LECTURE-31&32

BASE

COMPENSASTION:

WAGE

AND

SALARY

It involves monetary benefits to employees in the form of wages or salaries. The term wage is used to denote remuneration to workers doing manual or physical work. Thus , wages are given to compensate the unskilled workers for their services rendered to the organization . Wages may be based on hourly, daily, weekly or even monthly basis. But the term salary is usually defined to mean compensation to office employees, foreman, managers and professional and technical staff. It is paid on weekly, monthly or yearly basis.

SUPPLEMENTARY COMPENSATION
It involves fringe benefits offered through several employee services and benefits such as housing, subsidized food, medical aid, crche etc. It has been given different titles in industry such as services programmes, employee benefits and non-wage payments. Because of the increasing costs of fringe benefits some people also label them hidden pay roll.

TYPES OF SUPPLEMENTARY COMPENSATION

1) 2) 3) 4) PAYMENT FOR THE TIME NOT WORKED. PROTECTION AGAINST HAZARDS EMPLOYEE SERVICES LEGAL PAYMENTS

LECTURE-33
PERFORMANCE APPRAISAL

Performance refers to an employees accomplishment of assigned tasks.Appraisal means estimating the worth of something . Performance appraisal is the process of recording assessment of employee performance, potential and development needs. It is the systematic description of the job related strengths and weaknesses of an individual or a group. OBJECTIVES OF PERFORMANCE APPRAISAL It aims at improving organizational effectiveness. Role of performance appraisal in these areas is discussed below.: Human Resource Planning: It generates significant and revelant information about the promotability and potential of employees. Information used to assess the organisations internal supply of human resources and availability of managerial person for succession planning. Recruitment and Selection: Evaluation made in performance appraisal can be used to find out the particular areas of knowledge, skills and experience which successful performers possess and can be used to select right type of candidates. Career planning and development: - Feed back guidance enable employer to bring changes in their behavior, attitude, skills and knowledge also employees can be counseled to develop their particular type of work. Keeping in view of their strength and weakness.

Training and development:- Helps in identifying developments needs of employees to employer their performance to individual; and organization.
Compensation:- information gathered through performance appraisal provided

imports fro making decision concerning salary, incentives appreciation etc.

Achiever can be rewarded and poor performance can be give appropriate signals.
Employee valuation:- data gathered through performance appraisal can be

moved for making decision Concerning transfer , demotion or dismissed. It provides legal to organization and justification for such decision.

Basis issue in performance appraisal: - The issue taken into

consideration are: Should employees alone be the focus for P.A. What should be the basic for appraising employees performance? Should the effect of external environment on employees performance not be taken into account while evaluation their performance

LECTURE-34

Features affecting the performance of employees

a. Job it self: employees not put on clearly depend jobs and hence valuation can not be accurate. b. Organization and structure: take structure may and might depailmantation may prevent flow of information and low down decision making which may have advance effect on performance c. Rule procedure and method of work: when work is could out where rules and method used are not depend properly, un appropriates and outdated this affect the performance. d. Type of machinery and environment: Employees are unable to attain high standard f performance of machinery is outdated, defective or moving e. The work environment: Not conducive or efficient performance.

Basis for appraising performance: Every job requires it holds to

carry out various activities or display behaviors . some of which may be crucial for proper perfrmance of the job and some other may not be crucial. These are the performance decision. They need to specified for each job and how well they have to perform , performance dimension and performance standards need to be determined before employees are put on the job. Effect of external: External environment refer to all direct action and indirect action elements efficiency Ex: union suppliers customers etc. Rapid charges taking place in the external environment of organization require that interest of all these elements are balances so that disrupting in the functioning of the organization could be avoided and employees performance is not adversely affected.

Performance appraisal process:

It involves a series of stops that are aimed to provide objective, balanced and unbalanced opinion about performance of employees. Steps are

Establishing performance standard

i. ii. iii. Nature of performance standard Type of performance standard a common specific How to developed performance standard Communications the standards to employees Evaluating actual performance Comparing actual performance with standards Discussion appraisal with employees a. Comparing No one is perfect b. We do not see ourselves as other do c. Need to understand and appreciate employees view point d. Making employees accept the benefit of counseling 6. Taking corrective action Do nothing Remove the real cause for narration Revise the standards 2. 3. 4. 5.

Traditional methods
(i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) Ranking method Paired comparison method Grading Forced distribution method Checklist method Critical incident method Graphic scale method Essay method Field review method

LECTURE-35&36 Modern Methods

Approval be result or objectives Behaviorally achieved rating scale Assessment scale 360 degree appraisal 1.

Appraisal by result or objectives

Basic idea behind this appraisal is that the organization is concerned with achievement of objectives through the contributions of individual manager rather than on their traits Various steps involved -: i) Joint process between superior & his subordinates ii) Subordinate prepares plan for specific period in light of overall plan provided by his superior and final plan through mutual consultation. iii) Both of them decide the evaluation criteria. iv) End of the period the superior evaluates on the basis of mutually agreed criteria. v) Superior discusses the results of his evaluation; corrective actions suggested if necessary and mutual target agreed for next period. Limitations i) Emphasis on work achievements alone ii) Operational problem of those managers whose contributions cannot be measured precisely. iii) Puts emphasis on present performance only.

BARS (behaviorally anchored rating scale ) It measures observable, critical behaviors that are related to specific job dimensions i) Identification of performance measures. ii) Identification of critical behavior iii) Rationalization of critical behavior iv) Scaling of critical behavior v) Development of the BARS instruments Advantages I) II) III) IV) Employee behavior & not their unobservable traits are measured which gives better description of employees. This makes the technique much more compatible with the requirement of unbiased appraisal. People participate in determining job dimensions and the development of the scales & hence are widely enhanced. Rater can give objectives feedback on how ratee performed & on what specific behavior, the ratee must make improvements.

3.

Assessment centers: Purpose of this method is to test candidates in a social situation, using a number of assessors and a variety of procedures. It is a central location where managers come together and participates in a number of simulated exercises on the basis of which they are evaluated by a panel of raters.

Requirements i) ii) iii) iv) v) vi) Multiples assessment techniques need to be used and one of these must be a simulation technique Multiple trained assessors must be used. Judgment based on pooled information. Evaluation must be made at a time separate form the observation of behavior. Simulation exercise used in this method should be first tested for their reliability, validity and objective. Dimensions, attribute, characteristic or quality evaluated by the programme must be determined by an analysis of relevant job behavior.

Objectives of assessment centers i) To measure potential for first level supervision, upper management position. ii) To determine T & D need of employees. iii) To select recent college students for entry level position. iv) To provide more accurate HR information. v) To make an early determination of potential. vi) To assist in implementing affirmative action goals.

PROCESS Establishing goal for program Designing physical facilities

Detailed JA

Selecting exercises and participants

Defining dimension to be assessed

Training of assessors

Conducting of programs

Evaluating participates feedback and follow up activities

Positive features i) based on direct observation, providing accurate information.

ii)

Assessment based on composite, pooled judgment of several ratees

360 Degree Approval : Process of systematically gathering data on a

persons skills, abilities and behavior from a variety of sources - managers , peers, subordinates and even customers and clients. In this besides appraising the performance of the assessee his other attributes such as talents , behaviors , values and technical consideration are also appraised. Information collected from Appraised by superior Appraised by peers Appraised by subordinates Appraised by clients Positive aspects Greater self awareness of managers; reveals strength and weakness Reduced gap between self assessment and colleagues assessment Teamwork thrives through peer group assessment Facts about organization culture and ambiences are brought to light Empowerment is facilitated Inflexible employees are forced to initiate self change Negative aspects The system may be utilized to humilitate personnel Response from colleagues may be blased. Linking reward to appraisal may turn to be unfair It ignores performance in terms of reaching goals. The ratee may deny the truth of negative feedback.

(i) ii) ii) v)

LECTURE-37

Potential appraisal
Performance appraisals objective Evaluation of employee in present role. His development for higher order job To determine an employees likelihood to succeed in the new job, potential, appraisal is carried. Potential appraisal dicovers the hidden part in an individual. Steps 1. 2. 3. 4. Determination of role dimension for which an employees potentional is to be appraised. Various attributes required for the effective job performance mechanisess for appraising should be determined. Potential of the employee can be appraised in the light of various attributes identified as above Potential appraisal should be linked with other human resource management elements such as providing feed back and counseling T&D promotion job rotation etc.

Potential

High

Problem children

Stars

Low

Solid citizens

Low High Performance

Barriers to Appraisals
1. 2. 3. Faulty assumptions Psychological blocks Technical pit falls (i) Criterior problems (ii) Distortions a. Halo effects b. Central tendency c. Constant errors d. Raters liking and disliking

Overcoming barriers to appraisal (i) System can be designed to help in minimizing undesirable (ii) Rating must be made by immediate superior. (iii) Rating must be reviewed with the ratee (iv) Effective feedback system developed (v) Supportive management philosophy Effective Feedback 1. Intended to help the employees 2. Specific 3. Descriptive 4. Useful

5. 6. 7. 8.

Timely Employee readiness for feedback Clear Valid

Performance criteria for operatives 1 Quantity and quality of output in a given period 2 Work sample test 3 Length of service 4 Amount of training necessary 5 Rating by supervisor 6 Number of accidents in a given period 7 Number of absents in a given period 1 2 3 4 5 6 7 8 1 2 3 4 5 6 7 8 9 Performance criteria for frontline supervisors. Quantity and quality of output in a given period Labor cost per unit of output in a given period Material cost per unit output in a given period. Total cost per unit of output in a given period Absenteeism rate for a given period. Turnover rate for a given period Man shifts lost due to stoppage of work in a given period Number of accidents in a given period. Performance criteria for middle level managers Quantity and quality of output in a given period Labor cost per unit of output in a given period Material cost per unit output in a given period. Total cost per unit of output in a given period Rational use of overhead facilities Co ordination among supervisors Degree of knowledge among supervisors about corporate goals and policies Extent to which Extent of upward communication of ideas , information and quarries from frontline supervisors

Performance criteria for top management 1 Return on capital employee

2 3 4 5

Labor productivity indices Capacity utilization Gain or loss in market share Degree of knowledge among middle level managers about corporate goals and policies 6 Extent to which middle level managers regard themselves as managers and behave likewise 7 Extent of upward communication of ideas , information and quarries from middle level; managers 8 Contribution of the social culture value of the environment

LECTURE-38&39

JOB EVALUATION
Job evaluation may be defined simply as an attempt to determine and compare the demands which the normal performance of particular jobs make on normal worker without taken in to account of the individual abilities or performance of the workers concerned. Job evaluation is the process of analysis and assessment of jobs to ascertain reliably their relative worth using the assessment as a basis for a balanced wage structure. OBJECTIVES 1. 2. 3. 4. 5. Establishment of sound wage foundation for incentive and bonus programs. Maintenance of consistent wage policy. Enables management to gauge and control its payroll costs and more accurately. Provides a framework for periodic review of wages and salaries. Classify functions, authority and responsibility which in turn ends in work simplification and eliminating of duplicate operations. 6. Reduce grievances and labour turnover. 7. Serves as a basis for negotiation with the union. ADVANTAGES 1. Rational, internal and external consistent wages and salary structure can be evolved. 2. Helps in maintaining harmonious relations. 3. Standardizes process of determining wage differentials for various jobs. 4. Job evaluations takes all relevant factors into account to determine wages. 5. Provides rate for job not for man. 6. Helps to control works. LIMITATIONS 1. No standard list of factors to be considered for job evaluation. 2. Trade union regard job evaluation with suspicious. 3. It cannot be presumed that jobs of equal worth will be equally attractive to the employees. JOB EVALUATION PROGRAMME 1. 2. 3. 4. Through examination of jobs. Preparation of job description and job analysis. Comparison of one job with others. Arrangement of jobs in their current sequence in terms of value to the firm.

5. Relation of the sequence to a money scale. JOB ANALYSIS JOB DESCRIPTION JOB SPECIFICATION JOB RATING

MONEY ALLOCATION

JOB CLASSIFICATION

PRINCIPLES OF JOB EVALUATION 1. 2. 3. 4. 5. consideration of job clarify of job information pooling of knowledge grouping of jobs selection of job factors i) ii) iii) iv) v) vi) skill experience effort & initiatives responsibility working environment supervision needed

METHODS OF JOB EVALUATION Non quantitative methods 1. ranking or job comparison method 2. grading or job classification Quantitative methods 3. point rating

4. factor comparison 1. RANKING METHOD

The purpose of ranking is to determine what a job involves the same level of duties, responsibilities and requirements as others in the series or a higher or lower level than they do. Comparisons are made on the basis of whole jobs. Three techniques used for ranking purposes, namely 1. Utilizing job descriptions 2. making group comparisons 3. ranking along a number line 2. JOB GRADING Improvement over ranking method. It involves 1. establishment of job classes or grades 2. definition of each grade 3. classification of individual jobs according to how well their characterstics match those of the different grade definitions. For each grade or class there is a different rate of wage. 3. POINT METHOD Under this method a qualitative evaluation of different jobs in terms of various factors is made. Max. pts values are assigned to each job factors required to be considered. Each job is awarded pts. for each of the job factors. Wage level appropriate is fixed on the basis of total pts. Scored by it. MAJOR JOB FACTORS ARE: a) b) c) d) Skill Effort Responsibility Working conditions

STEPS

1) List of the type of jobs to be accompanied 2) Determine the factors to be used in this method & define them properly 3) Determine number of degrees allocated to each factor & prepare suitable definition of each 4) Assign pts to each degree of each factor 5) Select certain number of key jobs & evaluate each in terms of scale so construct 6) Design the wage structure 4. FACTOR COMPARISON METHOD Proposed by Eugene.J.Benge used to evaluate the wehite collar jobs, Combination of ranking & pt. System. Like rank method it votes jobs by comparing one job with another & like pt. System it is analytical in the sense of subdividing jobs into compensate factor. Factors are 5 in no.s 1) 2) 3) 4) 5) STEPS 1) Select factors & define clearly 2) Select key jobs which serve as standard against which all jobs are compared. 3) Allocate wage for each key job to differentiate factors 4) Develop job comparisons scale & insert key jobs in them 5) Evaluate the job in question factor by factor in relation to key jobs on job comparison scale 6) Design, adjust & operate wage structure. Mental requirement Skills Physical requirements Responsibilities Working conditions

LECTURE-40 EMPLOYEES HEALTH & SAFETY TYPES OF WORKING ENVIRONMENT 1. Physical Environment 2. Mental Environment 3. Social Environment PHYSICAL ENVIROMENT OR HEALTHY WORKING CONDITIONS i. ii. iii. iv. v. Cleanliness Lightning Temperature & ventilation Freedom from noise Working space

SAFETY IN INDUSTRY Safety measures result in reduced industrial accidents but also raise industrial efficiency. IMPACT ON INDUSTRIAL SAFETY ON PRODUCTIVITY Safety measures boost morale of workers helps in developing team spirit in sense of belongingness. INDUSTRIAL ACCIDENT It is an unexpected occurrence in an industrial establishment causing injury to one or more persons. Under factories act 1948 an industrial accident has been defined as an occurrence in an industrial establishment causing injury which makes him unfit to resume duties in the next 48 hours. ANALYSIS OF ACCIDENT (a) (b) (c) (d) (e) Total number of employees in unit exposed to different types of accidents. -Number Of accident. Kind of work in which employee was engaged. Date, time of day &the shift during which the accident occurred. Total number of hours during which employee was engaged in the particular job when accident occurred. (f) Personal data.

(g) Inadequate cause of data. Accident frequency date = (no. of injuries / no. of human hours worked)*10,00,000 Accident __frequency_rate = (no. of human days lost/no. of human hours worked)*10,00,000

CAUSES OF INDUSTRIAL ACCIDENT 1. 2. 3. 4. Inherent hazards. Collision. Slip or fall on floor & stairs case. Miscellaneous causes.

EFFECTS OF ACCIDENTS Measures for ensuring Industrial Safety i. ii. iii. iv. v. vi. vii. viii. ix. x. Safety Committee. Safety Training. Material Handeling Equipment. Guarding of Machines. Maintenance of plant. Regular Inspection. Equipment Redesidning. Proper Clothing. Clean Floors. Safety Campaign.

Safety Education Role of Government National Safety Council National Safety Awards Safety Day- 4th March

LECTURE-41
HEALTH OF WORKERS IN FACTORIES Sections 11 to 20 of the Factories Act 1948 contains provisions regarding creation of healthy working conditions for workers. These are examined below: 1) CLEANLINESSS(SEC-11) 2)DISPOSAL OF WASTES AND EFFLUENTS (SEC-12) 3)VENTILATION AND TEMPERATURE(SEC-13) 4)DUST AND FUMES(SEC-14) 5)ARTIFICIAL HUMIDIFICATION(SEC-15) 6)OVERCROWDING(SEC-16) 7)LIGHTING(SEC-17) 8)DRINKING WATER(SEC-18) 9)LATRINES AND URINALS(SEC-19) 10)SPITTOONS(SEC-20)

SAFETY OF FACTORY WORKERS The safety provisions are contained in section 21 to 41 of the Factories Act, 1948. 1) 2) 3) 4) 5) 6) 7) FENCING OF MACHINERY(SEC-21) WORK ON OR NEAR MACHINERY IN MOTION(sec-22) Employment of young persons on dangerous machines (SEC-23) STRIKING GEAR AND DEVICES FOR CUTTING OFF POWER(SEC-24) SELF-ACTING MACHINES(SEC-25) CASSING OF NEW MACHINERY(SEC-26) PROHIBITION OF EMPLOYMENT OF WOMEN AND CHILDREN NEAR COTTON-OPENERS(SEC-27) 8) HOISTS AND LIFTS(SEC-28) 9) LIFTING MACHINES, CHAINS, ROPES AND LIFTING TACKLES(SEC-29) 10) REVOLVING MACHINERY(SEC-30) 11) PRESSURE PLANT(SEC-31) 12) FLOORS, STAIRS AND MEANS OF ACCESS(SEC32) 13) PITS, SUMPS, OPENING IN FLOORS ETC.(SEC-33)

14) EXCESSIVE WEIGHTS(SEC-34) 15) PROTECTION OF EYES(SEC-35) 16) PRECAUTIONS AGAINST DANGEROUS FUMES(SEC-36) 17) PRECAUTIONS REGARDING THE USE OF PORTABLE LIGHT(SEC-36A) 18) EXPLOSIVE OR INFLAMMABLE DUST, GAS, ETC(SEC-37) 19) PRECAUTIONS IN CASE OF FIRE(SEC-38) 20) POWER TO REQUIRE SPECIFICAATION OF DEFECTIVE PART OR TESTS OF STABILITY(SEC-39) 21) SAFETY OF BUILDINGS AND MACHINERY(SEC-40) 22) MAINTENANCE OF BUILDINGS(SEC-40A) 23) SAFETY OFFICERS(SEC-40B) 24) POWER TO MAKE RULESS(SEC-41)

LECTURE-42&43
EMPLOYEES WELFARE Labour welfarfe entails all those activities of the employers which are directed towards providing the employees with certain facilities and services in addition to wages or salaries. AGENCIES OF LABOUR WELFARE CENTRAL GOVERNMENT STATE GOVERNMENT EMPLOYERS TRADE UNIONS CHARITABLE ORGANISATION TYPES OF WELFAARE SERVICES 1) ECONOMIC SERVICES 2) RECREATIONAL SERVICES 3) FACILITATIVE SERVICES i) Canteen, rest rooms and lunch rooms ii) Housing facilities iii) Medical facilities iv) Washing facilities v) Educational facilities vi) Leave travel concession PROVISIONS OF FACTORIES ACT REGARDING LABOUR WELFARE 1) 2) 3) 4) 5) 6) 7) 8) WASHING FACILITY(SEC-42) FACILITIES FOR STORING AND DRYING CLOTHING(SEC-43) FACILITIES FOR SITTING(SEC-44) FIRST AID APPLIANCES(SEC-45) CANTEENS(SEC-46)\ SHELTERS, REST ROOMS AND LUNCH ROOMS(SEC-47) CRECHES(SEC-48) WELFARE OFFICERS(SEC-49)

PROVISIONS REGARDING LABOUR WELFARE UNDER OTHER ACTS

PLANTATIONS LABOUR ACT, 1951 1)CANTEENS 2)CRECHES 3)RECREATIONAL FACILITIES 4)EDUCATIONAL FACILITIES\ 5)HOUSING FACILITIES 6)PROVIDE AMENITIES FOR PROTECTION AGAINST RAIN OR COLD 7)APPOINTMENT OF WELFARE OFFICER IN PLANTATION EMPLOYING 300 OR MORE WORKERS MINES ACT, 1952 1)MAINTENANCE OF CRECHES 2)PROVISION OF SHELTERS 3)PROVISION OF CANTEENS 4)MAINTENANCE OF FIRST AID BOXES AND ROOMS 5)PROVISIONIN COAL MINES i) PIT HEAD BATHS EQUIPPED WITH SHOWERS ii) SANITARY LATRINES iii) LOCKERS 1) APPOINTMENT OF WELFARE OFFICERS MERCHANT SHIPPING ACT, 1958 1) 2) 3) 4) 5) 6) 7) 8) 9) CREW ACCOMDATION SUPPLY OF SUFFICIENT DRINKING WATER SUPPLY OF NECESSITIES LIKE BEDDING, TOWELS ETC. SUPPLY OF MEDICINES \GRANT OF RELIEF TO DISTRESSED SEAMEN EVERY FOREIGN GOING SHIP SHOULD HAVE QUALIFIED DOCTOR APPOINTMENT OF SEAMENS, WELFARE OFFICERS ESTABLISHMENT OF HOSTELS, CLUBS, CANTEENS ETC PROVISION OF EDUCATIONAL FACILITIES

THE MOTOR TRANSPORT WORKERS ACT, 1961 1) 2) 3) 4) 5) CANTEENS CLEAN, WELL-LIGHTED REST ROOMS UNIFORM, RAINCOATS, WASHING ALLOWANCE MEDICAL FACILITIES\ FIRST AID FACILITIES

DOCK WORKERS ACT ,1948 AMENITIES PROVIDED IN THE PORT PREMISES 1) 2) 3) 4) 5) 6) 7) 8) TOILETRS DRINKING WATER WASHING FACILITIES BATHING FACILITIES CANTEENS REST SHELTERS FIRST-AID ARRANGEMENTS WELFARE MEASURES

LABOUR WELFARE OFFICER

LECTURE-44
SOCIAL SECURITY It is the endeavour of community as a whole to afford itself to the utmost extent possible to any individual uring periods of physical distress consequent on illness or injury and from the economic distress consequent on reduction or loss of earnings due to illness , disablement, maternity, unemployment, old age or death of the working member. Social Insurance It is a mechanism through which benefits are provided to the contributories necessary for satisfying wants during old age, sickness, unemployment and other contingencies of life. Social Assistance It is a program through which the Government attempts to ameliorate the distress caused by contingencies of life. No contribution are made, for getting the benefit by the workers. In other words, social assistance includesnon-contributory benefits towards the maintence of children, mothers, invalids, the aged, the disabled and other like the unemployed. Benefits are provided to persons of small means in sufficient quantity so that their minimum standards of needs could be satisfied.

MEASURES FOR SOCIAL SECURITY OF WORKERS 1) 2) 3) 4) THE WORKERSCOMPENSATION ACT, 1923 THE EMPLOYEESSTATE INSURANCE ACT, 1948 THE EMPLOYEES PROVIDENT FUND ACT ,1952 THE MATERNITY BENEFIT ACT, 1961.

LECTURE-45
ROLE OF HRM IN STRATEGIC MANAGEMENT
Strategic management of human resources facilitates creation of competitive advantage for the organization over its rivals by building unique human resource based competence. An organisationss recruitment, selection, training, performance appraisal, and compensation practices can have a strong influence on employee competence as illustrated below: a. b. c. d. RECRUITMENT AND SELECTION TRAINING PERFORMANCE APPRAISAL COMPENSATION

Strategic human resource management may be defined as the linking of human resource management with strategic goals and objectives in order to improve business performance and develop organizational culture that fosters innovation and flexibility.There is no denying the fact that human resources are at the core of achieving competitive advantage by a firm. This has led to strategic management human resource in dynamic organisaation. The HRM practices of an organization can be an important source of competitive advantage. For this strategic focus should be given on the following: 1) HRM pre-selection practices including human resource planning and job analysis. 2) HRM selection practices meant to staff various positions in the organization. Both recruitment and selection policies and procedures should be designed keeping in view the mission and purpose of the organization. 3) HRM post-selection practices to maintain and improve the workers job performance levels. HR decisions related to training and development, performance appraisal, compensation and motivation should be based on corporate strategy of the organization.

EMOTIONAL

QUOTIENT

The term EI is the ability to command respect by building relationships or the ability to get along with the people and situations. The term EI was used for the first time to involve a set fo personal and social abilities of an individual. It was realized that there is definitely much more success in life than possessing a high IQ and this realization eventually brought to light the concept EQ.Self-awareness, self regulation, motivation, empathy and social skills are main dimensions of EQ. Goleman has identified three elements of emotional quotient: 1) SELF AWARENESS 2) SOCIAL AWARENESS 3) SOCIAL SKILLS

LECTURE-46
MENTORING
The popular meaning of the term mentoring is to provide wise advice or counseling. In the context of human resource development, mentoring is considered as a process whereby a senior executive acts as a friend, philosopher and guide to a new recruit and provides him the support that the latter needs. The support may take the forms of emotional support I, coaching, counseling and guiding. The senior manager who provides such support is known as the mentor and person who is provided with such support is called the mentee or the protg. A MENTOR PERFORMS ALL TYPES OF FUNCTIONS FROM ELABORATING JOB CONTENTS TO PERSONAL COUNSELLING, FROM DRAWING UP A DRESS CODE TO TEACHING TABLE MANNERS, ETC.

MENTORING

PROCEDURE

It cannot be rigid. It will depend upon the nature and requirement of the organisaation. However mentoring at Smithkline Beecham Consumer Healthcare consists of the following seven steps: 1) One-day workshop for profiling menntees and allotment of mentors. 2) Five-day induction at the head office and first mentor-mentee meeting for familiarizing mentees with corporate functions and smoother initiation. 3) Role-clarity workshop for mentors and weekly meeting with mentees within the first month for avoidance of mentor-manager role conflict and forging closer ties with mentees. 4) Fortnightly mentor-mentee meeting and assigning of budgets for extending the concept to the peer level. 5) Need based meetings supplemented by phone calls and e-mails for reinforcing formal and informal learning by the mentees. 6) Review of the process by mentors and mentees for revising the process to generate feedback. 7) Final presentation by the mentees on mentoring for crystalling the feedback for corrective measures.

DIFFICULTIES

IN

MENTORING

t Mentoring may face the following hurdles in an organization: 1) 2) 3) 4) 5) Overload Lack of Role Clarity Lack of Information Unhelpful Attitude Lack of Mentoring Skills

In order to increase the effectiveness of mentoring the following suggestions should be kept in view: 1) Mentoring program should have the support of top management which should clarify the roles of both mentors and mentees. 2) Mentors should have adequate information about the potentials and career paths of the mentees. 3) Mentors should have helpful attitude towards the mentees. 4) Mentees should be encouraged to develop new ideas and sharpen their skills.

EMPLOYEE

STOCK

OPTION

These plans are basically designed for the executives. Under stock option plan the eligible executives arealloted companys shares below the market price. The executives who are offered shares under ESOP feel committed to the company and work for the growth of the company. Because of possibility of gains in future their motivational level is also increased. But if the market value of the shares foes down due to political uncertainity, general economic depression or some other reason, the employees holding shares under ESOP will be the losers. It is because of this reason that many executives dont prefer the Employee Stock Option Plan as an Incentive Plan. According to Flippo The typical employee ownership or stock option plan provides a mechanism through which certain eligible employees may purchase the stock of company at a reduced rate.

FEATURES

OF

EMPLOYEE

STOCK

OPTION

PLAN

1) Employee stock option plan is voluntary in nature. 2) It offers an option to purchase a certain amount of stock or shares in the future at a stated price or in the present at a price lower than the market price. 3) It is intended to procure and hold talented professional employees. 4) It makes the employee a part-owner of the company where he is working. 5) Mutuality of interest is created between the individual and the company. 6) Stocks are held in trust until employee chooses to withdraw from the plan or leave the company.

MERITS OF EMPLOYEE STOCK OPTION

The advantages of employee stock option are as under: 1) It promotes mutuality of interest between the employees and employer. 2) The employees get an opportunity to attend the meetings of the shareholders and have detailed information about the progress and future plans of the company. 3) It promotes thrift, efficiency and security on the part of employees. 4) Workers income is supplemented by dividends. 5) The management also gains because of better cooperation, lesser supervision, reduced labour turnover, improved industrial relations, better understanding on the part of workers, elimination of waste and enhancement of efficiency.

LECTURE-47&48
FLEXITIME
As the name implies, it gives employees some discretion as to when they will come to work in the morning and when they will leave in the afternoon. In the other words, flexitime is a system whereby employees are required to work a specific number of hours a week but are free to vary the hours of work within certain limits. Each day consists of a common core, usually, four hours with a flexibility band surrounding the core. Flexitime is short for flexible work-hours or work-schedule. It is based on the assumption that employees are paid for doing their quota of work and not for being at the place of work for a fixed number of hours on each working day. The system of flexitime offers strong motivational potential by increasing workers freedom and allowing workers to assume greater responsibility through creating opportunities for them to make decisions about their work schedule. Flexitime has a variety of advantages to both management and workers. There is evidence that employees have higher morale, lower absenteeism and tardiness rates and longer lengths of service. Productivity gains are also made as employees arrange to work during the times when they are most energetic.From the employees point of view the use of time can be better tailored to personal needs and preserences and private lives can consequently be made more comfortable. Flexitime has some limitations also. It cannot be implemented at all when the work requires all employees to be present at the same time. It may produce problems for managers in directing subordinates outside the core time period, cause confusion where there is shift work or interdependencies between functions. TOTAL QUALITY MANAGEMENT

Total Quality Management may be defined as creating an organisational culture committed to the continuous improvement of skills, teamwork, process, product and service quality, and customer satisfaction. For achieving total quality, three things are Essential: 1)Meeting customers requirements 2)Continuous improvement through management process 3)Involvement of all employees. Objectives of TQM Philosophy Meeting the customers requirements is the primary objective and the key to organizational survival and growth The second objective is continuous improvement of quality The third objective aims at developing the relationship of openness and trust among the employees at all levels in the organization.

COMPONENTS OF TOTAL QUALLITY MANAAGEMENT 1) CUSTOMER ORIENTIATION 2) CONTINUOUS IMPROVEMENT 3) EMPLOYEES INVOLVEMENT BENEFITS OF TQM The following benefits can be derived from a sound TQM program 1) TQM brings quality consciousness in the enterprise which encourages production of quality products. 2) TQM helps in providing greater satisfaction to the customers by meeting their requirements. 3) It creates a good public image. 4) There is better use of materials, machines, capital, human resources etc. 5) Wastages are reduced to a minimum. 6) Employees are committed to higher quality and feel highly motivated.

IMPLEMENTATION OF TQM

W.E.Deming suggested Plan-Do-Check_Act Cycle for the implementation of TQM in any organization. The steps in PDCA cycle are as follows: 1) Lay down policies and objectives of TQM. 2) Chalk out the methods to achieve TQM objectives. 3) Educate and train workers and managers to understand and meet the requirements of TQM. 4) Start the operation of TQM by introducing new product, machines, procedures, etc. 5) Observe results of operation and find out the causes of non-conformance to quality standards. 6) Analyse results and determine the consequences of non-conformance and place the report before the top management. 7) Prevent undesired effects in Quality improvement. Establish personal relationships with employees so that they can voice their concerns and ideas. 8) Suggest measures for improvement of methods and design in future.

KAIZEN The Japanese word for continuous improvement is KAIZEN, which means improving the overall system by constantly improving the little details. TQM managers dedicated to Kaizen are never totally happy with things. Its practitioners view quality as an endless journey, not a final destination. They are always experimenting, measuring, adjusting and improving. There are four general avenues for continuous improvement for any organization. These include: 1) 2) 3) 4) Improved and more consistent product and service quality. Faster cycle times Greater flexibility Lower costs and less waste.

International attention is being focused on the outstanding performance of the Japanese economy and the success of management practices being adopted of the Japanese firms. Interest in Japanese management system has rapidly increased in the western countries of the world. Quality improvement is central to the Japanese system along with life time employment , seniority based promotion, group participation, etc. In Japanese system, quality is expressed in relation to continuous improvement known as kaizen.

QUALITY CIRCLES CONCEPT AND FEATURES OF A QUALITY CIRCLE. The concept of Q.C emerged from quality control. Q.C are quite popular in Japan. Looking at their success, many organizations in U>.S.A. and India have also attempted to implement Q.C. It should be noted that Q.C provide a future-oriented approach. They seek high quality products in the current production run and in the future. A Q.C is a small group of employees doing similar or related work who meet regularly to identify, analyse and solve product-quality problems and to improve general operations. The Q.C are relatively autonomous units usually led by a supervisor or a senior worker and organized as work units. The workers, who have a shared area of responsibility, meet periodically to discuss , analyse, and propose solutions to ongoing problems. The key features of Q.C are as under: 1) 2) 3) 4) A Q.C is a voluntary group. It represents a collective effort. It intends to improve the quality of output. It coordinates the activities of members towards improving the quality of work in the workshop. 5) It facilitates frequent meetings and discussions of members for improving quality. 6) It has no discrimination against age, sex and position. PURPOSE OF Q.C. The technique of Q.C has been refined over the years. It is now followed to achieve the following objectives: 1) 2) 3) 4) 5) Overall improvement of quality of products manufactured by the enterprise. Improvement of production methods and productivity of the enterprise. Self-development of the employees who take part in Q.C. Encouragement of innovative ideas among the employees. Building high morale of employees by developing team-work in the organization.

BENEFITS OF Q.C 1) Formulation of Q.C in Japan and other countries has helped in bringing out several innovations and changes in work methods and products.

2) Q.C have proved to be a valuable tool for increasing productivity, improving quality and increasing workers job satisfaction. 3) Membership in a Q.C means a participative environment that provides identification with the work-group. 4) Quality circles help in the development of the participants as they are encouraged to produce innovate ideas and find new ways to improve product quality. 5) Q.C provide opportunities for better understanding among the members. 6) Q.Cs create awareness of the potential of the workers.

INTRODUCING Q.C IN AN ORGANISATION 1. 2. 3. 4. 5. 6. SELLING THE IDEA OF QUALITY CIRCLE CONSTITUTION OF Q.C ANALYSIS OF QUALITY PROBLEMS PROBLEM SOLVING PRESENTATION OF SUGGESTIONS TO THE MANAGEMENT IMPLEMENTATION

PROBLEMS IN IMPLEMENTATION OF QUALITY CIRCLES 1. 2. 3. 4. NEGATIVE ATTITUDE LACK OF ABILITY LACK OF MANAGEMENT COMMITMENT NON-IMPLEMENTATION OF SUGGESTIONS

LECTURE-49-51 HUMAN RESOURCE ACCOUNTING Human Resource Measurement in India (A Study of Indian Corporate Sector) Introduction In any organisation the most important input is the human element The success or failure of a company very much depends on the persons who man the organisation. It is a matter of common knowing that capital issues of even new undertakings are oversubscribed, if they floated by competent persons. This is because the investor in the capital market places high value in the human ability rather than any other factors like net worth, yield, price earnings ratio which are not available in the case of a new company. Even among nations, countries like Japan, West Germany and Korea are able to make rapid strides, thanks to the human resources, not in terms of numbers but terms of quality, devotion to work and loyalty to the rate. In the Asiad at Delhi also, we saw how the two Koreas secured a large number of medals quite out of proportion to their size, strength and resources. This was possible because of the emphasis on the development of human resources. Japan, a country which is not endowed with much of natural resources, is not handicapped at all, thanks to its human resources with the help of which that nations can surmount any difficulty. History is replete with examples of several great personalities like Christ, Buddha, Prophet Mohammed, Sankara and Vivekananda to realise what single individual can achieve without any material resources. In business also the greatest asset is the human resource of the enterprise and not the plant, equipment or the magnificent buildings it owns. It is worth recalling what Alfred Marshal said long ago the most valuable of all capital is that invested in human beings. However, it is unfortunate that the balance sheets do not exhibit this most vital asset, while capital invested in other assets is shown. This is one~ of the severe limitations of present day financial statements which hinder the uses of these statements from making full use of them. Generally, the productivity of investment in industries is known from the rate of return it gives. $0 far, these rates of productivity are considered in respect of physical assets investment only. To find out the productivity of investment in respect of human beings in any enterprise, Human, Resource Accounting (HRA) will be helpful. The Human Resource Accounting is also scaling tool that generates the quantitative control information about the contribution of human resources for promoting industrial productivity. R can help the management in taking many vital decisions relating to selection, lay-off, transfers, training, promotion, etc. The American

Accounting Associations Committee on Human Resource Accounting has defined human resource accounting as under: Human resource accounting is the process of identifying and measuring data about human resources and. Communicating this information to the interested parties. Thus, the basic premises underlying the theory of Human Resource Accounting are : (1) People are valuable resources of an enterprise; (2) The usefulness of manpower as an organizational resources is determined by the way in which it is managed; and (3) Information on investment and value of human resources is useful for decisionmaking in the enterprise. It helps in developing financial assessments for the people within the organisation and monitoring of these assessments in the light of net accounting policy of the concern from time to time. The purpose of HRA is to improve the quality of human resources decisions made both internally and externally concerning and organisation. However, the specific objectives of Human Resource Measurement may be outlined as under: (1) to assist the management in taking suitable decisions regarding investment on human resources; (2) to provide information to all people concerned regarding the earning potential of human resources of the organisation; (3) to assess the efficiency of human resources in obtaining productivity and profitability; and (4) to provide comparative information regarding costs and benefits associated with investment in human assets. Rationale of Human Resource Measurement The accountants in the past have not given due consideration to this important asset working in the enterprise. In our traditional accounting practices, the heavy amount incurred on the recruitment, placement, selection, training and development of the personnel is generally treated as revenue expenditure and hence it is debited to profit and loss account of the period during which such amount is incurred. But today, it is argued that these expenditures incurred by an enterprise to get the benefit of the services of its manpower force in future is against the accounting principle to treat them completely of a revenue nature. In fact, such expenditure should be capitalised and be shown in the balance sheet. The failure of professional accountants to treat human resources as asset just like physical and financial assets attracted the attention of academics and in seventies, the concept of Human Resource Accounting was evolved which emphasise that human resources should be treated like physical assets and should be shown in the balancesheet of the enterprise. Objectives The primary purpose of human resource accounting is to facilitate the management of people as organisational resources. It. can also called as human resource management accounting, Le., the application of accounting to the management of human resources. Rensis Likert, one of the earliest proponents of the subject, has listed the following objectives of Human Resource Accounting : (1) To furnish cost value information for making

(2) Management decision and maintaining human resources in order to attain cost effective organisational objectives. (3) To allow management personnel to monitor effectively the use of human resources. (4) To provide a sound and effective basis on asset control, Le., whether assets are conserved, depleted or appropriated. (5) To aid in the development of management principles by classifying the financial consequences of various practices. Present Value of Future Earning Model Under this approach, the value of human resources of an organisation is determined according to their present value to the organisation. A number of valuation models have been developed to determine the present value. This model has been developed by Brauch Lev and Aba Schwarts in 1971. They are of the opinion, that determination of the total of a firms labour force is a straightforward extension of the measurement procedure of an individual value to the organisation. They have divided the whole labour force into certain homogeneous groups such as skilled, unskilled, set11i-skilled, technical staff, managerial staff etc. and in accordance with different classes and age groups. Average earnings stream for different classes and age groups are prepared for each group separately and the present v5lue for the human capital is calculated. The aggregate present value of different groups represents the capitalised future earnings of the firm as a whole. They have advocated the use of cost of capital rate for the purpose of capitalising the present. value of the future earnings of the employees. According to them, the value of human capital represented by a person of age is the present value of his remaining future earnings from his employment. They have given the following formula for calculating the value of an individual: Vr = T E(t) / t : r (1 + r) t - r Where Vr = the human Capital value of a person r years old, E(t) = the persons annual earnings up to retirement, represented by the earning profile, r = discount rate (Cost of Capital), T = Retirement age. Rewards Evaluation Model This model has been suggested by FlanhoItz. It identifies the major variables that determine an individuals value to an organisation, i.e. his expected reliable value. The expected realisable value of an individual is the present worth of future services expected to be provided during the period he is expected to remain in the organisation. The model is based on the presumption that a persons value to an organisation depends upon the positions to be occupied by him in the organisation. The movement, of people from one organisation role to another is a stochasic process with rewards. As people move and occupy different organisational roles, they render services (i.e., rewards) to the organisation. However, the roles they will occupy in future will have to be determined probabilistically for each individual. The model suggests a five steps approach for assessing the value of an individual to the organisation : 1. Forecasting the period will remain in the organisation, i.e., his expected service life; 2. Identifying the services states, i.e., the roles that the might occupy including, of course, the time at which he will leave organisation;

3. Estimating the value derived by the organisation when a person occupies a particular position for a specified time period; 4. Estimation of the probability of occupying each possible mutually exclusive state at specified future times; and 5. Discounting the value at a predetermined rate to get the present value of human resources. This model is certainly an improvement over the Lev and Schwartz. But this model when examined on operational capacity falls short of a practical value inasmuch as that probabilities will have to be determined for each individual occupying various service states, and. these probabilities will have to be determined for all employees for periods on an individual basis. Further, it will be tremendously expensive way to predict career movements of exit probabilities on an individual basis. Moreover, data developed on the basis will involve large variance which will reduce usefulness of the model. Morse (1973) suggested this approach. Under it the value of human resources is equivalent to the present value of the net benefits derived by the enterprise from the service of its employees. The following steps are involved under this approach: 1. The gross value of the services to be rendered in future by the employees in their individual and collective capacity. 2. The value of direct and indirect future payments to the employees is determined. 3. The excess of the value of future human resources (as per (1) above) over the value of future payments (as per (2) above) is ascertained. This represents the net benefit to the enterprise because of human resources. 184 11.672.1 4. By applying a predetermined discount rate (usually the cost of capital) to the net benefit, the present value is determined. This amount represents the value of human resources to the enterprises. Certainty Equivalent Net Benefit Model This approach has been suggested by Pekin Ogan (1976) is, in fact, an extension of net benefit approach of morose. Under it, the value of human resources is determined by taking into consideration the certainty with which the net benefits in future will accrue to the enterprise. The method involves the following steps : (a) Net Benefit from each employee. (as determined under the previous approach) (b) Certainty factor at which the benefits will be available in future. (c) The certainty equivalent benefits will be calculated by multiplying the certainty factor with the net benefits from all employees. This will be the value of human resources of the enterprise.

Applications of Human Resource Accounting

If we look at the annual reports of public enterprises and private enterprises in India, we find that chairmans report invariable contains the statements highlighting the significance of human resources. The chairman of these enterprises make their remarks at the annual general meeting of the shareholders that our employees are most important assets and without their significant contribution, the present growth in the operation would not have been attained. I wish to place it as record of my sincere gratitude for the hard work done by the employees of our company. I thankfully acknowledge the

contribution made by our employees. These qualitative pronouncements reflect the importance of human resources in an enterprise but the quantitative information relating to their contribution or their value is nowhere recorded or shown in the financial accounts. However, in practice, a few enterprises, stated below, value their human resources and report this information in their annual reports. (A) Public Sector Enterprises (1) Bharat Heavy Electrical Ltd., (2) Cement Corporation of India, (3) Project and Equipment Corporation of India, (4) Engineers India Ltd., (5) Minerals and Metals Trading Corporation of India, (6) Electrical India Ltd., (7) Oil and Natural Gas Commission, (8) Hindustan Shipyard Ltd., (9) Steel Authority of India Ltd., and (10)Oil India Ltd .. (B) Private Sector Enterprises (1) Tata Engineering and Locomotive Works(TELCO) (2) Associated Cement Company (ACC), and (3) Southern Petro Chemical Industries Corporation (SPIC). The methodology of human asset accounting encompasses the elements such as : (a) The composition of employees in different grades for five years; (b) Productivity of human resources for five years; (c) Programmes for employee development; (d) Personnel payments to the employees and expanses on social welfare per employee; (e) Human asset valuation; (f) Human assets vis--vis total assets, and (g) Value of human assets in an organisation etc. Emerging Issues In India, human resource accounting has not been introduced so far as a system. The Companies Act, 1956 does not require furnishing of any significant information about human resource in financial statements of companies. The Institute of Chartered Accountants of India has issued accounting standards of different technical subjects of accounting but it has not been able to bring any definitive accounting standard for measurement and reporting of cost and value of human resources of an organisation. The existing accounting standards, however, fully support the adoption of human resource accounting for the purpose of meeting their own requirements in true sense. The result of non-disclosure of human resources cost and value information in financial statements of business enterprises, has been that financial statements do not reveal any quantitative information on human resources side and the statement of affairs is improperly reported to different authorities. The dichotomy in accounting between human and non-human capital is rather fundamental in that while fatter is recognized as an asset and recorded as such in the financial statements, the former is totally ignored. With the accelerated growth in science and technology the value of human capital is gradually increasing and hence it is essential for a company to reflect the investment in human resources. Recently, the idea of human

resources accounting attracted the minds of many scholars viz., Hermanson, Hekiman Jones, Likert, Flam holtz, Brument & others. The modern thinking of these scholars is that all the assets of. the Company including the human asset must be properly treated, analysed and reported by an accounting system in view of the long-term interest of the organisation. So the Human Resource Accounting is needed in this context. Human Resource Accounting is necessary: (a) disclose what is happening to the energy of human beings and what is its value for management, and (b) to find out the productivity of investment on human beings in organisation. It is the scaling tool that generates and reports quantitative control information about the contribution of human resource for promoting industrial productivity. The application and usefulness of Human Resource Measurement depends on the future efforts and experiments to be made by practicing managers, accountants and academicians. The application of HRA also needs support from the professional bodies and Government. In the absence of Human Resource Accounting, the management may not realise the negative effects of certain programmes aimed at improving profits in the short-run. Such programmes may result in decreased value of human assets due to fall in the productivity levels, high labour turnover, low morale, etc. The success of an organisation very much depends on the build-up of quality workforce at all levels. The success stories of BHEL, lTC, Hindustan Lever, Larsen & Toubro and several other enterprises are largely due to the emphasis on human resource development. If this vital asset is not shown in the balance-sheet, to that extent the public and live stores are handicapped. Human Resource Accounting helps investors and public by providing the necessary information.

LECTURE-52-54 Human Resources Information Systems The human resource information system is a systematic procedures for collecting, storing, maintaining retrieving and validation data needed by an organization about its human resources. The HRIS is usually a part of the organizations larger management information system. The HRIS need not be complex or even computerized. But computerization has its own advantage of providing more accurate and timely data for decision making. The areas of application of HRIS are many .Some of them include training management, risk management and legal requirements, attendance reporting and analysis, HRP, accident reporting and prevention, strategy planning, financial planning and other related areas. Steps in implementing an HRIS As with any major change, proper planning is an absolute necessity for successful implementation of an HRIS.The steps outlined below describes the specific procedures involved in successfully developing and implementing an HRIS. Step1: Inception of idea: The idea having an HRIS must originate somewhere the originator of idea should prepare a preliminary report showing the need for an HRIS and what it can do for the organizations. Step2: Feasibility study: This evaluates the present system and details the benefits of an HRIS.It evaluates the cost and benefits of an HRIS. Step3: Selecting a project team: Once the feasibility study has been accept ed and the resources allocated project team should be selected. The project team should consist of an HR representatives from both management information systems and payroll. Step4: Defining the requirements: A statement of requirements specifices in detail exactly what the HRIS will do. A large part of the statements normally deals with the details of the reports that will be produced. Naturally, the statement also describes other specific requirements. This typically includes written descriptions of how users collect and prepare data, obtain approvals, complete forms, retrieve data, and perform other nontechnical tasks associated with HRIS use. The key is here is to make sure that the mission the HRIS truly matches managements needs for an HRIS. Step5: Vendor analysis: This step determines what hardware and software are available that will best meet the organizations need for the lowest price.This is a difficult task. The best approach is usually not to ask vendors if a particular package can meet the organizations requirements but how it will meet those requirements. Steps6: Package contract negotiation: after a vendor has been selected , the contract must be negotiated, the contract stipulated+ the vendors responsibilities with regards to software,installation,service,maintenance,training and documentation. Step7: Training: Training usually begins as soon as possible after the contract has been signed. First the HR members of the project team are trained to use the HRIS.Towards the end of the implementation, the HR representative will train manager from other departments in ho w to submit information to the HRIS and how to request information from it.

Step8: Tailoring the system: This step involves making changes to system to best fit the needs of the organization. A general rule of thumb is not to modify the vendors package, because modifications frequently cause problems. An alternative approach is to develop programs that augment the vendors program rather altering it. Step9: Collecting the system: Prior to start-up of the system, data must be collected and entered into the system. Step10: Testing the system: Once the system has been tailored to the organizations need and the data entered, a period of testing follows. The purpose of the testing phase is verify the output of the HRIS and to make sure it is doing what it is supposed to do. Step11: Starting up: Start up begins when all the current actions are put into the system and reports are produced. It is wise to attempt start-ups during the lull period so that maximum possible time can be devoted to HRIS. Even though the system has been test, some additional errors often surface during start-up. Step12: Running in parallel: Even after the new HRIS has been tested, it is desirable to run the new system in parallel with the old system for a period of time. This allows for the comparison of outputs of both the system and examination of any inaccuracies. Step13: Maintenance: It normally takes several weeks or even months for HR people to feel comfortable with the new system. During this stabilization period, any remaining errors and adjustments should be handled. Step14: Evaluation: After the HRIS has been in place for reasonable length of time, the system should be evaluated. Is the HRIS right for the organization and is it being properly used? Following steps when implemented will not give HRIS success, but it will increase the probability. A well-designed human resources information system (HRIS) is a powerful, computer-based tool that enables you to enter and update all types of employee-related information quickly and easily. It lets you access and generate a wealth of HR management information, and produce internal reports and external compliance reports as needed. HRIS significantly contributes to the efficiency and effectiveness of your HR function. We offer a number of packaged systems to fit your needs and budget. Benefits: An HRIS system: Computerizes record-keeping. Increases key personnel data available to management. Enables you to produce timely reports, both standard and customized. Automates the preparation of many government-required reports. Enables you to track up-to-date time-off balances (vacations, sick days, holidays, and more). Saves time, increases efficiency.

Human Resource Audit

Nature of Human Resource Audit

An HR audit is a tool for evaluating the personnel activities of an organisation. The audit may include one division or an entire company. It gives feedback about the HR functions to operating managers and HR specialists. It also provides feedback about how well managers are meeting their HR duties. In short, the audit is an overall quality control check on HR activities in a division or company and an evaluation of how these activities support the organisations strategy Benefits of Human Resource Several benefits that result from an HR audit are: Identification of the contributions of the HR department to the organisation, Improvement of the professional image of the HR department, Encouragement of greater responsibility and professionalism among members of the HR department Clarification of the HR departments duties and responsibilities, Stimulation of uniformity of HR policies and practices, Finding critical personnel problems, Ensuring timely compliance with legal requirements, Reduction of HR costs through more effective personnel procedures, Creation of increased acceptance of the necessary changes in the HR department and A thorough review of the departments information system. The HR manager himself or herself is interested in knowing his or her department s effectiveness. It is not that the department is infallible. Errors do happen. Policies and practices become outdated. By auditing itself, the department finds problems before they become serious. Done correctly, the evaluation process can build a strong rapport between the department and operating managers, and it can reveal outdated assumptions that can be changed to meet the departments objectives and future challenges. Systematic assessment instills discipline in the personnel staff and encourages them to move away from intuitive techniques to more rigorous assessment of the likely benefits to be achieved. Further, a personnel function must establish credibility with the management by justifying its programmes and clearly demonstrating how it contributed to the attainment of organisational goals.

Scope of Audit
An HR audit must cover the activities of the department and extend beyond, because the peoples problems are not confined to the HR department alone. Thus, the audit should be broad in its scope. It must evaluate the personnel function, the use of its procedures by the managers and the impact of these activities on the employees. Specifically, an HR audit covers the following areas: 1. Audit of human resource function, 2. Audit of managerial compliance, 3. Audit of the human resource climate, and 4. Audit of corporate strategy.

Audit of Human Resource Function

This involves audit of all HR activities discussed till now in this book. For each activity, the auditors must (i) determine the objective of each activity, (ii) identify who is responsible for its performance, (iii) review the performance, (iv) develop an action plan to correct deviations, if any, between results and goals, and (v) follow up the action plan. The following 20 criteria would help measure effectiveness of the HR function of an organisation.Each statement has a four-point rating scale varying from very true to not true. 1. In your company, all issues are closely linked to every other business process. 2. The HR department is represented in strategy-building sessions of the top management. 3. HR issues are discussed explicitly when strategic plans are formulated. 4. The performance of the HR department and of the organisation are linked. 5. The HR function is given as much, or more significance, as other functions. 6. HR managers have sufficient power to suggest strategic initiative to the top management. 7. The HR department can easily compete for funds and management involvement. 8. The structure of the HR department is effective in delivering competent services. 9. Line managers are recruited along with trained specialists in the HR department. 10.The services of the HR department are equally available to everyone. 11.The head of the HR department is always accessible to all employees. 12.The HR department plans the companys manpower needs proactively. 13.The HR department conveys organisational goal to everyone. 14.The HR department links appraisal and compensation to corporate objectives. 15.The HR department meets the companys and individuals training needs. 16.The HR department disseminates information down the ranks. 17.The HR department does not handle staff-welfare, canteens, or payrolls management. 18. The HR department has knowledge qfbehavioura1 sciences and industrial psychology 19.The HR department gets feedback on its performance from other employees. 20.HR practices are audited, their costs computed, and then effectiveness evaluated. This HR management audit allows you to rate the extent to which an organisation has basic HR activities in place a-c how well they are being performed. In deciding upon your rating, consider also how other managers and employees would rate the activities I. Legal Compliance 1. Equal employment opportunity requirements 2. Immigration reform 3. Health and safety 4. Wage and hour laws 5. Employment-at-will statements 6. Privacy protection

7. ERISA reporting/compliance 8. Family/medical leave II. Obtaining Human Resources 9. Current job descriptions and specifications 10.HR supply-and-demand estimates (for 3 years) 11.Recruiting process and procedures 12.Job-related selection interviews 13.Physical exam procedures III. Maintaining Human Resources 14.Formal wage/salary system 15.Current benefits programs/options 16.Employee recognition programs 17.Employee handbook/personnel policy manual 18.Absenteeism and turnover control 19.Grievance resolution process 20.HR record-keeping/information systems 166 11.271 IV. Developing Human Resources 21.New employee orientation program 22.Job skills training programs 23.Employee development programs 24.Job-related performance appraisal 25.Appraisarfeedback training of managers