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Transcript of FUll HR
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Human Resource Management
TYBBI
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INTRODUCTION
Quality of human resource is a critical factor in the success of any organization, and more so in service organizations like banking and insurance.
HRM is concerned with managing manpower to improve individual, group and organizational effectiveness.
HRM involves: HR planning Recruitment and selection Training and development Motivation Performance appraisal Career development Promotions and transfers
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Definition
David Decenzo and Stephen Robbins defined HRM as:
A process consists of four functions- acquisition, development, motivation and maintenance of Human resources.
“Human Resource Management is concerned with the ‘people’ dimension in management. It is a process consisting of the acquisition, development, motivation and maintenance of Human resources.” Wendell French defines HRM as:
“the philosophy, policies, procedures and practices related to the management of people within the organization.”
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Nature of HRM
HRM is a process Acquisition
Development
Motivation
Maintenance
Focus on Objectives Universal Application Continuous in Nature Integrated use of Subsystems Multidisciplinary Approach Key element in Coping with Problems Development of Team Spirit Development of Employees’ Potentialities Long term Benefits
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Objectives of HRM
Ensure availability of competent workforce Integration of goals Cost containment Goals through able employees Harmonious Relationships Optimization of Human resources Growth and development of employees Satisfy needs Motivation Legal requirements Self Actualization
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Scope of HRM Human Resource Planning Job Analysis and Design Recruitment and Selection Orientation and Placement Training and Development Performance Appraisal Compensation Management Career Planning, promotions and transfers Motivation and communication Employee Welfare Human Resource Inventory HRIS Employee Safety and Health Industrial Relation
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Functions of HR
HRP Organization and Job design Staffing T&D Performance Appraisal and Review Compensation and Reward Maintaining effective employer- employee relationship Health and Safety Management Employee Participation Organization Improvement
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India’s Best Banks
Top ten largest banks in India-2013 SBI ICICI HDFC Punjab Bank of India BOB Canara Bank IDBI Bank of India Union Bank Axis
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Structure of a Human Resource Department
Factors influencing the structure of a HRD are: Size of the organization Management Philosophy Extent of decentralization Type of work Kind of people employed Type of service to be provided by HR
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Classic StructurePresident/ Director HR
Manager
Recruitment and
Selection
Manager
T&D
Manager
Compensation
and Benefit
s
Manager
Employee
Welfare
Manager
Employee
Relations
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Personnel Management
Personnel management can be defined as obtaining, using and maintaining a satisfied workforce.
Personnel management is basically an administrative record keeping function at the operational level.
HRM is a refined and advanced form of personnel management.
Personnel management views labour as a tool, the behavior of which can be manipulated for the benefit of the organization and replaced when worn out.
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Difference between HRM and PM
Management Economic Man Managerial emphasis Cost and investment Communication Training and development
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Human Resource Development
It is an integrated use of:Training and DevelopmentOrganizational DevelopmentCareer Development
To improve individual, group and organizational effectiveness
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Nature of HRD
Continuous in nature Learning and Training Career Development Organizational Development Potential Appraisal Performance Appraisal
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Role of HR Manager
Strategic Partner Employee Advocates Change Campion
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Qualities of a good HR Manager
Intelligence Empathy Free of stereotypes and prejudice Motivating abilities Analytical abilities A holistic approach Good understanding of human nature and social
environment
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Challenges faced by HRM Focus on knowledge and skill Globalization Attrition rate Reservation Issue Managing Women Workforce/ Workforce diversity Corporate Reorganizations Stress Management Work life balance Meet growing expectation of employees Future Challenges Technology Employee Health and safety
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Continued…
Ethical issues:Recruitment and SelectionPerformance AppraisalCash and incentive plansPrivacy issues
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Industrial Accidents
CausesEnvironmental causesHuman causes
Preventing accidentsAccident reportsOrganizational climateSafety trainingErgonomics
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HRM challenges for Indian Bank
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Job Analysis, Job Design and Job Evaluation
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Job Analysis Job Analysis is a systematic
exploration of the activities within a job.
It defines and documents the duties, responsibilities and accountabilities of a job and the conditions under which a job is performed. ?
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Job Description
Called as Position Description Written statement of what jobholder does,
how it is done, under what conditions and why.
Common format: title; duties; distinguishing characteristics; environmental conditions; authority and responsibilities.
Used to describe the job to applicants, to guide new employees, and to evaluate employees.
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Job Specification Also known as man or employee specifications. States minimum acceptable qualities and qualifications
necessary to perform the job. Used to select employees who have the essential
qualifications. Basic Contents: education, experience, age, physical,
mental and social characteristics.
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Process of Job Analysis
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Methods of Job Analysis
Job Analysis
Interview
Observation
Questionnaire
ChecklistDiary
Work Participation
Critical Incident Technique
Technical Conference
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Continued… Observation method – job analyst watches employees
directly or reviews film of workers on the job. Individual interview method – a team of job incumbents
is selected and extensively interviewed. Group interview method – a number of job incumbents
are interviewed simultaneously. Work Participation Method- Job analyst himself performs
the work and gets first hand information. Critical Incidents Method- Any incident that contributes
positively or negatively to the job, a report of the same is analyzed to prepare a list of Do’s and Don’ts
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Continued…
Structured questionnaire method – workers complete a specifically designed questionnaire.
Technical conference method – uses supervisors with an extensive knowledge of the job.
Diary method – job incumbents record their daily activities.
Checklist Method- Similar to Questionnaire method but more objective questions
The best results are usually achieved with some combination of methods.
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Importance/Use of Job Analysis
HRP Recruitment and selection Training and development Job Evaluation Employee compensation Engineering Design Job Design Performance Measurement and Rating Administrative Control Health and Safety measures Career Planning
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Job Design
It is the process of determining the specific tasks and responsibilities to be carried out by each member of the organization and/or teams.
The main objective of Job Design is to integrate: Needs of Employees Requirements of Organizations
It helps in determining what, how, how many and in which order are the tasks to be done.
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Factors Affecting Job Design
Organizational Factors
Environmental Factors
Behavioral Factors
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Organizational Factors
Task Characteristics
Work Flow
Ergonomics
Work Practices
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Environmental Factors
Employee abilities and availability
Social and cultural expectations
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Behavioral Factors
Feedback
Autonomy
Use of abilities
Variety
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Techniques of Job Design
Work Simplification
Job Enlargement
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Work Simplification
Breaking down of jobs into small tasks.
Salient features: Work is mechanically paced Employee works only on one part of the product Time required to train is drastically reduced
Negative Outcomes: Highly specialized and routine Boredom Lack of challenge Limited interaction
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Job Enrichment Increasing the workers control over the planning and performance of a
job and participation in setting the organization policy.
It is also called vertical job loading.
According to Richard hackman and Greg Oldham, for enriching the jobs, attention should be paid to : Skill Variety Task identity Task significance Autonomy and feedback
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Job Rotation Movement of an employee from one job to another.
Advantages: Reduces boredom and monotony. Broadens employees knowledge and skills Employee gets an opportunity to do a variety of work and interact
with new people
Disadvantages: Several monotonous jobs instead of one Disrupts work routine Not challenging in nature.
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Job Enlargement
It is the process of increasing the scope of the job by adding more tasks to it.
Also called as horizontal job loading.
Advantages: Reduces monotony and boredom Training and developing more versatile employees.
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Job Evaluations
It is a systematic, objective procedure for determining the value of a group of jobs for the organization
Specify relative value of each job in the organization.
Used to design equitable compensation program.
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Advantages of Job evaluation Wage Structure
New jobs
Improves relations and reduces grievances
Uniformity
Rates the job not the man
Examines different job structures
Job hierarchy
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Limitations of Job Evaluation Inaccuracy
Market forces
Changes in technology
Dissatisfaction
Time consuming and expensive
Financial burden
Conflicts
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Process of Job evaluation Gaining acceptance
Selecting jobs for evaluation
Job analysis and Job description
Job evaluation
Assigning money value
Periodic Review
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Techniques of Job Evaluation
Job ranking method
Job classification method
Factor comparison method
The point method
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Job Ranking Method
Jobs are arranged or ranked in their importance i.e from lowest to highest or vice versa.
Committee assesses the worth of each job on the basis of its title or on its content, if the latter are available.
Job Description can be used for ranking different jobs.
Ranked jobs are classified into groups, and jobs under particular groups may receive the same salary or salary range.
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Example
Rank
1. Accountant
2. Accounts clerk
3. Purchase Assistant
4. Machine Operator
5. Typist
6. Office Boy
Monthly Salaries
Rs. 3000
Rs. 1800
Rs.1700
Rs. 1400
Rs. 900
Rs. 600
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Job Classification Method As in the ranking method, the Job-grading method does not call for
a detailed or quantitative analysis of job factors.
Facts about the job are collected and matched with the grades which have been established by the raters (Committee)
Grades are arranged in the order of their importance
Lowest grade may cover jobs requiring greater physical work under close supervision, but carrying little responsibility.
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Example
Class I: Executives: Further classification under this method may be Office manager, Deputy office manager, office superintendent, etc.
Class II: Skilled workers: Under this category may come cashier, receipts clerk, etc.
Class III: Semiskilled workers: Under this category may come machine operators, switchboard operators, etc.
Class IV: Unskilled workers: File clerks, office boys, etc.
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Factor Comparison Method
Under this method, one begins with selection of factors .
Each factor is ranked individually with other jobs.
E.g.:-
Each job is ranked several times like,
1. Skill requirements,
2. Physical exertion,
3. Responsibility, and
4. Job conditions
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Point Ranking Method PRM is one of the most widely used JE Plan.
It involves identifying number of factors ,sub factors and degree to which these factors are present in Job
Points are assigned for each degree of each factor
Grand Total of these points ,classify the Job Worth
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Human Resource Planning
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Introduction Human resource planning is a
process by which an organization ensures that it has the right number and kinds
of people at the right place at the right time capable of effectively and
efficiently completing those tasks that will help the organization achieve its overall strategic objectives.
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Introduction
Linked to the organization’s overall strategy and planning to compete domestically and globally.
Overall plans and objectives must be translated into the number and types of workers needed.
Senior HRM staff need to lead top management in planning for HRM issues.
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Characteristic of HRP
Futuristic Continuous Process Part of Corporate planning Quantitative and Qualitative Long term and short term plans
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Objectives of HRP
Forecasting Human Resource Requirement Effective management of Change Realizing Organizational Goals Promoting Employees Effective utilization of Human Resource Meeting Personnel Requirements Prevent Disruption of Work Control Costs Training and Management Development
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Need for HRP
Smooth and efficient working of Organizations Filling Gaps in Manpower Expansion and Diversification Changing Technology Increased Employee Mobility Government Policies Budgeting Shortage of Skills
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Steps in HRP
Analyzing the Organizational
Plans
Forecasting the Overall Human
Resource Requirement
Assessment of Supply of human
resources
Estimating manpower
gaps
Action planning
Evaluation and Control
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Limitations
Problem of Accuracy Emphasis on Quantitative Aspects Uncertain Future Management Attitude Faulty Information System Expensive Time Consuming
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Factors affecting HRP
Lack of Skilled Resources
Separation of Employees
Change in Organizational Objectives
Change in Policies
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Voluntary Retirement Scheme
A voluntary retirement scheme (VRS) package is offered to employees as an incentive to retire earlier than their normal retirement age. The VRS package usually contains generous retirement benefits for certain employees.
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Reasons for offering VRS Discontinuation of existing products and services Economical to sub- contract or outsource the service Low productivity norms of existing work force and refusal/ reluctance
of trade unions to give higher productivity Existing workforce is unable to sustain high output norms High wage level of existing workforce as a percentage of value added. Overmanning Inability of management to get changes implemented through existing
workforce Need for more space, hence requirement to shift to a new location Cost of VRS today is lower than tomorrows VRS Merger of companies Refusal of existing workforce to learn and acquire new/higher skills for
working on new equipment and/or new process
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Problems faced by PSU banks with VRS plans
A sizeable portion of skilled/experienced workforce accepted the VRS creating an urgent need for upgradation of skills of employees remaining in the organization
A much greater number of officers (27.1%) applied for VRS as compared to clerical and subordinate staff (18.2%)
No remarkable improvement in the age profile of employees after VRS (42.4 yrs) as compared to the age profile before VRS (43.7 yrs)
Regional staff imbalance occurred as more employees from the western region opted for VRS. The poorest response was from the eastern and north-eastern region.
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Case Study
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Recruitment and Selection
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Introduction
RecruitingOnce an organization identifies its
human resource needs through employment planning, it can begin the process of recruiting potential candidates for actual or anticipated organizational vacancies.
It brings together those with jobs to fill and those seeking jobs.
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Definition
DeCenzo and Robbins:
“it is the process of discovering potential candidates for actual or anticipated organisational vacancies.”
Edwin Flippo:
“it is the process of searching for prospective employees and stimulating and encouraging them to apply for jobs in an organisation.”
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Sources of Recruitment
Internal Sources:PromotionsTransfersJob postingsRecall of retired and ex-employeesEmployee referralsSkills inventoriesHRIS
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Continued…. Advantages of Internal Source:
Familiarity Saving on costs and time Greater motivation Morale Reduced employee turnover Loyalty and commitment
Limitations: Fresh talent Restricted choice Unavailability of talent Favoritism Discontent
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Continued…
External Sources:Campus recruitmentAdvertisementsEmployment agenciesEmployee recommendationsProfessional bodiesDeputationPoachingUnsolicited or casual applicationsE-recruitment/online recruitment
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Continued…
Advantages of Internal Source: New talent and approach Wider choice Maintain balance Start-ups
Limitations: Expensive Time consuming Affects morale Training and orientation
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Questions???
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Selection
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Selection – the process by which an organization chooses from a list of applicants the person or persons who best meet the selection criteria for the position available, considering current environmental conditions
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Definition
Dale Yoder:
“it is the process in which candidates for employment are divided in to two classes- those are to be employment and those who are not.”
Thomas Stone:
“it is the process of differentiating between applicants in order to identify and hire those with a greater likelihood of success on the job.”
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Internal Environmental Factors Influencing Selection
Organization characteristics that can influence the selection process:SizeComplexityTechnological ability
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External Environmental Factors Influencing Selection
Government employment laws and regulations
Size, composition, and availability of local labor markets
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The Selection Procedure
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Preliminary Interview
It is the first step in the selection procedure
Objectives of this interview is to discard those candidates who are totally unqualified for the job
Candidates who seem suitable are given application blanks to fill
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Application Blanks
Purposes of ApplicationsRecord of applicant’s interest in the
jobProvides a profile of the applicantBasic record for applicants who are
hiredHelps in formulation questions for the
interview
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Sample Application Form
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Sample Application Form (cont’d)
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Selection Tests
Mechanism that attempts to measure certain characteristics of individuals,
Types of testsAptitude AbilityInterestPersonality
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Employment Interviews
It serves three purposes: It is an opportunity to obtain additional
information about the candidate and determine his suitability for the job
It provides information to the candidate about the organization, the specific job for which he has applied and personnel policies
It helps to establish a friendly relationships with the candidate and motivate suitable candidates to join the organization.
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Continued…
Interviews involve a face-to-face meeting with the candidate to probe areas not addressed by the application form or tests
Two strategies for effective use of interviews:1. Structuring the interview to be reliable and valid
2. Training managers on best interview techniques
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Continued…
Types of Interviews: Unstructured interview Structured interview Behavioral Interviews
Candidates are observed not only for what they say, but how they behave.
Role playing is often used. Stress Interviews.
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Medical Examination
It helps to determine whether the candidate is mentally and physically fit to perform the job.
It prevents employment of employees suffering from contagious diseases.
It saves expenditure that the organization may have to incur for medical treatment of the candidate.
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Reference Checks
Applicants are frequently asked to provide the names and addresses of two or three persons who know them well.
These persons are commonly referred to as referees or references.
The organization contacts the referees through mail or by telephone.
These persons may be previous employers, heads of educational institutions or other public figures
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Final Selection
Formal EducationExperience and
Past Performance
PhysicalCharacteristics
PersonalCharacteristics and
Personality Type
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Use of Group Discussions in Selection It is an important selection tool. It involves a free exchange if ideas
among group members of the group The number of participants varies but
typically from 8-15 people The usual time for a GD is between 20-
30 minutes GD is useful for assessing:
Social Skills Intellectual Skills Attitudes
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Questions????
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INDUCTION
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Definition
It is the process of receiving and welcoming employees when they first join the company and giving them the basic information they need to settle down quickly and happily start work.
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Objectives of Induction
Smooth entry Favorable attitude Quick adjustment Reduce employee turnover Increasing commitment Understand organizational norms Develop relationships Other relationships
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Contents of the induction program Information about the organization Learning arrangements and
opportunities Performance management processes Health and safety Conditions of service Pay and benefits Policies, procedures and working
arrangements Trade unions and employee involvement
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Orientation program
General information Specific orientation Follow-up
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Training and Development
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Introduction
Employee training a learning experience designed to achieve a relatively permanent change in an individual that will improve the ability to perform on the job.
Employee development future-oriented training, focusing on the personal growth of the employee
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Importance of Training
Higher productivity and profits Optimal use of resources Job satisfaction Safety Reduces stress Career development
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Importance of Training in Insurance Companies
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Employee Training
Determining Training Needs
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Training Need and Objectives
Job training of new employee Upgrading current jobs Management development Personal development Technological and scientific
information
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The Training Process
Identifying training needs Determining training objectives Designing the training program Implementation of the training
program Evaluation of the training program
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Identifying training needs
Organizational analysis Task analysis Person analysis
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Determining training objectives
The specific skills and knowledge to be imparted along with the attitudes to be cultivated
The employees who are to be trained The number of people to be trained and from
which unit The time period within which the training is to
be given The desired outcome on completion of training The training budget
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Designing the Training Program
It covers matters such as:Contents Training methods and techniqueOn the job or off the job trainingPlaceLearning principlesTrainers
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Implementation of the Training Program
Organizing training and other facilities Scheduling the training program Conducting the program Monitoring the progress of the
trainees
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Evaluation of the Training Program
To determine whether the training program met its objectives
Identify strengths and weaknesses in the training process
To calculate the cost/benefit ratio of the training program
To determine who benefited most from the training program and why.
To establish a data base for future decisions about the training program
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Methods of Employee Training
On-the-Job Training Orientation Training Programmed Instruction Computer Assisted Instruction Team Training
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Training Methods for Management Development
ON-THE JOB Coaching Job rotation and transfers Understudy assignments Committee assignments Project assignment Multiple management
OFF-THE JOB Lecture method Case studies Conferences Role-Playing Business games University training In-basket method Sensitivity training Wilderness training
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Evaluation of Training
Evaluation of Training is defined as any attempt to obtain information on the effects of a training program and to assess the value of the training in the light of that information
According to Kirk Patrick there are 4 criteria's used for Training evaluation Reaction criteria Learning criteria Behavioural criteria Results criteria
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Characteristics of a Good Training Program
Specific Significant Appropriate Systematic and planned group Transfer Supportive supervisors Choice of training Post training assessment
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New Issues in training
Cultural Diversity TrainingAttitude change programsBehaviour change programs
Four abilities critical for success of foreign projects:Tolerance for ambiguityBehavioural flexibilityNon judgementalismCultural empathy
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Customer Relationship Management
Customer identification Customer acquisition Customer retention Customer satisfaction and delight
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CRM Training steps
Understanding the organizational environment
Understanding the organization’s products
Analyze the product environment
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Sexual harassment Training
Two types: Quid pro quo harassment Hostile environment harassment
Training in this area focuses on: Teaching employees to be sensitive towards
other people’s values and preferences Making employees aware that there are
broad cultural differences Informing employees that people differ in
degree with regard to verbal statements
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Performance Appraisal
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Introduction
Performance Appraisal is a technique of assessing, as impartially as possible, the attributes, strengths, weaknesses, capacity and attitudes of individual employee in relation to his job.
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Purposes of a Performance Management System
Feedback - let employees know how well they have done and allow for employee input.
Development – identify areas in which employees have deficiencies or weaknesses.
It aims to provide data to managers with which they may judge future job assignments and compensation
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Major uses of Performance Appraisal Personnel training Wage and salary administration Placement Promotions Discharge Job satisfaction Manpower planning Validation of selection procedures Feedback
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The Appraisal Process
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Appraisal Methods
Traditional Methods Graphic rating scales Ranking Paired comparison method Forced distribution method Forced choice method Checklist method Essay evaluation Confidential reports Field review method Critical incidents Group appraisal
Modern Methods Assessment centre MBO Behaviorally Anchored Rating
scales (BARS) Human Asset Accounting
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Assessment centre
This not a technique of performance appraisal by itself. In fact, this is a system or organization where assessment of several individual is done by experts by using various techniques. These techniques used role playing, case studies etc.
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Management by Objectives (MBO)
Includes mutual objective setting and evaluation based on the attainment of the specific objectives
Common elements in an MBO program are:• goal specificity• participative decision making• an explicit time period• performance feedback
Effectively increases employee performance and organizational productivity.
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Behaviorally Anchored Rating Scales (BARS)
Appraiser rates employee on factors which are defined by behavioral descriptions illustrating various dimensions along each rating scale.
Steps in development of BARS:
1. Supervisors prepare a list of critical incidents
2. Group critical incidents into small clusters of performance dimensions
3. Group of experts are called. Reassign or classify the critical incidents in to the same performance dimensions
4. Experts rate “surviving” critical incidents
5. Final form of BARS consists of critical incidents that survived step 3 and 4.
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Human Asset Accounting
It attempts to measure the monetary value of the human resources of the organization.
Evaluation is done in terms of costs and contributions of employees.
Difference between cost and contribution reflects the performance of employees
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Other Methods of Performance Appraisal
Appraisal by peers/Buddy Appraisal by Subordinates Psychological Appraisal Self Evaluation 360 Degree Appraisal
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360 Degree Appraisal
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Factors that impede Performance Appraisal
Employee resistance Lack of time Lack of rewards Appraisal politics Lack of training Poor appraisal forms Avoid negative actions Organizational needs Poor reflection on the manager
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Human Errors in Performance Appraisal Leniency error Central tendency Halo effect Horn effect Similar – to- me error Logical error Constant error Recency error Rater’s stereotypes or bias
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Making Performance Appraisal More Effective
Careful planning Use of effective communication skills Encourage employee participation Focus on behavior Emphasis on development Plan future course of action Positive ending
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Human Resource Audit
HRA provides feedback on a number of critical issues: The extent to which HRM practices are contributing to
organizational effectiveness Extent to which organization's HRM practices meet
the employee’s needs and aspirations Accuracy Effectiveness of T&D Efficiency of performance appraisal system Soundness of remuneration program HR climate Compliance to legal requirements
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Continued…
HR audit may be done using the following approaches:Comparative approachExternal consultant approachStatistical approachCompliance approachMBO approach
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Performance Appraisal & the Law
Types of charges relating to Performance Appraisal: Discrimination Employer negligence Defamation Misrepresentation
A sound appraisal system should satisfy the following criteria:
Objective Job related Focused on behavior rather than traits Within Control of the ratee Should relate to specific functions
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Continued…
Compliance procedures: Uniform and standardized Formally communicated Notice of performance deficiencies and opportunity to
correct them Access to review appraisal reports Formal appeal mechanisms Multiple, diverse, and unbiased raters Written instructions Thorough and consistent documentation A system should be established to detect potentially
discriminatory effects or abuses
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TRANSFERS AND PROMOTIONS
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Introduction
Transfer refers to shifting of employees from one job to another within the same organization where salary, responsibilities and category of the new job and previous job are almost the same.
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Objectives of Transfer
Organizational needs Employee needs Optimal utilization of employees Increase employee versatility Relief Disciplinary action
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Transfer Policy The policy on Employee transfer needs to address the following:
Right of the organization to transfer
Terms and conditions
Transfer procedures
Transfer back to former job
Effects of remuneration and seniority
Conditions of a good policy Should state the types of transfers
Person who has authority to order transfer
Effect of transfer on pay and seniority
Facilities available to transferred employees
Conditions under which personal request for transfer will be entertained
Writing
Appropriate authority in case of appeals
Best interests
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Types of Transfer
Employee transfer is classified based on purpose as under: Transfers that are effected for T&D Transfers made for adjustment of varying volumes Transfers designed to correct the problem of poor employee
placement
Common types of Transfer: Production Replacement Versatility Shift Remedial Penal
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Promotion
It is an advancement of an employee’s rank or position in an organizational hierarchy system
“ a promotion is the transfer of an employee to a job that pays more money or that enjoys some preferred status”- Scott and Spreigal
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Promotional Ladder at CANARA BANK
Chairman and Managing Director
Executive Director
Scale VII: General Manger
Scale VI: Deputy General Manager
Scale V: Assistant General Manager
Scale IV: Divisional Manager
Scale III: Senior MAnager
Scale II: Manager
Scale I: Officer
Special Assistant
Clerk
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Objectives of Promotion
Incentive Recognition Boosts employee morale Enhances commitment of employees Job satisfaction Retain Competitive spirit Developing a competent internal source Minimize discontent and unrest
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Bases of Promotion
Promotion based on Seniority Advantages:
• Simplicity
• Objectivity
• Reward
• Reduces employee turnover
• Union approval
• In line with Indian culture
Criticism:• Faulty assumption
• Ignores performance
• Efficiency suffers
• Demotivating
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Continued…
Promotion based on Merit Advantages:
• Enhances efficiency• Motivates
Limitations:• Subjective• Favoritism• Opposition of unions• Insecurity
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Continued…
Promotion based on Seniority-Cum-Merit
Ways to strike a balance:Minimum length of serviceMeasurements of seniority and merit
through a common factorMinimum merit and seniority
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Types of Promotion
Horizontal
Vertical
Dry
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Promotion Policies Statement of the organisation’s broad directives on promotion matters Main characteristics:
Policy statement Basis of promotion Promotion charts Communication of policy Career planning Detailed records Employee training Consistency Fair and impartial Decision making authority Appeal mechanism
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Motivation
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Introduction
A need or desire that energizes and directs behavior
It may be internal or external It is a six phased process:
Need Deficiency
Search and Choice of strategy
Goal-Directed Behavior
Evaluation of Performance
Reward or Punishment
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What is Motivation
The act or process of stimulating to action, providing an incentive or motive, especially for an act.
Motivation is the art of getting people to do what you want them to do because they want to do it.
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Difficulties in studying Motivation
Wide variety of human behaviors Inferential Motives vary from person to person Motives change with time
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External Rewards
• Salary
• Working conditions
• Benefits
• Environment
Internal Rewards
• Achievement
• Responsibility
• Recognition
• Feedback
• Learning and growth
What motivates people
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Continued…
In addition to the external and internal awards, have:
• Employee engagement
• Challenging job profiles
• Keep them self-motivated
• Good projects
• Job rotation
• Job security / stability
• Good team, co-workers, bosses
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Theories of Motivation
Theory X and Y Need Hierarchy theory ERG theory Two factor theory Equity theory Expectancy theory Behavior modification theory Goal setting theory
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McGregor’s XY Theory
Theory X• Assumes that workers have little ambition, dislike
work, avoid responsibility, and require close supervision.
Theory Y• Assumes that workers can exercise self-direction,
desire responsibility, and like to work.
Assumption:• Motivation is maximized by participative decision
making, interesting jobs, and good group relations.
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Continued…
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Maslow’s-Hierarchy of Needs Theory
Needs were categorized as five levels of lower- to higher-order needs. Individuals must satisfy lower-order needs before
they can satisfy higher order needs. Satisfied needs will no longer motivate. Motivating a person depends on knowing at what
level that person is on the hierarchy. Hierarchy of needs
Lower-order (external): physiological, safety Higher-order (internal): social, esteem, self-
actualization
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PHYSIOLOGICAL OR SURVIVAL NEEDSFood, drink, shelter, sex, warmth, physical comfort
Continued…
Physiological needs(air, water, food, rest, exercise, etc)
Safety needs(shelter, job security, retirement plan, insurance)
Love and belonging(children, friends, partners)
Self esteem(Ego, status, respect ,
fame, recognition, reputation, dignity)
Selfactualization(Confidence,
achievements,freedom)
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Maslow’s Definition of a Self -actualized Person
Has no mental illness Satisfied in basic needs Fully exploited talents Motivated by values
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McClelland’s Theory of Needs
AFFILIATION POWERACHIEVEMENT
There are three major acquired needs that are major motives in work.
•Achievement: The need for achievement is characterized by the wish to take responsibility for finding solutions to problems, master complex tasks, set goals, etc.•Affiliation: the need for affiliation is characterized by a desire to belong, an enjoyment of teamwork, a concern about interpersonal relationships, and a need to reduce uncertainty.•Power: the need for power is characterized by a drive to control and influence others, a need to win arguments, and a need to persuade and prevail.
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ERG THEORY
Clayton Alderfer’s ERG theory is a variation of Maslow's hierarchy of needs.
Three groups of needs Existence needs: physical and material wants
Relatedness needs: desires for interpersonal relationships
Growth needs: desires to be creative and productive; to use one’s skills
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Maslow’s and Alderfer’s Needs Theories
Highest-order needs
Most essential (prepotent) needs
Maslow’s Need Hierarchy Categories
Alderfer’s Needs Hierarchy Categories
Self-actualization
Esteem
Belongingness
Safety
Physiological
Growth
Relatedness
Existence
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Both similar to and different from Maslow's need hierarchy
Satisfied and unsatisfied needs operate in much the same way
Movement upward is the same Movement downward is new
Continued…
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Fredrick Herzberg’s Two-Factor Theory
Motivators Can increase job satisfaction Factors related to doing the job (work itself, responsibility, personal
growth, sense of achievement, recognition)
Hygiene factors Can prevent dissatisfaction, but cannot increase satisfaction Factors extrinsic to or surrounding the job (supervision, relations
with co-workers, working conditions, company policies and practices)
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Continued…
Recognition
Achievement Growth
ResponsibilityNature of the work
Motivators: Factors directly related to doing
a job
Hygiene Factors: Elements associated
with conditions surrounding the job
Job
Relations with co-workers
Working conditions
BenefitsCompensation
Supervision
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Continued…
Dissatisfactionand
demotivation
Not dissatisfiedbut
not motivated
Positivesatisfaction
and motivation
Hygiene Factors
•Company policies•Quality of supervision•Relations with others•Personal life•Rate of pay•Job security•Working conditions
Motivational Factors
•Achievement•Career advancement•Personal growth•Job interest•Recognition•Responsibility
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Continued…
Hygiene-FactorsExtrinsic factors
related to conditions surrounding the job:
MotivatorsIntrinsic factors
related to the doing of the
job itself:
Neither satisfied nor dissatisfied
Hygiene factors must be satisfied first, leading to a state of being neither satisfied nor dissatisfied
From the state of being neither satisfied nor dissatisfied, motivators can impel an employee’s motivation and performance to higher levels
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J. Stacy Adam’s Equity Theory
Focuses on individuals’ comparisons of their own circumstances to those of others Inputs (age, experience, education, etc.) Outcomes (salary, benefits, titles, perks, etc.) Ratios of an individual’s input/outcome
versus that ratio of another person or people
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Continued…
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Continued… Employees who feed overrewarded may try to reduce
inequity by any of the below responses: Internal-physical- work harder Internal-psychological- discount the value of rewards External-physical- convince other workers to ask for more rewards External-psychological- choose someone else for comparision
Employees who feed underrewarded may try to reduce inequity by any of the below responses: Internal-physical – deliberately lower quality and quantity of work Internal-psychological- inflate the value of rewards External-physical- bargain for more rewards External-psychological- choose someone to compare himself more
favourably
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Victor Vroom’s Expectancy Theory
• States that an individual tends to act in a certain way based on the expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual.
• Key to the theory is understanding and managing employee goals and the linkages among and between effort, performance and rewards.
• Effort: employee abilities and training/development
• Performance: valid appraisal systems
•Rewards (goals): understanding employee needs
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Simplified Expectancy Model
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Continued…
Expectancy Relationships Expectancy (effort-performance linkage)
• The perceived probability that an individual’s effort will result in a certain level of performance.
Instrumentality• The perception that a particular level of
performance will result in attaining a desired outcome (reward).
Valence• The attractiveness/importance of the performance
reward (outcome) to the individual.
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Continued…
To influence employees’ motivation Identify rewards that are valued Strengthen subordinates’ beliefs that their
efforts will lead to valued rewards Clarify subordinates’ understanding of
exactly where they should direct their efforts Make sure that the desired rewards under
your control are given directly following particular levels of performance
Provide levels and amounts of rewards that are consistent with a realistic level of expected rewards
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B.F. Skinner’s Behavior Modification theory
It states behavior depends on consequences, and that, if the consequences are controlled, then behavior also can be controlled
Reinforcement theory focuses on the impact of external environmental consequences on behavior.
Law of effect — impact of type of consequence on future behavior.
Operant conditioning:
• Developed by B.F. Skinner.
• Applies law of effect to control behavior by manipulating its consequences.
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Operant conditioning strategies Positive reinforcement
Increases the frequency of a behavior through the contingent
presentation of a pleasant consequence.: eg: praise for good work
Negative reinforcement
Increases the frequency of a behavior through the contingent removal of
an unpleasant consequence. : eg: coming late prevents firing
Punishment
Decreases the frequency of a behavior through the contingent presentation of an unpleasant consequence.
Extinction
Decreases the frequency of a behavior through the contingent removal of an pleasant consequence. : eg: stop rewarding for suggestions
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Schedules of Reinforcement
Reinforcement may either be continuous or partial in nature
Interval schedules: reinforcement occurs after a certain amount of time has passed
Fixed Interval = reinforcement is presented after a fixed amount of time : eg: salary
Variable Interval = reinforcement is delivered on a random/variable time schedule : eg: checks in office
Ratio schedules: reinforcement occurs after a certain number of responses
Fixed Ratio = reinforcement presented after a fixed # of responses : eg: incentive
Variable Ratio = reinforcement delivery is variable but based on an overall average # of responses
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Goal Setting Theory
Developed by Edwin Locke.
Properly set and well-managed task goals can be highly motivating.
Motivational effects of task goals:
• Provide direction to people in their work.
• Clarify performance expectations.
• Establish a frame of reference for feedback.
• Provide a foundation for behavioral self-management.
Self efficacy
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Continued…
Elements important if goals are to motivate employees:Specific goalsChallenging goalsOwned
• Participation• Psychological Contracts• Supervisory Support• Rationale
Performance monitoring and Feedback
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How to Create Jobs that motivate
Job Enlargement Job Enrichment Empowerment
Job masteryControlRole modelsSocial reinforcement and persuasionEmotional support
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Hackman & Oldham’s Job Characteristics Model
Core Dimensions Psychological States Outcomes
Skill VarietyTask Identity Task Signif.
Autonomy
Feedback
Meaningfulness of Work
Responsibilityfor outcomes
Knowledge ofResults
High intrinsicmotivationHigh job per-ormanceHigh job satis-factionLow absenteeism & turnover
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Motivating Potential Score
MPS
=
Skill Variety +Task Identity+Task Significance3
X
Autonomy
X
Feedback
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Employee Ownership Plans
Profit sharing Gain Sharing Skill based Pay
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COMPENSATION MANAGEMENT
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Introduction
What employees receive in exchange for their contribution
It is a comprehensive term including pay, incentive and benefits
Compensation can come both directly through base pay and variable pay or indirectly through benefits
It is the total amount of the monetary and non monetary pay provided to an employee in return of work performed as required.
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Objectives of compensation
EfficiencyQualityPerformanceCost
Fairness
Compliance
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Wage and Salary administration
Wages : Aggregate earnings of an employee for his service
Salary: Compensation made to an employee for his service
It is a process of managing a company’s compensation program
It is the group of activities involved in development, implementation and maintenance of a pay system.
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Objectives of wage and salary administration
To establish a fair and equitable remuneration To attract competent personnel To retain present employees To improve productivity To control costs To improve union management relations To improve public image of the company
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Factors affecting wages and salary
The organisations ability to pay Supply and demand of labour Prevailing market rate Cost of living Ability of the organization to pay Productivity Trade union’s bargaining power Job requirements Managerial attitudes Psychological and social factors
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Methods of Wage Payment
Time Wage Piece Wage Balance wage
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Time wage Method
Based on amount of time spent Conditions
Unit of output is not measurable, commodity is non-standardised, not uniform and have varieties of output.
Volume of work is not always within the control of labor
When workers are new and learning the job or trade
When it is difficult to fix the unit of output When employees have little control over the
quality of output
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Piece Wage Method
Based on amount of work performed Features:
It can offer direct connection between effort and reward
It can ensure adequate planning and close control over labor costs.
Conditions: Amount of work can be easily measured,
standardised and counted Productivity is closely related to skill and
effort
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Balance or Debt Method
Combination of time and piece rates
Name of worker
Units completed
Total earnings under Piece rate (Rs.)
Total earnings under time wage rate (Rs.)
Credit (Rs.)
Debit (Rs.)
Balance (Rs.)
Ram (first week)
16 16 15 1 Nil 1
Ram (second week)
14 14 14 Nil Nil 1
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Essentials of a Sound Wage System
Just and reasonable Guarantee of living wage Simplicity Flexibility Promptness Incentive for extra remuneration Attractive to talented workers Equal pay for equal work
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India’s Highest Paid Banking CEOs
HDFC- Deepak Parekh: 2.48 Cr ICICI – KV Kamath: 2.47 Cr Kotak Mahindra Bank: Uday Kotak:
1.34 Cr UTI Bank- P.J. Nayak : 0.94 Cr
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Incentives
Anything that attracts an employee and stimulates him to work
Incentives are of two types:Financial Non-financial
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Objectives
Profitable for both workers and management Helps to increase production Reduce cost Increase morale by rewarding workers in
proportion to their output Recognise the worker for his good performance Reduce labour turnover and absenteeism Aim at improving relations between workers and
management
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Determinants of Incentives
The individual The work situation
TechnologyJob satisfactionFeedbackEquity
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Types of Incentives Plans Financial incentives
Salary, rewards, bonus, etc
Non- Financial incentives Job satisfaction Job security Respect and recognition T&D Opportunity for growth Suggestion scheme, praise, etc.
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Continued…
Individual Piecework Standard hour plan Bonus Commissions Perquisites Stock options
Group Productivity Gain Sharing plan Profit sharing plan
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Essentials of Good Incentive Plan Proper climate Cooperation of workers Workers participation Scientific standard Simplicity Equitable Flexible Less costly Guarantee minimum wages Ceiling on earning Grievance settlement on time Timely payment of incentive
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Fringe Benefits
It may be described as the various services and programs that organizations provide to their employees in addition to compensation in the form of wages and salaries
it is sometimes referred to as the “The Hidden Payroll” of organizations.
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Features of Fringe Benefits
They are a supplement to regular wages or salaries
It is not paid for any specific job or performance but to increase their interest in work
It is a cost for the employers They are meant to enhance the employee's
standard of living It may be statutory or voluntary
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Objectives of Fringe Benefits
Attracting and retaining talent Negotiation tool Promote organizational image Satisfy employee needs Increase satisfaction and morale
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Types of Fringe Benefits
Pension scheme Personal security Financial assistance Personal needs Company cars and petrol Other benefits Intangible benefits
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Employee Welfare It refers to various services, facilities and
amenities provided to employees for their betterment.
To include such services, facilities and amenities as may be established in or in the vicinity of undertakings to enable the persons employed in them to perform their work in healthy, congenial surroundings and to provide them with amenities conducive to good health and high morale.
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Types of Welfare Services Intramural welfare services
Wash basins, bathrooms and humidity
Work place sanitation and cleanliness
Water coolers
Safety gears
Canteen
Basic medical aid
Library
Work and personal counseling
Child care centers and crèches
Extramural Welfare services Housing
Transportation
Education facilities
Health services
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Any Questions
?
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PARTICIPATIVE MANAGEMENT
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Introduction
Workers participation provides a platform for formal and informal communication where workers know what is going on in the organization and they can suggest and communicate their opinion to the management.
Participation is about employees playing a greater part in the decision making process
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Definition
Newstrom and Davis define participation as “the mental and emotional involvement of people in group situations that encourages them to contribute to group goals and share responsibility for them.”
Important features in the definition: Mental and emotional involvement Motivation to contribute Acceptance of responsibility
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Objectives of Participation
Economic objectives
Social objectives
Psychological objectives
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Benefits of Participation Mutual understanding Improves performance Industrial democracy Promotes better industrial relations Increases job satisfaction Awakening of employees Satisfies employee expectations Better communication Openness to change Encourages creativity and innovation
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Methods and techniques of Participation
Works committees Co-partnership Employee directors Joint Management Councils (JMC) Suggestion schemes Quality Circles Total Quality Management Self Managing teams
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Factors Influencing Participation
Subject matter of participation Level of participation Extent of authority Personal characteristics
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Key to Successful Participation
Top management support Employee support Benefits greater than costs Employee ability Employee interests Communication ability Long term process
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Lack of success of Participative management in India Restriction of employees in decision making
process, due to assumption that they are not competent enough
Due to non fulfillment of lower order needs, majority of workers are not motivated enough to assume higher responsibilities in the organization
The union representatives are frequently members of political parties who put their vested political interests before the interest of workers
The focus has been on participation at higher levels.
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Attitude of labor unions towards participation
Traditionally, Union leaders have not been in favour of participation.
Current days union leaders feel participation gives them an opportunity to get on the inside and express their view points before any action or decision is taken.
Most union leaders take a viewpoint which falls somewhere in between traditional and modern.
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Limitations of Participation
Employees may become too independent
Occasional failure may demotivate employees
Great difficulty in adjusting Rather than acting as partners,
managers may play role of a judge and a critic
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Continued…
Potential problems can be overcome by basic guidelines such as: Participation should move from simple issues to more complex
one Provide employees with adequate training Do not force the workers to participate Communicate clearly the areas of decisional freedom Realistic goals must be set The philosophy behind participation should always be kept in
mind Decisions should never be manipulated in the name of
participation
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Industrial Relations
Industrial relations is concerned with the systems and procedures used by unions and employers to determine the reward for effort and other conditions of employment, to protect the interests of the employed and their employers and to regulate the ways in which employers treat their employees.
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Objectives of IR To establish harmonious relationship between the
management and the employees.
Protect workers interest.
Raise productivity in the organization and curb employee turnover and absenteeism.
To protect the manager’s interest.
To avoid governmental interference by amicable resolution of all issues.
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Parties to Industrial Relations
Employees and their associations Employers and their associations The government and its various
agencies
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PERSONNEL POLICIES AND MANUAL
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INTRODUCTION
Personnel policies provide an organization with a mechanism to manage risk by staying up to date with current trends in employment standards and legislation.
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Definition
Personnel policies constitutes guides to actions. They furnish the general standards or bases on which decisions are reached. Their genesis lies in an organizations values, philosophies, concepts and principles.
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Principles of Personnel Policies Principle of individual development Principle of scientific selection Principle of free flow of information Principle of participation Principle of fair remuneration Principle of incentive Principle of dignity of labour Principle of labor cooperation Principle of team spirit Principle of contribution to national prosperity
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Benefits of Personnel Policies
Clarity Uniformity and consistency Confidence and security Prompt decision making Continuity and stability Delegation of authority Standards of performance Motivation Resolve conflicts
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Personnel Manual
It is simply the organizations Human resources policies written into a usable guidebook for its employees
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Objectives of Personnel Manual
Understanding Consistency Responsibility Line of Authority Avoids confusion and indecision Avoids misunderstanding
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Guidelines for Personnel Manual
Responsibility for preparation of manual Careful drafting Contents Separate handbooks Revision Legal issues Forms Descriptions HR department is responsible May be abridged and expanded Employees may be intimated about the changes
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Policies regarding employee conduct and discipline at LIC
Obligation to maintain security Participation and demonstration Private trading Part-time work Acceptance of gift
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Trade Unions
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Introduction
Trade union is a voluntary association of workers which is formed to protect the rights and interests of workers, to prevent exploitation of workers by the employer and to establish good relations between the employer and employees.
“Strength lies in unity”
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Features of Trade Union
Association Voluntary Permanent Collective action Common interest Changing character Aim
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Advantages
Increase wages Represent workers Productivity deals Important in service sector
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Problems
Inter union rivalry Small size of union Financial weakness Leadership issues Politicalisation of unions Recognition of unions
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FRAUDS AND SCAMS IN FINANCIAL INSTITUTIONS
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Introduction
Frauds in financial institutions are not a new phenomenon
To check the menace of customer cheating and to protect the interests of the general public and public funds, the government has set up the “Serious Fraud Investigation Office” while the RBI has set up a “Board of Financial Supervision”
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TYPES OF FRAUDS
Deposit accounts Advance accounts Telegraphic transfers Drafts, mail transfers Cash department Travelers cheques, credit cards Letters of credit Foreign exchange transactions ATMs Internet Banking
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High risk areas
Credit related frauds Misappropriation of cash by fudging accounts
and signatures Unauthorized withdrawal Opening of fictitious accounts Use of interbranch and interbank clearing Cheating in foreign exchange Withdrawal from deposit accounts using forged
documents Identity theft Theft of PIN or password
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Impact of Frauds and Scams on Society and Investors
Harshad Mehta scam losses caused to the SBI was more than Rs. 5.5 billions
The Ketan Parekh scam caused losses of Rs. 1.3 billion to Bank of India
The Sanjay Seth led home trade scam amounted to Rs. 6 billions
The Healthcare industry in India is losing approximately Rs.600 crore on false claims every year.
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Effects of Bank and Insurance Frauds
Erosion of investor confidence Faith of FII is shaken up Stringent law for borrowings and affect
the business expansion plans of industrialists and entrepreneurs
Political instability Hole in insurance companies pockets
and affects all the stakeholders Higher premium, restricted benefits, etc.
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Role of Vigilance Department
Ensuring integrity in the organization Eliminating forces that obstruct
integrity in the organization Vigilance activity may be in the form
of:Preventive vigilanceDetective/investigative vigilancePunitive vigilance
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Controlling Frauds
Careful attention to recruitment and selection process Sound training Stringent rules Continuous vigilance Developing a good system of internal controls Discouraging collusion of employees with customers Regular monitoring of employees Conducting proactive auditing Ensuring swift punishment of wrongdoers and protection
of the honest and innocent Providing hotline for whistleblowers
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CONCEPTS
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Downsizing
A downsizing strategy reduces the scale (size) and scope of a business to improve its financial performance
A reduction of the workforce is one of only several possible ways of improving profitability or reducing costs.
Objective of downsizing is to achieve rightsizing. Where there is surplus of workforce, downsizing is
required Alternative methods to reduce employees:
Reduce work hours so total salary get reduced with same number of people
Transfer Offer incentives for early retirement or VRS Declare lay-off
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Separation
It is a step ahead of demotion. It involves cessation of services of a personnel form an
organization. The employment relationship between and organization
and an employee come to an end. Forms of retirement:
Resignation Dismissal Death Suspension Layoff Retrenchment Retirement
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Lay-off
Layoff is a temporary separation of an employee by the employer under specific circumstances.
Here, the services of an employee are not terminated.
It is temporary separation.
Layoff reduces financial burden on the organization.
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Retrenchment
Retrenchment is a sort of permanent separation by an employer with due notice as per statutory provisions.
The principle applied under retrenchment is, “last come first go”.
It is applied mainly when work force is Superfluous, not in cases of punishment, retirement, etc.
The industrial Disputes Act, 1947 has laid down conditions for retrenchment.
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Termination
It is permanent separation of an employee from the organization.
The action take should be bona fide and not be a punitive measure nor a case of victimization.
Dismissal is termination of service by way of punishment.
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Career Planning and Development
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DEFINITION OF CAREER
Career is a sequence of separate but related work activities that provides continuity, order and meaning to a persons life.Edwin Flippo
Career is the pattern of work related experiences that span the course of a persons lifeJeffrey Greenhaus
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Career Planning
“Career planning is a process of systematically matching career goals and individual capabilities with opportunities for their fulfillment”Schermerborn, Hunt and Osborn
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Aims of Career Planning
Attract and retain Map out careers Better use of human resource More stable workforce Utilise managerial talent Improve employee morale Provide guidance and encouragement to
employees Higher productivity and organizational
development
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Career Stages
Exploration stage
Establishment stage
Mid career stage
Late career stage
Decline stage
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HR In BANKS
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JD of a Bank Clerk
Keep account opening forms for all deposit schemes
Keep latest information on rate of interest and maturity values of all schemes
Open the account/ issue deposit receipt as per the account opening form
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Recruitment at LIC
Done by central office at MumbaiAdvertisements in national and
regional newspapersEntrance examInterview
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Induction at Canara Bank
Branch manager/ section incharge conducts the entry interview on the first day
The manager volunteers information about the banks history, mission, goals, etc
Finds out needs of the employee and helps him settle
Introduces to colleagues Handbook is provided
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CASE STUDY