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DIAGNOSIS & BENCHMARKING

By Sumalatha

Diagnosis
Definition
Human resource management is a series for decisions that affect the relationship between employees and employers; it affects many organizations and is intended to influence the effectiveness of employees and employers.

Diagnostic Process
Assess human resource conditions Set human resource objectives
EFFICIENCY

Choose and apply human resource activities Planning Staffing

Evaluate results

EXTERNAL CONDITIONS Economic conditions Government regulations Unions ORGANIZATIONAL CONDITIONS Nature of the organization Nature of the work EMPLOYEE CONDITIONS Abilities Motivation Interests

Efficiency Equity

Organization Employee EQUITY Organization Employee

Development
Employee Union Relations

Compensation

Assess Human Resource Conditions


EXTERNAL CONDITIONS
Economic conditions: It has a direct influence on the operations of the

organization, including human resource activities. Government regulations: Human resource laws and regulations have become increasingly important to employers. Union: They are formed to protect the labour rights. They force to adopt sound human resource policies. ORGANIZATIONAL CONDITIONS Nature of the organization: it is made up of strategies, objectives, financial situation, technology, and culture. Nature of the work :The difference in the work require designing and choosing different human resource management systems EMPLOYEE CONDITIONS Ability, Motivation and interest

Set Human Resource Objectives


EFFICIENCY Organization: Efficiency is a comparison between inputs and outputs. Efficient organization maximize output while minimizing input Employee efficiency = labour cost per unit revenue per unit EQUITY Organization: equity refers to the perceived fairness of both the procedures used to make human resource and ultimate decisions themselves. E.g.: Promotions, hiring, layoffs etc.

Choose and Apply Human Resource Activities


Planning: activities focus on how an organization should move

from its current human resource condition to achieve its human resource objectives. Staffing: activities determine the composition of an organizations human resources. Development: Employee development and training activities are among the most common and costly methods of achieving human resource objective. Compensation: includes the rewards and returns for employees expertise and services.

Evaluate Results
Identifying the contributions of sound human

resource management requires evaluation of results Evaluation is driven by the objectives established in two phases that is efficiency and equity

BENCHMARKING
Definition A comparison with selected performance indicators from different organizations, typically in the same industry or with comparable organizations that are considered to be best in class

Types of Benchmarking
Internal benchmarking: occurs when a firm compares

practices in one part of the organization against those in other internal units.
Competitive benchmarking: is conducted against external

competitors in the same market


Generic HR benchmarking: involves the comparison of HR

process that are the same regardless of industry

CASE STUDY

South Indian Bank


South Indian bank was instituted in 1950. Most of the employees joined as clerks with matriculation qualification in 1950s and in 1960s became the branch managers and Regional managers by 1988. Thus, most of the managers have been performing various functions of the bank decided to employ candidates with MBA (Marketing) qualifications as Marketing Executives in 1986. The managers of the bank protested against the managements decisions saying that they could perform, with their long experience, the marketing functions more efficiently than MBAs. But the top management ignored the opposition of the mangers and employed MBA (Marketing) candidates as Marketing Executives. MBAs joined the bank in 1987 and assumed the responsibilities of purchasing of deposits, selling advances and recovery of advances.

South Indian Bank


The performance of the bank was poor during 1987 and 1988 especially in areas like deposit mobilization (by 30%) sanctioning of advances (by 40%). The personnel department, besides other department of the bank, was asked to find out the reasons for the declining performance. The newly employed Marketing Executives felt that the old managers would not accept new ideas proposed by them, whereas the old managers opined that the Marketing executives, thought very high of themselves and did not allow themselves to share others experience and ideas. Both felt that there were no special interactions between the two groups.

Questions
Do you think that the performance of the

Marketing Executives has fallen? What is the problem in this case ? What do you recommend to solve the problem?

Thank you