1.

Introduction to Human Resource Management

Definition of HRM

Human resource management is the function performed in organizations that facilitate the most effective use of people to achieve organization or individual goal. Functions of HRM Acquisition Development Motivation Maintenance Acquisition Planning Recruitment Selection Socialization Development Employee training Management development Career development Motivation Job satisfaction Performance stimulation Performance evaluation Reward and punishment

 Compensation and benefit Discipline

Maintenance Employee safety and health Employee/Labor relations

Functions of HRM 1

Managerial

Planning

Organizing

Staffing

Directing

Controlling

Functions of HRM 2

Operational

Employment

HR Development

Compensation Mgt

Employee Relations

HR Planning

Performance Appraisal

Job Evaluation

Recruitment

Training

Wage and Salary Admn

Selection

Management Development Career Planning and Development

Incentives

Placement

Bonus

Induction

Fringe Benefits

HRM Responsibility HR Department Helping the organization to reach its goals. Efficiently employing skills and abilities of the workforce. Providing well-trained and well-motivated employees. Increasing the employees job satisfaction. Achieving quality of work life. Communicating HRM policies to all employees. Maintaining ethical policies and socially responsible behavior. Managing Change.

Characteristics of HRM Action-oriented Individual-oriented Globally oriented Future-oriented Competitive Challenges Facing HRM Globalization Technology Change management Development of human capital Market responsiveness Cost containment Emerging Employee Issues in HRM

 Diversity of background Age distribution Gender issues Education levels Employee rights Privacy issues Attitude towards work Family concerns

2. History of Human Resource Management

The Craft System The history of HRM can be traced back to England before the Industrial Revolution, where masons, carpenters, leather workers, and other craftsmen organized themselves into guilds. The guilds were responsible for supervision of apprentice training, production methods and quality, and working conditions. The guilds were the predecessors of trade unions.

The Industrial Revolution The Industrial Revolution in the late 18th Century replaced the time-consuming hand labor with mechanical means of production.

With the rapid growth of manufacturing industry, emergence of supervisors and managers widened the gap between the workers and owners.

Scientific Management Fredrick Taylors Scientific Management introduced the concept of division of labor and advocated separate responsibilities for management and workers managements responsibility to plan and workers responsibility to execute. He attempted to increase worker efficiency through work methods, time and motion study, and job specialization.

Industrial Psychology Hugo Munsterberg applied psychological principles towards increasing the ability of workers for performing effectively and efficiently. The maximum well-being of the workers was the focus of industrial psychology.

Human Relations Movement Hawthorne Studies: Elton Mayo and his associates conducted several studies on worker productivity. The studies pointed out the importance of social interaction and work group on output and satisfaction. The human relations movement eventually Organizational Behavior. became a branch in the study of

Personnel Department Personnel Departments emerged in the organizations first time in the 1920s in order to bridge the gap between the management and the workers. But early personnel departments were only concerned with the blue-collar workers. These departments were mostly involved in recordkeeping, dealing with union troubles, arranging farewell parties, annual picnic, etc.

Human Resource Management During 1970s, personnel management gradually evolved into human resource management broadening its scope in the organizations. HRM function was integrated into the organizational goals and strategies. The crucial role of HRM became gradually evident in attaining the strategic and competitive advantage of organizations for survival. Evolution of HRM The Craft System The Industrial Revolution Scientific Management Industrial Psychology Human Relations Movement Personnel Department Human Resource Management HRM Model The scope of HRM today has been defined by a model developed by ASTD (American Society for Training and Development): Training and development Organization development Organization/Job design Human resource planning Selection and staffing Personnel research and information systems Compensation/Benefit Employee assistance Union/Labor relations

The model suggests that these nine areas outputs:

have impacts on three human resources

Quality of work life Productivity Readiness for change

3. Environments of Human Resource Management

External Environmental Elements Government Union Economic conditions Labor force Geographic location Internal Environmental Elements Strategy Goals Organizational culture Nature of task Workgroup Leadership Government Laws and Regulations Government laws and regulations affect HRM policies, programs, and activities of organizations directly.

When an organization makes decisions about hiring, promotion, performance evaluation, downsizing, and discipline, it must weigh the impact of government regulations. Major areas of government legislation and regulation include:

The Union

Equal employment opportunity and human rights legislation. Employment of illegal aliens. Discrimination based on gender, age, disability. Compensation regulation. Benefits regulation. Workers health and safety regulation. Labor relations laws and regulations. Privacy laws.

A union is an organization that represents the interests of employees on such issues as working conditions, wages and salaries, fringe benefits, employees rights, grievance processes, and work hours. The presence of a union directly affects most aspects of HRM including recruiting, selection, performance evaluation, promotion, compensation, and benefits. Economic Conditions

Three aspects of economic conditions affect HRM programs: Productivity The nature of competitiveness The work sector of the organization

Composition and Diversity of the Labor Force

The labor force of a country comprises all people aged 18 years or older who are not in the military and who are employed or seeking job. The diversity of a labor force is based on age, gender, race, religion, and ethnicity. The composition and diversity of labor practices in any organization. force directly affects HRM policies and

Geographic Location of the Organization The location of the organization influences the kinds of people it hires and the HRM activities it conducts. The location factors include: Strategy The overall organizational strategy and the strategies at different organizational levels directly affect HRM strategies and goals. A close alignment of strategy, structure, people, and management is essential to attain competitive advantage. Urban vs. rural factor Educational factor Behavioral factor Legal-political factor Economic factor

Goals The goals of organizations differ within and among departments. The differences arise due to the importance the decision makers place on different goals.

The overall organizational goals affect the specific HRM goals.

Organizational Culture Organizational culture has significant impacts on the behavior, productivity, and expectations of employees. Culture provides a benchmark of the standards of behavior and performance among employees. For example, it can provide clear guidelines on attendance, punctuality, concerns about quality and customer service for the employees.

Nature of the Task The nature of job to be performed directly affects HRM in any organization. The job factors that influence the HRM policies and practices include: Degree of empowerment Degree of physical exertion required Degree of environmental unpleasantness Time dimension of work Human interaction on the job Degree of variety in the task

Work Group The goals and activities of work groups influence HRM policies and programs. When the goals of a work group match organizational goals, the task of HRM is easy. But when a work group pursues conflicting goals, it may jeopardize HRM objectives and programs involving benefits and compensation, profit sharing, safety, labor relations, etc.

Leadership Style and Experience The experience and leadership style of the operating managers directly affect HRM activities, since most of these activities are implemented at the work-unit level. The managers or leaders: influence the skills, personalities, behaviors, and motives of individuals. facilitate the interactions among individuals and workgroups. provide direction, encouragement, authority. provide knowledge and information about strategies, goals, policies, and tasks.

4. HR Planning
Definition The process by which an organization ensures that it has the right number and kinds of people, at the right places, at the right time, capable of effectively and efficiently completing those tasks that will help the organization achieve its overall objectives. The process by which an organization assesses the future supply of and demand for human resources. Strategic planning refers to an organizations decisions about: what it wants to accomplish (goals). how it wants to accomplish it (plans).

HR planning identifies the human resources requirements for accomplishing the strategic plans. Strategic and HR planning become effective when there is a reciprocal and interdependent relationship between them. Stages of HR Planning Situational analysis or environmental scanning Forecasting demand for human resources Analysis of the supply of human resources Development of plans for action .

Situational Analysis or Environmental Scanning Situational analysis or environmental scanning is the systematic monitoring of the major external forces influencing the organization. This is the stage at which strategic and HR planning initially interact. A strategic plan must adapt to the environmental situations, and the HR plan is a vital means for such adaptation. The external environmental factors which need to be monitored and analyzed include: Economic factors Technological changes Political-legal issues Socio-cultural concerns Demographic trends

Forecasting Demand for Human Resources HR Forecasting is the estimation of the number and type of people needed to meet organizations objectives. The organizational factors that influence the demand for human resources include: Competitive strategy Technology Structure Productivity

HR Forecasting Techniques: Quantitative techniques Qualitative techniques

Quantitative Techniques: refers to the use of statistical or mathematical tools. Trend analysis Modeling and multiple-predictive techniques: Markov chain analysis Regression analysis

Qualitative Techniques: refers to the use of opinions and judgments of managers and experts based on their experience, knowledge, and intuition to forecast HR needs. Delphi technique Nominal group technique Unit-demand forecasting

An organization should use quantitative and qualitative techniques in combination to better forecast the HR requirements. Analysis of the Supply of Human Resources Once an organization has forecasted its future human resources requirements, it must then determine if there are sufficient numbers and types of employees available to fulfill the anticipated requirements. This analysis should include: Internal labor supply External labor supply

Internal Labor Supply: The analysis of internal labor supply involves: Staffing tables Markov analysis Skill inventories and management inventories Replacement charts and succession plans

External Labor Supply: When an organization lacks an internal supply of employees for promotions, or when it is staffing entry-level positions, managers must consider the external supply of labor. It includes analyzing: Demographic factors Economic factors

Education and skill factors

Development of Plans for Action After analyzing the demand for and the supply of future human resources, these two forecasts are compared to determine the courses of action. The discrepancy between the demand and supply forecasts may lead to two situations: Shortage of human resources Surplus of human resources

Shortage of Human Resources: the options open for an organization in order to fill up the shortage include: Overtime Recruitment and recall Temporary employment Outsourcing

Overtime: if the shortage is small and the employees are willing to work overtime, it can be filled with present employees. Recruitment and Recall: when there is a shortage of highly skilled employees, the training and promotions of present employees, along with the recruitment of lessskilled employees can be an option. This decision can also include recalling employees who were previously laid off. Temporary Employment: when there is a temporary shortage of or swinging demand for employees, an organization can go for part-time employment of human resources. Benefits: More flexibility Less administrative and financial burdens In-house training cost saving Problems: Lack of belongingness

Risk of information disclosure Conflict between permanent and temporary employees Difficulty in cultural adaptation Soldiering

Outsourcing: an organization may also go for outsourcing and subcontracting human resources, especially for non-core jobs. Organizations goes for outsourcing when they find getting jobs done by outsiders is more profitable than doing by themselves. This is a logical choice when the firm lacks some expertise and does not want to invest time and energy to develop that. Surplus of Human Resources: the options open for an organization to deal with the surplus employees include: Demotion and transfer Early retirement Layoff and termination Attrition Downsizing

Demotion and Transfer: an organization can deal with excess employees by demoting and/or transferring them to other positions, departments, or locations.

Early Retirement: many organizations are increasingly adopting this option to reduce excess labor supply. They encourage the employees close to retirement to accept early retirements by offering attractive retirement benefits (golden handshake).

Layoff and Termination: temporary layoff is an option for an organization to deal with excess labor force by sending them home when the work load is less than normal and by recalling them when workload becomes normal. Termination takes place when the excess labor force is laid off permanently.

Attrition: many organizations rely on the gradual reduction of employees through resignations, retirements, or deaths to achieve a workforce balance. Employees lost through attrition are not replaced by new recruitment (hiring freeze).

Downsizing: the planned elimination of large number of employees designed to enhance organizational competitiveness. Reasons: Reduction of overhead cost Closure of outdated plants or introduction of new technology in old plants Change of location Decline of product/service demand Problems: Short-term benefits at the cost of long-term sufferings of downsized employees Loss of irreplaceable talents/experts Image crisis Fear of unknown among the remaining employees

5. Job Analysis and Job Design

Job A job is a type of position held by a person within an organization.

Job Analysis The process of systematic analysis of a job in order to determine the task, duties, and responsibilities of the job and the knowledge, skills, and abilities required to perform the job. The outputs of a job analysis include:

 Job description Job specification Job Description The list of tasks, duties, and responsibilities of a job. Task: a task is a distinct work activity carried out for a distinct purpose. Duty: a duty is a number of tasks. Responsibility: an obligation to perform certain tasks.

Job Specification The list of knowledge, skills, abilities, and other characteristics that an individual must have to perform a job. Knowledge: an organized body of information, usually of a factual or procedural nature applied directly to the performance of a task. Ability: a demonstrated competence to perform an observable behavior or a behavior that results in an observable output. Skill: a competence to perform a learned, psychomotor act, and may include a manual, verbal, or mental manipulation of data, people, or things. Other Characteristics: the personality factors (attitudes), aptitudes, or physical or mental traits needed to perform the job

Job analysis:

Who Conducts Job Analysis? Internal job analyst External job analyst Supervisor Job incumbent Job Analysis Methods Observation Method: in this method, the job analyst watches employees directly or reviews films of workers on the job. Interview Method: the job analyst questions the individual employees and managers about the job under review. Questionnaire Method: the job analyst makes and circulates structured questionnaires to be filled out by individually by the jobholders and managers. Technical Conference Method: this method utilizes supervisors with extensive knowledge of the job.

Diary/Logbook Method: this method requires the job holders to record their daily activities on the job.

6. Job Design

Definition Job design is the process of determining the specific tasks to be performed, the methods used in performing these tasks, and how the job relates to other work in the organization.

Approaches to Job Design Mechanistic Approach: Job specialization Motivational Approach: Job rotation Job enlargement Job enrichment Job characteristics model Work team

7. Recruitment of Human Resources

What is Recruiting? The process of searching for and obtaining a pool of qualified candidates to fill up job vacancies. The process begins when an organization seeks potential candidates against job vacancies and ends when the applications are submitted. Recruitment creates a buffer between HR planning and actual selection.

Forms of Recruiting Internal Recruiting Initial consideration given to the current employees. External Recruiting Consideration given to the outside labor market. Internal Recruiting Sources Promotion Transfer and relocation Temporary worker pool Job posting and bidding Skill inventory Internal Recruiting Advantages Builds better employee relations. Motivates employees to perform. Encourages ambitious employees. Increases the chances of better selection as information on the performance of candidates are readily available.

 Less costly than outside recruiting. Easy and faster socialization of selected employees. Internal Recruiting Disadvantages Need for strong career development program. Risk of recruiting inferior employees. Political infighting for promotions. Possible de-motivation of those not promoted Lack of varied perspectives. Employee soldiering due to assured internal recruiting. External Recruiting Sources Advertisements Employee referrals Employment agencies Campus recruiting Professional societies Walk-in applicants Advertisements Widely practiced by the organizations. Should be done wisely since it incurs a considerable cost for the organization. Media selection should match the nature of job vacancies and characteristics of the probable applicants. Organizations at times go for blind ad, that is, no identification of organization is given. Normally a post box no or address of a consulting firm is given who acts as intermediary. Employee Referrals

 Probable applicants are referred by the current employees. This reduces advertisement costs, but recommenders biasness and nepotism might leave a negative affect on overall recruiting. Employment Agencies It includes public agencies, private agencies, and management consultants headhunters. Campus Recruiting Organizations may directly contact candidates. Professional Societies Many professional organizations operate placement services for the benefit of their members. Walk-in Candidates Walk-ins are the casual or unsolicited applicants. Normally they contact the employer by letter, telephone, or in person. This source provides an excellent supply of stockpiled applicants. Walk-ins usually have a short life. Other Sources E-recruiting Job fair Internship Other companies External Recruiting Advantages Brings new and varied perspectives. May bring competitors secrets new insights. Cheaper than training a professional. educational institutions for potential or

 No political infighting for promotions. External Recruiting Disadvantages May not be able to obtain suitable job candidates. De-motivation of internal employees. Longer socialization time. May bring an attitude of we used to do it in this way at XYZ Company.

8. Selection of Human Resources

What is Selection? The process by which an organization chooses from applicants the person or persons who best meet/s the selection criteria for the position/s available. The objective of selection process is to choose the individual from the pool of candidates who can successfully perform the job. Job analysis, HR planning and recruitment are necessary prerequisites for the selection process.

EEO/Legal Requirements in Selection Race, color, national origin, and religion should not be the base for selection or even asked unless the nature of the job strongly supports for the consideration of those. However, those could be asked for better record of employees details. Arrest and conviction records have been ruled out by the courts to be an unlawful basis for refusal unless the nature of the job strongly supports for consideration of those. Credit rating or previous credit record have also been ruled out unless the nature of the job strongly supports for the consideration of those.

The Selection Process Initial screening Completion of application form

 Employment test Comprehensive interview Background investigation Physical examination Final employment decision Initial Screening The initial screening is conducted basing on job description and job specification. The applicants who do not fulfill the criteria are eliminated. A screening interview can be arranged to describe the job in enough details so the candidates can consider whether they are really serious about making applications. Identifying the expected salary range is another important outcome of screening interviews.

Completion of Application Form Once the initial screening has been done, the applicants are asked to complete the organizations application form. The amount of information asked from the candidates varies from organization to organization and with the nature of job. Completion of Application Form Some organizations ask to complete a comprehensive personal history profile. A duly filled up application form gives a pen picture of the qualifications, skills, experiences of the applicants. and

Employment Tests After completion of the application form, the applicants are tested. The most widely used test is the written test. Though written test is widely practiced in our country, it has lost its popularity in the western countries as research have found it does not bring many important details as required for the job.

Some of the tests used by organizations include: Aptitude Test: a means of measuring a persons capacity or latent ability to learn and perform a job. This measures ones verbal ability, numerical ability, perceptual speed and reasoning ability. Psychomotor Test: a test that measure a persons strength, dexterity, and coordi-nation. These test is more applicable for the kind of jobs in assembly line. Job Knowledge Test: a test to measure the job related knowledge of an applicant. This test can be either written or oral. Proficiency Test: a test used to measure how well a job applicant can do a sample of the work to be performed in the job. Interest Test: it tests the interest of the applicants in a particular job. The basic assumption of this test is that people are more likely to be successful in the jobs where they are more interested. Personality Test: a test that attempts to measure the personality traits. This has limited application in selection decisions as it may mislead the employers. The most widely used form of this test is TAT (Thematic Apperception Test). Polygraph Test: using a device to record physical changes in a persons body as he or she answers questions. It rests on a series of cause-effect assumptions, for example, lying causes fear and guilt and again, fear and guilt cause stress, etc. Graphology: the use of a trained analyst to examine a persons handwriting to assess the persons personality, emotional problems, honesty, etc. Comprehensive Interview: The comprehensive interview is designed to into areas that can not be addressed by the application form or tests. probe

The types of interview include: Structured interview Unstructured interview Stress interview Panel interview

 Group interview Background Investigation: Background investigation may include contacting former employers to confirm the candidates work record and to obtain their appraisal of his/her performance, contacting other job-related and personal references, and verifying the academic qualifications. Physical Examination: The last step prior to final gono go decision. The gravity of physical test will vary basing on the nature of the jobs. In recent days physical examination has been incorporated in almost all organizations. Physical examination can even be a part of initial screening. Drug test and HIV test are the two recent additions to physical examinations. Final Employment Decision: The last step in the selection process. At this stage the most suitable applicants qualifying in all other steps are finally selected. The organization should communicate the rejected applicants about the reasons for their rejection.

9. Orientation and Training of Human Resources

What is Orientation? The process of familiarizing new employees with the organization, their work units, and their jobs. The process of socialization by which new employees get acquainted with the organizational rules and regulations, norms, values,work procedures, and patterns of behavior.

Levels of Orientation Organizational Orientation A general orientation that presents topics of relevance and interest to all employees. Departmental and Job Orientation An orientation that includes issues unique to the new employees specific department and job.

Responsibility for Orientation HR Department and the new employees immediate manager normally share the responsibility for orientation. HR department is responsible for initiating and coordinating both levels of orientation, conducting organizational-level orientation, and training line managers for conducting departmental and job orientation.

What is Training? The systematic process of altering the behavior of employees in a direction that will enable them to perform their jobs and achieve organizational goals. A formal training program is an effort by the organization to impart job-related knowledge, skills, and behaviors to the employees. Training is related to the performance of current job and Development is related to the performance of future job.

Phases of Training Conducting the needs assessment Designing the training program Implementing the training program Evaluating the training program

Needs Assessment: The needs assessment phase attempts to determine: Why training is needed What kind of training is needed Where it is needed Who need it When and how long they need it Needs assessment involves: Organization analysis Task analysis Person analysis

Needs Assessment Organization analysis: an examination of organizational environment, strategies, and resources to determine where the training emphasis should be placed. Task analysis: a review of job description and specification to determine the training areas. Person analysis: the determination of the specific individuals who need training. Program Design: Once the training needs have been deter- mined, the next step is to design the type of learning environment necessary to enhance learning. Training design should focus on: Instructional objectives Trainee readiness and motivation Principles of learning Characteristics of instructors Instructional objectives: desired outcomes of a training program, which include: knowledge and skills to be acquired attitudes to be developed Trainee readiness and motivation Trainee readiness: refers to the knowledge and experience of the trainees necessary to absorb training to be conducted. Trainee motivation: for optimum learning, trainees must feel the necessity of training and have a constant desire to learn. Principles of learning: following principles designing a training program: Goal setting Meaningfulness of presentation Modeling of learning should be kept in mind while

 Individual differences Active practice and repetition Whole-versus-part learning Massed-versus-distributed learning Feedback and knowledge of progress Rewards and reinforcement

Characteristics of instructors: following is a list of desirable traits of an instructor: Knowledge of subject Adaptability Sincerity Sense of humor Interest Clear instructions Individual assistance Enthusiasm

Training Methods On-the-job training Apprenticeship training Vestibule training Off-the-job training

On-the-job training: training that shows the employee how to perform the job and allows him or her to do it with the instructions of a supervisor or trainer.

 Job rotation is an example. Apprenticeship training: A comprehensive training that combines the theoretical and practical aspects of the work required in a highly skilled occupation. It is a combination of on-the-job and off-the-job training.

Program Implementation Vestibule training: in this kind of training, the trainee learns the job in an environment that simulates the real working environment as closely as possible. Off-the-job training: beyond apprenticeship,vestibule training, and on-the-job training, all other training is off-the job training, whether it is conducted in the organization classrooms, vocational schools, or elsewhere.

Program Evaluation Conducting an evaluation of training program effectiveness. The evaluation should involve determining: Reaction: how much did the trainees like the program? Learning: what principles, facts, and concepts were learned ? Behavior: did the job behavior of the trainee change due to training? Result: what was the result of the program in terms of factors such as reduced cost or reduced turnover? is essential for determining its

10.Management Development

What is Management Development? The process by which managers gain the experience, skills, and attitudes necessary to become or remain effective managers.

Basis of Management Development Management development should be designed, conducted, and evaluated on the basis of: objectives of the organization management inventory succession plan changes in the management team Organizational Objectives If an organization goes for expansion, then it may require new managers at all levels. On the other hand, if the organization goes for restructuring or downsizing, then it may need fewer managers.

Management Inventory Management inventory is a variation of skill inventory, which includes information about the qualifications, skills, experiences, past performance, and the potential for advance- ment of all existing managers. A management inventory helps to identify the development activities necessary to ensure that the organization has adequate managerial talent to fill future managerial vacancies.

Succession Plan It is a chart that shows potential successors for each management position within the organization. A succession plan helps in identifying the managers at different levels and their needs for development.

Changes in Management Team Changes in the management team due to retirement, promotion, and transfer can be anticipated.But changes due to death, resignation, or voluntary retirement can not be predicted.Management development should be a continuous process to deal with anticipated or unforeseen changes in the management team.

Methods of Management Development On-the-job Development Coaching Understudy assignment Job rotation Committee and project assignment Off-the-job Development Classroom training Seminars and conferences Sensitivity training Transactional analysis Coaching Coaching involves a manager being guided by another experienced manager in problem solving. The coach gives guidance through direction, advice, criticism, and suggestion to help the development of the employee. It helps in effective learning through high interaction and rapid feedback. But persistence of current managerial style and practice and coachs ability are the two limitations of this method.

Understudy Assignment In this method, a potential manager is given the opportunity to relieve an experienced manager of his job and act as his substitute during the period of absence. This method is used primarily in situations where major or critical decisions can be delayed until the actual manager returns or can be made in close consultation with the next superior manager.

Job Rotation Job rotations can be either horizontal or vertical. Horizontal job rotation or lateral transfer is widely used in organizations to develop the potential managers for under-taking different managerial positions. Job rotation can be arranged on a planned basis or a situational basis. It helps in broadening the experiences and skills of managers. It also relieves boredom and monotony and stimulates new ideas.

Committee and Project Assignment Assignments to a committee or a project enables an employee to acquire required skills for the future managerial positions. Committees can be both permanent and temporary or ad hoc in nature. Such assignments provide scopes to the employee to share managerial decisionmaking, to learn by watching others, and to investigate specific organizational problems.

Classroom Training It is the most familiar type of management training. It includes: Lecture courses Simulation exercises Case studies Management games Role playing

 In-basket training Seminars and Conferences Seminars and conferences can be used to communicate ideas, policies, and procedures. A major role of seminars and conferences in management development is to change the outlooks and job-related attitude and behavior of managers. Sensitivity Training A process of unstructured group inter-actions in which participants share their ideas, beliefs, and attitudes in a free and open discussion. Objectives of sensitivity training include providing managers with increased awareness of their own behavior and of how others perceive them, greater sensi-tivity to others behaviors, and increased understanding of group processes. Transactional Analysis (TA) TA is both an approach for defining and analyzing communication interaction between people and a theory of personality. The theory suggests that an individuals personality consists of three ego states: The Parent: dominant, scolding, and authoritative. The Child: obedient, emotional, and manipulative. The Adult: objective, and rational.

11. Career Planning and Development

Career: A career is the pattern of work-related experiences and activities over the span of a persons work life. The sequence of positions that a person holds over his/her occupational life. Career Development: An ongoing and formalized effort of an organization to ensure that people with the proper qualifications and experiences are available when needed. Career Development Vs. Employee Training and Development Career Development: focuses on the long term career effectiveness and success of organizational personnel. Employee Training and Development: focuses on the performance of employees in the immediate or intermediate time frames. Individual Vs. Organizational Career Development Perspective Individual Perspective: Each individual must identify his or her own knowledge, skills, abilities, interests, and values. Seek out information about career options available within the organization. Set career goals and develop career plans. Individual Vs. Organizational Career Development Perspective Organizational Perspective: The organization should encourage the employees to take responsibility for their own careers. Offer continuing assistance in the form of feedback on individual performance. Provide information to the employees about the organization, jobs, and career opportunities available for employees.

Individual Vs. Organizational Career Development Perspective

feedback Value of Effective Career Development An effective career development program: Ensures needed talents will be available. Improves the organizations ability to attract and retain talented employees. Ensures growth and development opportunities for all employees including the minorities and women. Reduces employee frustration. Stages of Career The career of an individual typically starts at his/her school life and terminates when he/she retires. The five stages of career are: Exploration Establishment Mid-career Late career Decline

Exploration: This stage starts once individual goes through schooling and prepares for future job. This ends once s/he starts searching for a job. This stage is strongly influenced by the family, relatives, friends, teachers and the society as a whole. The exploration periods ends for most of us in our mid-twenties as we make transition from school to work. Organizations have little to do in this stage.

Establishment: Begins with the search for work and includes getting the first job, being accepted by the peers, learning the jobs and getting the first tangible evidence of success or failure in the real world. In this stage responsibility increases gradually. There is no set time frame for how long some-one stays in this stage. Normally in this stage the employees learn by mistakes and performance inclines gradually.

Mid-career: In this stage the employee may maintain his or her prior performance or begin to deteriorate. They face dilemmas about career for the first time. This is the stage when they may rethink about their current jobs and go for switching careers. Mistakes at this stage suffer greater penalties. This is the most vulnerable stage for employees as well as organizations. Organizations face the challenge to retain existing talented employees.

Late Career: This stage is the follow up of mid career stage if someone continues with the same job. At this stage individual becomes more or less static and follow the strategy going with the stream. Organization also do not expect or demand something extraordinary from them. How does he/she enjoys this stage will much depend on the performance at the mid-career stage. Employees start planning for their retirement.

Decline: This final stage of career is typically a difficult one for most of the employees. For the achievers, this is the time to leave the limelight and give up their power and position. For the non-achievers, this might be the time to leave behind their occupational frustrations and start a pleasant life. But for both achievers and non-achievers, it is a time for adjustments and having a life less structured with less of responsibilities. Understanding the stages and dimensions of career is important for managers, because they can assist employees in pursuing their goals in every stage (except exploration stage) by giving necessary information, guidance, trainings and incentives. This is also important for the managers to avoid carrying employees who are strongly unwilling to continue their career in the present organizations.

11. Performance Appraisal System

Performance Appraisal Process A formal process in an organization whereby each employee is evaluated to determine how he or she is performing. The process of evaluating employees depends on: Employee productivity: measured in terms of efficiency and effectiveness. Employee-created disruptions: measured in terms of accidents, absences, and tardiness. Purposes of Performance Appraisal Strategic Strategic and HR planning. Evaluating goal achievement. Administrative Deciding compensation and rewards. Deciding promotion, transfer, and lay-off. Meeting legal requirements. Validating selection test criteria. Developmental Providing performance feedback. Setting high performance goals. Designing performance improvement programs.

Steps in Performance Appraisal Process Establish performance standards. Set policies on who evaluates, when, and how often. Communicate performance expectations to employees. Gather employee performance data and measure actual performance. Compare actual performance with standards. Discuss the appraisal with employees. Initiate corrective actions, if necessary. Establish Standards: Derived from an organizations strategic goals. Based on job description and job specifi-cation. Characteristics of effective standards or criteria include: Reliability Relevance Sensitivity Practicality Set Policies on Who Evaluates, When, and How Often: Performance appraisal may involve: Manager/supervisor appraisal Self-appraisal Subordinate appraisal

 Peer appraisal Team appraisal Customer appraisal 360-degree appraisal Performance appraisal may be conducted annually, bi-annually, or even quarterly. Communicate Performance Expectations: Tell employees what are expected out of them and ensure that they understand those. Gather Data and Measure Performance: Sources of information on employee per-formance include: Personal observation Statistical reports Oral reports written reports Compare Performance with Standards: Identify deviations between standard per-formance and actual performance. Discuss Appraisal with the Employee: Discussing the appraisal with employees is a very challenging task for a manager. Appraisal discussion may have positive as well as negative motivational outcomes. Initiate Corrective Actions: Immediate actions deal with symptoms. Basic corrective actions deal with causes.

Performance Appraisal Methods Individual Appraisal Methods: Graphic rating scale Forced choice Essay evaluation Critical incident technique Checklists and weighted checklists Behaviorally anchored rating scales (BARS) Behavioral observation scales Group Appraisal Method: Ranking Paired comparison Forced distribution Management by objectives (MBO) Individual Appraisal Methods Graphic Rating Scale: This is one of the oldest and most popular methods of appraisal. A trait approach to performance appraisal whereby each employee is rated according to a scale of traits or characteristics. Graphic rating scales can be used to assess characteristics such as quantity and quality of work, job knowledge, honesty, integrity, cooperation, loyalty, dependability, etc. But focuses too much on person instead of performance. Forced Choice:

 A trait approach to performance appraisal that requires the rater to choose from several statements about work behavior which des-cribes an employee most closely. This method reduces bias and distortion in performance evaluation. But sometimes this method may be disliked by appraisers due forced and difficult nature of judgment. Essay Evaluation: A trait approach to performance appraisal that requires the appraiser to write a statement describing the employee behavior. The appraiser is usually instructed to describe the strengths and weaknesses of the employee and to make recommendations for his/her development. It may be used in combination with other methods. The quality of appraisal is limited by the appraisers writing skill and style. Critical Incident Technique: This technique requires raters to maintain a log of behavioral incidents that represent either superior or inferior performances of each employee being rated. This method reveals critical work behaviors of employees, the feedback of which can be given easily. But this method is time-consuming and it requires an appraiser to maintain the log of critical incidents meticulously. Checklists and Weighted Checklists: A checklist is a list of behavioral descriptions If the appraiser thinks that the employee has a trait listed the appraiser checks the item and if not the appraiser leaves it blank. The score from the checklist equals the number of checks. In a weighted checklist each of the items in the list carries certain weight. Normally weights of the items are not known to the appraiser and he or she only checks the items that apply. Then HR people calculate the total score as per the given weights.

Checklists and Weighted Checklists: The checklist reduces some bias since the appraiser and the scorer are different. But this system may involve more cost since separate checklist is to be prepared for each of the several job categories.

Behaviorally Anchored Rating Scales (BARS): Also called behavioral expectation scale (BES). The features of BARS include: Six to ten performance dimensions are iden-tified and defined by a team of managers and subordinates. A scale for each dimension is constructed with positive and negative critical incidents anchored on the scale. Each employee is rated on the dimensions. Feedback on the rating is given using terms displayed on the form.

Since designing BARS involves participation of employees the performance appraisal process and the ratings obtained through BARS may be better accepted by them. Some studies have also found that BARS can yield more accurate ratings. But BARS requires considerable time and effort to develop and separate scales may need to be developed for separate performance dimensions of different jobs.

Group Appraisal Methods Ranking: In ranking system, an appraiser ranks his sub-ordinates in order on some overall criterion. But ranking can be very difficult to do if this involves ranking a large number of employees. It is much easier for an appraiser to rank the best and the worst ones than ranking people who are in between.

 The ranking may also be difficult in case of a small group of excellent, close performers whom the appraiser has to rank from the best to the worst. Paired Comparison: In paired comparison, an appraiser compares every employee with every other employee in the work group and identifies the better per-former. The final ranking is then determined by how many times a given employee was chosen as the better performer in all comparisons. A limitation of this method is that it involves a lot of comparisons to be made. Forced Distribution: This method also uses a ranking format. But in this case, employees are ranked in group. The appraiser puts certain percentages of the employees into predetermined categories. A limitation of this method is that the apprai-ser must use the predetermined distribution regardless of how well or how poor the emplo-yees performed. Management By Objectives (MBO): MBO is a process that converts organizational objectives into individual objectives. The employees are evaluated by how well they accomplish their given objectives. It has four steps: goal setting, action planning, self-control, and periodic reviews. The most important advantage of MBO is that it is forward-looking and resultoriented. But MBO may fail if employee participation is not sought while setting the individual goals. Errors in Performance Appraisal Distributional Errors Central tendency error Leniency or strictness error

Temporal Errors Recency error Contrast error

Personal Bias Error Similar-to-me error Halo error Stereotyping

Improving Performance Appraisal Use behaviorally based methods Combine individual and group appraisal techniques Provide continuous feedback Use multiple appraisers Use selective rating Train appraisers Conduct follow-up appraisal interviews Give incentives to good appraisers

12. Organizational Reward System

Organizational Rewards and Employee Motivation The Psychological Contract Relation between Reward and Motivation Maslows need hierarchy theory

 Herzbergss two-factor theory Vrooms expectancy theory Adams equity theory Maslows need hierarchy theory

According to Maslow, people are motivated to satisfy the lower needs before they try to satisfy the higher need. Also, once a need is satisfied it is no longer a powerful motivator. Herzbergss two-factor theory Herzberg Two-Factor theory divides Maslows Hierarchy into a lower-level and a higherlevel set of needs, and suggests that the best way to provide motivation for an employee is to offer to satisfy the persons higher-order needs, ego and selfactualization. Herzberg said that lower-order needs, or hygiene factors, are different from higherorder needs, or motivators.

He maintains that adding more hygiene factors to the job is a very bad way to motivate because lower-order needs are quickly satisfied.

Vrooms expectancy theory Expectancy theory states that a persons motivation to exert a certain level of effort is a function of three things: expectancy (E), instrumentality (I), and valance (V). Motivation = E x I x V. E is the persons expectancy that his or her effort will lead to performance, I represents the perceived relationship between successful performance and obtaining the reward, and V refers to the perceived value the person attaches to the reward.

Adams equity theory Adamss equity theory assumes that people have a need for fairness at work, and therefore, value and seek it. People are motivated to maintain a balance between what they perceive as their inputs or contributions and their rewards as compared to others.

Classification of Rewards Extrinsic Vs. Intrinsic Rewards Extrinsic Rewards: are external to the job and come from an outside source. Money Promotion Fringe benefits Intrinsic Rewards: are the satisfactions some-one gets from the job itself. Pride in the job Feeling of accomplishment Belongingness

 Financial Vs. Non-financial Rewards Financial Rewards: are the rewards that enhance employees financial well-being. Direct Financial Rewards Wages Bonuses Profit-sharing

Indirect Financial Rewards Pension plans Paid vacations Paid sick leaves Purchase discounts

Financial Vs. Non-financial Rewards Non-financial Rewards: are the rewards that make the life on the job more attractive. Impressive job title Desired work assignment Decorated office Reserved parking space Own secretary

Performance-based Vs. Membership-based Rewards

Performance-based Rewards: Commissions Piecework pay plans Incentives Group bonuses Merit pay plans

Membership-based Rewards: Benefits and services Insurance plans Profit-sharing Seniority

Bases for Rewards Hourly work Piecework

External Factors that Influence Organizational Reward Policy Economy Labor market Government Trade union

Internal Factors that Influence Organizational Reward Policy Nature of organization Nature of job

Employees relative worth Labor budget

Characteristics of Effective Rewards Adequate Cost-effective Equitable Balanced Flexible Visible Acceptable to the employee Secure Incentive-providing

Criteria for Reward Distribution Performance Effort Seniority Skills head Job difficulty Discretionary time

13. Compensation Management

Objective of a Compensation System The primary objective of an organizational com-pensation system is to establish a structure for the equitable compensation of employees basing on their jobs and their level of performance.

Compensation Determination Deciding compensation for employees involves three aspects: Determination of pay-structure Determination of pay-level Determination of individual pay

Determination of Pay-structure Determining the relative worth of different jobs within the organization. Involves setting a value on each job within the organization relative to all other jobs. Job evaluation is the approach used.

Determination of Pay-level Examining pay relative to employees working organizations. Also called job-pricing. Objective is to keep the organization competitive in the labor market. Ensures external equity. Pay survey is a major tool used in job-pricing. on similar jobs in other

Determination of Individual Pay Examining pay relative to employees working on the same job within the organization.

 Ensures internal equity. What is Job Evaluation? Job evaluation is a systematic process of determining the value of each job in relation to other jobs in the organization in order to determine which jobs should be paid more than others. Job Evaluation Methods Job Ranking Job ranking involves arranging all jobs in an organization in a simple rank order from the simplest to the most difficult. Qualitative in nature. This method is suitable for small and simple organizations having less number of jobs. But not suitable for big and complex organizations having a large number of jobs. Subjectivity and lack of definite or consistent standard is another limitation. Job Classification Job classification is the process grouping jobs into different grades or classes on the basis of differences in skills, duties, responsibilities, knowledge, working conditions and other job- related factors. Then those grades of jobs are ranked by levels of difficulty or sophistication. Qualitative in nature. This method is quick, simple, and cheap. It is also easy to understand and communicate. Job ranking Job classification Point method Factor comparison

 But it may lead to inappropriate grouping of some jobs and consequent feeling of inequity. Point Method Point method involves breaking down jobs on the basis of certain identifiable criteria (such as skill, effort, responsibilities, etc) and then allocating points or weights to each of these criteria as per their importance. The points of each job are then added and jobs with similar point-totals are placed in similar pay grades. Quantitative in nature. This method is the most consistent one with least rating errors. But it is complex, costly and time-consuming. Factor Comparison Method This method involves identifying certain key jobs in the organization and then comparing them by using a universal five-factor (that is, skills, responsibilities, physical effort, mental effort, and working conditions) scale. A base rate is decided for each of the key jobs which is then allocated among the five criteria. Quantitative in nature. It is a step-by-step systematic method which needs of each organization. can be tailored to meet specific

But this method is also complex, costly and time-consuming. What are Pay Surveys? Techniques and instruments used to collect data about compensation paid to employees in: a geographic area an industry an occupational group

Obtaining valid and reliable information on the external wage rates is critical to creating a competitive compensation structure.

Sources of Pay Surveys Pay surveys are conducted by: Professional and consulting agencies Trade associations Business journals Trade unions Government agencies Companies themselves

High-pay Strategy Paying at higher-than-average levels.

Low-pay Strategy Paying at lower-than-average levels.

Comparable-pay Strategy Paying at going-rate levels.

Pay Curve Pay Grades Pay Ranges

Pay Based on Individual Differences To the individual employee, the most important compensation decision is how much he or she will earn. Determination of individual pay is based on: Individual differences in experiences, skills, and performance. Employee expectations that seniority, higher performance, or both deserve higher pay.

 Organizations design a total compensation plan basing on the above factors. Total Compensation Approach A total compensation plan includes 3 elements:

to determine individual pay

Base Pay: it is based on industry pay rates and organizations financial ability. It serves as a platform for variable pay. Variable Pay: it is the incentive pay based on individual differences and employee producti-vity. Indirect Pay: it gives indirect financial benefits to the employees.

Levels of Incentive Compensation Plans Incentive rewards for employees may be determined basing on volume of production, fulfillment of performance goals, or improvement in overall organizational productivity. Incentives can be paid at three levels: Individual incentives Group incentives Organization-wide incentives

Individual Incentives Individual incentives can be of following types: Piecework: an incentive plan under which hourly employees receive a certain rate for each unit produced. Differential piece rate: an incentive plan to pay one rate for to all hourly employees who produce a certain standard quantity and then a higher rate for producing excess quantity above the standard. Time-saving incentive: an incentive plan based on time-saving under which an employee is given a bonus for reaching a given level of production of output in less than the standard time.

Sales commission: an incentive plan which rewards employees based on their sales volume. Individual bonus: a reward which is offered on a one-time basis for high performance.

Group Incentives The kinds of individual incentives can also be paid on a group basis considering the combined performance of individuals in a group. Group incentives are more preferable when: it is difficult to measure individual employee output. the tasks of individual employees are closely interrelated and cooperation is needed among employees to perform those tasks.

Group incentive plans encourage employees to exert peer pressure on group members to better perform. Such incentive plans reduce compensation costs. But under a group incentive plan, some of the group members may not find a direct relationship between their individual performances and that of the group which may result in de-motivation or soldiering. Organization-wide Incentives The goal of an organization-wide incentive plan is to direct the efforts of all employees towards achieving overall organizational effectiveness. This type of incentive produces rewards for all employees based on one of the two performance concepts: a sharing of profit generated by the efforts of all employees altogether. a sharing of money saved as a result of efforts of employees to reduce costs.

The approaches to organization-wide incentives include: Suggestion system Gain-sharing plan

Profit-sharing plan Stock-based compensation

Suggestion system: under this system, incentive in the form of cash is offered to the employee for making suggestions that result in increased profit or reduced cost. Gain-sharing plan: an incentive program under which employees receive bonus on organization-wide performance according to a predetermined gain-sharing formula. Profit-sharing plan: under this system, a fixed percentage of total organizational profit is distributed to employees in the form of cash bonuses or deferred bonus amounts. Stock-based compensation: under this system, employees are given the option to purchase the companys stocks at a predetermined price that is usually less than the market price.

14. Indirect Compensation: Benefits and Services

What are Employee Benefits? These are indirect and membership-based rewards offered by an organization to attract and retain employees. Benefits programs do not directly affect the performance of employees but inadequate benefits lead to employee dissatisfaction.

Objectives of Benefits Program Improve employee work satisfaction. Meet employee health and security

requirements. Attract and motivate employees. Reduce employee turnover.

Remain competitive in labour market.

Types of Employee Benefits Legally Required Benefits Social security Unemployment insurance Workers compensation insurance Unpaid leave of absence

Discretionary Benefits Health care benefits Paid time off Supplemental unemployment benefits Life and long-term care insurance Retirements and pensions

Legally Required Benefits Social Security Provides income for retirees, unemployed or surviving dependents. disabled workers, and

Financed equally by employee and employer contributions based on a percentage of the earnings.

Unemployment Insurance Provides the laid off employees with some income continuation during the periods of involuntary unemployment. Funded by the employers who pay combined federal and state payroll tax imposed on the base wages.

 Workers Compensation Insurance Provides for treatment expenses and/or compensate for losses resulting from work-related accidents or illness regardless of fault. Premium costs are paid by the employer only.

Unpaid Leave of Absence An employer is required to grant unpaid leave of absence to an eligible employee for different reasons including extended illness, illness in the family, pregnancy, the birth or adoption of a child, educational or political activities, and social service activities.

Discretionary Benefits Health Care Benefits Traditional health insurance Health-care cost-containment programs

Paid Time Off Paid vacations and bonuses in lieu of paid vacations Paid holidays Paid personal days Paid sick leaves Severance pay

Supplemental Unemployment Benefits Providing weekly benefits to the laid off employees based on the total hours of work performed from a fund financed by the employer in addition to unemployment compensation.

Life and Long-Term Care Insurance Group term life insurance provides death survivors. and accidental death to

Long-term care insurance pays for nursing home and medical-related costs during old age.

Retirement Program Silver Handshake: an early-retirement benefit in the form of increased pension benefits for several years or a cash bonus.

Pension Plans Contributory plan: contributed jointly by the employer and employees. Non-contributory plan: contributed solely by the employer. Defined-benefit plan: the amount received by retirement is specific. an employee on

Defined-contribution plan: the amount contributed by the employer is specific.

Flexible Benefits Program Flexible benefits program allows employees to choose from assorted benefits packages. Called cafeteria compensation. Helps the organizations to keep costs down.

Types of Employee Services Employee Assistance Programs (EAP) Services provided by the employers to help workers cope with a wide variety of problems that interfere with the way they perform their jobs. Typically provide diagnosis, counseling, and referral for advice or treatment for problems related to alcohol or drug abuse, emotional difficulties, and financial or family difficulties.

Child and Elder Care Care provided to a child or an elderly relative by an employee who remains actively at work.

 Other Employee Services Recreational and social events Food services On-site health services Legal services Transportation pooling Housing and relocation Credit unions Financial planning Purchasing assistance Awards

15. Employee Safety and Health

Safety Hazards Aspects of the work environment that have the potential of causing immediate and sometimes violent harm or even death. Safety hazards cause accidents and consequent injuries. The potential injuries include loss of hearing, eyesight, or body parts; cuts, sprains, burns, bruises, and broken bones; and electric shock.

Safety Hazards Causes of Accidents Human causes. responsible for majority of accidents which include: carelessness

taking unnecessary risks intoxication daydreaming lack of training/experience

Environmental causes. which include: poorly maintained tools and equipment unsafe machinery hazardous materials (chemicals or gases) poor lighting

Health Hazards Aspects of the work environment that slowly and cumulatively lead to deterioration of health. The person may: develop a chronic or life threatening illness become permanently disabled

Typical causes are: physical and biological hazards toxic and carcinogenic dusts and chemicals stressful work equipment and conditions

Government Regulations on Safety and Health Bangladesh Factories Act 1965 Bangladesh Factories Rules 1979 Bangladesh Labour Law 2006

Organizations Response to Safety and Health Business organizations have both legal and moral responsibilities to provide a safe and healthy workplace. Prevention and design Inspection and research Training and motivation

Responsibility for Safety and Health Top management Managers Employees Safety committee Government inspectors

Consequences of Inadequate Safety and Health Programs Increased workers compensation costs Increased lawsuits Larger health insurance costs Fines from government agencies Pressures from trade unions Time lost due to injury and illness Time to investigate and report incidents Damage to equipment and materials

Preventive Approach to Employees Safety Education and awareness Safety training and motivation

Designing safe equipment and work methods Use of protective gears and devices Strict enforcement of safety regulations Safety contests and prizes

Preventive Approach to Employees Health Encourages employees to make changes in lifestyle through: better nutrition fitness programs abstinence from smoking and alcohol emotional problem and stress counseling physical examinations health bonuses

Other Safety and Health Issues Stress management Violence in the workplace Indoor environmental quality (IEQ) Cumulative Trauma Disorders (CTDs) and

Repetitive Stress Injuries (RSIs) Stress Management Stress: an adjustive demand caused by physical, mental, or emotional factors that requires coping behavior. Burnout: the most severe stage of distress that results in depression, frustration, and loss of productivity. Steps to reduce stress include: matching individuals to their jobs

clarifying expectations redesigning jobs offering involvement and participation stress management training

Violence in the Workplace Violence in the workplace includes employees being harassed, threatened, or attacked on the job. Organizations must have a mechanism to deal with workplace violence.

Indoor Environmental Quality (IEQ) It refers to the quality of the atmosphere in a workplace. Sick-building: is a workplace environment that contains harmful airborne chemicals, asbestos, smokes, or other indoor air pollutants.

Cumulative Trauma Disorders (CTDs) and Repetitive Stress Injuries (RSIs) CTDs: refer to the conditions that arise from obvious trauma or injury that occurs more than once. RSIs: the injuries resulting from continuous, repetitive movement of body parts. The most common injury is carpal tunnel syndrome. Ergonomics: fitting the work environment to the individual to prevent repetitive motion injuries. It includes designing computer work stations, assembly lines, furniture, etc.

16. Managing Employee Discipline

What is Discipline? Refers to a condition in the organization when employees conduct themselves in accordance with the organizations rules and standards of acceptable behavior.

Categories of Difficult Employees Those whose quality of work is unsatisfactory. Those whose workplace productivity is affected by their off-the-job personal problems. Those who violate laws while on the job. Those who consistently break company rules and do not respond to supervisory reactions.

Common Disciplinary Problems Work Performance Problems Failure to complete work assignments Substandard production quality Failure to meet given production targets

Attendance Problems Unexcused absence Chronic absenteeism Leaving without permission Unexcused/excessive tardiness

Common Disciplinary Problems Dishonesty and Related Problems Stealing Fraudulent activities Misuse/damage of company property Moonlighting

On-the-job Behavior Problems Failure to follow work procedure

Insubordination Intoxication or drug abuse Horseplay Workplace violence Use of abusive or threatening language Sexual harassment

Possible Causes of Deficit Employee Behavior Problems of intelligence and job knowledge Emotional problems Motivational problems Physical problems Family problems Problems caused by the work group Problems originating in company policies Problems stemming from society and its values Problems from the work context and the work itself

A Disciplinary Model

Approaches to Employee Discipline The Hot Stove Rule Progressive Discipline Positive Discipline

The Hot Stove Rule Rule of discipline that can be compared with a hot stove in that it gives warning, is effective immediately, is enforced consistently, and applies to all employees in an impersonal and unbiased way.

The Hot Stove Rule Warning System: Before any behavior has occurred, a good manager has communicated what the consequences of the undesirable behavior are.

Immediate Burn:

If discipline is required, it must occur immediately after the undesirable act is observed. The person must see the connection between the act and the discipline.

Consistency: There are no favorites stoves burn everyone alike. Any employee who performs the same undesirable act will be disciplined similarly.

Impersonality: Disciplinary action is not pointed toward a person. It is meant to eliminate undesirable behaviors.

Progressive Discipline Discipline approach in which a sequence of penalties is administered - each one slightly more severe than previous one. Goal is to build a discipline program that progresses from less severe to more severe punishment. Objective is to create and maintain a productive, responsive workforce.

Progressive Discipline Progressive disciplinary actions Oral warning Written warning Suspension Demotion Pay cut Dismissal

Problems with the Hot Stove Rule and Progressive Discipline They focus on past behavior.

 There is the possibility that employees who are disciplined in a punitive way: will not build commitment into their jobs. will not feel better about the job or the company.

Positive Discipline Future-oriented approach. Working with employees to solve problems so that problems do not occur again. Recognizes that people make mistakes. Deemphasizes punitive action by management. Employee termination is a consequence.

17. Labor Relations and Collective Bargaining

Introduction A union is an organization of workers, acting collectively, seeking to promote and protect its mutual interests through collective bargaining. Impact of unionization Only about 13% of the private sector work force is unionized. Labor contracts typically stipulate: wages hours terms and conditions of employment limit managements discretion Union Membership by Industry

Why Employees Join Unions Higher wages and benefits: The strength of large numbers and negotiating skills of professional bargainers give unions an advantage over individuals.

Why Employees Join Unions Greater job security: Collective bargaining contracts limit managements ability to arbitrarily hire, promote or fire. Influence over work rules: Unions represent workers and define channels for complaints and concerns. Compulsory membership Union shops require that all employees hired into positions covered under the collective-bargaining agreement must join the union. Agency shops require nonunion employees to pay an amount equal to union fees and dues. Open shops allow union membership to be totally voluntary. Maintenance of membership clauses require union members to remain for the duration of the contract. Dues checkoff provisions require employers to withhold union dues from members paychecks. Labor Legislation The Wagner Act Also known as the National Labor Relations Act : Bill of rights for unions, guaranteeing right to organize and bargain collectively. National Labor Relations Board (NLRB): determines bargaining units conducts elections prevents or corrects unfair labor practices Labor Legislation Unfair labor practices include: interfering with an employees rights to bargain collectively refusing to bargain collectively with employee representatives Taft-Hartley Act Also known as the Labor-Management Relations Act :

Specified unfair union labor practices.coercion of employees to join the union refusing to bargain collectively engaging in illegal strikes and boycottsobtaining compensation for services not performed Taft-Hartley Act: Prohibited closed shops, secondary boycotts, and gave the president power to issue a cooling-off period. Created Federal Mediation and Conciliation Service (FMCS) to help labor and management settle disputes.

The Railway Labor Act: Gave workers in the transportation industry the right to bargain collectively and allowed congressional and presidential intercession in the event of an impasse.

Landrum-Griffin Act: Also known as the Labor and Management Reporting and Disclosure Act. Made union officials accountable for funds, elections and other business and representational matters. Required annual filing of information by unions and by individuals employed by unions. Required that all members be allowed to vote by secret ballot. Executive orders 10988 and 11491, Permitted federal employees to join unions and established the Federal Labor Relations Council (FLRC). Civil Racketeering Influenced and Corrupt Organizations Act (RICO) of 1970 Prohibits payment and loans in the form of bribery, kickbacks or extortion. Has been used to oust labor officials with organized crime ties. Civil Service Reform Act of 1978 Replaced executive orders as basic law governing labor relations for federal employees.

Unionizing Employees Union Organizing Process:

Unionizing Employees: Thirty percent of employees must sign authorization cards indicating their interest in having an election. A representation certification (RC), a secret-ballot election is held If the union is accepted by a majority of eligible voting workers, the union becomes the workers legal representative. Once the National Labor Relations Board certifies a union, each worker must abide by the negotiated contract. Most organizations managements will try to influence workers against voting for union representation. Representation Decertification (RD) elections can be held to vote unions out. RMs are decertification elections initiated by management. Most agreements bar the use of decertification elections during the terms of a contract. Collective Bargaining The negotiation, administration, and interpretation of a written agreement between two parties, at least one of which represents a group that is acting collectively, that covers a specific period of time. Objective and Scope of Collective Bargaining

Contracts must be acceptable to management, union representatives and union membership. Four issues appear in all labor contracts. (The first three are mandated by the Wagner Act) wages hours terms and conditions of employment grievance procedure

Collective Bargaining Participants Management is represented by senior management for industrial relations, corporate executives and company lawyers In small companies, the president typically represents the company. Union bargaining teams include an officer of the local union, local shop stewards and representation from the international/national union. Government watches to ensure rules are followed. Financial institutions set limits on the cost of the contract The Collective Bargaining Process Preparing to negotiate : Fact-gathering: Includes internal information (e.g., employee performance records, overtime) and external (i.e., data on what similar organizations are doing and the economy). Goal-setting: Management decides what it can expect from the negotiation. Strategy development: This includes assessing the other sides power and tactics. Negotiating at the bargaining table: Each side usually begins by publicly demanding more than they are willing to accept. More realistic assessments and compromises take place behind closed doors. After oral agreement, a written contract is submitted to the union for ratification. Contract administration refers to the implementation, interpretation and monitoring of the negotiated contract between labor and management. Information dissemination includes helping staff and workers understand the new contract provisions.

Implementing refers to making the changes to comply with contract terms. Interpreting the contract and grievance resolution : Grievance procedures are specified in the contract and outline the steps for resolving complaints as quickly as possible by starting at the lowest level with the immediate supervisor. Grievance (rights) arbitration is typically the final step in the grievance process Disputes that cannot be resolved are resolved by an arbitrator, or third party, whose decision is final. Monitoring Both union and management keep track of how effective the current contract is and any need for changes. Failure to Reach Agreement Strikes versus lockouts Economic strikes - labor and management cannot reach agreement before the current contract expires. Wildcat strikes - unauthorized and illegal strikes that occur because of worker dissatisfaction during an existing contract. Lockouts - when organizations deny unionized workers access to their jobs during an impasse. Failure to Reach Agreement Impasse-Resolution Techniques: Used when labor and management cannot reach agreement. Conciliation and mediation involve a third party to either keep negotiations going or make non-binding settlement recommendations. Fact-finding involves a neutral third-party who conducts a hearing and recommends a non-binding settlement.

Interest arbitration Involves a panel of one neutral, one management and one union representative who hear testimony and render a decision to settle a contract negotiation dispute. Primarily in public-sector bargaining. Binding only if there is unanimous agreement. Critical Issues for Unions Today Union membership: Where have the members gone? Union membership in the U.S. reached a high of 36% in the early 1940s; there has been a steady decline since then.

Union membership: Where have the members gone? Reasons for decline in membership include: new concerns of a growing middle-class greater diversity of the work force growth of the service sector diminished financial resources of unions anti-union pressures resulting from increased competitiveness layoffs of large numbers of union workers hiring of replacement workers for strikers

Union membership: Where have the members gone? Unions are changing some of their organizing tactics and may currently be gaining public support. They also are placing more emphasis on the service sector. Labor-Management Cooperation : Some unions recognize that they can gain more by cooperating with management rather than fighting. The Electromation Inc. case illustrates the potential legal difficulties of cooperative efforts: The NLRB ruled that employee committees were an unfair labor practice. Public-Sector Unionization:

Membership of government workers in unions has increased from 11% in 1970 to nearly 38% in 2002. Public sector labor relations differs from private sector labor relations. Sunshine laws in some states mandate that labor-management negotiations be open to the public. Unionizing the Nontraditional Employee : New targets for unionization include service, government and management workers. As restructuring, delayering and de-jobbing change economic conditions of workers, interest in unions may grow, as exemplified by the successful unionization of health care workers. International Labor Relations: Differing Perspectives Toward Labor Relations Countries differ in their labor relations histories, government involvement, and public acceptance of labor unions. The labor relations function for international companies is more likely to be centralized with the parent company when domestic sales are larger than those overseas. The European Community Brings together a dozen or more labor relations systems. Countries wishing to do business in Europe must keep up with changing labor legislation.