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Management
What is HRM? Scope & Functions of HRM. Characteristics of HRM. Evolution of HRM in India. Challenges of HRM. Difference between HRM & HRD.
Definitions of HRM
A set of systematic and planned activities designed by an organization to provide its Human capital with the necessary skills to meet current and future job demands. The planning, organizing, monitoring and controlling of processes in the Human Capital vertical which include Sourcing, Induction, Compensation management, Performance Appraisals, Training & Development, Career Planning, Job rotation, Transfers & Promotions, Safety & Welfare, Employee Relations, Staff Exits e.t.c constitute HRM. HRM is the effective and efficient management of Talent Acquisition, Talent Development & Talent Retention.
Scope of HRM
Manpower or Human Resource Planning. Recruitment & Selection Sourcing. Induction. Job Analysis, Design & Evaluation. Performance Appraisals. Training & Development. Job Rotation, Transfers & Promotions. Career Planning. Compensation Management. Rewards & Recognition. Health, Safety & Welfare. Industrial Relations/Employee Relations. Statutory compliances of Labour legislations
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Characteristics of HRM
Deals with management of people or Human resources. Is an Applied Behavioural science. Draws concepts from Philosophy, Psychology, Sociology, Political science, Economics e.t.c. A multi-disciplinary approach. Is concerned with Org. Behaviour & Org. Development. Brings people and organizations together and is concerned with evolving a positive and a strong value oriented high performing culture, which would result in Employee development and Organizational growth and excellence. Establishes a framework for managing people better in the organizational context. As HRM deals with people, it needs to be transparent, sensitive, empathetic and having a long term vision.
Challenges of HRM
Talent Attraction & Retention has become a process which needs to be meticulously structured and creatively managed. Training & Development needs to create a Learning Organization. Compensation Management needs to be in sink with market trends and should be competitive. Staff burn-out. Need for structured career development. Motivational factors seem to be changing and are getting complex by the day. Loyalty & Commitment Shorter career spans. HR Out-sourcing.
CONTEXT OF HRD
It is an integral part of HRM. It aims to create a Learning Organization. It matches the org. need for Human Resource with the individual need for career growth and development It brings about behavioral changes in people for acquiring desired levels of competence and excellence. HRD aims to get the human capital of an enterprise ready to tap on current and future growth opportunities by offering organized Learning & Development experiences.
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CONTEXT OF HRD
It is a system comprising of several interrelated sub-systems. It is a planned process to acquire or sharpen capabilities, develop general capabilities and develop an organizational culture which contributes to individual development as well as organizational excellence. It develops competencies at all levels.
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Job Design
It involves a systematic attempt to organize tasks/duties and responsibilities into a unit of work to achieve certain objectives. Horizontal scale differentiation Different tasks across the org. being performed by different people. Vertical scale differentiation Establishing hierarchy of tasks for supervision of sub-groups. Per Michael Armstrong: Job Design is the process of deciding on the contents of a job role in terms of its responsibilities, on the methods to be used in carrying out the job, in terms of techniques, systems and procedures and on the relationships that should exist between the job holder and his superior, team members and subordinates. Job Design incorporates the following 3 steps: * Specification of individual tasks. * Determining the methods of performing each task. * Combination or grouping of tasks into specific jobs to be assigned to individuals. Job Design should successfully integrate org. requirements & the individual needs/competencies. Well designed jobs ensure talent attraction & retention.
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JOB ENLARGEMENT
It means expanding the scope of the job by aggregating 2 or more job roles into a single one. Tasks/duties get expanded. Assigning more tasks of a similar nature Horizontal loading.
Vertical loading Area of accountability is increased and controls reduced thereby giving staff more autonomy and control over their roles. Brings about a wholeness in the role by reducing monotony.
It is a branch of Industrial Engineering and it does not increase the depth of a job.
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JOB ENRICHMENT
Based on the assumption that jobs should be made interesting and challenging for staff motivation. A branch of Motivational Theories OB. Provides opportunities for achievement, recognition, career advancement.
It enriches the job content thereby upgrading the responsibility, scope and challenge.
It leads to staff performing the management function of planning and control. Job Enrichment involves a VERTICAL loading of the job. Job Enrichment gives greater autonomy and control.
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TASK SIGNIFICANCE.
AUTONOMY. FEEDBACK.
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JOB EVALUATION
It means determining the relative worth of jobs in an org. by comparing it with other jobs within the org. and with the external job market. It helps in establishing job hierarchy. It indicates the relative importance of one job with reference to the others.
Job Evaluation
The aim of job evaluation is to provide a systematic and consistent
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To promote goodwill, strengthen and maintain morale and loyalty and provide an incentive for efficiency.
To provide management with a basis of proper control
Uniformity in understanding w.r.t definition of the rating elements and consistency in degree of those elements. Rating plan should be made public.
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2. Classification Method
In job classification the number of grades is decided first and detailed grade definitions produced. Representative (benchmark) jobs are evaluated to validate the definitions. Jobs are classified into an existing grade/category structure or hierarchy. Each job is assigned to the grade/category providing the closest match to the job.
The classification of a position is decided by comparing the whole job with the appropriate job grading standard.
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Complicated, expensive and difficult to explain to staff. Application of weightages and monetary values require involvement of experts.
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* HR Supply forecasting.
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* FORECASTING.
* ACQUIRING. * DEVELOPING.
* MAINTAINING.
HRP can be defined as a strategy for Talent acquisition, utilization, improvement and maintenance of an orgs.
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technological environment.
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*Control & Evaluation This step indicates whether there is Surplus OR Shortage of Manpower. *If there is shortage, Recruitment & Selection will be initiated.
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*Announces a Separation scheme which compensates separating staff for early retirement.
*Invites application from staff. Authority to accept lies with the Management. *Is different Termination. from Retrenchment, Dismissal &
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*It estimates the available vacancies and takes suitable steps for selecting and appointing candidates against those vacancies.
*Available vacancies are given wide publicity and suitable candidates are first attracted so that they show their keenness to apply. *Objective is to create a reservoir of eligible and interested candidates who would be keen to participate in the Selection process.
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*Is a POSITIVE function and the first point of contact that an org. makes with potential staff.
*Per Edwin Flippo: It is the process of searching for prospective staff and stimulating them to apply for jobs in the org. *Vacancies are created due to transfers, promotions, retirement, termination, permanent disability, attrition e.t.c. OR on account of business growth/expansion/diversification.
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*Is the process of selecting the best, hence a NEGATIVE function as it eliminates those who do not meet the profile.
*Selection process thus needs to be scientific. *Unscientific recruitment & selection process leads to attrition, low productivity, material wastage, accidents, inefficiency.
*Transfers.
*Internal Notification Adverts. *Retirements.
*Recalls.
*Former staff.
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*Campus recruitment.
*Press Adverts. *Internal Notification Adverts.
*Management consultants.
*Staff Deputation. *Management Training schemes.
* Synthetic Test: Developed when Analytical Test is not possible as jobs are more complex. A complex simulated scenario similar to the job role but on a smaller scale is designed to measure analytics.
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*Compatibility ascertained.
*Mental qualities get evaluated. *Application of knowledge gets tested. *Selection becomes more accurate and hence reliable.
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*Details of the job role, its importance, contributions to the org. e.t.c.
*To make him comfortable and give him the confidence to 57 perform.
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Functional orientation.
*Follow-up Induction.
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It is the backbone of HRM practice and is a powerful vehicle for conversion of staff potential into performance. Performance Appraisal is a part of Performance Management, which is defined as a multi-step process of aligning employee work behaviors with the strategy and goals of the org. It is the process of creating a work environment in which people are enabled to perform to the best of their abilities. A Performance Measurement system is a tool for implementing strategic planning and achieving continuous improvement at all levels of an org. 62
* Performance Analysis.
* Performance Appraisal. * Performance Development. * Performance Management Audit.
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Client evaluation.
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Multiple perceptions help the Appraisee understand what other stake holders think of him and this can lead to a healthy development of ones potential.
Only formal communication process is used making it more accountable. Certain competencies like Team building, Interpersonal skills, Leadership e.t.c. are identified and measured.
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UTILITY OF 360 DEGREE APPRAISAL Self development and counseling. Training & Management Development.
Org. Development.
Team building.
Career Development.
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Confidential Reports.
Ranking Method. Grading Method. Graphic Rating Scales. Checklist method. Forced Choice Rating method. Critical Incident method. Essay method. Group Appraisal. Field Review method.
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Ranking Method: Staff performing similar jobs are ranked in a descending order.
Grading Method: Grades or classes are first established and well defined. Performance of individual employee is then compared and evaluated against the set standards and then a grade is accordingly assigned. Graphic Rating Scale method: 4 to 12 factors depending on job category are selected. Each of these factors are classified into degrees or a scale (Very Good, Good, Average, Below Average). These factors and their degrees are marked graphically.
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to
all
jobs
in an org.
Since MBO results will be linked to rewards, staff will be reluctant to accept or establish challenging goals. Allocation of merit pay on half yearly or annual basis may encourage setting up of goals with short term horizons. Time consuming and dominated by superiors while setting goals.
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These scales have scale points which are determined by statements of effective and ineffective behaviours.
Termed behaviourally anchored because scales represent a large range of descriptive statements of behaviour varying from the least to the most effective. Rater must indicate which behaviour on each scale best describes the performance of an employee.
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on
Halo effect: Consistently high or low ratings favourable/unfavourable impression of the rater.
basis
Horn effect: Tendency to rate lower than what performance justifies. The recent failure may wipe out good performance of the past. Central Tendency: Averaging work characteristics in the middle grades. Recency effect: Good performance close to the appraisal period influencing appraisal decisions in favour of the appraisee. Primacy effect: Initial impression influencing the appraisal report. First impression = Last impression.
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To improve performance.
3 types as given below: TELL & SELLDIRECTIVE.
Self appraisal and peer evaluation are also used for final rating.
Evaluators prepare a summary report and feedback is given. Intellectual capacity, confidence, assertiveness, stress management, problem solving capabilities, decision making, creativity e.t.c are tested.
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They are more accurate than supervisory judgement in predicting staff potential.
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Types of Training:
INDUCTION TRAINING. SKILLS OR ON THE JOB TRAINING.
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Case Study.
Role Playing. Simulation. Programmed Instruction Subject matter presented in a series of carefully planned sequential units with increasing complexity/difficulty. Laboratory Training Behavioural and emotional learning called Sensitivity Training.
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JOB BEHAVIOUR.
ORGANIZATION. ULTIMATE VALUE.
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Viewing all trainees as same One size fits all. Not providing time to practice.
Not providing a pat on the back.
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Chapter 5: EMPLOYEE TRAINING & DEVELOPMENT Follow-Up & Evaluation of Training Process:
Evaluation is necessary to find out the extent to which training objectives are achieved. Evaluation should be based on objective methods and standards. Evaluation should be specific and continuous. Appropriate methods for evaluation should be used.
Interviews.
Feedback.
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Executive or Management Development is a planned, systematic and continuous process of learning and growth by which Managers develop their conceptual and analytical abilities to manage.
It is the result of not just participation in formal courses of instruction but also of actual job experience. It is primarily concerned with improving the performance of Managers by giving them stimulating opportunities for growth and development. It is a long term process as Managers take time to acquire and improve their capabilities. It helps Managers to realize their full potential. The basic purpose of Management Development is to ensure that as and when the need for Managers arises at various levels in the org, there are suitably qualified people to man those positions.
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Chapter 5: EMPLOYEE TRAINING & DEVELOPMENT Objectives of Management Development: To improve the performance of Managers. To plan the career development of Managers. To improve the overall performance of the org. To build a high performance culture geared towards excellence.
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Need of Management Development: Shortage of talented managerial pool. Complexity of managerial jobs.
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Membership of committees.
Project assignment. Promotions & Transfers.
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A job is defined as a group of positions that are similar in kind and level of work.
Job rotation implies moving of staff from one role to the other. The job remains unchanged but staff performing them shift. BENEFITS: Raises intrinsic reward potential of a job. Multi-tasking benefits staff as well as orgs. Sensitization to other job roles improves inter-dept co-op. Reduces monotony and boredom.
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LIMITATIONS:
Does not improve the jobs per se Challenge factor. Staff might find it uninteresting as it calls for change. Increases training cost and work flows get affected.
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JOB TRANSFER:
Is a change in the job where the new job is substantially equal to the old in terms of pay, status and responsibilities. It is also defined as a lateral shift causing movement of individuals from one position to another usually without involving any marked changes in duties, responsibilities, skills needed or compensation. Transfer is neither a promotion nor a demotion, but merely a horizontal or lateral movement of staff.
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Types of Transfers:
PRODUCTION TRANSFERS Surplus or shortage. REPLACEMENT TRANSFERS Replacement of junior employees by senior employees who are surplus, so as to avoid lay-off. VERSATILITY TRANSFERS: For multi skilling and shouldering challenging roles. SHIFT TRANSFERS: Mobility in shift working. REMEDIAL TRANSFERS: For rectification of faulty placements. INTER & INTRA DEPARTMENTAL.
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Concept of Promotions:
Promotion is defined as advancement of an employee to a better job. It can also be defined as vertical scaling of staff leading to movement in the next higher role with a rise in emoluments. A part of the Career planning process a reward for consistent performance and the potential to shoulder higher responsibilities. Promotion involves a change from one job to another that is better in terms of status and responsibilities.
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Types of Promotions:
HORIZONTAL..Job category & role does not change.
Basis of Promotions:
Merit based: Promotion due to superior performance in the current job role. Merit denotes an individuals knowledge, skills, abilities and efficiency.
Good motivator helps focus on talented staff who are recognized and rewarded. Also inspires others to come up to speed.
Merit standards needs communicated to all. to be defined appropriately and
Basis of Promotions:
Seniority based: Seniority refers to the relative length of service in the same org. Promotion based on length of service is easy to arrive at and there is no subjectivity or scope for discrimination. This serves as a reward for loyalty. That staff learn more with experience may not necessarily be a valid assumption. Demotivates young and more competent staff.
Promotion Policy:
Should give due weightage to seniority and merit. Should provide equal opportunities in all categories, jobs, functions. Transparent process which must tell the employees the various avenues for achieving vertical growth through career maps, charts e.t.c. Norms for judging merit, potential must be established and due weightage should be given to merit and seniority and this should be spelt out clearly.
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Promotion Policy:
Mode of acquiring new knowledge, skills e.t.c should be told to staff so that they can prepare themselves for career advancement.
Benefits/Purpose of Promotion:
Recognition of good performance and potential to take on the next role.
What is Career?
It is a sequence of position/jobs held by a person during the course of his working life. It is a sequence of separate but related work activities that provide continuity, order and meaning to a persons life. Career planning is a systematic process by which one selects /decides career goals and the path to achieve these goals. A Career path represents various jobs performed by an employee during the course of his working life. It is an important aspect of HRP. Career planning is the responsibility of an individual employee, while the org. provides necessary guidance and counseling in planning and developing their careers as per the org. needs.
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Career Counseling:
Seniors provide career guidance by helping staff to understand their S/W. so that they can plan their career progress better. Encourages staff to take interest in certain areas where suitable opportunities for Career development are available. Needed when staff to have plan their own careers. Helps in removing unrealistic expectations and selecting career options which can be achieved with confidence. Enables staff to understand the forces and dynamics of the system.
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Decline stage.
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Wage or Salary is a monetary payment/compensation from the employer to the employee for work done or services rendered.
Generally Compensation includes the following 3 components: BASIC COMPENSATION or BASE PAY. INCENTIVE COMPENSATION Paid as Incentives. SUPPLEMENTARY COMPENSATION Paid as Fringe Benefits & Employee Services.
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Gradual increase.
Attractive to talented workers. Periodical review/scanning. Equal pay for equal work.
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E = RN
E means Total Earnings. R means rate per hour or day. N means no. of hours or day work. Efficiency, sincerity and ability are not given any attention.
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WE = NR
WE means workers earnings. N means number of pieces produced.
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variations in the achievement of specific results. ILO defines incentive as payment by results.
Incentive wage plans are those plans where workers are encouraged to produce more and are also rewarded accordingly.
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wages relate earnings to productivity and may use premiums, bonuses, or a variety of rates to compensate for superior performance.
DALE Piece rate system is the oldest incentive wage plan. In many incentive plans, a combination of time rate and piece rate systems is used.
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Profit sharing is an arrangement under which the employer agrees to give a part of the net profit to workers provided they raise the net profit over and above an agreed limit.
Profit-sharing is a different from regular wage payment.
Workers are treated as partners in the production process and profit is treated as the outcome of the joint efforts of employer and workers.
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In Western countries, profit-sharing concept is popular since long as a group incentive plan of wage payment.
Profit sharing scheme was initiated by South Metropolitan Gas Company,UK,1891.
Profit sharing is an arrangement freely entered into by which the employee receives a share fixed in advance of the profits. Profit-sharing is a method of industrial remuneration under which an employer undertakes to pay to his employees, a share in the net profits of the enterprise in addition to their regular 160 wages.
FEATURE OF PROFIT-SHARING.
Method/Technique of extra-payment Payment out of net profit. Employer and employees are parties for profit sharing. Payment on yearly basis. Agreement possible on different basis.
Raises profitability.
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ADVANTAGES OF PROFIT-SHARING.
More initiative and interest by worker. Increase in production and productivity. Fair to employer and employees. Ensures cordial industrial relations. Less supervision required.
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ARGUMENTS
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As per the payment of Bonus Act, 1965 payment of minimum bonus(8.33%) is made compulsory. The maximum limit of bonus payment is 20% The system of profit-sharing is more rational and scientific as compared to the system of bonus payment. We have a system of bonus payment which is a cheap substitute for the profit sharing scheme.
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Chapter 10: COMPENSATION MANAGEMENT PART 2 FRINGE BENEFITS & THEIR RELEVANCE
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Chapter 10: COMPENSATION MANAGEMENT PART 2 FRINGE BENEFITS & THEIR RELEVANCE
Fringe benefits may be defined as broad/wide rage of benefits and services that employees receive as an integral part of their total compensation packages.
Such benefits include benefits such as provident fund, gratuity, medical care, hospitalisation, accident relief, health and group insurance, canteen, uniform, recreation and the like. Fringe benefits constitute indirect compensation as they are usually extended as a condition of employment and not directly related to performance of concerned employee.
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Chapter 10: COMPENSATION MANAGEMENT PART 2 FRINGE BENEFITS & THEIR RELEVANCE
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Chapter 10: COMPENSATION MANAGEMENT PART 2 FRINGE BENEFITS & THEIR RELEVANCE
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Chapter 10: COMPENSATION MANAGEMENT PART 2 FRINGE BENEFITS & THEIR RELEVANCE
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Chapter 10: COMPENSATION MANAGEMENT PART 2 FRINGE BENEFITS & THEIR RELEVANCE
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Chapter 10: COMPENSATION MANAGEMENT PART 2 FRINGE BENEFITS & THEIR RELEVANCE
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Chapter 10: COMPENSATION MANAGEMENT PART 2 FRINGE BENEFITS & THEIR RELEVANCE
EMPLOYEE SERVICES
Canteen, Cafeteria, Lunch Room. Transport facility. Housing facilities Staff quarters, Housing Loans. Purchasing services Company products at discounted rates. Crche.
Recreational
Services
Sports
facilities,
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Chapter 10: COMPENSATION MANAGEMENT PART 2 FRINGE BENEFITS & THEIR RELEVANCE
Voluntary
Fringe Benefits Medical facilities, Housing, Subsidized meals, Educational facilities, Recreational facilities, Employee Co-operative societies.
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METHODS / MANAGEMENT?
TECHNIQUES
OF
PARTICIPATIVE
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METHODS / MANAGEMENT?
TECHNIQUES
OF
PARTICIPATIVE
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which the representatives of labour organisations and the representatives of the business organisation meet and attempt to negotiate a contract or agreement which specifies the nature of employer-employee-union relationship.
For the success of collective bargaining, strong trade union, enlightened and democratic management, constructive approach on the part of both the parties and morale support from the government and society are required.
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Late shri V. V. Giri (Ex-President of India) was a strong supporter of collective bargaining agreements.
This Giris Approach on collective bargaining has relevance even in the present day industrial situation.
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The statement made in Third Five-Year Plan document is worth noting: For the peaceful evolution of economic system on a
democratic basis, it is essential that workers participation in management should be accepted as a fundamental principle and an urgent need.
Unfortunately, actual participation is ineffective in India.
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All matters relating to wages, bonus, etc. which are subject to collective bargaining are excluded from the scope of such councils.
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PERSONNEL POLICY.
A policy is a plan of action. Personnel policies relate to hiring of manpower, terms and conditions of employment, compensation payment, hours of work, training and development, promotions and transfers, facilities (housing, transport, uniforms, etc.) and concessions given to employees and so on.
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determined course of action that is established to guide the performance of work toward the organisation objectives. It is a type of standing plan that serves to guide subordinates in the execution of their tasks.
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action. They furnish the general standards or bases on which decisions are reached. Their genesis ties in an organisations values, philosophy, concepts and principles.
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Principle of participation.
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Giving suitable authority to Incharge, Personnel policy manual. Appointing of small committee for manual preparation. Interviewing supervisors for information collection.
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1 Degree Feedback
Feedback By The Superior Alone Self Appraisal Assessment By Colleagues Reporting Manager (Immediate Superior) Provide Feedback Upward Review/assessment By Subordinates Assessment By Entire Circle Of Influence Cumulative Feedback From The Past Years (Self, 217 Superior And Colleague Assessment)
90 Degree Feedback
WHAT IS HRD?
HRD means Building..
Competency in people Commitment in people Culture in the organization
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WHAT IS HRD ?
HRD Means .Business Improvement .Business Excellence
HRD tires to bring about qualitative changes in this stock of Human Capital in accordance with the needs of the organization and Corporate objectives. It tires to mould the stock as per requirements.
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OPERATIVE FUNCTIONS OF HRM COMPENSATION MGT HUMAN RELATIONS Motivation Training Recruitment Job design Career pl Wage Job satisfaction Perks Induction Job analysis Placement Quality of life Communication Grievance Discp. action 222 Job evaluation Morale
Selection
Career system
Attraction and retention of human resources
Work system
Utilization of human resources
Role analysis Role efficacy Performance plan Performance feedback and guidance Performance appraisal Promotion Job rotation Reward 224
Development system
Development of human resources
Induction Training Job enrichment Self-learning mechanisms Potential appraisal Succession Development Counselling Mentors system
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Providing answers to employee and manager questions pertaining to policy, benefits, employment law
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a measure of efficiency with regards to the use of human resources within a firm. In either case, productivity is simply the value of the outputs a firm produces divided by the costs of producing those outputs. The formula for productivity is simply:
To increase productivity, outputs must increase more than costs. There are two basic ways to accomplish this, decrease costs while maintaining output, or increase output while maintaining
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