and thinking and to go
into considerable details on a particular subject of special interest to the candidate. The
theory behind this is that if the candidate is found good in his area of special interest, the
chances are high if given job he would take serious interest in it.
6. Board or panel interview
This is done by members of interview board or a selection committee. It is done usually for
supervisory or managerial positions. It pools the collective judgment and wisdom of the
members of the panel. The candidate may be asked to meet the panel individually for a fairly
lengthy interview.
7. Group interview
This is designed to see how the candidates react to and against each other. All the candidate
may be brought together and they may be interviewed. The candidates may, alternatively, be
given a topic for discussion and to be observed as to who will lead the discussion, and how
they will participate in the discussion, how each will make his presentation and how they will
react to each other’s views and presentation.

Interview Rating
Important aspect of personality can be categorized under the following seven main heading
 Physical make up: Health, physique, age, appearance, bearing, speech.
 Attainments: Education, occupational training and experience
 Intelligence: Basic and effective

65
  Special Aptitude: written or oral fluency of expression, numeracy, organizational ability
and administrative skills.
 Interests: Intellectual, physical active, practical, social, artistic
 Disposition: Self-reliance, nature. Motivation, acceptability
 Circumstances: Domestic, social background and experience, future prospects.
On the basis of the information gathered through an interview, each candidate should be
rated in respect of each point given as i) outstanding ii) good iii) above average iv) below
average v) unsatisfactory. Marks should be allocated to each of these, and the score for each
point is arrived at by weights and the total of all these will determine the final position of the
candidate at the interview.

Procedure for an interview

1. Review of background information

2. Preparation of question plan (a system to follow)
3. Putting a candidate to ease
4. Drawing out the best in a candidate
5. Concluding the interview

Limitations of interview
Interviews have their own limitations of which some of the mare given below.
 Subjective judgment of the interviewers may be based on his prejudices, likes, dislikes,
biases, etc.
 One prominent characteristic of a candidate may be allowed to dominate appraisal of the
entire personality.
 The interviewer’s experience may have created a close association between some
particular traits and a distinctive type of personality.
 Some managers believe that they are good at a character analysis based on some pseudo-
scientific methods and are guided by their own abilities at it.

Guidelines for Improving Interviews

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 The effectiveness of the interviews can be improved if the following points can be kept in
mind by the interviewers.
 An interview should have a definite time schedule with ample time for the
interview.
 The impersonal approach should be avoided
 Interview should have the necessary element of privacy.
 The interviewer should listen carefully to what the applicant says and the
information collected should be carefully recorded either while the interview is
going on or immediately thereafter.
 Attention should be paid not only to the words spoken, but also to the facial
expressions and mannerisms of the interviewee.
 The interview should end when sufficient information has been gathered.
 The interviewee should be told where he stands- whether he will be contacted
later. Whether he is to visit another person, or it appears that the organization may
not be able to use his abilities
Evaluation

The various steps involved in a candidate are meant to ascertain his competence and suitability
for the job in question. The objective is to employ the best person from among the many
applicants, based on the information gathered through objective and standardized tests. The
following are among the important advantages of selection procedure:

1. Objectivity – they are not subjective

2. Economy – elimination of unsuccessful employees helps to cut costs and time to go through
everybody.
3. Talent search – looks at those who have the potential of being developed In future.

Activity: Find out from your human resource department which of the above mentioned type of
interview the use for the purpose of selection. What do they aim to judge through each of these
interviews and for selection of what level of employees are these used?

Physical examination

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Job applicants who get over one or more of the preliminary hurdles are sent for a physical
examination either to the organizations physician or a medical officer approved for the purpose.
The following are the purposes served by physical examinations
1. It gives an indication regarding fitness of the candidate for the job concerned
2. It discovers existing disabilities and obtains a record thereof which may be helpful later
in deciding the company’s responsibility in the events of worker’s compensation claim.
3. It helps in preventing employment of those suffering from some type of contagious
diseases.
4. It helps in placing those who are otherwise employable but whose physical handicaps
may necessitate assignment only to specified tasks.
Content of Physical Examination
1. The applicant’s medical history
2. His physical measurement- height, weight
3. General examination- skin, musculature and joints
4. Special senses- visual, auditory activity
5. Clinical examination- eyes, ears, noise, throat and teeth
6. Check-up of blood pressure and heart
7. Pathological tests of urine, blood etc.
8. X-ray examination of the chest and other part of the body
9. Neuro-psychiatric examination, particularly when medical history or a physician’s
observation indicates adjustment problems
You would realize that the importance of these characteristics varies from job to job and,
therefore, different weightages have to be given to each for an overall evaluation.
Reference checks

The applicant is asked to mention in his application the names and addresses of, usually, three
such persons who knows him well. These may be in his previous employers, friends or
professional colleagues. These people are approached by mail and are asked to give truthful
information about the job candidates. The information given should be treated with the
confidence it deserves.

Final Decision and Placement

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Applicants who cross all the hurdles are finally considered. If there are more persons than the
number required for the best job the ones, with the highest score are then selected. Sometimes a
particular person is selected for a given job. Often more than one person may be selected for the
job of similar nature. In the second case, individual employees have to be put under individual
supervisors with the approval of the latter
A proper placement reduces employee turnover, absenteeism and accidents rates and improves
moral

Induction and Orientation

This is the last activity in relation to a newly employed person before he is trained for his job.
This is the introduction of employee to the job and the organization. The primary purpose is to
sell the company to the new employee so that he may feel proud of his association with the
company. An employee has to work with fellow employees and his supervisor. For this he must
know them, the way they work and also the practices and the policies of the organization so that
he may integrate himself with the enterprise. Any neglect in the area of induction and orientation
may lead to high labour turnover, confusion, wasted time and expenditure.

Induction Programme
A good induction program should cover the following
 The company, its history and products, process of production and major operations
involved in his job.
 The significance of job with all the necessary information about it including job training
and job hazards
 Structure of the organization and the various functions of other departments.
 Employees’ own department and job, and how he fits in the organization.
 Personnel policy and sources of information
 Company policies, practices, objectives and regulations.
 Terms and conditions of service, amenities and welfare facilities
 Grievances procedures and discipline handling.
 Social benefits and recreational services
 Opportunities, promotion, transfer, suggestion schemes, and job satisfaction.

69
  Rules and regulations governing hours of work and over-time, safety and accident
prevention, holidays and vacations, methods of reporting, tardiness and absenteeism.
An induction program basically consist of three steps
1. General orientation by the staff
2. Specific orientation by the job supervisor
3. Follow-up orientation by either the personnel department or the supervisor.

Conclusion
The chapter has helped follow the selection process in an organization. It has helped you
understand the various activities involved in the process and the order in which these are carried
out. It is very clear to you now the various activities and under what circumstances each is
advisable. You are also aware of the precautions you need to take to ensure that you achieve the
desired results.

Selection Interviews
Meaning and Purpose of Interview
An interview is a formal consultation to evaluate the aptitude, training etc of a prospective
employee. It is a face to face observational and personal appraisal method to evaluate a candidate
for any job. An employment interview should serve three purposes; obtaining information,
giving information and motivation. It should provide an appraisal of personality by obtaining
relevant information about the prospective employee’s background, training work history,
education and interests. The candidate should be given information about the company, the
specific jobs and the personnel policies. It should also help in establishing a friendly relationship
between the employer and the applicant and motivate the satisfactory applicant to want to work
for the company or the organization.

Kinds of interviews
8. Informal interview:
This may take place anywhere. The employer or a manager in a personnel department, may
ask a few questions, such as name, place birth, previous experience, etc. it is not planned and

70
is used widely when the labor market is tight and the organization needs workers badly. It is
conducted in an informal setting which includes the house of the manager.
9. Formal interview
This is held in a more formal atmosphere in the employment office by the employment
officer with the help of well-structured questions. The time and the place of the interview are
stipulated by the employment office
10. Patterned interview
This is a formal interview carefully planned. The interviewer has a plan of action worked out
in relation to time to be devoted to each candidate, types of information to be sought,
information to be given, the modality of interview and so on. He may use the plan with some
amount of flexibility.
11. Stress interview
This is designed to test the candidate and his conduct and behavior by putting him under
conditions of stress and strain. This is very useful to test the behavior of individual under
disagreeable and trying situations.
12. Systematic, in-depth interview
This is designed to intensively examine the candidate’s background and thinking and to go
into considerable details on a particular subject of special interest to the candidate. The
theory behind this is that if the candidate is found good in his area of special interest, the
chances are high if given job he would take serious interest in it.
13. Board or panel interview
This is done by members of interview board or a selection committee. It is done usually for
supervisory or managerial positions. It pools the collective judgment and wisdom of the
members of the panel. The candidate may be asked to meet the panel individually for a fairly
lengthy interview.
14. Group interview
This is designed to see how the candidates react to and against each other. All the candidate
may be brought together and they may be interviewed. The candidates may, alternatively, be
given a topic for discussion and to be observed as to who will lead the discussion, and how
they will participate in the discussion, how each will make his presentation and how they will
react to each other’s views and presentation.

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 Interview Rating
Important aspect of personality can be categorized under the following seven main heading
 Physical make up: Health, physique, age, appearance, bearing, speech.
 Attainments: Education, occupational training and experience
 Intelligence: Basic and effective
 Special Aptitude: written or oral fluency of expression, numeracy, organizational ability
and administrative skills.
 Interests: Intellectual, physical active, practical, social, artistic
 Disposition: Self-reliance, nature. Motivation, acceptability
 Circumstances: Domestic, social background and experience, future prospects.
On the basis of the information gathered through an interview, each candidate should be
rated in respect of each point given as i) outstanding ii) good iii) above average iv) below
average v) unsatisfactory. Marks should be allocated to each of these, and the score for each
point is arrived at by weights and the total of all these will determine the final position of the
candidate at the interview.
Procedure for an interview

6. Review of background information

7. Preparation of question plan (a system to follow)
8. Putting a candidate to ease
9. Drawing out the best in a candidate
10. Concluding the interview
Physical examination
Job applicants who get over one or more of the preliminary hurdles are sent for a physical
examination either to the organizations physician or a medical officer approved for the purpose.
The following are the purposes served by physical examinations
5. It gives an indication regarding fitness of the candidate for the job concerned
6. It discovers existing disabilities and obtains a record thereof which may be helpful later
in deciding the company’s responsibility in the events of worker’s compensation claim.
7. It helps in preventing employment of those suffering from some type of contagious
diseases.

72
 8. It helps in placing those who are otherwise employable but whose physical handicaps
may necessitate assignment only to specified tasks.
Content of Physical Examination
10. The applicant’s medical history
11. His physical measurement- height, weight
12. General examination- skin, musculature and joints
13. Special senses- visual, auditory activity
14. Clinical examination- eyes, ears, noise, throat and teeth
15. Check-up of blood pressure and heart
16. Pathological tests of urine, blood etc.
17. X-ray examination of the chest and other part of the body
18. Neuro-psychiatric examination, particularly when medical history or a physician’s
observation indicates adjustment problems
You would realize that the importance of these characteristics varies from job to job and,
therefore, different weightages have to be given to each for an overall evaluation.
Reference checks

The applicant is asked to mention in his application the names and addresses of, usually, three
such persons who knows him well. These may be in his previous employers, friends or
professional colleagues. These people are approached by mail and are asked to give truthful
information about the job candidates. The information given should be treated with the
confidence it deserves.
Final Decision and Placement
Applicants who cross all the hurdles are finally considered. If there are more persons than the
number required for the best job the ones, with the highest score are then selected. Sometimes a
particular person is selected for a given job. Often more than one person may be selected for the
job of similar nature. In the second case, individual employees have to be put under individual
supervisors with the approval of the latter
A proper placement reduces employee turnover, absenteeism and accidents rates and improves
moral
Induction and Orientation
This is the last activity in relation to a newly employed person before he is trained for his job.

73
This is the introduction of employee to the job and the organization. The primary purpose is to
sell the company to the new employee so that he may feel proud of his association with the
company. An employee has to work with fellow employees and his supervisor. For this he must
know them, the way they work and also the practices and the policies of the organization so that
he may integrate himself with the enterprise. Any neglect in the area of induction and orientation
may lead to high labour turnover, confusion, wasted time and expenditure.

Induction Programme
A good induction program should cover the following
 The company, its history and products, process of production and major operations
involved in his job.
 The significance of job with all the necessary information about it including job training
and job hazards
 Structure of the organization and the various functions of other departments.
 Employees’ own department and job, and how he fits in the organization.
 Personnel policy and sources of information
 Company policies, practices, objectives and regulations.
 Terms and conditions of service, amenities and welfare facilities
 Grievances procedures and discipline handling.
 Social benefits and recreational services
 Opportunities, promotion, transfer, suggestion schemes, and job satisfaction.
 Rules and regulations governing hours of work and over-time, safety and accident
prevention, holidays and vacations, methods of reporting, tardiness and absenteeism.
An induction program basically consist of three steps
4. General orientation by the staff
5. Specific orientation by the job supervisor
6. Follow-up orientation by either the personnel department or the supervisor.
Conclusion
The chapter has helped follow the selection process in an organization. It has helped you
understand the various activities involved in the process and the order in which these are carried
out. It is very clear to you now the various activities and under what circumstances each is

74
advisable. You are also aware of the precautions you need to take to ensure that you achieve the
desired results.

Matching Jobs with Skills:

One of the primary responsibilities of a personnel manager is to procure and recruit employees
in sufficient number to meet the requirement of enterprise from time to time. The most important
in the direction of recruitment and selection of the right people in the right job is to plan the
human resource. For you to able to recruit the right manpower, you need to clearly have a picture
of the kind of jobs in the organization and determine the type of people you would require to
perform the said jobs effectively and efficiently. This can only be possible if you do a thorough
job analysis. Therefore in this chapter we are going to talk about job analysis.

Job Analysis
The purpose of this topic is to show you how to analyze a job and write job descriptions. We will
see that analyzing jobs involves determining in details what the job entails and what kind of
people the organization should hire for the job.
Basic Terminology
The simplest unit of work is the micro-motion. A micro-motion involves a very elementary
movement such as reaching, grasping, positioning or releasing an object. An aggregation of two
or more micro-motions forms an element. An element is a complete entity such as picking up,
transporting and positioning an item. A group of working elements makes up a work task.
Related tasks comprise the duties of a job. Duties when combined with responsibilities
(obligations to be performed) define a position. A group of positions that are identical with
respect to their major tasks and responsibilities form a job. A job may be held by more than one
person whereas a position cannot.

Job analysis defined

A job may be defined as a collection of duties, tasks, and responsibilities which as a whole is
regarded as a regular assignment to individuals and employees. Therefore job analysis can be
defined as a detailed and systematic study of information relating to the operations and
responsibilities of a specific job it is the process of determining, by observation and study and
reporting pertinent information relating to the nature of a specific job. It is the determination of

75
tasks which compromise the job and of the skills, knowledge, abilities and responsibilities
required of the worker for successful performance and which differentiates one job from all
others. (Edwin B. Flippo)

The basics of job analysis

A well done job analysis will give you information used for writing job descriptions (a list of
what the job entails) and job specifications (what kind of people to hire for the job). Job analysis
tries to answer the following:
 What is the employee doing in a job?
 How is he doing the job?
 What tools are employed in the job?
 How is the job understudy related to other jobs?
 What skills, ability, qualification are needed to perform the job?
 How do we determine the requirements for measuring employees’ performance?
(Performance standard.)
 What are the operational procedures adopted, what are the safety hazards faced,
how is the line of authority and responsibility to be classified?
In the process of answering the above questions, the human resource specialist would collect one
or more of information.

 Work activities. The human resource specialist would first collect information about the
job’s actual work activities. This includes how, why and when the workers performs each
activity.
 Human behaviors. He would also collect information about human behavior which is
needed to perform a particular job activity. For example, communicating, deciding and
writing.
 Machines, tools, equipment and work aids. This category includes information regarding
tools used, material processed, knowledge dealt with and applied (such as finance or
law), and service rendered (such as counseling or repairing)
 Performance standards. These are the standards which are used for performance
appraisal. Management would also want to know the quality, quantity and level of each
job duty.

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  Job context. This includes information such as matters as physical working conditions,
work schedule, and the organizational and social context. For example the number of
people the employee would normally interact with.
 Human requirement. This includes information regarding the job’s human requirement,
such as job related knowledge or skills (education, training, work experience) and
required personal attributes (aptitudes, physical characteristics, personality, interests).
Job analysis is the cornerstone of all human resource functions. Data obtained from job analysis
produces the following information about a job:

 Overall purpose – why the job exists, and in essence, what the jobholder is
expected to contribute.
 Content – the nature and scope of the jobs in terms of the tasks and operations to
be performed and duties to be carried out i.e. the processes of converting inputs
(knowledge, skills and abilities) into outputs (results).
 Accountabilities – the results or outputs for which the jobholder is accountable.
 Performance criteria – the criteria, measures or indicators that enable an
assessment to be carried out to ascertain the degree to which the job is being
performed satisfactorily.
 Responsibilities – the level of responsibility the job holder has to exercise by
reference to the scope and input of the job; the amount of discretion allowed to
make decisions; the difficulty; scale, variety and complexity of the problems to be
solved.
 Organizational factors – the reporting relationships of the jobholder, the people
reporting directly or indirectly to the jobholder and the extent to which the
jobholder is involved in team.
 Motivation factors – the particular features of the job that are likely to motivate or
demotivate jobholders.
 Development factors – promotion and career prospects, and the opportunity to
acquire new skills or expertise.
 Environmental factors – working conditions, health & safety considerations,
unsocial hours, mobility and ergonomic factors relating to the design and use of
equipment & workstations.

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The above information would enable you to attract the right candidate for a job opening.
Therefore job analysis must be done carefully it would cost an organization a fortune.

Strategies for Matching Supply and Demand

 Recruitment and selection
 Promotion
 Redeployment/transfer
 Restructure/job re-design
 Remuneration/performance pay
 overtime
 Absence/loaning
 Condition of employment
 Redundancy
 Retraining
TOPIC FIVE

PERFORMANCE MANAGEMENT

Objective
The learners should demonstrate clear understanding and the relevance of the following
 Concept of Performance management
 Employee Training and Development
 Performance Appraisal
The learner should also be able to assess training requirements and design a successful
orientation and training program.

Performance management

Performance management is a process by which managers and employees work together to plan,
monitor and review an employee's work objectives and overall contribution to the organization.
It is an ongoing process of communication between a supervisor and an employee that occurs
throughout the year, in support of accomplishing the strategic objectives of the organization. The
communication process includes clarifying expectations, setting objectives, identifying goals,
providing feedback, and reviewing results.

History of Performance Management

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Performance Management began around 60 years ago as a source of income justification and was
used to determine an employee’s wage based on performance. Organisations used Performance
Management to drive behaviour from the employees to get specific outcomes. In practice this
worked well for certain employees who were solely driven by financial rewards. However,
where employees were driven by learning and development of their skills, it failed miserably.
The gap between justification of pay and the development of skills and knowledge became a
huge problem in the use of Performance Management. This became evident in the late 1980s; the
realization that a more comprehensive approach to manage and reward performance was needed.
This approach of managing performance was developed in the United Kingdom and the United
States much earlier than it was developed in Australia.

In recent decades, however, the process of managing people has become more formalized and
specialised. Many of the old performance appraisal methods have been absorbed into the concept
of Performance Management, which aims to be a more extensive and comprehensive process of
management. Some of the developments that have shaped Performance Management in recent
years are the differentiation of employees or talent management, management by objectives and
constant monitoring and review. Its development was accelerated by the following factors:

 The introduction of human resource management as a strategic driver and integrated

approach to the management and development of employees; and

 The understanding that the process of Performance Management is something that's

completed by line managers throughout the year - it is not a once off annual event
coordinated by the personnel department.

Performance Management Cycle

Overseeing performance and providing feedback is not an isolated event, focused in an annual
performance review. It is an ongoing process that takes place throughout the year. The
Performance Management process is a cycle, with discussions varying year-to-year based on
changing objectives.

The cycle includes Planning, Checking-In, and Review.

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  To begin the planning process, you and your employee review overall expectations,
which include collaborating on the development of performance objectives. Individual
development goals are also updated. You then develop a performance plan that directs the
employee's efforts toward achieving specific results to support organizational excellence
and employee success.
 Goals and objectives are discussed throughout the year, during check-in meetings. This
provides a framework to ensure employees achieve results through coaching and mutual
feedback.
 At the end of the performance period, you review the employee's performance against
expected objectives, as well as the means used and behaviors demonstrated in achieving
those objectives. Together, you establish new objectives for the next performance period.

Components of a Performance Management System

The performance management system may contain all of these components, but it is the overall
system that matters, not the individual components.
A performance management system includes the following actions.
 Develop clear job descriptions using an employee recruitment plan that identifies the
selection team.
 Recruit potential employees and select the most qualified to participate in interviews
onsite.
 Conduct interviews to narrow down your pool of candidates.
 Hold multiple additional meetings, as needed, to get to know your candidates' strengths,
weaknesses, and abilities to contribute what you need.
 Select appropriate people using a comprehensive employee selection process to identify
the most qualified candidate who has the best cultural fit and job fit that you need.
 Offer your selected candidate the job and negotiate the terms and conditions of
employment including salary, benefits, paid time off, and other organizational perks.
 Welcome the new employee to your organization.
 Provide effective new employee orientation, assign a mentor, and integrate your new
employee into the organization and its culture.

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  Negotiate requirements and accomplishment-based performance standards, outcomes,
and measures between the employee and his or her new manager.
 Provide ongoing education and training as needed.
 Provide on-going coaching and feedback.
 Conduct quarterly performance development planning discussions.
 Design effective compensation and recognition systems that reward people for their
ongoing contributions.
 Provide promotional/career development opportunities including lateral moves, transfers,
and job shadowing for staff.
 Assist with exit interviews to understand WHY valued employees leave the organization

How Annual Appraisals are Different but Part of Performance Management

Most organisations have some type of employee appraisal system, and many are experiencing the
shortcomings of manual staff evaluation systems. When discussing workforce performance the
most commonly asked question is "how does performance management differ from performance
appraisals or staff reviews"? Performance management is used to ensure that employees'
activities and outcomes are congruent with the organization’s objectives and entails specifying
those activities and outcomes that will result in the firm successfully implementing the strategy
(Noe et al. 2000). An effective performance management process establishes the groundwork for
excellence by:

 Linking individual employee objectives with the organization’s mission and strategic
plans. The employee has a clear concept on how they contribute to the achievement the
overall business objective,
 Focusing on setting clear performance objectives and expectations through the use of
results, actions and behaviors,
 Defining clear development plans as part of the process, and
 Conducting regular discussions throughout the performance cycle which include such
things as coaching, mentoring, feedback and assessment.

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Performance appraisal properly describes a process of judging past performance and not
measuring that performance against clear and agreed objectives. Performance management shifts
the focus away from just an annual event to an on-going process. The figure below is a process
diagram that provides a graphical view of the major differences between the two processes.

Graphical view of the difference between Performance Appraisal and Management

Source: www.peoplestreme.com

The Benefits of Performance Management

Performance management essentially shifts the focus away from annual reviews to a more
ongoing form of accountability. The simple implementation of periodic meetings ensures an
ongoing level of progress rather than stagnation for the majority of a year and then a sudden rush
to meet objectives at the last minute.

Performance management, when implemented correctly, can create positive performance

outcomes at a drastic rate. Below are just a few basic benefits obtainable for employees,
managers and organizations:

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  Improved communication. Employees and managers communicate more regularly to
discuss company objectives and overall progress.
 Established rules. Employees and managers more easily understand the process and
stipulations for how performance appraisals are performed.
 Reduced stress. Employees aren’t stressing about impressing a manager through some
random task and managers aren’t worrying about offending employees for not
performing.

Performance management is a healthy endeavor not only for employee development, but also for
organization growth.

Human Resource Development

Human Resource Development (HRD) is the frameworks for helping employees develop their
personal and organizational skills, knowledge, and abilities. Human Resource Development
includes such opportunities as employee training, employee career development, performance
management and development, coaching, mentoring, succession planning, key employee
identification, tuition assistance, and organization development.

The focus of all aspects of Human Resource Development is on developing the most superior
workforce so that the organization and individual employees can accomplish their work goals in
service to customers.

Organizations have many opportunities for human resources or employee development, both
within and outside of the workplace.

Human Resource Development can be formal such as in classroom training, a college course, or
an organizational planned change effort. Or, Human Resource Development can be informal as
in employee coaching by a manager. Healthy organizations believe in Human Resource
Development and cover all of these bases.

Functions of HRD

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The objective of Human Resource training and development is to maximize the return on
investment from the organization's human capital and minimize financial risk. It is the
responsibility of human resource managers to conduct these activities in an effective, legal, fair,
and consistent manner.
Human resource management serves these key functions:
1. Selection
2. Training and Development;
3. Performance Evaluation and Management;
4. Promotions;
5. Redundancy;
6. Industrial and Employee Relations;
7. Record keeping of all personal data;
8. Compensation, pensions, bonuses etc in liaison with Payroll;
9. Confidential advice to internal 'customers' in relation to problems at work;
10. Career development

Training and development

In the field of human resource management, training and development is the field concerned
with organizational activity aimed at bettering the performance of individuals and groups in
organizational settings. It has been known by several names, including employee development,
human resource development, and learning and development.

Harrison observes that the name was endlessly debated by the Chartered Institute of Personnel
and Development during its review of professional standards in 1999/2000. "Employee
Development" was seen as too evocative of the master-slave relationship between employer and
employee for those who refer to their employees as "partners" or "associates" to be comfortable
with. "Human Resource Development" was rejected by academics, who objected to the idea that
people were "resources" — an idea that they felt to be demeaning to the individual. Eventually,
the CIPD settled upon "Learning and Development", although that was itself not free from
problems, "learning" being an over general and ambiguous name. Moreover, the field is still
widely known by the other names.

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Training and development encompasses three main activities: training, education, and
development. Garavan, Costine, and Heraty, of the Irish Institute of Training and Development,
note that these ideas are often considered to be synonymous. However, to practitioners, they
encompass three separate, although interrelated, activities.

Training

This activity is both focused upon, and evaluated against, the job that an individual
currently holds.

Education

This activity focuses upon the jobs that an individual may potentially hold in the future,
and is evaluated against those jobs.

Development

This activity focuses upon the activities that the organization employing the individual, or
that the individual is part of, may partake in the future, and is almost impossible to
evaluate.

The "stakeholders" in training and development are categorized into several classes. The
sponsors of training and development are senior managers. The clients of training and
development are business planners. Line managers are responsible for coaching, resources, and
performance. The participants are those who actually undergo the processes. The facilitators are
Human Resource Management staff. And the providers are specialists in the field. Each of these
groups has its own agenda and motivations, which sometimes conflict with the agendas and
motivations of the others.

The conflicts are the best part of career consequences are those that take place between
employees and their bosses. The number one reason people leave their jobs is conflict with their
bosses. And yet, as author, workplace relationship authority, and executive coach, Dr. John
Hooves points out, "Tempting as it is, nobody ever enhanced his or her career by making the
boss look stupid." Training an employee to get along well with authority and with people who
entertain diverse points of view is one of the best guarantees of long-term success. Talent,

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knowledge, and skill alone won't compensate for a sour relationship with a superior, peer, or
customer.

Purpose of Employee Training and Development

The quality of employees and their development through training and education are major factors
in determining long-term profitability of a small business. If you hire and keep good employees,
it is good policy to invest in the development of their skills, so they can increase their
productivity.

Training often is considered for new employees only. This is a mistake because ongoing training
for current employees helps them adjust to rapidly changing job requirements.

Reasons for emphasizing the growth and development of personnel include

 Creating a pool of readily available and adequate replacements for personnel who may
leave or move up in the organization.
 Enhancing the company's ability to adopt and use advances in technology because of a
sufficiently knowledgeable staff.
 Building a more efficient, effective and highly motivated team, which enhances the
company's competitive position and improves employee morale.
 Ensuring adequate human resources for expansion into new programs.

Research has shown specific benefits that a small business receives from training and developing
its workers, including:

 Increased productivity.
 Reduced employee turnover.
 Increased efficiency resulting in financial gains.
 Decreased need for supervision.

Employees frequently develop a greater sense of self-worth, dignity and well-being as they
become more valuable to the firm and to society. Generally they will receive a greater share of

86
the material gains that result from their increased productivity. These factors give them a sense
of satisfaction through the achievement of personal and company goals.

General Benefits from Employee Training and Development

There are numerous sources of online information about training and development. Several of
these sites suggest reasons for supervisors to conduct training among employees. These reasons
include:

 Increased job satisfaction and morale among employees

 Increased employee motivation
 Increased efficiencies in processes, resulting in financial gain
 Increased capacity to adopt new technologies and methods
 Increased innovation in strategies and products
 Reduced employee turnover
 Enhanced company image, e.g., conducting ethics training (not a good reason for ethics
training!)
 Risk management, e.g., training about sexual harassment, diversity training

Traditional and Modern Approach of Training and Development

Traditional Approach – Most of the organizations before never used to believe in

training. They were holding the traditional view that managers are born and not made.
There were also some views that training is a very costly affair and not worth.
Organizations used to believe more in executive pinching. But now the scenario seems to
be changing.

The modern approach of training and development is that many Organizations have
realized the importance of corporate training. Training is now considered as more of
retention tool than a cost. The training system in many industries has been changed to
create a smarter workforce and yield the best results

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 Training and Development Objectives

The principal objective of training and development division is to make sure the
availability of a skilled and willing workforce to an organization. In addition to that, there
are four other objectives: Individual, Organizational, Functional, and Societal.

Individual Objectives – help employees in achieving their personal goals, which in turn,
enhances the individual contribution to an organization.

Organizational Objectives – assist the organization with its primary objective by

bringing individual effectiveness.

Functional Objectives – maintain the department’s contribution at a level suitable to the

organization’s needs.

Societal Objectives – ensure that an organization is ethically and socially responsible to

the needs and challenges of the society.

The Training Process

The model below traces the steps necessary in the training process:

 Organizational Objectives
 Needs Assessment
 Is There a Gap?
 Training Objectives
 Select the Trainees
 Select the Training Methods and Mode
 Choose a Means of Evaluating
 Administer Training
 Evaluate the Training

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Your business should have a clearly defined strategy and set of objectives that direct and drive
all the decisions made especially for training decisions. Firms that plan their training process are
more successful than those that do not. Most business owners want to succeed, but do not engage
in training design that promise to improve their chances of success. Why? The five reasons most
often identified are:

1. Time - Small businesses managers find that time demands do not allow them to
train employees.
2. Getting started - Most small business managers have not practiced training
employees. The training process is unfamiliar.
3. Broad expertise - Managers tend to have broad expertise rather than the
specialized skills needed for training and development activities.
4. Lack of trust and openness - Many managers prefer to keep information to
themselves. By doing so they keep information from subordinates and others who
could be useful in the training and development process.
5. Skepticism as to the value of the training - Some small business owners believe
the future cannot be predicted or controlled and their efforts, therefore, are best
centred on current activities i.e., making money today.

A well-conceived training program can help your firm succeed. A program structured with the
company's strategy and objectives in mind has a high probability of improving productivity and
other goals that are set in the training mission.

For any business, formulating a training strategy requires addressing a series of questions.

 Who are your customers? Why do they buy from you?

 Who are your competitors? How do they serve the market? What competitive advantages
do they enjoy? What parts of the market have they ignored?
 What strengths does the company have? What weaknesses?
 What social trends are emerging that will affect the firm?

The purpose of formulating a training strategy is to answer two relatively simple but vitally
important questions:

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(1) What is our business? and

(2) What should our business be? Armed with the answers to these questions and a clear vision
of its mission, strategy and objectives, a company can identify its training needs.

Identifying Training Needs

Training needs can be assessed by analysing three major human resource areas: the organization
as a whole, the job characteristics and the needs of the individuals. This analysis will provide
answers to the following questions:

 Where is training needed?

 What specifically must an employee learn in order to be more productive?
 Who needs to be trained?

Employee Training and Development Process

1. Begin by assessing the current status of the company how it does what it does best and
the abilities of your employees to do these tasks. This analysis will provide some
benchmarks against which the effectiveness of a training program can be evaluated. Your
firm should know where it wants to be in five years from its long-range strategic plan.
What you need is a training program to take your firm from here to there.
2. Consider whether the organization is financially committed to supporting the training
efforts. If not, any attempt to develop a solid training program will fail.
3. Determine exactly where training is needed. It is foolish to implement a companywide
training effort without concentrating resources where they are needed most. An internal
audit will help point out areas that may benefit from training. Also, a skills inventory can
help determine the skills possessed by the employees in general. This inventory will help
the organization determine what skills are available now and what skills are needed for
future development.

Also, in today's market-driven economy, you would be remiss not to ask your customers what
they like about your business and what areas they think should be improved. In summary, the

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analysis should focus on the total organization and should tell you (1) where training is needed
and (2) where it will work within the organization.

4. Once you have determined where training is needed, concentrate on the content of the
program. Analyze the characteristics of the job based on its description, the written
narrative of what the employee actually does. Training based on job descriptions should
go into detail about how the job is performed on a task-by-task basis. Actually doing the
job will enable you to get a better feel for what is done.

Individual employees can be evaluated by comparing their current skill levels or performance to
the organization's performance standards or anticipated needs. Any discrepancies between actual
and anticipated skill levels identifies as training need.

5. Selection of Trainees: Once you have decided what training is necessary and where it is
needed, the next decision is who should be trained? For a small business, this question is
crucial. Training an employee is expensive, especially when he or she leaves your firm
for a better job. Therefore, it is important to carefully select who will be trained.

Training programs should be designed to consider the ability of the employee to learn the
material and to use it effectively, and to make the most efficient use of resources possible. It is
also important that employees be motivated by the training experience. Employee failure in the
program is not only damaging to the employee but a waste of money as well. Selecting the right
trainees is important to the success of the program.

6. Training Goals: The goals of the training program should relate directly to the needs
determined by the assessment process outlined above. Course objectives should clearly
state what behavior or skill will be changed as a result of the training and should relate to
the mission and strategic plan of the company. Goals should include milestones to help
take the employee from where he or she is today to where the firm wants him or her in
the future. Setting goals helps to evaluate the training program and also to motivate
employees. Allowing employees to participate in setting goals increases the probability of
success.

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 7. Training Methods: There are two broad types of training available to small businesses:
on-the-job and off-the-job techniques. Individual circumstances and the "who," "what"
and "why" of your training program

On-the-job training is delivered to employees while they perform their regular jobs. In this
way, they do not lose time while they are learning. After a plan is developed for what should be
taught, employees should be informed of the details. A timetable should be established with
periodic evaluations to inform employees about their progress. On-the-job techniques include
orientations, job instruction training, apprenticeships, internships and assistantships, job rotation
and coaching.

Off-the-job techniques include lectures, special study, films, television conferences or

discussions, case studies, role playing, simulation, programmed instruction and laboratory
training. Most of these techniques can be used by small businesses although, some may be too
costly.

Orientations are for new employees. The first several days on the job are crucial in the success
of new employees. This point is illustrated by the fact that 60 percent of all employees who quit
do so in the first ten days. Orientation training should emphasize the following topics:

 The company's history and mission.

 The key members in the organization.
 The key members in the department, and how the department helps fulfill the mission of
the company.
 Personnel rules and regulations.

Some companies use verbal presentations while others have written presentations. Many small
businesses convey these topics in one-on-one orientations. No matter what method is used, it is
important that the newcomer understand his or her new place of employment.

Lectures present training material verbally and are used when the goal is to present a great deal
of material to many people. It is more cost effective to lecture to a group than to train people
individually. Lecturing is one-way communication and as such may not be the most effective

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way to train. Also, it is hard to ensure that the entire audience understands a topic on the same
level; by targeting the average attendee you may undertrain some and lose others. Despite these
drawbacks, lecturing is the most cost-effective way of reaching large audiences.

Role playing and simulation are training techniques that attempt to bring realistic decision
making situations to the trainee. Likely problems and alternative solutions are presented for
discussion. The adage there is no better trainer than experience is exemplified with this type of
training. Experienced employees can describe real world experiences, and can help in and learn
from developing the solutions to these simulations. This method is cost effective and is used in
marketing and management training.

Audio-visual methods such as television, videotapes and films are the most effective means of
providing real world conditions and situations in a short time. One advantage is that the
presentation is the same no matter how many times it's played. This is not true with lectures,
which can change as the speaker is changed or can be influenced by outside constraints. The
major flaw with the audio-visual method is that it does not allow for questions and interactions
with the speaker, nor does it allow for changes in the presentation for different audiences.

Job rotation involves moving an employee through a series of jobs so he or she can get a good
feel for the tasks that are associated with different jobs. It is usually used in training for
supervisory positions. The employee learns a little about everything. This is a good strategy for
small businesses because of the many jobs an employee may be asked to do.

Apprenticeships develop employees who can do many different tasks. They usually involve
several related groups of skills that allow the apprentice to practice a particular trade, and they
take place over a long period of time in which the apprentice works for, and with, the senior
skilled worker. Apprenticeships are especially appropriate for jobs requiring production skills.

Internships and assistantships are usually a combination of classroom and on-the-job training.
They are often used to train prospective managers or marketing personnel.

Programmed learning, computer-aided instruction and interactive video all have one thing in
common: they allow the trainee to learn at his or her own pace. Also, they allow material already

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learned to be bypassed in favor of material with which a trainee is having difficulty. After the
introductory period, the instructor need not be present, and the trainee can learn as his or her time
allows. These methods sound good, but may be beyond the resources of some small businesses.

Laboratory training is conducted for groups by skilled trainers. It usually is conducted at a

neutral site and is used by upper- and middle management trainees to develop a spirit of
teamwork and an increased ability to deal with management and peers. It can be costly and
usually is offered by larger small businesses.

8. Trainers: Who actually conducts the training depends on the type of training needed and
who will be receiving it. On-the-job training is conducted mostly by supervisors; off-the-
job training, by either in-house personnel or outside instructors.

In-house training is the daily responsibility of supervisors and employees. Supervisors are
ultimately responsible for the productivity and, therefore, the training of their subordinates.
These supervisors should be taught the techniques of good training. They must be aware of the
knowledge and skills necessary to make a productive employee. Trainers should be taught to
establish goals and objectives for their training and to determine how these objectives can be
used to influence the productivity of their departments. They also must be aware of how adults
learn and how best to communicate with adults. Small businesses need to develop their
supervisors' training capabilities by sending them to courses on training methods. The investment
will pay off in increased productivity.

There are several ways to select training personnel for off-the-job training programs. Many small
businesses use in-house personnel to develop formal training programs to be delivered to
employees off line from their normal work activities, during company meetings or individually at
prearranged training sessions.

There are many outside training sources, including consultants, technical and vocational schools,
continuing education programs, chambers of commerce and economic development groups.
Selecting an outside source for training has advantages and disadvantages. The biggest
advantage is that these organizations are well versed in training techniques, which is often not
the case with in-house personnel.

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The disadvantage of using outside training specialists is their limited knowledge of the
company's product or service and customer needs. These trainers have a more general knowledge
of customer satisfaction and needs. In many cases, the outside trainer can develop this
knowledge quickly by immersing himself or herself in the company prior to training the
employees. Another disadvantage of using outside trainers is the relatively high cost compared to
in-house training, although the higher cost may be offset by the increased effectiveness of the
training.

Whoever is selected to conduct the training, either outside or in-house trainers, it is important
that the company's goals and values be carefully explained.

9. Training Administration: Having planned the training program properly, you must now
administer the training to the selected employees. It is important to follow through to
make sure the goals are being met. Questions to consider before training begins include:

 Location.
 Facilities.
 Accessibility.
 Comfort.
 Equipment.
 Timing.

Careful attention to these operational details will contribute to the success of the training
program. An effective training program administrator should follow these steps:

 Define the organizational objectives.

 Determine the needs of the training program.
 Define training goals.
 Develop training methods.
 Decide whom to train.
 Decide who should do the training.
 Administer the training.
 Evaluate the training program.

Following these steps will help an administrator develop an effective training program to ensure
that the firm keeps qualified employees who are productive, happy workers. This will contribute
positively to the bottom line.

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 10. Evaluation of Training: Training should be evaluated several times during the process.
Determine these milestones when you develop the training. Employees should be
evaluated by comparing their newly acquired skills with the skills defined by the goals of
the training program. Any discrepancies should be noted and adjustments made to the
training program to enable it to meet specified goals. Many training programs fall short
of their expectations simply because the administrator failed to evaluate its progress until
it was too late. Timely evaluation will prevent the training from straying from its goals.

Performance Appraisal

A performance appraisal, employee appraisal, performance review, or (career) development

discussion is a method by which the job performance of an employee is evaluated (generally in
terms of quality, quantity, cost, and time) typically by the corresponding manager or
supervisor[2]. A performance appraisal is a part of guiding and managing career development. It
is the process of obtaining, analyzing, and recording information about the relative worth of an
employee to the organization. Performance appraisal is an analysis of an employee's recent
successes and failures, personal strengths and weaknesses, and suitability for promotion or
further training. It is also the judgment of an employee's performance in a job based on
considerations other than productivity alone.

Modern Appraisal
Performance appraisal may be defined as a structured formal interaction between a subordinate
and supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in
which the work performance of the subordinate is examined and discussed, with a view to
identifying weaknesses and strengths as well as opportunities for improvement and skills
development.

In many organizations - but not all - appraisal results are used, either directly or indirectly, to
help determine reward outcomes. That is, the appraisal results are used to identify the better
performing employees who should get the majority of available merit pay increases, bonuses,
and promotions.

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By the same token, appraisal results are used to identify the poorer performers who may require
some form of counselling, or in extreme cases, demotion, dismissal or decreases in pay.
(Organizations need to be aware of laws in their country that might restrict their capacity to
dismiss employees or decrease pay.)

Whether this is an appropriate use of performance appraisal - the assignment and justification of
rewards and penalties - is a very uncertain and contentious matter.

Aims

Generally, the aims of a performance appraisal are to:

 Give employees feedback on performance

 Identify employee training needs
 Document criteria used to allocate organizational rewards
 Form a basis for personnel decisions: salary increases, promotions, disciplinary actions,
bonuses, etc.
 Provide the opportunity for organizational diagnosis and development
 Facilitate communication between employee and administration
 Validate selection techniques and human resource policies to meet federal Equal
Employment Opportunity requirements.
 To improve performance through counseling, coaching and development.

Methods

A common approach to assessing performance is to use a numerical or scalar rating system

whereby managers are asked to score an individual against a number of objectives/attributes. In
some companies, employees receive assessments from their manager, peers, subordinates, and
customers, while also performing a self-assessment. This is known as a 360-degree appraisal
and forms good communication patterns.

The most popular methods used in the performance appraisal process include the following:

 Management by objectives
 360-degree appraisal
 Behavioral observation scale
 Behaviorally anchored rating scales

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Trait-based systems, which rely on factors such as integrity and conscientiousness, are also
commonly used by businesses. The scientific literature on the subject provides evidence that
assessing employees on factors such as these should be avoided. The reasons for this are twofold:

1) Because trait-based systems are by definition based on personality traits, they make it difficult
for a manager to provide feedback that can cause positive change in employee performance. This
is caused by the fact that personality dimensions are for the most part static, and while an
employee can change a specific behavior they cannot change their personality. For example, a
person who lacks integrity may stop lying to a manager because they have been caught, but they
still have low integrity and are likely to lie again when the threat of being caught is gone.

2) Trait-based systems, because they are vague, are more easily influenced by office politics,
causing them to be less reliable as a source of information on an employee's true performance.
The vagueness of these instruments allows managers to fill them out based on who they want
to/feel should get a raise, rather than basing scores on specific behaviors employees
should/should not be engaging in. These systems are also more likely to leave a company open to
discrimination claims because a manager can make biased decisions without having to back them
up with specific behavioral information.

Criticism

Performance appraisals are an instrument for social control. They are annual discussions,
avoided more often than held, in which one adult identifies for another adult three improvement
areas to work on over the next twelve months. You can soften them all you want, call them
development discussions, have them on a regular basis, have the subordinate identify the
improvement areas instead of the boss, and discuss values. None of this changes the basic
transaction... If the intent of the appraisal is learning, it is not going to happen when the context
of the dialogue is evaluation and judgment.

Activity

2. Explain how Annual Appraisals are Different but Part of

Performance Management

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 3. Critically evaluate performance management in today’s
organizations

TOPIC SIX

CAREER MANAGEMENT AND ORGANIZATIONAL DEVELOPMENT

Objectives: At the end of the topic the learner should be able to appreciate the relevance of the
following in an organization

 Career Planning & Development

 Organizational Development

Definition of Career Development

Career development represents the entire sequence of activities and events related to an
individual's career. Career development encompasses acquiring of educational qualifications and
certifications, career path, self-actualization as an individual, shifting of careers and career
growth, learning curve, family life, accomplishments and recognitions or felicitations.

Goals

Setting goals and milestones based around well-defined objectives is integral to any career
development plan. In today's fast-moving and constantly shifting business and external
environment, goal setting tends to be more medium term.

Individual Involvement

Career development is generally decided, shaped and managed by an individual rather than
the immediate superior, Human Resources (HR) department or organization-defined
influence that it was generation or two ago.

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 Flexibility

A career development plan needs to flexible enough to account for crisis situations, mid-
career blues, relocation possibilities, career shifts and other exigencies.

Staying Competitive

Career development calls for innate professionalism, sharp-edged focus, a keen learning
temperament, intent to gain new skills and certifications as desired.

Family Role

Family commitments, growing needs of a young family and health-related issues of elderly
parents are some aspects that are part of the stages of career development that influence
career shifts, relocation plans and other changes.

Career Development Techniques

There are many career development techniques that you can learn once you have landed
yourself with a job for the first time. Just like in your undergraduate years where you learn
the basic principles and specialized in your area of studies, it is important for one to take the
necessary effort to learn the basic skills needed to be effective in the work that one is doing.

Many have the wrong notion that the education effort stops once one graduated from a
university or college. Learning to do well and be skilful in ones vocation is a lifelong
process. Some of the career development techniques skills that one should acquire are
leadership skills, communication skills, time management skills, problem solving skills, team
building

Succession Planning

Definition and Background

"Succession planning" is a process for identifying and developing internal people with the
potential to fill key leadership positions in the company. Succession planning increases the

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availability of experienced and capable employees that are prepared to assume these roles as they
become available. Taken narrowly, "replacement planning" for key roles is the heart of
succession planning. Effective succession or talent-pool management concerns itself with
building a series of feeder groups up and down the entire leadership pipeline or progression
(Charan, Drotter, Noel, 2001). In contrast, replacement planning is focused narrowly on
identifying specific back-up candidates for given senior management positions. For the most part
position-driven replacement planning (often referred to as the "truck scenario") is a forecast,
which research indicates does not have substantial impact on outcomes.

Fundamental to the succession-management process is an underlying philosophy that argues that

top talent in the corporation must be managed for the greater good of the enterprise. Merck and
other companies argue that a "talent mindset" must be part of the leadership culture for these
practices to be effective.

Research indicates many succession-planning initiatives fall short of their intent (Corporate
Leadership Council, 1998). "Bench strength," as it is commonly called, remains a stubborn
problem in many if not most companies. Studies indicate that companies that report the greatest
gains from succession planning feature high ownership by the CEO and high degrees of
engagement among the larger leadership team (Kesler, 2002).

Companies that are well known for their succession planning and executive talent development
practices include: GE, Honeywell, IBM, Marriott, Microsoft, Pepsi and Proctor and Gamble.

Research indicates that clear objectives are critical to establishing effective succession planning
(Kesler, 2002). These objectives tend to be core to many or most companies that have well-
established practices:

 Identify those with the potential to assume greater responsibility in the organization
 Provide critical development experiences to those that can move into key roles
 Engage the leadership in supporting the development of high-potential leaders
 Build a data base that can be used to make better staffing decisions for key jobs

In other companies these additional objectives may be embedded in the succession process:

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  Improve employee commitment and retention
 Meet the career development expectations of existing employees
 Counter the increasing difficulty and costs of recruiting employees externally

The Field of Succession Management

There is a substantial body of literature on the subject of succession planning. The first book that
addressed the topic fully was "Executive Continuity" by Walter Mahler. Mahler was responsible
in the 1970s for helping to shape the General Electric succession process which became the gold
standard of corporate practice. Mahler, who was heavily influenced by Peter Drucker, wrote
three other books on the subject of succession, all of which are out of print. His colleagues, Steve
Drotter and Greg Kesler, as well as others, expanded on Mahler's work in their writings. "The
Leadership Pipeline: How to Build the Leadership Powered Company," by Charan, Drotter and
Noel is noteworthy. A new edited collection of materials, edited by Marshall Goldsmith,
describes many contemporary examples in large companies (Goldsmith and Carter, 2010).

Most large corporations assign a process owner for talent and succession management.
Resourcing of the work varies widely from numbers of highly-dedicated internal consultants to
limited professional support embedded in the roles of human resources generalists. Often these
staff resources are separate from external staffing or recruiting functions. Some companies today
seek to integrate internal and external staffing. Others are more inclined to integrate succession
management with the performance management process in order simplify the work for line
managers.

Large consultancies, such as McKinsey, have recently focused on the broader talent issue, but
most consulting support to executive succession and development practices probably comes from
numerous boutique firms and retired executives in the field.

The leading professional affiliation for succession-planning professionals is, arguably, The
Human Resources Planning Society, an international association with academic and practitioner
membership from around the world.

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Process and Practices

Companies devise elaborate models to characterize their succession and development practices.
Most reflect a cyclical series of activities that include these fundamentals:

 Identify key roles for succession or replacement planning

 Define the competencies and motivational profile required to undertake those roles
 Assess people against these criteria - with a future orientation
 Identify pools of talent that could potentially fill and perform highly in key roles
 Develop employees to be ready for advancement into key roles - primarily through the
right set of experiences.

In many companies, over the past several years, the emphasis has shifted from planning job
assignments to development, with much greater focus on managing key experiences that are
critical to growing global business leaders. North American companies tend to be more active in
this regard, followed by European and Latin American countries.

Pepsi Co, IBM and Nike are current examples of the so-called "game planning" approach to
succession and talent management. In these and other companies annual reviews are
supplemented with an ongoing series of discussions among senior leaders about who is ready to
assume larger roles. Vacancies are anticipated and slates of names are prepared based on highest
potential and readiness for job moves. Organization realignments are viewed as critical windows
of opportunity to create development moves that will serve the greater good of the enterprise.

Assessment is a key practice in effective succession planning. There is no widely accepted

formula for evaluating the future potential of leaders, but there are many tools and approaches
that continue to be used today, ranging from personality and cognitive testing to team-based
interviewing and simulations and other assessment center methods.

Companies struggle to find practices that are effective and practical. It is clear leaders who rely
on instinct and gut to make promotion decisions are often not effective. Research indicates that
the most valid practices for assessment are those that involve multiple methods and especially

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multiple raters (McCall, 1998). "Calibration meetings," composed of senior leaders can be quite
effective judging a slate of potential senior leaders with the right tools and facilitation.

Four Tips of Effective Succession Planning

One of the most common leadership development questions that I hear from executives is, "Why
does succession planning feel like such a waste of time?"

I do a lot of work on executive coaching and succession with my good friend, Jim Moore. Jim is
the former CLO of three major companies. Here are some of our thoughts on how to make
leadership succession a more relevant process in your company.

Many of the CEOs we talk with these days express concern about the lack of bench strength in
their companies. They are very worried that they lack sufficient "ready now" candidates to
replace planned & unplanned losses of key leaders. As a result, the future continuity and
performance of the business is at risk. These same executives also tell us that their companies
have been doing succession planning for years. On average, the executives we meet give their
succession planning process a grade of C+ and they give their execution of succession plans a
grade of D. If you are among the companies who are not happy with the impact of your
succession planning process, you have plenty of company. Here are four practical ideas on how
you can get more impact from your organization's succession planning efforts.

1. Change the name from Succession Planning to Succession Development.

Plans do not develop anyone — only development experiences develop people. We see many
companies put more effort and attention into the planning process than they do into the
development process. Succession planning processes have lots of to-do — forms, charts,
meetings, due dates and checklists. They sometimes create a false sense that the planning process
is an end in itself rather than a precursor to real development. Many humans fall into the same
trap regarding physical fitness. We have may have fantastic plans in place to lose weight. We

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may be very proud of our plans, which include detailed daily goals for diet, alcohol
consumption, and exercise. And if our execution were half as impressive as our planning, we
would be very svelte. Our focus should be on weight loss, not planning for weight loss.

2. Measure outcomes, not process

This change of emphasis is important for several reasons. First, executives’ pay attention to what
gets measured and what gets rewarded. If leadership development is not enough of a priority for
the company to establish goals and track progress against those goals, it will be difficult to make
any succession planning process work. Second, the act of engaging with senior executives to
establish these goals will build support for succession planning and ownership for leadership
development. Third, these results will help guide future efforts and mid-course corrections.

The metrics a company could establish for Succession Development might include goals like the
percent of executive level vacancies that are actually filled with an internal promotion vs. an
external hire, or the percent of promotions that actually come from the high-potential pool. Too
often, we find companies measure only the percent of managers that had completed succession
plans in place.

3. Keep it simple.

We sometimes find companies adding excessively complex assessment criteria to the succession
planning process in an effort to improve the quality of the assessment. Some of these criteria are
challenging even for behavioral scientists to assess, much less the average line manager. Since
the planning process is only a precursor to focus the development, it doesn't need to be perfect.
More sophisticated assessments can be built into the development process and administered by a
competent coach.

4. Stay realistic.

1. Following are two classic examples how succession plans may lack realism:
The head of engineering is a high performing leader who has the potential to be COO.
She has always been in an engineering role. If she had sales experience, she would be

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 even more ready to be the COO so her development plan is written to include a job move
to be head of sales. However, this company would never take the risk of putting someone
without sales experience in the top sales job — so her development plan perpetually says,
"move to a sales job" even though that will never happen.
2. The CFO is a high performing leader who has passed all the assessment criteria to be a
high potential, ready-now candidate for the CEO job. He is told he is the top candidate.
However, the CEO can't stand the guy, and as a result, he will never get the job as long as
that CEO has a say in the matter.

While development plans and succession charts aren't promises, they are often communicated as
such and can lead to frustration if they aren't realistic. Bottom line; don't jerk around high
performing leaders with unrealistic development expectations. Only give the promise of
succession if there is a realistic chance of its happening.

Organization Development

Organization development (OD) is a planned, organization-wide effort to increase an

organization's effectiveness and viability. Warren Bennis has referred to OD as a response to
change, a complex educational strategy intended to change the beliefs, attitudes, values, and
structure of organization so that they can better adapt to new technologies, marketing and
challenges, and the dizzying rate of change itself. OD is neither "anything done to better an
organization" nor is it "the training function of the organization"; it is a particular kind of change
process designed to bring about a particular kind of end result. OD can involve interventions in
the organization's "processes," using behavioural science knowledge as well as organizational
reflection, system improvement, planning, and self-analysis.

Kurt Lewin (1898–1947) is widely recognized as the founding father of OD, although he died
before the concept became current in the mid-1950s. From Lewin came the ideas of group
dynamics and action research which underpin the basic OD process as well as providing its
collaborative consultant/client ethos. Institutionally, Lewin founded the "Research Center for
Group Dynamics" (RCGD). RCGD colleagues were among those who founded the National
Training Laboratories (NTL), from which the T-group and group-based OD emerged.

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The term "Organization Development" is often used interchangeably with Organizational
effectiveness, especially when used as the name of a department within an organization.
Organization development is a growing field that is responsive to many new approaches
including Positive Adult Development.

At the core of OD is the concept of organization, defined as two or more people working
together toward one or more shared goal(s). Development in this context is the notion that an
organization may become more effective over time at achieving its goals.

OD is a long range effort to improve organization's problem solving and renewal processes,
particularly through more effective and collaborative management of organizational culture,
often with the assistance of a change agent or catalyst and the use of the theory and technology
of applied behavioral science. Although behavioral science has provided the basic foundation for
the study and practice of organizational development, new and emerging fields of study have
made their presence known.

Experts in systems thinking, leadership studies, organizational leadership, and organizational

learning (to name a few) whose perspective is not steeped in just the behavioral sciences, but a
much more multi-disciplinary and inter-disciplinary approach have emerged as OD catalysts.
These emergent expert perspectives see the organization as the holistic interplay of a number of
systems that impact the process and outputs of the entire organization. More importantly, the
term change agent or catalyst is synonymous with the notion of a leader who is engaged in doing
leadership, a transformative or effectiveness process as opposed to management, a more
incremental or efficiency based change methodology.

Organization development is a "contractual relationship between a change agent and a

sponsoring organization entered into for the purpose of using applied behavioral science and or
other organizational change perspectives in a systems context to improve organizational
performance and the capacity of the organization to improve itself".

Organization development is an ongoing, systematic process to implement effective change in an

organization. Organization development is known as both a field of applied behavioral science
focused on understanding and managing organizational change and as a field of scientific study

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and inquiry. It is interdisciplinary in nature and draws on sociology, psychology, and theories of
motivation, learning, and personality.

Contractual relationship

Although neither the sponsoring organization nor the change agent can be sure at the outset of
the exact nature of the problem or problems to be dealt with or how long the change agents' help
will be needed, it is essential that some tentative agreement on these matters be reached. The
sponsoring organization needs to know generally what the change agent's preliminary plan is
what its own commitments are in relation to personal commitments and responsibility for the
program, and what the change agent's fee will be. The change agent must assure himself that the
organizations, and particularly the top executives', commitment to change is strong enough to
support the kind of self-analysis and personal involvement requisite to success of the program.
Recognizing the uncertainties lying ahead on both sides, a termination agreement permitting
either side to withdraw at any time is usually included.

Change agent

A change agent in the sense used here is not a technical expert skilled in such functional areas as
accounting, production, or finance. He is a behavioral scientist who knows how to get people in
an organization involved in solving their own problems. His main strength is a comprehensive
knowledge of human behavior, supported by a number of intervention techniques (to be
discussed later). The change agent can be either external or internal to the organization. An
internal change agent is usually a staff person who has expertise in the behavioral sciences and in
the intervention technology of OD. Beckhard reports several cases in which line people have
been trained in OD and have returned to their organizations to engage in successful change
assignments.[3] In the natural evolution of change mechanisms in organizations, this would seem
to approach the ideal arrangement. Qualified change agents can be found on some university
faculties, or they may be private consultants associated with such organizations as the National
Training Laboratories Institute for Applied Behavioral Science

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The change agent may be a staff or line member of the organization who is schooled in OD
theory and technique. In such a case, the "contractual relationship" is an in-house agreement that
should probably be explicit with respect to all of the conditions involved except the fee.

Sponsoring organization

The initiative for OD programs comes from an organization that has a problem. This means that
top management or someone authorized by top management is aware that a problem exists and
has decided to seek help in solving it. There is a direct analogy here to the practice of
psychotherapy: The client or patient must actively seek help in finding a solution to his
problems. This indicates a willingness on the part of the client organization to accept help and
assures the organization that management is actively concerned.

Applied behavioral science

One of the outstanding characteristics of OD that distinguishes it from most other improvement
programs is that it is based on a "helping relationship." Some believe that the change agent is not
a physician to the organization's ills; that s/he does not examine the "patient," make a diagnosis,
and write a prescription. Nor does s/he try to teach organizational members a new inventory of
knowledge which they then transfer to the job situation. Using theory and methods drawn from
such behavioral sciences as (industrial/organizational psychology, industrial sociology,
communication, cultural anthropology, administrative theory, organizational behavior,
economics, and political science, the change agent's main function is to help the organization
define and solve its own problems. The basic method used is known as action research. This
approach, which is described in detail later, consists of a preliminary diagnosis, collecting data,
feedback of the data to the client, data exploration by the client group, action planning based on
the data, and taking action.

Systems context

OD deals with a total system — the organization as a whole, including its relevant environment
— or with a subsystem or systems — departments or work groups — in the context of the total
system. Parts of systems, for example, individuals, cliques, structures, norms, values, and

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products are not considered in isolation; the principle of interdependency, that is, that change in
one part of a system affects the other parts, is fully recognized. Thus, OD interventions focus on
the total culture and cultural processes of organizations. The focus is also on groups, since the
relevant behavior of individuals in organizations and groups is generally a product of group
influences rather than personality.

Improved organizational performance

The objective of OD is to improve the organization's capacity to handle its internal and external
functioning and relationships. This would include such things as improved interpersonal and
group processes, more effective communication, enhanced ability to cope with organizational
problems of all kinds, more effective decision processes, more appropriate leadership style,
improved skill in dealing with destructive conflict, and higher levels of trust and cooperation
among organizational members. These objectives stem from a value system based on an
optimistic view of the nature of man — that man in a supportive environment is capable of
achieving higher levels of development and accomplishment. Essential to organization
development and effectiveness is the scientific method — inquiry, a rigorous search for causes,
experimental testing of hypotheses, and review of results.

Organizational self-renewal

The ultimate aim of OD practitioners is to "work themselves out of a job" by leaving the client
organization with a set of tools, behaviors, attitudes, and an action plan with which to monitor its
own state of health and to take corrective steps toward its own renewal and development. This is
consistent with the systems concept of feedback as a regulatory and corrective mechanism.

Early development

Kurt Lewin played a key role in the evolution of organization development as it is known today.
As early as World War II, Lewin experimented with a collaborative change process (involving
himself as consultant and a client group) based on a three-step process of planning, taking action,
and measuring results. This was the forerunner of action research, an important element of OD,
which will be discussed later. Lewin then participated in the beginnings of laboratory training, or

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T-groups, and, after his death in 1947, his close associates helped to develop survey-research
methods at the University of Michigan. These procedures became important parts of OD as
developments in this field continued at the National Training Laboratories and in growing
numbers of universities and private consulting firms across the country.

The failure of off-site laboratory training to live up to its early promise was one of the important
forces stimulating the development of OD. Laboratory training is learning from a person's "here
and now" experience as a member of an ongoing training group. Such groups usually meet
without a specific agenda. Their purpose is for the members to learn about themselves from their
spontaneous "here and now" responses to an ambiguous hypothetical situation. Problems of
leadership, structure, status, communication, and self-serving behavior typically arise in such a
group. The members have an opportunity to learn something about themselves and to practice
such skills as listening, observing others, and functioning as effective group members.[5]

As formerly practiced (and occasionally still practiced for special purposes), laboratory training
was conducted in "stranger groups," or groups composed of individuals from different
organizations, situations, and backgrounds. A major difficulty developed, however, in
transferring knowledge gained from these "stranger labs" to the actual situation "back home".
This required a transfer between two different cultures, the relatively safe and protected
environment of the T-group (or training group) and the give-and-take of the organizational
environment with its traditional values. This led the early pioneers in this type of learning to
begin to apply it to "family groups" — that is, groups located within an organization. From this
shift in the locale of the training site and the realization that culture was an important factor in
influencing group members (along with some other developments in the behavioral sciences)
emerged the concept of organization development.

Case history The Cambridge Clinic found itself having difficulty with its internal working
relationships. The medical director, concerned with the effect these problems could have on
patient care, contacted an organizational consultant at a local university and asked him for help.
A preliminary discussion among the director, the clinic administrator, and the consultant seemed
to point to problems in leadership, conflict resolution, and decision processes. The consultant

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suggested that data be gathered so that a working diagnosis could be made. The clinic officials
agreed, and tentative working arrangements were concluded.

The consultant held a series of interviews involving all members of the clinic staff, the medical
director, and the administrator. Then the consultant summarized, the interview data to identify
specific problem areas. At the beginning of a workshop about a week later, the consultant fed
back to the clinic staff the data he had collected.

The staff arranged the problems in the following priorities

Role conflicts between certain members of the medical staff were creating tensions that
interfered with the necessity for cooperation in handling patients. The leadership style of the
medical director resulted in his putting off decisions on important operating matters. This led to
confusion and sometimes to inaction on the part of the medical and administrative staffs.
Communication between the administrative, medical, and outreach (social worker) staffs on
mutual problems tended to be avoided. Open conflicts over policies and procedures were thus
held in check, but suppressed feelings clearly had a negative influence on interpersonal and
intergroup behavior.

Through the use of role analysis and other techniques suggested by the consultant, the clinic staff
and the medical director were able to explore the role conflict and leadership problems and to
devise effective ways of coping with them. Exercises designed to improve communication skills
and a workshop session on dealing with conflict led to progress in developing more openness
and trust throughout the clinic. An important result of this first workshop was the creation of an
action plan that set forth specific steps to be applied to clinic problems by clinic personnel during
the ensuing period. The consultant agreed to monitor these efforts and to assist in any way he
could. Additional discussions and team development sessions were held with the director and the
medical and administrative staffs.

A second workshop attended by the entire clinic staff took place about two months after the first.
At the second workshop, the clinic staff continued to work together on the problems of dealing
with conflict and interpersonal communication. During the last half-day of the meeting, the staff

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developed a revised action plan covering improvement activities to be undertaken in the
following weeks and months to improve the working relationships of the clinic.

A notable additional benefit of this OD program was that the clinic staff learned new ways of
monitoring the clinic's performance as an organization and of coping with some of its other
problems. Six months later, when the consultant did a follow-up check on the organization, the
staff confirmed that interpersonal problems were now under better control and that some of the
techniques learned at the two workshops associated with the OD programs were still being used.

Organizational Development is a system-wide application and transfer of behavioral science

knowledge to the planned development, improvement, and reinforcement of the strategies,
structure, and process that lead to organization effectiveness.

Activity: Do your own analysis of the problem in the above case

Understanding Organizations

Weisbard presents a six-step model for understanding organization:

1. Purposes: The organization member are clear about the organization’s mission and
purpose and goal agreements, whether people support the organization’ purpose.
2. Structure: How do we divide up the work? The question is whether there is an adequate
fit between the purpose and the internal structure.
3. Relationship: Between individual, between units or department that perform different
tasks, and between the people and requirements of their job.
4. Rewards: The consultant should diagnose the similarities between what the organization
formally reward or punished for doing.
5. Leadership: Is to watch for blips among the other boxes and maintain balance among
them
6. Helpful mechanism: Is a helpful organization that must attend to in order to survive
which as planning, control, budgeting, and other information systems that help
organization member accomplish.

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Modern development

In recent years, serious questioning has emerged about the relevance of OD to managing change
in modern organizations. The need for "reinventing" the field has become a topic that even some
of its "founding fathers" are discussing critically.

With this call for reinvention and change, scholars have begun to examine organizational
development from an emotion-based standpoint. For example, deKlerk (2007) writes about how
emotional trauma can negatively affect performance. Due to downsizing, outsourcing, mergers,
restructuring, continual changes, invasions of privacy, harassment, and abuses of power, many
employees experience the emotions of aggression, anxiety, apprehension, cynicism, and fear,
which can lead to performance decreases. deKlerk (2007) suggests that in order to heal the
trauma and increase performance, O.D. practitioners must acknowledge the existence of the
trauma, provide a safe place for employees to discuss their feelings, symbolize the trauma and
put it into perspective, and then allow for and deal with the emotional responses. One method of
achieving this is by having employees draw pictures of what they feel about the situation, and
then having them explain their drawings with each other. Drawing pictures is beneficial because
it allows employees to express emotions they normally would not be able to put into words.
Also, drawings often prompt active participation in the activity, as everyone is required to draw a
picture and then discuss its meaning.

Action research

Wendell L French and Cecil Bell define organization development (OD) at one point as
"organization improvement through action research". If one idea can be said to summarize OD's
underlying philosophy, it would be action research as it was conceptualized by Kurt Lewin and
later elaborated and expanded on by other behavioral scientists. Concerned with social change
and, more particularly, with effective, permanent social change, Lewin believed that the
motivation to change was strongly related to action: If people are active in decisions affecting
them, they are more likely to adopt new ways. "Rational social management", he said, "proceeds
in a spiral of steps, each of which is composed of a circle of planning, action and fact-finding
about the result of action".

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Figure 1: Systems Model of Action-Research Process

Lewin's description of the process of change involves three steps:

"Unfreezing": Faced with a dilemma or disconfirmation, the individual or group becomes aware
of a need to change.

"Changing": The situation is diagnosed and new models of behavior are explored and tested.

"Refreezing": Application of new behavior is evaluated, and if reinforcing, adopted.

Figure 1 summarizes the steps and processes involved in planned change through action
research. Action research is depicted as a cyclical process of change. The cycle begins with a
series of planning actions initiated by the client and the change agent working together. The
principal elements of this stage include a preliminary diagnosis, data gathering, feedback of
results, and joint action planning. In the language of systems theory, this is the input phase, in
which the client system becomes aware of problems as yet unidentified, realizes it may need
outside help to effect changes, and shares with the consultant the process of problem diagnosis.

The second stage of action research is the action, or transformation, phase. This stage includes
actions relating to learning processes (perhaps in the form of role analysis) and to planning and
executing behavioral changes in the client organization. As shown in Figure 1, feedback at this
stage would move via Feedback Loop A and would have the effect of altering previous planning
to bring the learning activities of the client system into better alignment with change objectives.

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Included in this stage is action-planning activity carried out jointly by the consultant and
members of the client system. Following the workshop or learning sessions, these action steps
are carried out on the job as part of the transformation stage.

The third stage of action research is the output, or results, phase. This stage includes actual
changes in behavior (if any) resulting from corrective action steps taken following the second
stage. Data are again gathered from the client system so that progress can be determined and
necessary adjustments in learning activities can be made. Minor adjustments of this nature can be
made in learning activities via Feedback Loop B (see Figure 1). Major adjustments and
reevaluations would return the OD project to the first, or planning, stage for basic changes in the
program. The action-research model shown in Figure 1 closely follows Lewin's repetitive cycle
of planning, action, and measuring results. It also illustrates other aspects of Lewin's general
model of change. As indicated in the diagram, the planning stage is a period of unfreezing, or
problem awareness. The action stage is a period of changing that is, trying out new forms of
behavior in an effort to understand and cope with the system's problems. (There is inevitable
overlap between the stages, since the boundaries are not clear-cut and cannot be in a continuous
process). The results stage is a period of refreezing, in which new behaviors are tried out on the
job and, if successful and reinforcing, become a part of the system's repertoire of problem-
solving behavior.

Action research is problem centered, client centered, and action oriented. It involves the client
system in a diagnostic, active-learning, problem-finding, and problem-solving process. Data are
not simply returned in the form of a written report but instead are fed back in open joint sessions,
and the client and the change agent collaborate in identifying and ranking specific problems, in
devising methods for finding their real causes, and in developing plans for coping with them
realistically and practically. Scientific method in the form of data gathering, forming hypotheses,
testing hypotheses, and measuring results, although not pursued as rigorously as in the
laboratory, is nevertheless an integral part of the process. Action research also sets in motion a
long-range, cyclical, self-correcting mechanism for maintaining and enhancing the effectiveness
of the client's system by leaving the system with practical and useful tools for self-analysis and
self-renewal.

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OD Interventions

"Interventions" are principal learning processes in the "action" stage of organization

development. Interventions are structured activities used individually or in combination by the
members of a client system to improve their social or task performance. They may be introduced
by a change agent as part of an improvement program, or they may be used by the client
following a program to check on the state of the organization's health, or to effect necessary
changes in its own behavior. "Structured activities" mean such diverse procedures as experiential
exercises, questionnaires, attitude surveys, interviews, relevant group discussions, and even
lunchtime meetings between the change agent and a member of the client organization. Every
action that influences an organization's improvement program in a change agent-client system
relationship can be said to be an intervention.

There are many possible intervention strategies from which to choose. Several assumptions
about the nature and functioning of organizations are made in the choice of a particular strategy.
Beckhard lists six such assumptions:

1. The basic building blocks of an organization are groups (teams). Therefore, the basic
units of change are groups, not individuals.
2. An always relevant change goal is the reduction of inappropriate competition between
parts of the organization and the development of a more collaborative condition.
3. Decision making in a healthy organization is located where the information sources are,
rather than in a particular role or level of hierarchy.
4. Organizations, subunits of organizations, and individuals continuously manage their
affairs against goals. Controls are interim measurements, not the basis of managerial
strategy.
5. One goal of a healthy organization is to develop generally open communication, mutual
trust, and confidence between and across levels.
6. People support what they help create. People affected by a change must be allowed active
participation and a sense of ownership in the planning and conduct of the change.

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Interventions range from those designed to improve the effectiveness of individuals through
those designed to deal with teams and groups, intergroup relations, and the total organization.
There are interventions that focus on task issues (what people do), and those that focus on
process issues (how people go about doing it). Finally, interventions may be roughly classified
according to which change mechanism they tend to emphasize: for example, feedback,
awareness of changing cultural norms, interaction and communication, conflict, and education
through either new knowledge or skill practice.

One of the most difficult tasks confronting the change agent is to help create in the client system
a safe climate for learning and change. In a favorable climate, human learning builds on itself
and continues indefinitely during man's lifetime. Out of new behavior, new dilemmas and
problems emerge as the spiral continues upward to new levels. In an unfavorable climate, in
contrast, learning is far less certain, and in an atmosphere of psychological threat, it often stops
altogether. Unfreezing old ways can be inhibited in organizations because the climate makes
employees feel that it is inappropriate to reveal true feelings, even though such revelations could
be constructive. In an inhibited atmosphere, therefore, necessary feedback is not available. Also,
trying out new ways may be viewed as risky because it violates established norms. Such an
organization may also be constrained because of the law of systems: If one part changes, other
parts will become involved. Hence, it is easier to maintain the status quo. Hierarchical authority,
specialization, span of control, and other characteristics of formal systems also discourage
experimentation.

The change agent must address himself to all of these hazards and obstacles. Some of the things
which will help him are:

1. A real need in the client system to change

2. Genuine support from management
3. Setting a personal example: listening, supporting behavior
4. A sound background in the behavioral sciences
5. A working knowledge of systems theory
6. A belief in man as a rational, self-educating being fully capable of learning better ways to
do things.

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A few examples of interventions include team building, coaching, Large Group Interventions,
mentoring, performance appraisal, downsizing, TQM, and leadership development.

Activity:

 Demonstrate how succession plans may lack realism

 Develop programmes that can enhance organizational development

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 TOPIC SEVEN

THEORIES OF MOTIVATION

Objective:

At the end of this topic the learners will appreciate the importance of motivation theories
knowledge in managing employees in organizations. They will also be able to come up with
strategies of motivating employees for productivity

 Theories Explained
 Significance of Motivation Theories
 Strategies of Motivating Employees

Employee Motivation

Often, people confuse the idea of 'happy' employees with 'motivated' employees. These may be
related, but motivation actually describes the level of desire employees feel to perform,
regardless of the level of happiness. Employees who are adequately motivated to perform will be
more productive, more engaged and feel more invested in their work. When employees feel these
things, it helps them, and thereby their managers, be more successful.

It is a manager's job to motivate employees to do their jobs well. So how do managers do this?
The answer is motivation in management, the process through which managers encourage
employees to be productive and effective.

Think of what you might experience in a retail setting when a motivated cashier is processing
your transaction. This type of cashier will:

 Be friendly, creating a pleasant transaction that makes you more likely to return
 Process your transaction quickly, meaning that the store can service more customers
 Suggest an additional item you would like to purchase, increasing sales for the store

In short, this employee is productive and delivers a high-quality output.

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Definition

Motivation is a theoretical construct used to explain behavior. It gives the reasons for people's
actions, desires, and needs. Motivation can also be defined as one's direction to behavior, or
what causes a person to want to repeat a behavior and vice versa.

Motivation is a term that refers to a process that elicits, controls, and sustains certain behaviors.
It is a group phenomenon which affects the nature of an individual's behavior, the strength of the
behavior, and the persistence of the behavior. For instance: an individual has not eaten, so he or
she feels hungry, and as a response he or she eats and diminishes feelings of hunger.

There are many approaches to motivation: physiological, behavioral, cognitive, and social. It is
the crucial element in setting and attaining goals—and research shows you can influence your
own levels of motivation and self-control. According to various theories, motivation may be
rooted in a basic need to minimize physical pain and maximize pleasure; or it may include
specific needs such as eating and resting; or a desired object, goal, state of being, or ideal; or it
may be attributed to less-apparent reasons such as altruism, selfishness, morality, or avoiding
mortality. Conceptually, motivation should not be confused with either volition or optimism.
Motivation is related to, but distinct from, emotion.

At one time, employees were considered just another input into the production of goods and
services. But this changed after the Hawthorne studies. The Hawthorne studies were conducted
by Elton Mayo at Hawthorne Plant in the 1920s. The researchers were studying the effect of
different working environments on productivity. They used lighting as an experimental variable
(the effect of bright lighting and dull lighting). Initially they noticed that employees were
working harder but it was not because of the lighting. They concluded that productivity increased
due to attention that the workers got from the research team and not because of changes to the
experimental variable. The Hawthorne studies found that employees are not motivated solely by
money but motivation is linked to employee behavior and their attitudes. The Hawthorne Studies
began the human relations approach to management, so the needs and motivation of employees
became the primary focus of managers.

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5 Psychological Theories of Motivation to Increase Productivity

We all want to be more productive but getting motivated enough to actually get things done can
seem impossible.

Social scientists have been studying motivation for decades, trying to find out what motivates
our behaviour, how and why.

Dozens of theories of motivation have been proposed over the years. Here are 5 popular theories
of motivation that can help you increase workplace productivity…

1. Hertzberg’s Two-Factor Theory

The Two-Factor Theory of motivation (otherwise known as dual-factor theory or motivation-

hygiene theory) was developed by psychologist Frederick Herzberg in the 1950s.

Analysing the responses of 200 accountants and engineers who were asked about their positive
and negative feelings about their work, Herzberg found 2 factors that influence employee
motivation and satisfaction…

1. Motivator factors – Simply put, these are factors that lead to satisfaction and motivate
employees to work harder. Examples might include enjoying your work, feeling recognized and
career progression.

2. Hygiene factors – These factors can lead to dissatisfaction and a lack of motivation if they are
absent. Examples include salary, company policies, benefits, relationships with managers and co-
workers.

According to Herzberg’s findings, while motivator and hygiene factors both influenced
motivation, they appeared to work completely independently of each other…

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While motivator factors increased employee satisfaction and motivation, the absence of these
factors didn’t necessarily cause dissatisfaction. Likewise, the presence of hygiene factors didn’t
appear to increase satisfaction and motivation but their absence caused an increase in
dissatisfaction.

How to apply it to the workplace

This theory implies that for the happiest and most productive workforce, you need to work on
improving both motivator and hygiene factors.

To help motivate your employees, make sure they feel appreciated and supported. Give plenty of
feedback and make sure your employees understand how they can grow and progress through the
company.

To prevent job dissatisfaction, make sure that your employees feel that they are treated right by
offering them the best possible working conditions and fair pay. Make sure you pay attention to
your team and form supportive relationships with them.

Don’t forget that all of your employees are different and what motivates one person might not
motivate another. Paul Hebert of Symbolist believes that benefits packages should not be one-
size-fits all…

“For true engagement to occur in a company you must first remove the issues that cause
dissatisfaction – the baseline benefits offered by the company that satisfy the hygiene needs of
the employee. Then you must focus on the individual and what they want out of their association
with your enterprise.”

2. Maslow’s Hierarchy of Needs

The Hierarchy of Needs theory was coined by psychologist Abraham Maslow in his 1943 paper
“A Theory of Human Motivation”.

The crux of the theory is that individuals’ most basic needs must be met before they become
motivated to achieve higher level needs.

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The hierarchy is made up of 5 levels:

1. Physiological – these needs must be met in order for a person to survive, such as food, water
and shelter.
2. Safety – including personal and financial security and health and wellbeing.
3. Love/belonging – the need for friendships, relationships and family.
4. Esteem – the need to feel confident and be respected by others.
5. Self-actualization – the desire to achieve everything you possibly can and become the most
that you can be.

According to the hierarchy of needs, you must be in good health, safe and secure with
meaningful relationships and confidence before you are able to be the most that you can be.

How to apply it to the workplace

Chip Conley, founder of the Joie de Vivre hotel chain and Head of Hospitality at Airbnb, used
the Hierarchy of Needs pyramid to transform his business. According to Chip, many managers
struggle with the abstract concept of self-actualization and so focus on lower levels of the
pyramid instead.

Conley found one way of helping with higher levels was to help his employees understand the
meaning of their roles during a staff retreat…

“In one exercise, we got groups of eight housekeepers at a table and asked an abstract question:
if someone from Mars came down and saw what you were doing as a housekeeper in a hotel,
what name would they call you? They came up with “The Serenity Sisters,” “The Clutter
Busters,” and “The Peace of Mind Police.” There was a sense that people were doing more than
just cleaning a room. They were creating a space for a traveler who was far away from home to
feel safe and protected.”

Conley’s team was able to realize the importance of their job to the company and to the people
they were helping. By showing them the value of their roles, the teams were able to feel
respected and motivated to work harder.

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In order to get the most out of your team, you should also make sure you support them in other
aspects of their lives outside work. Perhaps you could offer flexible working hours to give
employees time to focus on their families and make sure they are paid fairly to help them feel
financially stable.

3. Hawthorne Effect

The Hawthorne Effect was first described by Henry A. Landsberger in 1950 who noticed a
tendency for some people to work harder and perform better when they were being observed by
researchers.

The Hawthorne Effect is named after a series of social experiments on the influence of physical
conditions on productivity at Western Electric’s factory at Hawthorne, Chicago in the 1920s and
30s.

The researchers changed a number of physical conditions over the course of the experiments
including lighting, working hours and breaks. In all cases, employee productivity increased when
a change was made. The researchers concluded that employees became motivated to work harder
as a response to the attention being paid to them, rather than the actual physical changes
themselves.

How to apply it to the workplace

The Hawthorne Effect studies suggest that employees will work harder if they know they’re
being observed. While I don’t recommend hovering over your employees watching them all day,
you could try providing regular feedback, letting your team know that you know what they’re up
to and how they’re doing.

Showing your employees that you care about them and their working conditions may also
motivate them to work harder. Encourage your team to give you feedback and suggestions about
their workspace and development.

4. Expectancy Theory

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Expectancy Theory proposes that people will choose how to behave depending on the outcomes
they expect as a result of their behaviour. In other words, we decide what to do based on what we
expect the outcome to be. At work, it might be that we work longer hours because we expect a
pay rise.

However, Expectancy Theory also suggests that the process by which we decide our behaviours
is also influenced by how likely we perceive those rewards to be. In this instance, workers may
be more likely to work harder if they had been promised a pay rise (and thus perceived that
outcome as very likely) than if they had only assumed they might get one (and perceived the
outcome as possible but not likely)

Expectancy Theory is based on three elements:

1. Expectancy – the belief that your effort will result in your desired goal. This is based on your
past experience, your self-confidence and how difficult you think the goal is to achieve.
2. Instrumentality – the belief that you will receive a reward if you meet performance
expectations.
3. Valence – the value you place on the reward.

Therefore, according to Expectancy Theory, people are most motivated if they believe that they
will receive a desired reward if they hit an achievable target. They are least motivated if they
don’t want the reward or they don’t believe that their efforts will result in the reward.

How to apply it to the workplace

The key here is to set achievable goals for your employees and provide rewards that they actually
want.

Rewards don’t have to come in the form of pay rises, bonuses or all-expenses paid nights out
(although I find these are usually welcomed!) Praise, opportunities for progression and
“employee of the month” style rewards can all go a long way in motivating your employees.

Need some inspiration? Check out these 51 inexpensive ways to reward employees from author
of The Toilet Paper Entrepreneur, Mike Michalowicz.

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5. Three-Dimensional Theory of Attribution

Attribution Theory explains how we attach meaning to our own, and other people’s, behaviour.
There are a number of theories about attribution.

Bernard Weiner’s Three-Dimensional theory of attribution assumes that people try to determine
why we do what we do. According to Weiner, the reasons we attribute to our behaviour can
influence how we behave in the future.

For example, a student who fails an exam could attribute their failure to a number of factors and
it’s this attribution that will affect their motivation in the future.

Weiner theorized that specific attributions (e.g. bad luck, not studying hard enough) were less
important than the characteristics of that attribution. According to Weiner, there are three main
characteristics of attributions that can affect future motivation.

1. Stability – how stable is the attribution? For example, if the student believes they failed the
exam because they weren’t smart enough, this is a stable factor. An unstable factor is less
permanent, such as being ill.

According to Weiner, stable attributions for successful achievements, such as passing exams, can
lead to positive expectations, and thus higher motivation, for success in the future.

However, in negative situations, such as failing the exam, stable attributions can lead to lower
expectations in the future.

2. Locus of control – was the event caused by an internal or an external factor?

For example, if the student believes it’s their own fault they failed the exam, because they are
innately not smart enough (an internal cause), they may be less motivated in the future. If they
believed an external factor was to blame, such as poor teaching, they may not experience such a
drop in motivation.

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3. Controllability – how controllable was the situation? If an individual believes they could
have performed better, they may be less motivated to try again in the future than someone who
believes they failed because of factors outside of their control.

How to apply it to the workplace

Weiner’s Three-Dimensional theory of attribution has implications for employee feedback.

Make sure you give your employees specific feedback, letting them know that you know they
can improve and how they can about it. This, in theory, will help prevent them from attributing
their failure to an innate lack of skill and see that success is controllable if they work harder or
use different strategies.

You could also praise your employees for showing an improvement, even if the outcome was
still not correct. For example, you might praise someone for using the correct methodology even
though the results weren’t what you wanted. This way, you are encouraging employees to
attribute the failure to controllable factors, which again, can be improved upon in the future

 Many managers assume that if an employee is not performing well, the reason must be a
lack of motivation. Do you think this reasoning is accurate? What is the problem with the
assumption?
 Review Maslow’s hierarchy of needs. Do you agree with the particular ranking of
employee needs?
 How can an organization satisfy employee needs that are included in Maslow’s
hierarchy?
 Which motivation theory have you found to be most useful in explaining why people
behave in a certain way? Why?
 Review the hygiene and motivators in the two-factor theory of motivation. Do you agree
with the distinction between hygiene factors and motivators? Are there any hygiene
factors that you would consider to be motivators?
 A friend of yours demonstrates the traits of achievement motivation: This person is
competitive, requires frequent and immediate feedback, and enjoys accomplishing things

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 and doing things better than she did before. She has recently been promoted to a
managerial position and seeks your advice. What would you tell her

Importance of Motivation

Motivation is a very important for an organization because of the following benefits it provides:

1. Puts human resources into action

Every concern requires physical, financial and human resources to accomplish the goals.
It is through motivation that the human resources can be utilized by making full use of it.
This can be done by building willingness in employees to work. This will help the
enterprise in securing best possible utilization of resources.

2. Improves level of efficiency of employees

The level of a subordinate or a employee does not only depend upon his qualifications
and abilities. For getting best of his work performance, the gap between ability and
willingness has to be filled which helps in improving the level of performance of
subordinates. This will result into-

a. Increase in productivity,
b. Reducing cost of operations, and
c. Improving overall efficiency.
3. Leads to achievement of organizational goals

The goals of an enterprise can be achieved only when the following factors take place :-

a. There is best possible utilization of resources,

b. There is a co-operative work environment,
c. The employees are goal-directed and they act in a purposive manner,
d. Goals can be achieved if co-ordination and co-operation takes place
simultaneously which can be effectively done through motivation.
4. Builds friendly relationship

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 Motivation is an important factor which brings employees satisfaction. This can be done
by keeping into mind and framing an incentive plan for the benefit of the employees. This
could initiate the following things:

a. Monetary and non-monetary incentives,

b. Promotion opportunities for employees,
c. Disincentives for inefficient employees.

In order to build a cordial, friendly atmosphere in a concern, the above steps should be
taken by a manager. This would help in:

 Effective co-operation which brings stability,

 Industrial dispute and unrest in employees will reduce,
 The employees will be adaptable to the changes and there will be no resistance to the
change,
 This will help in providing a smooth and sound concern in which individual interests will
coincide with the organizational interests,
 This will result in profit maximization through increased productivity.

5. Leads to stability of work force

Stability of workforce is very important from the point of view of reputation and
goodwill of a concern. The employees can remain loyal to the enterprise only when they
have a feeling of participation in the management. The skills and efficiency of employees
will always be of advantage to employees as well as employees. This will lead to a good
public image in the market which will attract competent and qualified people into a
concern. As it is said, “Old is gold” which suffices with the role of motivation here, the
older the people, more the experience and their adjustment into a concern which can be of
benefit to the enterprise.

While directing his subordinate, a manager must create and sustain in them the desire to
work for the specified objectives:

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1. High Efficiency:

A good motivational system releases the immense untapped reservoirs of physical and mental
capabilities. A number of studies have shown that motivation plays a crucial role in determining
the level of performance. “Poorly motivated people can nullify the soundest organisation.” said
Allen.

By satisfying human needs motivation helps in increasing productivity. Better utilisation of

resources lowers cost of operations. Motivation is always goal directed. Therefore, higher the
level of motivation, greater is the degree of goal accomplishment.

2. Better Image:

A firm that provides opportunities for financial and personal advancement has a better image in
the employment market. People prefer to work for an enterprise because of opportunity for
development, and sympathetic outlook. This helps in attracting qualified personnel and
simplifies the staffing function.

3. Facilitates Change:

Effective motivation helps to overcome resistance to change and negative attitude on the part of
employees like restriction of output. Satisfied workers take interest in new organisational goals
and are more receptive to changes that management wants to introduce in order to improve
efficiency of operations.

4. Human Relations:

Effective motivation creates job satisfaction which results in cordial relations between employer
and employees. Industrial disputes, labour absenteeism and turnover are reduced with
consequent benefits. Motivation helps to solve the central problem of management, i.e., effective
use of human resources. Without motivation the workers may not put their best efforts and may
seek satisfaction of their needs outside the organisation.

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The success of any organisation depends upon the optimum utilisation of resources. The
utilisation of physical resources depends upon the ability to work and the willingness to work of
the employees. In practice, ability is not the problem but necessary will to work is lacking.
Motivation is the main tool for building such a will. It is for this reason that Rensis Likert said,
“Motivation is the core of management.” It is the key to management in action.

From the above discussion, we can say that motivation is an internal feeling which can be
understood only by manager since he is in close contact with the employees. Needs, wants and
desires are inter-related and they are the driving force to act. These needs can be understood by
the manager and he can frame motivation plans accordingly. We can say that motivation
therefore is a continuous process since motivation process is based on needs which are unlimited.
The process has to be continued throughout.

We can summarize by saying that motivation is important both to an individual and a business.

Motivation is important to an individual as:

1. Motivation will help him achieve his personal goals.

2. If an individual is motivated, he will have job satisfaction.
3. Motivation will help in self-development of individual.
4. An individual would always gain by working with a dynamic team.

Similarly, motivation is important to a business as:

1. The more motivated the employees are, the more empowered the team is.
2. The more is the team work and individual employee contribution, more profitable and
successful is the business.
3. During period of amendments, there will be more adaptability and creativity.
4. Motivation will lead to an optimistic and challenging attitude at work place.

Motivation Strategies

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To some extent, a high level of employee motivation is derived from effective management
practices. To develop motivated employees, a manager must treat people as individuals,
empower workers, provide an effective reward system, redesign jobs, and create a flexible
workplace.
1. Empowering employees

Empowerment occurs when individuals in an organization are given autonomy, authority, trust,
and encouragement to accomplish a task. Empowerment is designed to unshackle the worker and
to make a job the worker's responsibility.

In an attempt to empower and to change some of the old bureaucratic ideas, managers are
promoting corporate intrapreneurships. Intrapreneurship encourages employees to pursue new
ideas and gives them the authority to promote those ideas. Obviously, intrapreneurship is not for
the timid, because old structures and processes are turned upside down.

Providing an effective reward system

Managers often use rewards to reinforce employee behavior that they want to continue. A
reward is a work outcome of positive value to the individual. Organizations are rich in rewards
for people whose performance accomplishments help meet organizational objectives. People
receive rewards in one of the following two ways:

 Extrinsic rewards are externally administered. They are valued outcomes given to
someone by another person, typically a supervisor or higher level manager. Common
workplace examples are pay bonuses, promotions, time off, special assignments, office
fixtures, awards, verbal praise, and so on. In all cases, the motivational stimulus of
extrinsic rewards originates outside the individual.

 Intrinsic rewards are self‐administered. Think of the “natural high” a person may
experience after completing a job. That person feels good because she has a feeling of
competency, personal development, and self‐control over her work. In contrast to
extrinsic rewards, the motivational stimulus of intrinsic rewards is internal and doesn't
depend on the actions of other people.

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To motivate behavior, the organization needs to provide an effective reward system. An effective
reward system has four elements:

 Rewards need to satisfy the basic needs of all employees.

 Rewards need to be included in the system and be comparable to ones offered by a

competitive organization in the same area.

 Rewards need to be available to people in the same positions and be distributed fairly and
equitably.

 The overall reward system needs to be multifaceted. Because all people are different,
managers must provide a range of rewards—pay, time off, recognition, or promotion. In
addition, managers should provide several different ways to earn these rewards.

This last point is worth noting. With the widely developing trend toward empowerment in
American industry, many employees and employers are beginning to view traditional pay
systems as inadequate. In a traditional system, people are paid according to the positions they
hold, not the contributions they make. As organizations adopt approaches built upon teams,
customer satisfaction, and empowerment, workers need to be paid differently. Many companies
have already responded by designing numerous pay plans, designed by employee design teams,
which base rewards on skill levels.

Rewards demonstrate to employees that their behavior is appropriate and should be repeated. If
employees don't feel that their work is valued, their motivation will decline.

2. Redesigning jobs

Many people go to work every day and go through the same, unenthusiastic actions to perform
their jobs. These individuals often refer to this condition as burnout. But smart managers can do
something to improve this condition before an employee becomes bored and loses motivation.
The concept of job redesign, which requires knowledge of and concern for the human qualities
people bring with them to the organization, applies motivational theories to the structure of work
for improving productivity and satisfaction

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When redesigning jobs, managers look at both job scope and job depth. Redesign attempts may
include the following:

 Job enlargement. Often referred to as horizontal job loading, job enlargement increases
the variety of tasks a job includes. Although it doesn't increase the quality or the
challenge of those tasks, job enlargement may reduce some of the monotony, and as an
employee's boredom decreases, his or her work quality generally increases.

 Job rotation. This practice assigns people to different jobs or tasks to different people on
a temporary basis. The idea is to add variety and to expose people to the dependence that
one job has on other jobs. Job rotation can encourage higher levels of contributions and
renew interest and enthusiasm. The organization benefits from a cross‐trained workforce.

 Job enrichment. Also called vertical job loading, this application includes not only an
increased variety of tasks, but also provides an employee with more responsibility and
authority. If the skills required to do the job are skills that match the jobholder's abilities,
job enrichment may improve morale and performance.

3. Creating flexibility

Today's employees value personal time. Because of family needs, a traditional nine‐to‐five
workday may not work for many people. Therefore, flextime, which permits employees to set
and control their own work hours, is one way that organizations are accommodating their
employees' needs. Here are some other options organizations are trying as well:

 A compressed workweek is a form of flextime that allows a full‐time job to be

completed in less than the standard 40‐hour, five‐day workweek. Its most common form
is the 4/40 schedule, which gives employees three days off each week. This schedule
benefits the individual through more leisure time and lower commuting costs. The
organization should benefit through lower absenteeism and improved performance. Of
course, the danger in this type of scheduling is the possibility of increased fatigue.

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  Job sharing or twinning occurs when one full‐time job is split between two or more
persons. Job sharing often involves each person working one‐half day, but it can also be
done on weekly or monthly sharing arrangements. When jobs can be split and shared,
organizations can benefit by employing talented people who would otherwise be unable
to work full‐time. The qualified employee who is also a parent may not want to be in the
office for a full day but may be willing to work a half‐day. Although adjustment
problems sometimes occur, the arrangement can be good for all concerned.

 Telecommuting, sometimes called flexplaces, is a work arrangement that allows at least

a portion of scheduled work hours to be completed outside of the office, with work‐at‐
home as one of the options. Telecommuting frees the jobholder from needing to work
fixed hours, wearing special work attire, enduring the normal constraints of commuting,
and having direct contact with supervisors. Home workers often demonstrate increased
productivity, report fewer distractions, enjoy the freedom to be their own boss, and
appreciate the benefit of having more time for themselves.

 Of course, when there are positives, there are also negatives. Many home workers feel
that they work too much and are isolated from their family and friends. In addition to the
feelings of isolation, many employees feel that the lack of visibility at the office may
result in the loss of promotions.

Activity:

 Analyze the levels of needs of employees in a normal organization

 Explain the strategies you would use to motivate employees in different levels of need

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 TOPIC EIGHT

LABOUR WELFARE, EMPLOYEE SAFETY AND HEALTH

Objective
 The learners will be able to come up with measures that would ensure good health and
safety of employees in organization
 Develop techniques of dealing with accidents and emergencies in organizations
 Discuss workplace health and safety programs and the roles of the employer and the
employee in enforcing health and safety policies and procedures.

Introduction
This chapter deals with the services provided by the Human Resource Department in order to
help the organization meet its legal and social responsibilities to ensure a healthy and safe
working environment. This would enable the employee to cope with their personal issues.

Labour welfare
Labour is a factor of production that an organization cannot do away with. No organization can
operate in the absence of cohesiveness and co-operation between labour and management. One
of the ways management seek co-operation from labour force is by providing better working
conditions, adequate lighting and ventilation, suitable temperatures etc. in other words they try
to provide a conducive working environment. These go a long way to stimulate workers to give
their best in terms of performance and productivity hence higher profits for the organization.

Labour welfare Defined

Oxford dictionary defines labour welfare as “any effort to make life worth living for workmen”.
Labour committee on its part defined the same as “in the widest sense, labour welfare compares
all matters affecting the health, safety, comfort and general welfare of the workmen and includes
provision for education, recreation, housing etc.”

Aims and objectives of labour welfare

Employers take up welfare activities with the following aims and objectives in mind

 To win over employees’ loyalty

 To boost the morale of employees

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  To give honest expression to philanthropic and paternalistic feelings
 To combat trade union and socialist ideas
 To reduce labour turnover and maintain consistent labour force in the enterprise
 To increase efficiency and productivity of employees
 To save corporate taxes
 To earn goodwill and enhance creditor’s and public image about the organization
 To reduce the threat of government intervention
 To retain intelligent, effective and efficient employees
 To make recruitment more effective
Employee Safety
Health and safety policies and programmes are concerned with protecting employees and other
people affected by what the company produces and does, against the hazards arising from their
employment or their links with the company. Safety and accident prevention concern managers
for several reasons such as staggering number of work-related accidents. Yet there are apparently
many employers who may take safety less seriously. Therefore employee safety and health
programmes should occupy a pivotal position in personnel management. This is because a
healthy employee is a productive employee. The importance of accident prevention and safety is
escalated in the recent past because modern industrial workers are subject, in the wake of rapid
industrial advancement, to mechanical, chemical, electrical and radiation hazards. Employee
safety is maintained when accidents are prevented.

Causes of accidents
Unsafe conditions at work place includes:-

 Unsafe and defective equipment

 Hazardous arrangement or procedure in and around the machines and equipment
 Inadequate safety devices
 Improper illumination (light)
 Poor house keeping
 Improper or inadequate ventilation or impure air source
 Improperly guarded equipment
 Unsafe storage, congestion and over loading etc

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Unsafe acts includes:-

 Failure to use safety or protective equipment provided by the organization.

 Operating or working in unsafe speed
 Make safety devices inoperative e.g. disconnecting them
 Use unsafe equipment and unsafe procedures
 Failure to consider the safety warning in the work spot
 Throw material on the floor carelessly
 Day dreaming
 Improper cleaning e.g. oil equipment or floors
Safety Programme
To prevent industrial accidents and to ensure employee safety almost every employer should
launch a safety programme considering the following points.

1. The safety program should have the top management approval and support.
2. Supervisory personnel should be entrusted with the responsibility of safety programmes.
3. Safety should be given due consideration like other areas such as wages and salary
administration, recruitment, selection and training etc.
4. A definite safety programme should be developed to educate all employees in safety and
to secure their services active cooperation in order to eliminate industrial accidents.
5. In all phases of management – planning, organizing, procurement or raw materials,
supervision and operations – safety should be included.

Occupational, Safety and Health Act 2001

The factories Act. Cap 514 makes some provisions for the health, safety and welfare of persons
employed in factories and other places. The Act came into operation on 1 st September, 1951.
The issues addressed by this Act includes:-

a) Health
 Cleanliness
 Overcrowding
 Ventilation
 Lighting
 Drainage of floors

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  Sanitary conveniences
b) Safety
 Fencing of machinery
 Self-acting machinery
 Inexperienced workers
 Hoists and lifts
 Lifting machines, chains, ropes and lighting tackles
 Cranes and other lifting machines
 Floors, stairs and means of access
 Precaution against Dangerous fumes
 Precaution against explosive or inflammable dust and gas
 Steam boiler
 Air receivers
 Prevention of fire
 Familiarity of workers with means of escape
c) Welfare
 Supply of drinking water
 Washing facilities
 Accommodation for clothing
 Facilities for sitting
 First Aid

Activity
 Assume you have been appointed a HR manager in an organization dealing with
production of harmful chemicals. You have been asked to come up with a safety
policy for the organization. How would it look like?

TOPIC NINE

EMPLOYEE RELATION

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Objective

At the end of the topic the learner should be have deep understanding and use of the following

 Significance of employee relations

 Parties to employee relations
 Employee unions
 Role of Trade Union
 Collective Bargaining
 Collective agreement
 Manage the employment relationship, which is a shared responsibility between
employers, management, human resources specialists, and employees.

Definition
Armstrong (2001) defines employee relation as “consisting of all those areas of human resource
management that involves relationships with employees – directly and/or through collective
agreements where trade unions are recognized. It is a collective relationship between employers
and employees. They are concerned with generally managing the employment relationship.
These relation-ships will be concerned with the agreement of terms and conditions of
employment and with issues arising from employment. Employee relations practices include
formal processes, procedures and channels of communication. Employee relations have a wider
scope than “industrial relations”. Industrial relations are confined to the regulation of the
relationship principally by means of collective bargaining, whereas an employee relation is
concerned with all aspects of the interrelationship between management and employees. It
embraces most, if not all, of the following issues.

 The contractual obligations between employer and employed

 Communications policy and practice
 Joint decision making
 Joint problem solving
 Collective bargaining
 Individual grievance and disciplinary policy and practice
 Social responsibility

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  Employee development
 Employee welfare
However, employee relations confirms mostly to the first six issues. Even though trade union
plays a role in most of those issues, it is not a prerequisite, for employee relations is as important
for non-union organizations as it is for unionized organizations.

Significance of Employee Relations

1) Sound Employee relations in increased productivity which is necessary for bringing rapid
development.
2) It helps in establishing and maintaining the industrial democracy which is necessary for
the establishment of a socialist society.
3) It results in smooth collective bargaining on part of both labor and management.
4) Helps government in framing and implementing various laws pertaining to labor
forbidding unfair practices of unions and employers.
5) Good employee relations results in less number of disputes and grievances, and it boost
the morale and discipline of workers.
6) Good industrial relations results in orderliness, effectiveness and efficiency of economy.
Unions gain more strength and vitality. Inter-union rivalry reduces considerably.
Objective of Employee Relations

Sound employee relations are necessary for bringing about and maintaining good and
healthy relationship between employers and employees. Industrial relations are basically
aimed at:-

1. Safeguarding the interests of labor and management by securing the highest level
of mutual understanding and good will among those workers and sections in the
industry which participates in the process if production.
2. Avoiding the industrial conflict or strife and developing harmonious relations
which are absolutely essential for improving productivity and industrial progress.
3. Raising productivity to a higher level by reducing absenteeism and labor turnover.
4. Establishing and nursing of growth of an industrial democracy based on labor
partnership in the sharing of profits and of management decisions, so that an

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 individual can grow to his fullest potential and contribute to the industry as well
as country.
5. Eliminating the possible strikes and lockouts by providing reasonable wages,
improved working conditions and settling the grievances.
6. Establishing government control over such plants and units which are running at
substantial losses and those units producing goods prohibited in the public
interest.

Parties to Employee Relations

The major parties to employee relations are primarily individual employees and their managers.
However there are other important stakeholders in management – employee relationships. They
include:-

 Trade Union Representative

 Government and government bodies
 Courts and tribunals
 Employer’s association representatives
A. Managers tend to see employee relations in terms of the following activities.
1. Creating and maintaining employee motivation
2. Obtaining commitment from the workforce
3. Establishing mutually beneficial channels of communication throughout the organization
4. Achieving high level of efficiency
5. Negotiating terms and conditions of employment with employee representatives
6. Sharing decision making with employees
7. Engaging in a power struggle with trade unions
B. Employers’ association representative would tend to share most of the above views
C. Trade unionists tend to see employee relations as:-
 Collative bargaining about terms and conditions of employment
 Representing individuals and groups of individuals in conflict with their management
 Improving the ability of employees to influence events in the workplace
 Regulating relations with other trade unions

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D. Individual employees tend to see employee relations in terms of the opportunity to:-
 Improve their conditions of employment
 Voice any grievances
 Exchange views and ideas with management
 Share in decision making
E. Third parties, such as government ministries, arbitrators, judges and civil servants may see
employee relations more in terms of:-
 Creating and maintaining harmonious relationship at work
 Creating a framework of rules of fair conduct in employer employee relations
 Representing the community as a whole in dealing with the repercussions of internal
conflicts or decisions made within individual organizations.
 Establishing peace-making arrangements to deal with breakdowns in employer-employee
relations.
 Achieving a prosperous society with justice.
The above different perspectives bring about some degree of conflicts in employee relations.
However, there can also be a substantial amount of common interest, and much of employee
relations is concerned with finding out what are these areas and how they can be turned to
mutual advantage.

Collective Bargaining
Introduction

Individual employment contract is the cornerstone of the employment relationship. Let us now
look at the main elements of ‘collective contracts’ or collective agreements. These are
agreement made collectively between employee representatives and managements. They are
important for individual because they have the effect of becoming implied terms of the
individual employment contract. However not all employees are covered by collective
bargaining arrangements. Collective bargaining will also tend to affect the whole labour market
including non-union firms.

What is Collective Bargaining?

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ACAS, (1980) defines collective bargaining as “the process whereby procedures are jointly
agreed and wages and conditions of employment are settled by negotiations between employers,
or association of employers and workers’ organizations.

Thus some of the important features of collective bargaining includes:-

1. the emphasis on collective action, not on individual action

2. the concern both with rule-making and with the settlement of employment conditions
3. the aim, as in every form of bargaining, is to reach agreement eventually
4. the interest of parties to collective bargaining are not identical, and therefore conflicts
of interest is assumed
5. it is not imposed by law but its voluntary activity

Forms of Collective Bargaining

Collective bargaining takes two basic forms, as identified by Chamberlain and Kuhn (1965)

 Conjunctive Bargaining
This arises from the absolute requirement that some agreement may be reached so the operations
on which both are dependent may continue, and results in a working relationship in which each
party agrees, explicitly or implicitly, and to accept certain responsibilities of each other.

 Cooperative bargaining
This is where it is recognized that each party is dependent on the other and can achieve its
objectives more effectively if it wins the support of the other.

Types of Agreement
There are two types of industrial relations agreement

(a) Procedure Agreements

These are formal, written procedures that act as a voluntary code of conduct for the parties
concerned (i.e. managers, employers and employee representatives). By agreeing a
framework of rules, the respective parties are agreeing to abstain from the arbitrary use of the
powers. It generally encompasses the following kind of issues

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  Recognition of one or more trade unions for the purpose of collective bargaining on
behalf of organizations employees
 Regulation of membership (e.g. who is to be included and on what terms)
 Representational arrangements (e.g. how many union representatives and what rights they
will have)
 Definition of the subjects for substantive bargaining
 Development procedures for handling disputes between the parties
 Development of a grievance procedure
 Definition of the rules for dealing with the declaration of redundancies
 Arrangements for the collection of union subscriptions (e.g. by deduction from pay)
(b) Substantive Agreements
These are formal, written agreements containing the terms under which, for the time being,
employees are to be employed such agreements usually run for a limited period, such as one
year, or possibly two. In times of high cost inflation, it is usual for unions to make a formal
chain annually, so as to ensure that wages and salaries keep pace with the cost of living. A
typical substantive agreement contains details of:-

 Revisions to salaries/rate of pay

 Bonus/incentive arrangements
 Changes in working hours (e.g. introduction of shift working or agreement on a
shorter working week)
 Holiday entitlement/arrangements
 Pension arrangements
 Staffing levels
 Productivity improvements arising from changes and working practices.
Not all substantive agreements include pay. The reason is that large companies, in particular,
have several levels of negotiations with their unions, pay is usually settled at a corporate level,
leaving local units to decide on working practices, hours and holiday arrangement within
framework of a Company Agreement on pay and basic conditions.

Collective Bargaining Power

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The process of negotiating collective agreements does not occur in a vacuum. It forms part of a
continuous relationship between rank-and file employees and their management. The aim is to
achieve a workable relationship with management, founded on mutual respect, in which tangible
benefits are realized on agreed terms and not just at management’s whim. This is the view of
employee representatives. On the other hand management representative view collective
bargaining as one method of attaining corporate objectives relating to pay and the conduct of
employee relations. By the time bargaining begins, there are already several divergent attitude to
work when it comes to agreeing what is to be negotiated and how.

Below is a model of successful negotiation.

Management decides Settlement Published Union decides

strategy/Objectives strategy/objectives
Implemented and
 Employee relations  Pay conditions
 Pay policy Monitored  Unionization etc

Agreed Assess bargaining power

Assess bargaining Settlement

Decide tactics Final negotiations Decide tactics

Analyze claim and

prepare answer
Initial negotiation Prepare & submit
union’s claim

Model of successful negotiation source Cole (2002)

The model gives an indication of the extent of preparatory work that has to be undertaken by
both sides in a negotiation. Each side has to decide its overall objectives or strategy, assess its

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relative bargaining strength, and, in the light of that assessment, decide on the tactics to be
employed to achieve an optimum result.

Power in Bargaining
Power is the ability to influence people’s behaviour in industrial relation both parties have a
degree of what might be called intrinsic power, that is their ability to influence the other by
virtue of their status. For example a manager has positional power where a worker has expert
power (i.e. skills needed by employer)

Whether or not either side decides to test their power resources depends on a number of factors
e.g.:-

1. The degree of dependence on each other

2. The amount of trust in the relationship
3. The existence of rule of behaviour
4. The astuteness of the negotiators
5. The extent to which sanctions are available.
The above factors will determine the extent to which either side uses coercion rather than
persuasion to bring about a settlement, for these are the two main approaches available. The
degree of interdependence that exists between management and the workforce is a major factor
in negotiations. There are three main approaches available.

1. Employees rely heavily on management, because there is little alternative employment

available. Thus management is in strong bargaining position.
2. Management relies heavily on some or all groups of employees, because alternative skills
are more available in the market place, and because there is no technological alternative
available. Thus employees are in a strong bargaining position.
3. Both sides recognize their mutual interdependence in prevailing circumstances. Thus
both parties can recognize their relative strengths and weaknesses.
The amount of trust built up between management and trade union representatives, in particular,
and between management and work force generally, is a major factor in the quality of industrial
relations of an organization. Where trust is high, it is less likely that one side or the other will

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resort to sanctions, i.e. the imposition of penalties on the other. Typical sanctions open to trade
unions acting collectively are:-

 Strikes (withdrawal of labour)

 Non-co-operation
 Banning extra duties/overtime working
 Work-to-rule
Typical management sanctions include:-

 Dismissal by means of redundancy

 Dismissal for strike action
 Refusal to implement improvements
 Insistence on introducing change regardless of employees views
 Ignoring the union’s demand

Rules are an important means by which conflict may be institutionalized. Where industrial
relations rules exist, then the parties concerned are constrained in their actions. Typical rules
include:-

 Company rules concerning discipline

 Trade union rules for shop steward/employee representatives
 Custom-and-practice, i.e. unwritten rules
 Legal requirements
Conclusion

Collective bargaining is a very vital element in management – employee relations, enabling

agreed rules of conduct to be drawn between the parties thus organizations can be run smoothly.

The Role of Trade Union

Trade unions can be said to be an organization of workers that aims to improve pay and
conditions of work. In other words, it aims to protect and promote employees interests in the
work place, mainly by means of collective bargaining and consultation with employers. In
practice, they have also played an important role in the political life of the nation, and, to a lesser
extent, in its social affairs. As with all organizations providing a service to the community, the

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ability of trade unions to exercise power and influence over users of their services depends on the
relative demand for that service. Thus when demand for skilled labour in the economy is high,
trade unions are in a relatively powerful position to negotiate on behalf of that labour. They are
also able in such circumstances to employ a wide range of sanctions against employers. When
demand for labour is slack and unemployment is high, trade union power to influence events
become more limited.

Trade union dominate the pay bargaining area and have an important watchdog role to perform,
supported by law, to prevent managements from acting in a purely arbitrary fashion. However,
today, it is more likely that groups of employees in the form of empowered work teams will the
biggest contribution to the control of work and its processes. The emphasis in employee
relations today is as much on producing joint procedures and rule of behaviour. Wages and other
conditions are now more influenced by the competitive situation than by internal power struggles
between management and trade unions.

Types of Trade Union

Trade unions are placed in four categories:-

 Manual workers’ union

 White-collar unions
 Managerial/professional unions
 Staff associations

Task:
Explain the responsibilities of management, HRM specialists, managers, and employees in
managing the employment relationship in a unionized or a non-unionized environment

TOPIC TEN

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 REWARD MANAGEMENT
Introduction

A person may opt for employment in an organization to satisfy various needs and desires. He
may do so to satisfy his economic needs, security needs, social needs, recognition and status
needs. But satisfaction of economic needs must occupy an importance place in his list of
priorities.

It is therefore, only proper those policies with regard to wage and salary administration and
supplementary benefits to employees should form a vital component of the policy of the
organization

Compensation

Employee compensation refers to all forms of pay or rewards going to employees and arising
from their employment. It has two main components, direct financial payments (wages, salaries,
incentives, commission and bonuses) and indirect payments (financial benefits like employers
paid insurance and vacations). The process of establishing pay rates while ensuring external,
internal, and, to some extend the procedural equity consists of five steps. They are:

1) Conduct a salary survey of what other employers are paying for

comparable jobs
2) Determine the worth of each job in your organization through job
evaluation
3) Group similar jobs into pay grades
4) Price each pay grade by wave curves
5) Fine-tune pay rates.

In this chapter, we are going to concentrate on determining the worth of each job in your
organization. However you should familiarize yourself with the other four steps.

Job Evaluation

Introduction

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The aim of job evaluation is to determine the worth of different jobs in an organization. The
worth of job should be made clear because the level of pay should reflect the worth of a job
being performed by an employee.

Job evaluation

According to Edwin Flippo “job evaluation is a systematic and orderly process of determining
the worth of a job in relation to other jobs.

Objectives of Job Evaluation

1. To secure and maintain complete, accurate and impersonal descriptions of each distinct
job or occupation in the entire plant
2. To provide a standard procedure for determining the relative worth of each job in a plant.
3. To determine the rate of pay for each job which fair and equitable with relation to other
jobs in the plant, community or industry.
4. To ensure that the like wages are paid to all employees for like work done
5. To promote a fair and accurate consideration of all employees for advancement and
transfer.
6. To provide information for work organization, employee’s selection, placement, training
and numerous other problems.
Benefits of Job Evaluation

1. It provides useful platform for effective wage and salary control.

2. It provides for smooth union management negotiations of wages.
3. It helps to compare salary and wage structure of employees in the organization with that
of the employees in the industry as a whole.
4. It helps in standardization and improvement in working conditions.
5. It helps employees in clearly understanding their duties and responsibilities.
6. Existing grievances for setting justifiable wages can be looked into by negotiating with
the management.
Methods of job evaluation

1. Ranking Method: This involves arranging jobs from the highest to lowest

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 2. Factor comparison method: Jobs are ranked according to series of factors such as, mental
effort, physical effort, skills needed, working conditions etc
3. Point Method: Regular numerical grades for all jobs are assigned and the jobs of the same
grade qualify for the same wage.
4. Classification Method: A predetermined number of job groups or job classes are
established and jobs are assigned to these classification.
e.g. Class 1 Executive- G.M, assistant manager, deputy manager, office superintendent,
Departmental heads.
Element of good compensation policy

The following are key elements of a sound compensation policy:

 Levels and adequacy of wage payment (depends on wage level etc.)

 Equity in wage payment
 Recognition of efficiency performance (old vs. inexperienced workers)
 Incentive payment
Factors influencing wages and salaries structure:

 The firm capacity to pay

 Demand for and supply of labor
 The exciting market wage rate
 The cost of hiring
 Job requirement
 Productivity of labor (per man hour)
 Managerial attitude
 Psychological and social factors
 Trade union bargaining power
Methods of wage payment

1) Time rate method

Under this method, payment is made on the basis of time that may be an hour, a day, a
week or a month. A certain sum of money is set for each of the above unit of time.
Mostly, the workers are paid according to number of hours worked in a particular week

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Q
 or month. Hourly rate is decided in advance at the time a worker is employed. This
hourly rate is multiplied by the number of hours worked during a particular month and
the resultant figure is the wage for that month.

2) Piece rate method

Under this method, an employee is paid per unit of product, article or per job completed.
This method is used only if the work can be divided into uniform pieces as is often
possible for factory jobs
Question: what are the advantages and disadvantages of piece rate method?

3) High time rate for over time.

4) Piece rate with guaranteed time rate (if output exceeds)
5) Differential piece rate (rate varies at different levels of output)
Question: discuss the above methods of payment (i.e. nos. 3, 4&5)

Incentive Schemes and Fringe Benefits

Incentive pay may be regarded as the extra pay that is provided for extra performance in addition
to regular pay.

Objectives

1) To motivate workers to perform effectively.

2) To improve the profits of an enterprise through a reduction in the cost of labor and
material or both.
3) To secure a better utilization of manpower, better promotion scheduling and performance
control, and a more effective personnel policy.
4) To increase workers earning without dragging the firm into a higher wage structure.
5) To induce the effective employees to stick to the enterprise.
6) To attract effective workers from inside to join this firm.
N/B Incentives can be offered to a group of individuals depending on the nature of job
being done
Non-Financial Motivation
 Status

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  Promotion
 Responsibility
 Recognition of workers
 Job security
 Praise

Fringe Benefits

Every organization provides some benefits and services to its employees in order to attract and
retain item, and to maintain loyalty towards the enterprise.

Fringe benefits are the supplements to wages received by wages at a cost to employers. The term
fringe benefits encompasses a number of benefits such as

 Paid vacation
 Pension
 Health & insurance plan etc.
Why an employer should provide fringe benefits to employees
1) Inflation has brought about great demand for provision of extra benefits to the
employees.
2) When it is not possible for employees to negotiate higher wages and salaries,
they remain contented with fringe benefits
3) When some big organization announces fringe benefits to their employees, the
competing organizations may also be forces to offer those benefits in order to
retain their own staff
4) The growth and strength of trade union then exerts a profound influence on the
company benefits and services to employees.
5) The contemporary management scientists believe that the benefits of increased in
productivity resulting from increased industrialization should go to employees
who are primarily responsible for it.
Objectives of Fringe Benefits

1) To keep in tune with the prevailing practices of offering fringe benefits and services
provided by the competing firms.

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 2) To increase and improve employees’ morale and create a helpful and positive attitude on
the part of the employees towards the enterprises.
3) To create and maintain a good image of the company in the minds of the employees and
the customers.
4) To recruit and retain better personnel in the enterprise.
5) To protect the employees against the hazards of life
6) To acknowledge the trade union bargaining power.
Fringe Benefits Includes

 Payment for non-working time

 Profit and bonus
 Legally sanctioned payment on social security sciences
 Workmen compensation
 Post-retirement, medical, educational, cultural and recreational needs of employees.
 Subsided housing, food and other related activities.
Activity:
Discuss the challenges of developing a wage structure and suggest ways of overcoming these
challenges.

TOPIC ELEVEN

156
Objective
 To come up with a grievance handling procedure
 Appreciate the importance of employee involvement

GRIEVANCES AND GRIEVANCE RESOLUTION

A grievance is an individual dispute between an employee and his or her employer. It can also be
any factor involving wages, terms or conditions of employment that is used as a complaint
against the employer. The labour contract’s grievance procedure usually handles problems
brought about by grievances. It is a procedure that provides an orderly system whereby both
employer and union determine whether some action violated the contract. The grievance process
allows both parties to interpret and give meaning to various clauses, and transforms the contract
into a living organism.

Sources of Grievances
Employees may use just about any factor involving wages, terms or conditions of employment as
the basic of grievance. However, certain grievances are more serious, since they are usually more
difficult to settle. Discipline cases and security problems including promotions, transfers and
lay-offs would top this list. Others would include grievance growing out of the job evaluations
and work assignments, overtime, vocations, incentive plans, and holidays. Here are four
examples of grievances.

1. Absenteeism: An employer fired an employee for excessive absences. The employee filed a
grievance stating that there had been no previous warnings or discipline related to excessive
absences.
2. Insubordination: An employee on two occasions refused to obey a supervisor’s order to
meet with him, unless a union representative was present at the meeting. As a result, the
employee was discharged and subsequently filed a grievance protesting the discharge.
3. Overtime: The employer discontinued Sunday overtime work after a department was split.
Employees affected filed a grievance protesting loss of the overtime work.
4. Plant rules: The plant had posted rule barring employees from eating or drinking during
unscheduled breaks. The employees filed a grievance claiming the rule was arbitrary.

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A grievance is often a symptom of an underlying problem. Sometimes, bad relationships
between supervisors and subordinates are to blame. This is often the cause of grievance over
“fair treatment”, for instance. Organizational factors such as automated jobs or ambiguous job
descriptions that frustrate or aggravate employees also cause grievances.

Union activism is another cause; the union may solicit grievances from workers to underscore
ineffective supervision. Problem employees are yet another underlying cause of grievances.
These are individuals, who, by their nature, are negative, dissatisfied, and prone to complaints.
Discipline and dismissal are also both major sources of grievances.

The Grievance Procedure

Most collective bargaining contracts contain a very specific grievance procedure. It lists the
various steps in the procedure, time limits associated with each step, and specific rules such as
“all charges of contract violation must be reduced to writing”.

Union grievance procedures differ from firm to firm. Below are the stages of a typical grievance
procedure.

Employee raises grievances with immediate

Supervisor

If matters are not settled it’s taken to the next level of management and
the employees may be accompanied by a friend or trade union
representative

If the matter is still not resolved, it is taken to a senior management

level, and the employee may take a representative as before

If the employee is still not satisfied he/she may appeal to the managing
Director
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Guideline for Handling Grievance
The best way to handle a grievance is to develop a work environment in which grievances do not
occur in the first place. It is important to be able to recognize, diagnose and correct the causes of
potential employee dissatisfaction before they become grievances. The manager is on firing line
and must steer a course between treating employees fairly and maintaining management’s rights
and prerogatives.

Whereas grievances are initiated by the employee, disciplinary matters are initiated by
management. At work discipline is a question of devising appropriate rules of behaviour for
employees and providing fair and consistent means of enforcing them. One expert has
developed a list of do’s and don’ts as useful guides in handling grievances. Some critical ones
includes:-

Do

1. Investigate and handle each case as though it may eventually result in arbitration.
2. Talk with the employee about his or her grievance; give the person a full hearing.
3. Require the union to identify specific contractual provisions allegedly violated.
4. Comply with the contractual time limit for handling the grievance.
5. Visit the work area of the grievance.
6. Determine whether there were any witnesses.
7. Examine the grievant personal records.
8. Fully examine prior grievance records.
9. Treat the union representative as your equal.
10. Hold your grievance discussions privately.
11. Fully inform your own supervisors of grievance matters.
Don’t

1. Discuss the case with the union steward alone. The grievant should be there.
2. Make arrangements with individual employees that are inconsistent with the labour
agreement.
3. Hold back the remedy if the company is wrong.
4. Admit to the binding effect of a past practice.

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5. Relinquish to the union your rights as a manager.
6. Settle grievances based on what is “fair”. Instead, stick to the labour agreement.
7. Bargain over items not covered by the contract.
8. Give long written grievance answers.
9. Trade a grievance settlement for a grievance withdrawal.
10. Deny grievances because “your hands have been tied by management”.
11. Agree to informal amendment in the contract.
A key issue in any disciplinary procedure is that of authority to act. In order to achieve fairness
and consistency, individual managers and supervisors need to know what the limits of their
authority are when it comes to disciplinary action. The options available to organizations are:-

1. Oral warning to employee

2. First written warning
3. Second and final written warning
4. Suspension of employee with pay
5. Suspension of employee without pay
6. Dismissal
Employee Participation
In the recent years there has been an enormous growth in the popularity of various employee
involvement schemes under the umbrella of empowerment. Employee involvement to a term
that has a history and as Foy (1994) points out, empowering people is as important today as
involving them in the 1980s and getting them to participate in the 1970s.

As we have already notes, employee involvement is not a new concept. It has a rich and varied
history but in recent years many managerial initiatives have sprung up in its name. the best
known of these have been quality circles, team-briefing, team working and empowerment, which
are often an nested with organizational culture change schemes such as total quality
management, culture change schemes such as total quality management, customer services
initiatives, business process re-engineering, and the learning organization.

Aims of Employee Involvement and Participation

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The CIPD in its code on Employee Involvement and Participation in the United Kingdom (1930
c) states that the involvement of, and participation by, employees in any organization, should aim
to:-

 Generate commitment of all employees to the success of the organization.

 Enable the organization better to meet the needs of its customers and adapt to changing
market requirements, and hence to maximize its future prospects and the prospects of
those who work in it.
 Help the organization to improve performance and productively and adopt new methods
of working to match new technology, drawing on the resources of knowledge and
practical skills of all its employees.
 Improve the satisfaction employees get from their work
 Provide all employees with the opportunity to influence and be involved in decisions
which are likely to affect their interests.
Forms of employee involvement includes

1. Downward communication
2. Upward problem solving
3. Task participation
4. Consultation and representative participation
5. Financial involvement

Activity: Critically explain the process of handling disputes/grievances in an organization

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 TOPIC TWELVE

EMPLOYEE COUNSELLING AND STRESS MANAGEMENT

Objective: At the end of this topic the learner will have a clear understanding of the following
 Meaning of employee counselling
 Need of employee counselling
 Areas of employee counselling
 Meaning and sources of employee stress
 Dealing with employee stress

What is Employee Counseling?

Employee counselling is a psychological health care intervention which can take many forms. Its
aim is to assist both the employer and employee by intervening with an active problem-solving
approach to tackling the problems at hand.

The costs to industry and commerce each year associated with employees’ poor psychological
health are enormous. A significant proportion of the Gross National Product (GNP) of
industrialized countries is lost each year through ill-health, particularly in respect of stress-
related illness.

These costs increase substantially when lost productivity resulting from stress-related
inefficiency and incompetence is taken into account. Stress-related incompetence is not
inevitable though.

Employee counselling can do much to prevent the negative effects of stress at an individual level
and ultimately at an organizational level.

Few organizations can now afford to ignore the consequences associated with employees’
psychological health

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A counseling session is a meeting between the supervisor and the employee which may focus on
a specific incident, a particular aspect of an employee's performance which the supervisor has
identified as needing improvement, or the employee's overall performance or conduct.

Need of Employee Counseling

Employee counselling gives individuals a valuable opportunity to work through problems and
stresses in a strictly confidential and supportive atmosphere.

Counselling provides access to several basic forms of helping: giving information, direct action,
teaching and coaching, advocacy, and providing feedback and advice, for example

Typically, counselling involves the individual employee meeting with a psychological adviser,
usually on a one-on-one basis. It is not uncommon for the individual employee and counsellor to
meet once or twice a week for several weeks. However, the number and frequency of meetings
required will depend upon the nature of the perceived difficulty and the nature of the intervention
needed.

The focus of counselling sessions is to encourage discussion of personal and work-related

difficulties. This is often followed by the adoption of an active problem-solving approach to
tackle the problems at hand.

The specific aims of employee counselling are to:

 Explore and find the key sources of difficulty (this step may include the use of diagnostic
self-report tests.
 Review the individual’s current strategies and styles of coping.
 Implement methods of dealing with the perceived problem, thereby alleviating the issue.
Often, this step may involve also improving interpersonal relations at work and/or
improving personal performance.
 Evaluate the effectiveness of the chosen strategies.

Objectives/Functions of Counselling

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Whatever may be purpose of counselling, objectives/functions of counselling can be categorized
into six major areas which are detailed as follows:

Rendering advice:

It is the function of coaching by the counsellor, who may be the immediate boss or a
professional. Here the counsellor listens to the problems of the employees and then guides them
to the right direction. Reassurance it is the function of restoring the confidence of the employees,
helping them to feel courageous, to gain strength, and to develop positive thinking. In cases,
where employees are entrusted with challenging assignments, reassuring them is very important,
to help them realize that they can achieve the results.

Clarifying the thinking:

It is the function of encouragement to the employees to be rational and realistic. Employees often
lose their emotional balance in executing their assignments and jobs, and hence commit
decisional errors. Helping them to be rational by clarifying their way of thinking, puts them back
into the realities and enables them to achieve the results.

Release of emotional tension:

It is the process of relief from frustration and stress. The counsellor allows the employees to
share their grief. In the process of sharing, employees get relief from their emotional tensions.
This does not lead to a solution by itself, but it breaks the ice, allowing the counsellor to
understand the possible ways for solution.

Communication:

It is a process of sharing the information and understanding, through upward and downward
communication. Upward communication flows from the employees, who bring their feelings and
emotional problems to the notice of the management. Downward communication flows from the
counsellors, who help the employees get an insight into the activities of the organization.

Reorientation:

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It is a process of encouragement to bring internal changes in goals, values, and mental models,
helping employees to leverage their strengths and guarding against their weaknesses.

Types of Counselling

Depending on the reasons for counselling, a counsellor can make use of several types of
counselling, as detailed below:

Directive counselling

In this type of counselling, the counsellor plays the role of an empathetic listener and then takes
decisions about the right courses of action for the employees. The counsellor also motivates the
employees to follow the suggested courses of action.

Non-directive counselling

The counsellor uses this type of counselling, not only to listen but also to provoke the employees
to explain the problems. On understanding the problems, the counsellor determines the courses
of action and then facilitates the employees to identify on their own, the possible solutions to
those problems. Since finding solutions to problems is left to the employees who are being
counselled, we also call it ‘client-centred’ counselling.

Participative or cooperative counselling

It is in between the earlier two types of counselling. Here, both the counsellor and the counselled
develop close mental relationships, exchange ideas, feelings, knowledge, and information, to
overcome the problem of the counselee. Since the possible-solution inputs are also collected
from the counselee, we call it participative counselling.

In organizations, managers have to adopt suitable types of counselling depending on the reasons,
type of employees for whom the counselling is intended, and the underlying situation that
prevails at a particular point of time. Directive counselling is preferred in those cases, where the
employees are unable to decide their courses of action.

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Non-directive counseling is for those who are knowledgeable and capable enough to decide,
once the problems are explained to them. Participative counselling is effective in cases where
organizations are trying to change, which may be for mergers and acquisitions, technological
changes, business process reengineering, policy related changes, etc.

Most of the merger cases fail due to emotional blocks of the employees. Videocon’s success in
transforming the Philips unit, after acquisition, is attributable to participative counselling. All
senior executives were initially told to put in 80 per cent of their time in talking to people and
helping them to get their doubts and apprehensions clarified.

This helped the company to enable the people to relate with the transformation process, shedding
their age-old legacy bound thoughts and beliefs. However, another Philips unit. Total Plastics
Solutions, acquired by their employees could not be transformed. Hence, the manager as
counsellor has to adopt a contingency view of counselling, irrespective of his/her preferred style.

Steps in the Counselling Process:

Irrespective of the reasons and the style adopted for counselling, the counsellor has to adopt
certain common steps, to make the process successful

Such stages or steps are:

Initiating

At this stage the counsellor establishes a rapport with the employee concerned, developing
mutual understanding and promoting openness. This ensures inculcation of confidence in the
mind of the person being counselled and in the process, to gain acceptance from that person.

Exploring

At this stage the counselee is urged to describe in his/her own words, the situation, feelings,
problems, and the needs. Here, the counsellor endeavours to let the counselee understand his/her
own weaknesses and shortcomings and in the process develop a sense of mutuality. Mutuality is

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positively relating and interacting with the people. To promote mutuality, the counsellor has to
have empathy in his communication, negotiation and mediation skills.

Also, his/her personal attitude should be that of caring and respect for the counselee and should
also show an eagerness to cooperate.

Framing of action plan

To make the counselling process successful, the counsellor has to frame an action plan, duly
charting the do’s and don’ts. Thus, counselling is used by organizations as a tool to help the
employees to bring about attitudinal changes in themselves and to adjust with the changing
situations, duly promoting the sense of mutuality.

However, it is also important to understand that counselling, per se, cannot improve the work
environment, or make the workers’ productive. Along with the other tools, counselling has to be
used as a supplemental effort to bring about the required improvements and changes in the
behaviour of the employees.

Concerns of counselors

An employee should be counseled when he or she has personal problems that affect
job performance. Supervisors should recognize early signs. Signs of a troubled employee
include:·
 Sudden change of behavior ·
 Preoccupation
 Irritability·
 Increased accidents·
 Increased fatigue·
 Excessive drinking·
 Reduced production·
 Waste·
 Difficulty in absorbing training·
 Substance abuse

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Some of the most common Work/Life issues that our members face are:

 Child care and daycare

 Aging issues and elder care
 Health and wellness
 Legal problems and family law
 Debt and debt restructuring
 Financial planning
 Education and tuition planning
 Real estate and tenant/landlord concerns
 Estate planning, probate and wills

Employees stress is a growing concern for organizations today. Stress can be defined as a lively
circumstance in which people face constraints, opportunities, or loss of something they desire
and for which the consequence is both unpredictable as well as crucial.

Things that are stressing your employees and how to fix them:

1. Their paychecks. Since many people live paycheck to paycheck and don't have a cushion in
case of layoff, many employees worry if they'll be paid on time.

How to fix it: Educate your employees quarterly on the financial stability of the company and
what they can expect in the coming month. There should never be surprises for employees when
it comes to their paychecks.

2. Their jobs. Do they have a future at the company? Will they be promoted and get a raise? Or
will they be laid off at the first downturn? It's difficult, especially for older employees, to get
another job during times of high unemployment.

How to fix it: Review employee job performance and career expectations informally on a
quarterly basis. Again, there should be no surprises.

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3. What the boss thinks. The manager comes into the office one day in a bad mood and every
employee wonders if he or she is the cause. This can be especially worrisome if the manager
always favors certain employees over others.

How to fix it: As a business owner, you need to assure employees that issues outside the office
aren't a reflection on them. Also, don't choose favorites—play fair with all your employees.

4. Fulfilling unrealistic expectations. Many employees want to work hard, but worry about
their lack of control over how and when the work is performed. They feel pressure from what
they believe are unrealistic expectations.

How to fix it: The manager needs to set objectives for the employee, but then let the employee
control the manner in which they are achieved. (In other words, stop micromanaging.)

5. Their personal lives. Employees are worried about their families, what others think and what
people are saying about them in social media updates.

How to fix it: As long as work is getting done, don’t monitor infrequent use of cell phones and
social media at work. Employees will "sneak a peek" anyway.

6. Coworker drama. All employees aren't going to get along. And some workers believe others
are holding them back from getting the job done.

How to fix it: Pay special attention to how the team works together, not just how employees
perform as individuals. Identify team leaders who can foster teamwork.

7. They don’t like their physical environment. They have no private space at work. This is
becoming increasingly common for open workspace offices

How to fix it: While it may not always be possible or desirable to give every employee a private
workspace, there should be some location at work (like a locker) that only that employee can
access.

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8. Long commutes. Some employees come to work already stressed because of traffic or other
commuting hassles.

How to fix it: If possible, hire people who live closer to work. For people who don't, try
adjusting their schedules so they're not commuting during rush hour. You can also test to see if
working at home, at least part time, would be effective.

9. Their health (or their high insurance deductibles). Employees worry about their weight,
appearance and other health issues, as well as the cost of healthcare.

How to fix it: Let employees choose their level of insurance coverage based on what they need
and the cost they can afford. Every owner should try to participate in paying for a portion of
employees' healthcare as part of their overall compensation package. (Also, offering a gym perk
could go far to help employees feel better and boost their productivity.)

10. Long meetings. Employees think that many meetings are either too long or just pointless.
During these meetings, they keep thinking about all the other work they need to get done, and
worry about when they're going to do it.

How to fix it: Set a time limit to every meeting and always adhere to an agenda that's set up
front. Having attendees stand during meetings will also shorten their length

Some Other common causes of stress include:

1. Overload

This is the extent to which individuals feel that the demands of their workload and the associated
time pressures are a source of pressure, for example:

 unrealistic deadlines and expectations, often as a result of super achievement by the most
talented
 technology overload
 unmanageable workloads
 under recruitment of staff for work already timetabled

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 2. Control

The experience of pressure is strongly linked to perceptions of control. Lack of influence and
consultation in the way in which work is organized and performed can be a potential source of
pressure, for example:

 lack of control over aspects of the job

 lack of involvement in decision making
 account not taken of staff ideas/suggestions about the job
 lack of influence over performance targets
 lack of time

3. Work relationships

Many jobs demand regular contact with other people at work. Poor or unsupportive relationships
with colleagues and/or supervisors can be a potential source of pressure. In addition, pressure can
occur if individuals feel isolated or unfairly treated.

Poor work relationships can be a result of:

 aggressive management style

 lack of support from others
 isolation at work
 aversive behaviour, e.g. bullying and harassment
 lack of understanding and leadership
 manager forever finding fault
 others not pulling their weight
 others take credit for personal achievements
 poor relationships with colleagues

4. Job security

This is the extent to which lack of job security and job changes are a source of pressure, for
example:

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  job insecurity
 lack of job permanence, e.g. temporary/fixed term contracts
 future job change
 fear of skill redundancy

5. Work-life balance

The demands of work have the potential to spill over and affect personal and home life and so
put a strain on relationships outside work, for example:

 long hours: being expected to or having to work additional hours at home to the detriment
of personal, partner and family relationships
 over-demanding and inflexible work schedules
 unsocial hours
 excessive travel time
 work interfering with home/personal life

6. Resources and communication

To perform a job effectively, individuals need to feel that they have appropriate training,
equipment and resources. They also need to feel that they are adequately informed and that they
are valued. Stress may result from lack of:

 information about what is going on in the organisation

 feedback on performance
 adequate training to do the job
 equipment/resources to do the job

7. Pays and benefits

The financial rewards associated with a job are important in terms of lifestyle. They are also
often perceived to be an indication of an individual's worth and value to the organisation.
Although financial reward may not be a prime motivator, it could become a factor if there are
other negative aspects of the job.

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 8. Aspects of the job

These are potential sources of stress that relate to the fundamental nature of the job itself. Factors
such as the physical working conditions, type of tasks and the amount of satisfaction derived
from the job.

 job is unlikely to change in the next 5–10 years

 poor physical working conditions
 fear of physical violence
 work performance closely monitored
 organisation changes for change's sake
 dull and repetitive work
 dealing with difficult customers/clients
 lack of enjoyment of job

Strategies for Managing Stress

Stress experienced by the employees in their job has negative impact on their health,
performance and their behaviour in the organization. Thus, stress needs to be managed
effectively so as to set off these harmful consequences. Strategies for managing stress are as
follows-

Organizational strategies for managing stress

1. Encouraging more of organizational communication with the employees so that there is

no role ambiguity/conflict. Effective communication can also change employee views.
Managers can use better signs and symbols which are not misinterpreted by the
employees.
2. Encourage employees’ participation in decision-making. This will reduce role stress.
3. Grant the employees greater independence, meaningful and timely feedback, and greater
responsibility.
4. The organizational goals should be realistic, stimulating and particular. The employees
must be given feedback on how well they are heading towards these goals.

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 5. Encourage decentralization.
6. Have a fair and just distribution of incentives and salary structure.
7. Promote job rotation and job enrichment.
8. Create a just and safe working environment.
9. Have effective hiring and orientation procedure.
10. Appreciate the employees on accomplishing and over-exceeding their targets.

Individual strategies for managing stress

1. The employees should make a “to-do” list daily, prioritize the acts in the list and plan the
acts accordingly. Take regular breaks during work to relax you. By effective time
management, the employees can achieve their targets timely and can meet work pressures
and, thus, avoid stress.
2. Do hard work. Strive to achieve your goals but do not do it to the harm of family, health,
or peer.
3. Indulge in physical exercises. It helps in effective blood circulation, keeps you fit, diverts
mind from work pressures.
4. Encourage a healthy lifestyle. Take a regular sleep, have plenty of water, have healthy
eating habits. Promote relaxation techniques such as yoga, listening music and
meditation.
5. The employees should have optimistic approach about their work. They should avoid
connections with negative approach employees.
6. The employees should have emotional intelligence at workplace. They should have self-
awareness, self-confidence and self-control at workplace.
7. The employees should build social support. They should have close connections with
trustworthy peer who can listen to their problems and boost their confidence level. This
social network will help the employees to overcome stress.
8. Employee counselling is a very good strategy to overcome employee stress. Through
counselling, employees can become aware of their strengths and how to develop those
strengths; their weaknesses and how to eliminate them; and they can develop strategies
for changing their behaviour. Employees are also given career counselling which helps in
reducing their ambiguities with regard to career.

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 9. Find a fun way to release stress, such as, cracking jokes, playing tennis, golf, etc.
10. Do not remain pre-occupied with yourself. Turn your focus outwards. Help others. This
will release some stress.

Activity: Discuss issues that are stressing your employees and explain how one can fix them

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 TOPIC THIRTEEN

EMERGING ISSUES

The objective is for the learners to be able to investigate how HRM is responding to current
business trends, opportunities, and challenges

CASE STUDY

ETHICAL CASES TO DETERMINE

Below are three situations that illustrate a few of the ethical challenges that may arise in human
resource management. Each is analyzed as to the appropriate ethical response to each situation,
including suggested methods of approach that would be appropriate for the Christian
businessperson.

The three actual cases from my experiences over a quarter of a century illustrate ethics in the
workplace. Biblical principles will be applied to determine the appropriate ethical conduct by
management. A Christian human relations manager might well find himself in the position of Dr.
David Allen, the first African-American on the Harvard Medical School faculty who, when
mediating some racial tensions, said under his breath, “I wish Jesus were here today because he
could resolve this problem.” and a still small voice inside him said, “I am here, only now I live in
you.”

Case Number One:

After many years of teaching in a school of business, managing several businesses, and being the
senior partner in a tax law firm, I accepted representation of a large corporation in an ad valorem
tax litigation against the taxing authority of a Western state. In the representation the company
furnished an office and a secretary in their executive office building. All of their records were
immediately available in that building and it made more sense to work there. The secretary who
was assigned was an exceptionally attractive blond. If you lined her up with any ten secretaries

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in the company, you would think that she was hired because of her looks rather than her skills.
However, she turned out to be an absolutely top quality secretary. Her typing skills were
marvellous. She typed over sixty words per minute taking dictation from a Dictaphone. Her
spelling was perfect. Her work product was immaculate. It would have been difficult to find any
fault with her production as a secretary.

However, looking at her other work habits revealed substantial flaws. As a single woman she
liked to frequent bars every evening, drink until late at night, and often arrived at the office one
to two hours late with a slight hangover. Her appearance was generally mediocre, but her good
looks overcame her lack of skill in dress and make–up. She was surly with other employees and
had a general bad attitude about doing anything requested of her other than the secretarial
functions in her job description. Her work ethic was poor; when she completed her work she
would read a novel rather than see if there was additional work in the office that she could do.

What do you do with such a secretary? Even when she arrived at 10:00 a.m., she was able to
complete by 3:00 p.m. all of the work assigned to her for the day, and the work was done so well
that there was little room for criticism.

The ethical considerations for the human relations manager in dealing with an employee like this
one are enormous. The human relations manager is faced with the challenge of an employee who
by any number of factors should be reprimanded or terminated, but who was one of those rare
individuals who could accomplish in five hours what few other secretaries could do in eight
hours.

As her immediate supervisor I was asked to prepare periodic job reviews and make
recommendations on retention, advancement, and compensation. Both in my law office and in
my major business, flex time had been used to permit employees to arrive and depart when they
wanted to so long as they put in their eight hours, or if they accomplished their assigned tasks to
management’s satisfaction.

Of more importance than punctuality was this secretary’s general attitude toward other
employees and about her work. Great looks alone do not make up for a churlish attitude, but
frankly I did not particularly want to lose a secretary whose work was so excellent.

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In preparing to write this article I interviewed five individuals whose opinion I highly respected
and got their opinions on the three cases. Very frankly I was surprised by their comments.

The first interview was with a former seminary professor and a former pastor of several large
Southern Baptist churches. He looked at the situation from the institutional side and what was
best for the business before giving consideration to the human side—what the action would mean
in the life of the individual. During the interview he related a situation at the seminary when he
was teaching there. The President, when dealing with a difficult situation, had prayer with the
errant faculty member, and then fired him.

A second interview with a former pastor of several large Southern Baptist churches and former
president of a Baptist seminary produced similar results. He considered the three cases from the
viewpoint of the institution and not the individual.

An interview with two former Deans from Southern Baptist theological seminaries yielded
unanticipated results when one of the men flatly stated that in making the tough decisions
required to keep an institution functioning smoothly, it was nearly impossible to apply ethical
considerations, i.e. the functioning of the school outweighed any attempt at reclamation of the
individual. The other former dean was less harsh and in the first case suggested doing everything
possible to salvage the individual in counseling and aiding her in relocation, but like his cohort
would put the organizations overall good above that of the individual. One conclusion from these
interviews was that these men “had been there and done that” and spoke from their practical
experience.

The finally interview was with a retired president of a Baptist seminary in another country, who
earned a PhD in Ethics from Baylor. He used a slightly different ethical approach and recognized
that being honest in employee treatment, with the business owners in mind, could conflict with
what might be best for the employee. However, like the others interviewed, ultimately he would
put the best interests of the business ahead of the best interests of the employee.

These interviews can be contrasted with the view of Henry Krabbendam, who suggests ethical
businessmen “must meet the requirements of a biblical motivation, a biblical standard, a biblical
goal, a biblical decision-making process and a biblical prospect.” He sets the standard as

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Christian love that impacted greatly on how employees should be treated. He also suggested
motivation, when thought of in terms of service and self–sacrifice, as a key factor in impacting
employee relations. In the decision making process he looked to the book of James and stated
“To make decisions and settle issues, therefore, that are ethical in nature, James invites us to
assess a situation and search out possible implications with sanctified sense, determine how it
looks in the light of the law of love, and apply the Decalogue thus formulating in a sense a
brand-new case law.”

In the first case should the human relations manager attempt to salvage a person that was headed
in a direction that ultimately would lead to her ruin? Phrased in such a way the obvious answer is
“yes”.

As a secondary challenge, would it be ethically proper for the human relations manager to ask a
lawyer, engaged solely to handle specific litigation, to utilize his time (which the company was
compensating at $150 per hour) for what easily could prove to be countless hours of counselling?
Leaving aside the lawyer’s ethical challenge of charging the company for work that was
unassigned and not within the scope of the engagement, what ethical obligations should a
company owe to society, in consideration of doing business in society, to provide growth and on
occasion rehabilitation for one of society’s members?

Should the basic principal of Christian ethics, to imitate God be applicable to the business world?
Certainly every businessperson is not going to accept “ethical behavior” as necessarily
originating out of a religious context and it is difficult for Christian ethicists to ignore ethical
systems that are not based on the Christian religion. The moral teachings of the Decalogue,
excluding those pertaining to God, to a great extent are found in the Hammurabi Code and a
number of other preserved ancient laws. Can it be said, in twenty–first century America, that
religion and ethics are inseparable? In other words, are ethics exclusively theocentric? For many
human relations managers the answer would be no, but since the presupposition of this article is
yes, then the question must be asked, “How should this potential executive secretary be treated?”
Guidance from the Old Testament indicates that workers (slaves) were to be treated with
generosity. Application of this principle to the secretary in question would require something in
addition to a reprimand or termination.

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Should Christian ethical teachings extend into economic relations only as far as they are
workable? This is the view of one author who he states the presumption that “every human being
is made in the image of God and therefore possesses incalculable worth and dignity. “Thus every
individual is a repository of certain inalienable rights. It is the belief that the supreme purpose of
human existence is neither to accumulate money, nor to provide goods and services for society,
but to glorify God.

The same author states “the vast structures of industry and commerce are means to the end of
enabling people to live for God’s glory.” However, Chewing has an interesting twist in
application for he concludes that the ethical manager must consider the profits for which the
owners operate the business. If the profit side of the business is ignored the business possibly can
fail, which hurts both the investors and the employees. After noting the Christian businessman is
confronted with the inescapable conflict between his responsibility to the investors of the
business and in the implementation of biblical principles, he gives a scriptural solution: “If any
of you lacks wisdom, he should ask God who gives generously to all.”

The human relations director in the first case has several avenues of approach. Initially a
decision must be made whether the employee is marginal and should be terminated or
alternatively effort should be made to salvage the individual as an employee. Assuming the
decision is to retain the employee, if possible, the first and most obvious initial approach would
be counselling. Since she nearly always completed her work before the end of the workday, there
would be time to counsel with her without interfering with her production.

The counselling could cover the challenges she presented to the company, the potential she could
have with the company, and the errors of her ways, indicate the ultimate results both in her
private life and in her employment for a continuation of her lifestyle. If counselling failed to
have the desire effect the next step probably would be to issue a written warning in accordance
with the company’s policy as printed in the procedures manual and furnish her with a copy of the
procedure so she would be fully informed about the next step and then give her ample
opportunity for correction. Ultimately, however, if her attitude and work ethic did not change, for
the good of the business she most probably should be terminated.

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If termination is justified, is it the ethical thing to do? And if she is terminated, what Christian
ethical obligations does the employer have toward her? How far should the Christian employer
go in trying to salvage a young lady? Does the morale of her fellow employees justify her
termination? Certainly her work product was as good, if not better than her fellow employees.
The interviews with the five individuals cited above, together with the textual material from
Vernon Grounds would answer yes—it is ethical, within the Christian framework, to terminate
after appropriate counseling and opportunity for change. But at the very least an offer should be
made to provide counseling about her life goals and her employment goals, as well as help in
locating new employment.

Case Number Two:

Our company was low bidder for the remediation of biomedical waste at a large county hospital
forty miles from the home office. This necessitated putting in a medical waste transfer facility
and assigning five employees to work in it three days a week. The five employees drove to the
location in one automobile and the company compensated the driver for mileage. Three of the
employees were male and two were female.

One of the female employees made an oral complaint to a human relations specialist, claiming
sexual harassment. All five employees had been with the company very long, and our company
knew very little about any of them. From a legal standpoint the company’s action was clear.
Company policy dictated that an independent firm that investigated sexual harassment
complaints be engaged immediately, and the employee making the accusation be transferred to
another work area. An investigation and report indicated the accuser’s charges were not
corroborated by any of the other four employees. The investigator’s opinion was that the charges
were an attempt to get the company to pay the accuser mileage to drive her car to work.

Obviously under these circumstances it would be inappropriate to terminate the accused. What
action, however, should be taken against the accuser, whose charges had cost the company
several thousand dollars in investigator’s fees? Texas is an “at will” employment state in which
an employer can terminate an employee at any time without reason or cause.

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Even in the face of the report, the accuser held to her story that she had been sexually harassed.
The investigator’s fees came from the company’s human relations department budget. The
director of the department was furious and desired to terminate the accuser immediately. He was
unhappy about having to scale back other planned activities to stay within budget and was
concerned that this employee could find other areas in which to be disruptive.

From the beginning the company was owned and directed by Christians. It had been their policy
to hire; for executive positions and supervisors, only practicing Christians. The human relations
director (also an active church member) desired to terminate the accuser.

The initial reaction from the owners was that the money for the investigator had been spent and
firing the employee would not bring it back. They were not so much concerned for the accuser as
they were for the morale of other employees. Could the five of them still work together after
what had happened? Would the accused attempt any type of retaliation if the accuser was
transferred back to her old position? While worrying about these issues, the management team
seemed to miss a valuable opportunity.

T. B. Maston, the renowned Baptist ethicist, suggested that morals are the basis of ethics and
biblical teachings, particularly the Ten Commandments, comprise moral authority dictated by
God. Maston states that judgment and punishment are part of the moral law; justice does not
offend the law, and thus does not offend human ethical behavior. Using this reasoning the
owners certainly should have supported the desire of the human relations director to terminate
the accuser.

However, Dr. Maston went further. He put great emphasis on the principle to “love your
neighbour as yourself” and the new commandment of Jesus, “that you love one another. An
ethical conclusion might be that the ethical employer would not take action that would
unnecessarily harm employees. This principle applies to many areas of the workplace, including
a safe work environment, never asking an employee to do anything illegal, providing a living
wage with medical benefits, and other similar considerations. What is the employer to do,
however, when the reverse situation is thrust upon him? In this second case the employee caused
harm to the employer through added worry and a substantial expenditure of time and expense.

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Two authors posed several cases that were somewhat analogous with Case Two. Their work was
considerably more philosophy than practical, but in discussing the moral behavior of the
employee, they stated:

In fact, rules belong to the ‘surface’ of morality; the essence of morality consists of deeper
values, such as the intrinsic worth and dignity of all human beings and rights and justice. If a
person accepts those deeper values then that person demonstrates respect for moral rules. This
management means that the person recognizes a good reason is needed to justify breaking a
moral rule. Achieving ethical improvement in the workplace requires, among needed changes,
increasing respect for moral rules.

Their approach would suggest informing an employee that his or her conduct was not acceptable
and then sanction the employee as an example to others.

In regard to this second case, the business owners strongly suggested to the human relations
director that he give appropriate counsel to the accuser and if satisfied with her response to the
counselling, to retain her as an employee. This appears to be a just and ethical way to deal with
this case.

Case Three.

The company employed about thirty drivers for its “front–end” loader trucks (trucks with forks
on the front that lift dumpsters over the truck cab and empty them into a hopper behind the
driver’s head). The trucks have internal compactors and when full will weigh close to thirty tons.
The fuel cost for pushing an empty front–end loader down the street is about one-fifth of the cost
of pushing a full one down the street. Thus routes are designed to begin at the furthest point from
the landfill and work toward the landfill. Part of the driver’s duty is to make certain that the
fewest miles are driven when fully loaded.

For years the drivers, like all other employees in the refuse division, were paid on an hourly
basis,. The hourly rate was quite high, intentionally set to combat a specific challenge. It is
difficult to manoeuvre a large truck in a congested apartment complex parking lot without doing
damage. The solution was to double their pay, with the absolute warning that they would be

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terminated if they had even one accident. The accidents ceased overnight. The drivers became
very careful because they liked the higher pay.

A new Chief Operations Officer, who had an MBA and many new ideas, made a study of the
comparative costs for each dumpster lift. He discovered that some of the drivers were on the
clock for over ten hours, while other drivers (due to various skills), could run their route in six
hours. Thus the company was paying a premium to inefficient drivers.

The proposed solution was to put the drivers back on minimum wage and provide them
additional compensation for each dumpster they picked up. The slow drivers rebelled and the
speedy drivers thought it was a great idea. The end result was that the faster drivers requested
additional dumpsters be added to their routes, which reduced the number of routes by 20%. Since
front–end loader garbage trucks each cost about $150,000, the reduction in the number of needed
trucks resulted in a significant savings.

What was the ethical challenge here? Most of the slower drivers were older and had relied on
their overtime income to keep children in college, make payments on a home, or meet other basic
needs. By moving them to a different pay schedule, which management felt was fair to the
company, the driver’s were impacted significantly. One corporate ethics text described the
owners’ ethical dilemma: “To separate from ‘personal ethics’ any autonomous area of ‘business
life’ where God does not rule would be unthinkable in biblical theology.” The authors of this text
offered corporate management some basic principles: 1. God’s law demands justice and truth; 2.
There is an interrelatedness of all things—nothing is isolated from its effects on others; and 3. A
believer must inject biblical ethics into corporate decision-making.

Case three happened at a point in the company history when it was not struggling financially. If
the situation had occurred early in the company history, when it was burdened by significant debt
payments, there probably would have been little sympathy for the older drivers and their loss of
income.

Christian ethical principles that apply to the ethical treatment of the older drivers are found in
Stephen Mott’s biblical ethics textbook:

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Our ethical behavior is to correspond to what God has enabled us to be by adoption and grace
based on God’s historical, once–for–all act in Christ’s death and resurrection. Be (imperative)
what you are (indicative) in Christ; thus we are given an ‘indicative and imperative’ ethical
appeal. We could call it ‘grace and ethics.’

One basic plank of Christian ethics is that Love transcends Justice. Justice can be an instrument
of love. Justice functions to ensure that in our common life we are for our fellow human beings,
which is, indeed, the meaning of love.

Wherever there is basic human need, we are obliged to help to the extent of our ability and
opportunity. We are not faced with a dualistic ethic: there is not one ethical standard for private
and intimate life and a different one for commercial and political life. The same criteria of
judgment apply to both situations, but the latter is more complex.

Case three presents a classic case of conflict between doing what is best for the company, which
would reduce the pay of the older drivers in accordance with their production, or doing what is
best for the drivers by permitting them to maintain the same income for the same work they had
been doing for years. An analysis of the problem might indicate different outcomes, depending
on the person having to make the decision.

A supervisor with a duty to the company most probably would have to make a different decision
than an owner of the company, whose bottom line was going to be reduced by the decision.
Ethical choices in business are complex and difficult.

A large part of human resource management of necessity deals with many competing ethical
values—fairness, honesty, industry, profitability, and social responsibility. A business
organization committed to ethical leadership will show moral responsibility in all of these areas.

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