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Organizational BehaviorRobbins & Judge

Chapter 18: Human Resource Policy and

Practices

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Summary of Lecture 30

- Organizational Structure

- Characteristics of Bureaucracy

- Describe Matrix Organization

- Why managers want to create boundary-less organizations

- List the factors that favor different organizational structure

- Explain behavioral implications of different organizational structures

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Learning Objectives

- What is HRM

- Define HRM policy

- Recruitment and Selection

- Training and Development

- Performance Appraisal

_ International HRM

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HUMAN RESOURCE MANAGEMENT (HRM)

HRM defined as

“HRM is management function concerned with hiring , motivating and

maintaining people in an organization. It focuses on people in

organization”

(Aswathappa, 2008, p.5)

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HRM: Peoples Dimensions In Organizations

• HRM: the application of management functions and principles related to employees

• HRM functions applicable every where (not for profit and profit driven organizations)

• Employees decisions are integrated

• Employee decision brings effectiveness/efficiency in organization

• HRM includes all major activities in professional life of a worker

• All activities from employee entry to managing performance and training until he or she leaves

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THE EVOLVING STRATAGICROLE OF HUMAN RESOURCE MANAGEMENT

Strategic Human Resource Management

• “Involves development of consistent, aligned collection of practices, programs, & policies to facilitate achievement of strategic objectives” (Mello, 2011, p. 156)

• Mindset & practices away from “personnel management” & focusing on strategic issues instead of operational issues

• HR programs and policies are made and integrated in perspective of mission, objectives, and strategy

• Writing down HR strategy facilitates involvement & convincing senior executives & other employees

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HRM Activities

• HR Planning

• Job Analysis and Design

• Recruitment and Selection

• Training and Development

• Remuneration

• Welfare

• Safe and Healthy Work Environment

• Industrial relations

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SECRETES OF BEST EMPLOYERS

• Effected and committed leadership

• Management of talent

• Spotting and attracting talent

• Setting high goals

• Coaching and training

• Effective appraisal and reward system

• Building skills for future

• Building growth into every job

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HR POLICIES AND PRACTICES

• A policy is plan of action

• HR policies need to ensure consistency and uniformity in

treating people (guideline to course of action)

• It motivates employees and build loyalty

• Benchmark to evaluate performance

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1 HR Philosophy How management/organization views human resource and what value it associates to the employee development.

2 Employment Policy

Manpower planning, recruitment, probation, promotion, transfer, termination, retirement policy etc. Work scheduling, overtime, duty hours, holidays.

3 Compensation Pay, benefits, leaves, contributory provident fund, gratuity, GP fund, retirement plans, medical facility, social security, house rent/hiring facility etc.

4 Performance evaluation & Employee training

Performance appraisal procedure, methods, and guidelines for training and development of employees.

HR POLICY DOCUMENT

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5 Community Relationships

Social /Community activities, Corporate Social Responsibility, Relationship with project stakeholders.

6 Legal and Ethical Issues

Code of conduct, work ethics, norms, values, information disclosure policy, privacy of personal record and official communications, equal employment opportunity policy, outside work policy etc.

7 Occupational Health and Safety

Smoke free work place, workplace facilities (ergonomics), Health and safety policy and guidelines

8 Disciplinary Actions

Procedure for initiating disciplinary proceedings, opportunity of fair trail and hearing, right of appeal, grievance handling procedure, code of conduct.

HR POLICY DOCUMENT

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Nature of Job Analysis

- Job: Job is bundle of related tasks

- Work: Synonymous of job and defined as “physical and mental activity that is carried out at a particular place and time, according to the instructions, in return for money”

- Monetary reward is mandatory for performing of task to be said work in business organization context

- Psychological perspective is concerned with employee behavior

- Sociological perspective is concerned with structural and contextual factors affecting individual's experience at work (such as leadership, communication system, power and politics, group dynamics etc)

- The nature of work and how job is organized affect other human resource functions/activities

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Job Analysis

- Job Analysis is the process of collecting data and information about a job and result of job analysis is job description and job specification

Job AnalysisJob Analysis

Job DescriptionJob titleLocation

Job SummaryDuties

ReportingAuthority

Machines and toolsMaterials used

Supervision/SubordinateWorking conditions

Hazards

Job DescriptionJob titleLocation

Job SummaryDuties

ReportingAuthority

Machines and toolsMaterials used

Supervision/SubordinateWorking conditions

Hazards

Job SpecificationStatement of individual

Qualification necessary todo job

EducationExperience

TrainingInitiative

Physical abilitiesPsychological abilitiesCommunication skills

ResponsibilitiesSensory demands

Job SpecificationStatement of individual

Qualification necessary todo job

EducationExperience

TrainingInitiative

Physical abilitiesPsychological abilitiesCommunication skills

ResponsibilitiesSensory demands

Adopted from : Aswathappa, 2008, p. 106

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Recruitment

- Recruitment is defined as “the process of searching for and obtaining applicant for jobs, from among whom the right people can be selected” (p. 144)

- Theoretically recruitment process ends when job applications have been received

- In practice it goes further to screening applications to filter those applicants who are not eligible for or suitable for job

- The term recruitment is often described or understood as complete process of employee hiring

- Recruitment and selection are two different processes

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Purpose of Recruitment

- Increase pool of potential job candidates

- Increase success rate of the selection process

- Make ensure the right people is selected against vacant position (minimizing probability of leaving organization in case of selection of wrong or misfit candidate)

- Meeting legal and social obligation of workforce composition

- Identify and encouraging potential candidates/job applicants

- Evaluating the effectiveness of available sources and techniques of recruitment

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Source of Recruitment

1 Internal Recruitment

- Present Employees (Promotion and transfer)Advantages- Builds morale- Encourages competent employees- Good selection- Cheaper way- Familiar with organization

Disadvantages- Outside competent candidates- Inbreeding

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Source of Recruitment

1 Internal Recruitment

- Former Employees (Performance is known, aware with organizational culture)

- Previous Applicants (best when to fill in job quickly, cost effective)

2 External Recruitment

- Advertisement: The most popular method

- Blind ad (no identification of company)

- AIDA (attention, interest, desire, action)

Content of Job AdvertisementI) job content ii) working conditionsiii) location of job iv) compensationv) job specification vi) to whom apply

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Source of Recruitment

Internal Sources

Advantages Disadvantages

Less costly Candidates current work may be affected

Better knowledge of skills and performance

Old concept of doing

Morale and Commitment Organizational politics

Awareness of culture Morale problem for employee not promoted

Sou

rce:

Asw

atha

ppa,

200

8, p

. 15

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External Sources

New skills and new experience Costly and time consuming

Compliance with laws Right candidate rejected (false positive error) wrong candidate selected (false negative error)

Scope for resentment and jealousy reduced

Person and organization misfit

Sou

rce:

Asw

atha

ppa,

200

8, p

. 15

9

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Selection

- Selection is defined as “the process of differentiating between applicants in order to identify and hire those with a greater

likelihood of success in a job” (p. 170)

Or

- “Selection is the process of picking individuals (out of the pool of job applicants) with requisite qualification and

competence to fill jobs in the organization.”

Difference between recruitment & selection

- In recruitment potential job applicants are attracted and encouraged to apply for vacant position whereas selection

focuses on identifying the candidate suitable for the job from pool of job applicants and hire to fill in vacant position - Recruitment and selection are two different processes but

often inviting job applications and selecting candidate is called hiring or recruitment process.

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Employment Test

S.No. Employment Test Example

1 General Knowledge To judge general knowledge regarding geography, politics, religion etc.

2 IQ Test Intelligent quotient test to estimate how quickly candidate processes complex problems

3 Personality Test To judge type of personality like extrovert, introvert, innovative etc. MBTI is most common and acceptable personality test that uses 8 personality dimensions to elicit 16 personality types

4 English Proficiency Test To judge English proficiency level For example: What is the meaning of the word exultantly?

5 Technical/Mechanical Proficiency Test

Asking questions regarding mechanical and technical aspect of job to judge expertise in handling tools, machines, and equipments

6 Cognitive Ability Test To judge intellectual and mental capabilities of candidates

7 Reasoning Test To judge reasoning capabilities of candidates. Situation is given with certain preconditions to find right answer

8 Quantitative Ability To judge quantitative skills like processing of numbersFor example: Divide 8 by 0.5 then multiple by 0.3

9 Physical Ability Test Physical ability of candidates is judged by giving candidates physical tasks to complete in given time frame. Example: Rope climbing, obstacles.

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Guidelines to Interviewers

Do's Dont's

Plan the interview Start the interview without preparation

Build informal relationship Directly start asking difficult questions

Encourage candidate to talk as much

Jump to conclusion very early

Probe where necessary Allow the candidate to take over session

Find out interest and preferences of candidate and their strength and weaknesses and behaviors

Talking too much

Take control and direct the interview session

Start interview with prior perception

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Nature of Training and Development

- In general “training and development refers to the imparting of specific skills, abilities, and knowledge to employee”

(p. 206)

- In more detail “ training and development is any attempt to improve current or future employee performance by increasing an employee's ability to perform through learning usually by changing the employee's attitude or increasing his or her skills and knowledge. The need fro training and development is determined by the employee's performance deficiency”

Training and development need = standard performance -Actual performance

- Training is process of imparting skills and knowledge

- Education is theoretical learning given in classroom

- Development activity aims to give learning opportunities that result in growth of employees

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Inputs in Training- Skills: Worker should have Skills to operate machinery and other tools.

Managers should have interpersonal skills

- Education: Teach theoretical knowledge, concepts to develop a sense of judgment and reasoningEducation is important for top executives and managers

Development: More focus on knowledge. For example knowledge about management principles, business environment, and techniques Any training and development program must have following components - How to create sense of commitment and motivation- How to make them result oriented- How to make themselves aware of needs of others and themselves- How to create sense of leadership and power to influence and lead others -

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Training Process

Need Assessment- Diagnosis current problems and future needs

- Individual (performance gap, change in technology, transfer, and Group Level (change in organizations' strategy, new product line, new technology, low moral and motivation)Training need identify the training objectives to be achieved at the end of training program

- Need Assessment Methods

Group or Organizational Analysis Individual Analysis

Organizational goals and objectives Performance Appraisal

Efficiency indices Interview

Exit Interviews Questionnaire

Quality Circles Attitude Survey

Customer Survey Training Progress

Source: Aswathappa, Human Resource Management, Text and Cases, 2008, p. 218

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Training Process

Phase 1Training Need

Phase 2Training Design

Phase 3Training Implementation

Phase 4Training Evaluation

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Steps in Training Program

Source: Aswathappa, Human Resource Management, Text and Cases, 2008, p. 220

Who are the trainees? Who are the trainers? What methods andtechniques?

Where to conduct the program?

What principles of learning?

What should be the Level of training?

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Training Process

Is the organization is better because of training?

Are trainees behaving differently in the job after training? Are they using knowledge and skills learned in the training?

To what extent the trainees have greater knowledge of skills after the training program?

Did the trainees like the program, trainer, facilities, timing? Did they think that training was useful? What improvement they suggest?

Result

Behavior

Learning

Reaction

Accidents QualityProductivityCostMoraleProfitsTurnover

Performance, appraisal by supervisor, peer, subordinate, customers

Written Tests, Performance tests

Questionnaires

MeasuresLevel Four Levels of Training Evaluation

Source: Aswathappa, Human Resource Management, Text and Cases, 2008, p. 230

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Performance Appraisal

• Performance appraisal is to evaluate the performance of an employee to determine whether he is performing his given task and duties well or to monitor whether he has given his best effort and performance on given job

• Performance appraisal is an assessment of individual performance, the performance is measured against such factors as job knowledge, quality, quantity of output, initiative, leadership, abilities, supervision, cooperation, judgment, analytical skills, problem solving skills, etc.

(P. 239)• The other similar terms often used for performance appraisal

are performance rating, employee performance review, employee assessment, personal appraisal, employee evaluation, or performance evaluation

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Performance Appraisal

Job Analysis PerformanceAppraisal

Performance Standards

Describe work and professional requirementof a job

Describe the job relevant strengths and weaknesses of each individual

Translate job requirementsinto levels of acceptableor unacceptable performance

Relationship of Performance Appraisal and Job Analysis

Source: Aswathappa, Human Resource Management, Text and Cases, 2008, p. 240

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Multi Purposes of Performance Appraisal

Administrative Developmental

Set selection criteria Identification of individual training needs

Promotion Performance feedback

Retention or termination Determining job assignment and transfer

Identification of poor performers Identification of strengths and weaknesses of employee

Compensation Recognize and appreciate individual performance

Evaluate training effectiveness Goal setting and evaluation

Adopted from: Aswathappa, Human Resource Management, Text and Cases, 2008, p. 240

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Performance Appraisal Process

1 Designing Appraisal Program

Appraisal Design

What methods?

Who are the raters?

Whom to evaluate?

What to evaluate?

Formal vs informal

What problems/errors?

How to solve?

When to evaluate?

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360 Degree Performance Appraisal Advantages Disadvantages

 1 More comprehensive 2 Quality of information is better 3 Compliments TQM perspective by soliciting external and internal customers 4 Less bias/prejudice 5 increase employee self development

 1 More Complex 2 Conflicting opinion 3 Requires extensive training to implement  4 Grouping may make it ineffective

Source: Snell, Bohlander & Vohra: Human Resource Management. A South Asian Perspective, (2010, p. 324)

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Benefits of Proper Compensation Administration

1 2 3 4 5

Attracts talent Motivates Employees

Rewards Performance

Reduces Turnover

Manages Compensation Budget

Compensation policy aims to attract talented employees and motivate them to put their efforts and commitment to work that increase job satisfaction work performance

Benefits of Proper Compensation

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Employee Benefits

TreatsFree lunchesCoffee breaksPicnicsDinnersBirthday treats

Knick KnacksDesk accessoriesCompany watchesDiaries/PlannersWalletsT-shirts/Ties

AwardsTrophiesCertificatesLetter of appreciation

Office EnvironmentRedecorationFlexible hoursFurnitureAssistant

Social AcknowledgementInformal recognitionRecognition at official partyMembership of clubsUse of company facilities for personal events

TokensMovie ticketsVacation tripsCoupon redeemable at storesEarly time offsAnniversary or birthday presents

On the jobMore responsibilitySpecial assignmentsTraining

Source: Aswathappa. Human Resource Management, Text and Cases, 2008, p. 333

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International Human Resource Management

• Globalization has significantly influence HRM practices and policies

• All HRM functions need international orientation

• MNC operating internationally need to be more focused to attract, motivate and transfer workforce globally

• The process of procuring, allocating, motivating, training & development, and compensating and utilizing human resources in international business is called international human resource management

• IHRM covers six main functions of domestic HRM such as HR planning, recruiting, training and development, performance management, compensation and labour relations

• The three countries categories of IHRM are country where headquarter is based, country where subsidiary is located, and country from where workforce and finances come

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Managing International HR Activities

1) Cross Cultural Training:

• Expatriate receives pre-departure training on host country culture to make it easy for him/her to adjust to new culture

• Expatriate often receives training on repatriation to avoid cross cultural shock

Merits Demerits

More chances of success in foreign assignment

May not remove cultural biases

Provides comprehensive global perspective

Recipient may not take it serious

Sense of confidence May not make real difference in business

Reduces cultural shock Can not prepare manager to face all real life problem

Source: Aswathappa. Human Resource Management, Text and Cases, 2008, p. 672 333

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Managerial Implications

HR policies and practices are main force in shaping employee behavior and attitude

Recruitment and selection process determined who is hired and what is person-job level?

If there is flaw in selection process then more chances of job satisfaction, absenteeism, lower productivity, low OCB and increase turn over

Training improves skills and increase potential to perform at higher level

Performance appraisal significance influence individual behavior

Performance and satisfaction increase when performance appraisal is fair more focus on behaviors and result oriented criteria

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Discussion Question 1: How recruitment and selection process affect satisfaction and work performance?

Discussion Question 2: What is role of training and development in shaping work behaviors and performance?

Discussion Question 3: What is importance of performance appraisal system?

Discussion Question 4: How HR policies and practices affect individual behavior?

Discussion Questions

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Summary

- What is HRM

- Define HRM policy

- Recruitment and Selection

- Training and Development

- Performance Appraisal

_ International HRM