Unite 1:The potential benefits of a strategic approach: Guests (1992) model of HRM is based around four goals of:

-Strategic integration with planning to ensure coherent HRM policies- Commitment of the employees to the organisation and to high performance- Flexibility of both organisational structure and functions, based on a multi skilled workforce- High quality of goods and services. This model is based on three dimensions commitment, flexibility and quality to ensure beneficial outcomes such as high job performance, coping with change, cost effectiveness and low levels of absence and low staff turnover. Approaches to the strategic management of people: The best practice view: A best practice is a method or technique that has consistently shown results superior to those achieved with other means, and that is used as a benchmark. In addition, it used to describe the process of developing and following a standard way of doing things that multiple organizations can use. The notion of best practice - sometimes called 'high commitment' HRM - proposes that the adoption of certain best practices in HRM will result in better organizational performance. This view starts from the premise that a single set or bundle of HR policies and practices will lead to better organisational performance, sustained over a lengthy period, whatever the prevailing business circumstances. EXAMPLES: According to Pfeffers 1994 model that shows the seven important practices: (providing employment security, selective hiring, extensive training, sharing information, self-managed teams, high pay based on company performance and the reduction of status differentials) and according to Guest 2001 and the case study of study pack that mention 18 practices: Realistic job previews; Use of psychometric tests for selection; Welldeveloped induction training; Provision of extensive training for experienced employees; Regular appraisals; Regular feedback on performance from many sources; Individual performance-related pay; Profit-related bonuses; Flexible job descriptions; Multi-skilling; Presence of work-improvement teams; Presence of problem solving groups; Information provided on firms business plan; Information provided on the firms performance targets; No compulsory redundancies; Avoidance of voluntary redundancies; Commitment to single status; Harmonised holiday entitlement. However, there is a huge number of studies which provide evidence of best practices, usually implemented in coherent bundles, and therefore it is difficult to draw generalized conclusions about which is the 'best' way The best practice model offers the following advantages:- Focus on staff as resources with the associated investment in high performance strategies: development, reward and recruitment practices- Emphasis on the professionalism of personnel practice- Involvement and empowerment of staffAdvanced management skills- Ethical HR practice- Emphasis on organisational flexibility, quality and integration of activities. Some problematic aspects of this view are as follows:- Perception of the effectiveness of those practices which emphasise skills of implementation- A suggestion that best practices do not fit business strategy, which is worrying when linked to the relevance of people management at the top of the organisation- A problem of real strategic choices HR is driven by outside factors which point us toward the next model of SHRM, the best fit view. Criticisms of the best practice view as a way of managing people have been constructed on the grounds of:- Cost of implementation- Tensions between the need for production and cost minimisation on the one hand, and issues of flexibility, creativity and skills enhancement on the other- The restricted applicability of the model mainly to the western private sector, where there is wider scope for managerial choice legally and economically- The doubtful ability to assess the impact of HR interests using financial measures- The belief that it is easier to establish and sustain the model on green field sites. Examples: (Macmillan 2003) The concept of best practice has been employed extensively in environmental management. For example, it has been employed in aquaculture such as recommending low-phosphorus feed ingredients, in forestry to manage riparian buffer zones, in livestock and pasture management to regulate stocking rates, and in particular, best management practices have been important to improving water quality relating to nonpoint source pollution of fertilizers in agriculture The best fit view (link HRM to business strategy):Best fit argues that HRM improves performance where there is a close vertical fit between the HRM practices and the company's strategy. This link ensures close coherence between the HR people processes and policies and the external market or business strategy. The success of a best fit model depends on its ability to:-Integrate into the strategic plans of the organisation- Provide horizontal or vertical integration of the key policy areas- Best fit allows organisations to determine whether a hard or a soft approach needs to be taken given the prevailing circumstances. A hard view might include outsourcing, enhanced productivity, and emphasis on tighter contracting. A soft view relies on involvement, partnership and communication and sharing. Disadvantage: can overlook employee interests- Some firms are good all-rounders so HR practices unlikely to be based on one strategy- There is always tension- Can be too focussed at expense of flexibility and agility- While practices may meet existing strategies, things change quickly so HR strategy cannot be too parochial. Best fit integration Best fit integration is an open template to interpret the environment in which business operates and to evaluate the integrated reaction or responses that are necessary. Best practice differs in that the outcomes are not prescribed. Best practice does not emphasise fit or matching but is solution oriented. LEVEL OF INTEGRATION REQUIRED TO MEET THE BEST FIT MODEL (BULLER):- A one-way response level where business strategy informs HR strategy- A two-way response level where the relationship between the two is interdependent but not fully integrated- A fully integrated, reciprocal level with topdown, bottom-up strategy formulation. EXAMPLES: of best fit strategies: Steel mini mills in USA: when it uses differentiation strategy, it has 65% adopted high commitment Managemenet, however, when it uses low cost strategy it has 95% adopted cost minimisation. Apparel in clothing industry: by using differentiation strategy it has high fashion, lean production, multi skilling, team work however, by low cost it has low employee interaction, efficiency at expenses of HR Resource-based approach: emphasises on the internal capabilities and resources of the organisation in formulating strategy to achieve a sustainable competitive advantage in its industries. There are significant problems with the principles of the two previous models:- They represent rational and linear

approaches to strategy- The emphasis on the fit of strategy, structure and HR policies does not focus on the distinctive resource capabilities of individuals within the organisation- The lack of evidence indicating that explicit HR strategies have an impact on organisational performance. A resource based model has a different perspective from other approaches. Whilst conventional HR approaches start with external factors such as threats and opportunities, the resource based view looks. first at the organisation and its potential, and develops ways to exploit or enhance the available resources. In a resource based model, the SHRM role becomes one of creating systems and procedures that focus not on external relationships but on how staff and their abilities are used. The resource based model recognises that many aspects of capability can be formally defined in skill terms and developed accordingly. However, the truly distinctive aspects are often hard to define and are formed through informal processes of learning in the workplace. Storeys view is that sustained competitive advantage derives from assets that add value, are unique or rare, are difficult to imitate and cannot be substituted. Mueller (1998) develops the resource-based view with five propositions concerning the organisations assets. Proposition 1 is that they must be developed in slow, incremental and uncertain ways, not in any linear or planned way- Proposition 2 is that they require broad-based commitment over a lengthy period, not a single initiative- Proposition 3 stresses the importance of routinising skill formation activities and Formal and informal learning activities must be effectively captured by the organisation- Proposition 4 concerns the development of cultures that will allow potential to be used and developed. Challenge rather than conformity, is encouraged as a strategic end, while balancing the need to store organisational value- Proposition 5 is that organisations need to build barriers to imitation and loss of their resources, both in patents, copyright, and so on, and their people resources. RBV criticism:-How resources develop and change over time. - It is difficult to implement.

Example: Apple: it focuses on its internal resources (employees skills, competencies, resources) which are hard to imitate from its competitors that make Apple as the market leader. Due to the different changes that are going on in the business world, as well as the realization of different businesses and firms that the employees are considered as an asset as well as important resource of the organization, more and more companies are focusing on planning and implementation of different strategies that will focus on the integration or connection of the human resource with the success of the entire business, together with the process of setting standards, goals and visions. The best practice approach:On the other hand, the best practice approach consider that there is a exact set of human resource practices that can be applied in almost any organizational context that helps to increase the performance that helps to deliver outcomes that are valuable for all the stakeholders, particularly employees. As a result, the said approach covers different related prescriptive models of human resource management such as high-commitment, high-involvement, high-performance work system, and mutual gains models (Shields 2007, p. 90). The best practice approach is based on the idea that there is a set of best HRM practices and that applying them will help to superior organizational performance. There are different critics and commentators that are attacking the idea of best practice. This is because the best practice or universalist views by pointing out the discrepancy between a belief in best practice as well as the resource-based view that pertains on the intangible assets that includes HR, which allows the firm in order to do better than its competitors. The major question is how can the universalism of the best practice be linked with the view that only some resources and routines are significant and vital by being rare as well as imperfectly limitable? Aside from that, it is also hard to accept that there is a universal best practice, because one practice that have been successful for one organization, doesnt necessarily mean that will work on others (Armstrong 2006, p. 65). Lists of best practices: A number of lists of best practices have been produced, the best known of which was produced by Pfeffer (1994)- employment security- selective hiring- self-managed teams -high compensation contingent on performance- training to provide a skilled and motivated workforcereduction of status differentials- sharing information. The following list was drawn up by Guest (1999):- Selection and the careful use of selection tests to identify those with the potential to make a contribution- Training, and in particular a recognition that training is an ongoing activity- Job design to ensure flexibility, commitment and motivation including steps to ensure that employees have the responsibility and autonomy to use their knowledge and skills fully- Communication to ensure that a two-way process keeps everyone fully informed- Employee share ownership programmes to increase employees awareness of the implications of their actions for the financial performance of the firm. What works well in one organization will not necessarily work well in another because it may not ft its strategy, culture, management style, technology or working practices. Becker et al (1997: 41) remark that: Organizational high-performance work systems are highly idiosyncratic and must be tailored carefully to each firms individual situation to achieve optimum results. Some authors criticise this model for several reasons:- Disconnection from company's goals and context- Disregard of national differences such as management practices and culture12- Inconsistency between the RBV's emphasis on in-immutability and best-practice universalism The Best Fit Approach: The best fit approach focuses on the importance of making sure that the HR strategies are suitable to the different circumstances of the entire organization, together with culture, operational processes as well as external environment. Thus, it focus on the idea that different human resource (HR) strategies have to focus on a given needs of both the organization and its people (Armstrong 2006, p. 138). Due to the said reason, most of critics and commentators believe that best fit approach is more important and vital than the best practice.The process starts with the analysis of the business needs of the firm within its context such as culture, structure, technology and process that indicate what has to be done. Afterward, it can be useful in order to choose and mix different best practices ingredients, as well as develop an approach that applies those that are applicable in a way that is aligned in order to identify different business needs (Armstrong 2006, p. 139). However, 'best-fit' approach has been criticised for the following reasons:Lack of alignment with employee interests, compliance with prevailing social norms and legal requirements- Too simplistic view of business strategy (the reality is more complex than only innovation, cost-reduction and quality-enhancement strategy in the Schuler and Jackson model)- Too much focus on existing competitive strategy (reactive) rather than ongoing environmental changes (proactive). Comments on the concept of best fit The best fit model seems to be more realistic than the best practice model. As Dyer and Holder (1998: 31) pointed out: The inescapable conclusion is that what is best depends. It can therefore be claimed that best fit is more important than best practice. But there are limitations to the concept of best fit. Paauwe (2004: 37) argued that: It is necessary to avoid falling into the trap of contingent determinism *ie acting as if

the context absolutely determines the strategy+. There is, or should be, room for making strategic choices. There is a danger of mechanistically matching HR policies and practices with strategy. It is not credible to claim that there are single contextual factors that determine HR strategy, and internal fit cannot therefore be complete. As Boxall (2007: 61) pointed out: It is clearly impossible to make all HR policies reflective of a chosen competitive or economic mission. Purcell (1999: 35) refers to the concept of idiosyncratic contingency, which shows that each firm has to make choices not just on business and operational strategies but on what type of HR system is best for its purposes. He also commented that: The search for a contingency or matching model of HRM is also limited by the impossibility of modeling all the contingent variables, the difficulty of showing their interconnection, and the way in which changes in one variable have an impact on others, let alone the need to model idiosyncratic and path dependent contingencies (ibid: 37).Lawler (1995, p. 14) states that all organizational systems must start with business strategy because "it specifies what the company wants to accomplish, how it wants to behave, and the kinds of performance and performance levels it must demonstrate to be effective." Business strategy, driving individual and organizational behaviors, is the touchstone for the development of the reward strategy. Unite 2: The main challenges that prevent HR departments from deliver SHRM: According to Torrington (1996) there are three challenges faced by HR specialists: -Confidence: different aspects may affect the confidence of HR staff:The HR staff is being reactive rather than proactive. In other words, reactive HR focus more on setting polices and regulations that are needed only when the problem arise rather than being proactive by responding to the needs and the problems before they occur by setting effective solutions, programs, polices to manage, motivate and attract the employees in order to have best possible performance. (Chroc.com) by Neil Kokemuller Also, when we have HR staff which is not strategic and is not coordinated to the business strategy, the confidence of the personnel specialist will be affected negatively. Another reason of lack confidence is when the HR staff is being more employee focused by giving great attention to the employee relations and how to address employee issues rather than being business focused and working across all the functions of both HR and the business as a whole. (businessfinancemag.com) by Joanne Sammer -identity: The personal activities of HR have not change but we notice that only the name is changed from personal to HRM- direction: HRM department directed to be involved in strategic policy making but in implementation it doesnt. According to Mabey & Lawton (1998) there are other three challenges the HR specialists face when developing HR strategy:- The challenge of managing intangible assets. This means the ability to access scarce skills and to cope with the implications of new forms of organizations- The challenge of managing strategic change, including trends towards flexibility in organisations and in job design, the breakup of bureaucracies and of traditional structures of employment. These changes create major challenges for working attitudes and relationships and require a sustained and holistic approach to people management- The challenge of innovation in terms of what organisations produce by way of goods and services, and the way they approach the task. Development, innovation and creativity become core intangible assets, a focus for managing people strategically. In other words, bringing the design tasks of innovation together with a focus on innovatory behavior. According to the case study (Yes, Personnel does make a Difference) by David Guest and Kim Hoque, (People Management, November 1999) The problems faced by personnel specialists include the cultural or soft issues:- direct influences in policy outcomes - status of personnel role on the Board of Directors- responsibilities/authority - business expansion/pro action. The ways to respond to these challenges: According to Torrington (1998) concludes that the prospects for the strategic development of HR functions are threefold:- First, to avoid being reactive the HR should create different solutions to the HR implications of change- Management should not devolve entire responsibility for HR policy to line managers. This dilutes effective people management across the organization. (Direction)- HR personnel must focus on the process of how people are employed, deployed, empowered and motivated, because preoccupation with organisational employment systems focuses exclusively on performance. (Identity) According to Guest, in order to deal with those challenges the company should perform HR polices that reflect new divisions of labor that helps in keeping the firms organized by determining where each employee will work, and dividing the responsibilities and task that should be done by each employee to achieve the org goals. Also, create polices that balance the employee commitment to work, non work activities and perhaps multiple organizations. Also, Offer differing levels of commitment and flexible policies to fit these differing employee expectations and offer contractual flexibility. Trends in the management of HR functions that address some of the historical criticisms of HR departments:- Auditing performance: The objective of auditing HR function is to ensure that the investment in personnel and training can be justified in business terms. It is therefore based on cost effectiveness, contribution, service and the way best practice is followed. Starting with the trends in management of HR functions the auditing performance can consider the strengths based approach to benchmark the effectiveness and the cost efficiency in particular areas of the organization. Is it necessary in every stage/ process or working package to introduce the strengths based approach? Can areas/jobs be identified where skills only are required? Where needs to be a strengths focus, thinking in terms of budgets? Lastly the additional value can be measured, ceteris paribus; then report implications to reform HR strategy over again. The advantages of audits are: Legitimacy and credibility / Value for money / Effectiveness of service delivery / Relevance of service delivery / Basis for adopting service focus.Devolution: The objective of devolution is to ensure a more business led personnel response to employment issues. It involves the reallocation of personnel activities from specialists either: To line managers / To other specialists, such as the financial controller or company secretary / To other locations away from the main headquarters of the organisation. Devolution of any of these activities can be a function of either a decision making authority or the day to day management of activities, or both. Hall & Torrington(1998) suggest that devolution of the following activities is most prevalent: Work organisation / Training / Recruitment and selection / Appraisal / Employee relations. However, there are no simple and straightforward criteria to guide devolution of activities. Organisations do not necessarily devolve the same policies or indeed to the same degree within the policy areas. However, some activities are more or less likely to be devolved. HR departments frequently retain strategic areas of the HR function such as policymaking, pay review processes and the design of appraisal schemes. It may also retain operational areas such as the monitoring of performance, provision of advice about disciplinary cases and the coordination of training. Activities that are likely to be devolved are the interview process, disciplinary interviews, job needs analyses and the negotiation of overtime and other work practices. The benefits of devolution that you may have suggested include:-Enhanced ownership/importance of people issues- Better working relationships between managers and employees -Empowerment for manager- Responsive decision making in other departments- Higher operational problem solving skills- Flexibility- Better

working relationships between personnel and line managers- HR is freed up for a diagnostic and evaluative role. The disadvantages might include:- Loss of integration of policies- Dilution of the strategic content of HR- Loss of professionalism and commitment to HR issues.Decentralisation of HR function: Generally, organisations tend to centralise activities to achieve greater control of processes and costs, whereas decentralised activities are thought to allow companies to become more flexible, to speed up decision making and to become closer to their customer base. A large organisation with a single product will tend towards greater centralisation while multiple products and/or markets will require decentralisation. There are implications too for the management of people. Centralised structures tend to emphasise the development of specialist skills and knowledge. Decentralised structures lend themselves well to developing flexible management and employee skills and cross-functional working. Hall & Torrington (1998) outline three different forms of decentralisation to illustrate the main issues of influence on HR decisions:- Type A may have either a HR unit reporting directly to a head of department or one reporting indirectly to a central head of HR- Type B is the reverse of type A. It may have either a HR unit reporting directly to a central head of HR or one reporting indirectly to a head of department-Type C has only a HR unit reporting directly to a central head of HR.DISADVANTAGES OF DECENTRALISATION: services become fragmented and unintegrated, subject to short-term response, rather than longer-term development of organisation-wide competitiveness. Outsourcing: As with many business functions, outsourcing has become an important method of achieving flexibility and reducing costs. The arguments for outsourcing HR services can be summarised as follows:- Outside organisations can afford to retain a greater level of specialist knowledge that can be called upon when needed. - HR activities are not core skills and therefore can be more easily bought in without loss of competitiveness or risk to business performance. The business of the business is not HR management. - Professional skills have a greater impact when brought in. Outside consultants have a better change impact rather than insiders. However, like devolution we must be careful to look at what is being outsourced. Core activities such as maintaining employee records, operating grievance and discipline procedures, collective bargaining, recruitment, training, reward and so on have not been outsourced. These are seen as central functions, which are either dependent on internal relationships being established or are areas that are confidential or legally sensitive, centrality ensures internal accountability. Outsourcing is a critical step for the organisation that has longer term implications for the knowledge and commitment of one of its key functions. Any decision to do so would need to be based on a careful evaluation of costs, quality of service and impact on the longer term adaptability and flexibility of the organisation. This decision will have significant implications for the reaction and cooperation of line managers and other staff. In short, it is a matter of confidence, identification and trust in a key aspect of the business. Example: According to Fowler, 1997 in his case study how to outsource personnel outsource HR departments has many advantages: cost effectiveness, higher level of specialisation and new ideas. Yet, it has some problems such as: cultural issues, and hard to trust outsourced parties when you sharing your organisation knowledge and competencies. ROLES OF HR FUNCTION: Torrington (1996) defines four roles for HR based on metaphors of:- Strategic practitioner, aligning business and HR strategyAdministrative expert, building an efficient infrastructure in which organizational processes can operate- Employee champion, increasing employee commitment and capability and providing for the employee voice- Change agent, managing transformation and ensuring capacity for change. Ulrich (1997) displays in the following model the interrelationships between different strategic aspects of the roles of an HR department.- Strategic Partner The strategic role focuses on aligning HR strategies and practices with business strategies. The LMs acts as a strategic partner in ensuring the success of the business strategies. By fulfilling this role, a LM increases the ability of a business to implement its strategies. Strategic HR is owned, directed, and used by LMs to make effective HR strategies happen Choi and Wan Ismail (2008)- Administrative Expert Creating an organizational infrastructure has been a traditional HR role. The second role, the administrative expert or functional expert is constructed around the task of ensuring that traditional HR processes such as staffing and training are carried out efficiently and effectively. Ulrich (1997) further explained that an administrative expert ferret out unnecessary costs, improve efficiency and constantly find new ways to do things better- Employee Champion Ulrich (1997) described employee contribution role for HR champions are those encompassing their involvement in the day-to-day problem, concerns, and needs of employees. The metaphor for this HR role is employee champion. These champions personally spend time with employees, train and encourage managers in the other departments to do the same. Later, Ulrich and Brockbank (2005) has revised these roles and split this role into two, which are employee advocate and HR developer. Employee advocate role focuses on the needs of todays employees through listening, understanding, and emphasizing. On the other hand, a human capital developer role centred on managing and developing human capital (individuals and teams), and focuses on preparing employee to be successful in the future.- Change Agent The fourth HR role is based on a strategic focus on people and aims at managing transformation and change faced by companies. The role of change agent subsequently directs focus to the requirement of ensuring that the organisation has the competence to handle change by assisting employees in their attempts to embrace and execute change (Ulrich, 1997). Change agents are accountable for the deliverance of organisational transformation and culture change, and this role, in turn creates value by ensuring that the whole organisation is able to change according to the circumstances by building the capability to change into its core competences Lemmergaard (2008). Evaluation of HR functions: Developing people, bringing out talent, supporting the organizational strategy, and being corrective in situations where there are deficiencies are the functions of HR. The key areas for evaluation are:1. HR Policy Formulation: Includes strategic policy and how well it supports organisational strategy and goals, and development of core competencies, culture change, etc. How well does policy support devolution of functions where appropriate (e.g. education and training, recruitment)? How well do the enabling policies (to develop skills, career management, rewards, recognition) work? 2. Planning: How effective is HR planning, recruitment planning, career planning, succession and workforce planning? How well is workforce diversity, job design, organisational structure and change planned? 3. Development: How effective is foundation and induction training, professional development, leadership and management training, career development, mentoring, staff assignments and movement? 4. Staff relations: Areas for assessment include management of industrial relations/employee relations, enterprise bargaining, grievance resolution, communication, promotion of teamwork. 5. Performance: Is there a business code of conduct (covering ethics) and how well is it adhered to? How effective is induction, how is performance managed, how are staff supervised, how effective is the appraisal programme? Are rewards and recognition programmes effective in enhancing performance? 6. Staffing Practices: How effective is appointment and selection? How competitive is remuneration (and does it attract staff of the right calibre to support organisational aims)? How effective is delegation? How effective and fair is the job classification system, work level standards? How flexible is the work environment and is it in keeping with technological developments? How equitable are staffing practices in promotion, rewards, separation? 7. Health and Safety: What level of training is there for occupational health and safety? How do you rate the work environment and culture? How is staff with disabilities and long-term illnesses supported? How well are injuries handled?

Unite 3: HR Planning: Planning the right man for right job and developing him into effective team member is an important function of every manager. It is because HR is an important corporate asset and performance of organizations depends upon the way it is put in use. HRP is a deliberate strategy for acquisition, improvement and preservation of enterprises human resources. It is a managerial function aimed at coordinating the requirements, for and availability of different types of employees. This involves ensuring that the organization has enough of right kind of people at right time and also adjusting the requirements to the available supply. HRP is a forward looking function and an organizational tool to identify skill and competency gaps and subsequently develop plans for development of deficient skills and competencies in human resources to remain competitive. Human resource planning is a decision making process that combines three important activities: - Identifying and acquiring the right number of people with the proper skills- Motivating them to achieve high performance, and Creating interactive links between business objectives and resource planning activities. The basic goal of human resource planning, then, is to predict the future and, based on these predictions, implement programs to avoid anticipated problems. Very briefly humans resource planning is the process of examining an organizations or individuals future human resource needs (for instance, what types of skills will be needed for jobs of the future) compared to future human resource capabilities (such as the types of skills employees or you already have) and developing human resource policies and practices to address potential problems for example, implementing training programs to avoid skill deficiencies. Human resources planning based on HR guiding principles ensures a well-structured component that synchronizes organizational philosophy and human resources strategy: Stressing HR Importance: One of the beginning principles of HR planning stresses the importance of human resources. Engaging leadership that understands the impact of a functional human resources department is the best way to adhere to this principle. The Encyclopedia for Business, 2nd Edition, states: "Business consultants note that modern human resource management is guided by several overriding principles. Perhaps the paramount principle is a simple recognition that human resources are the most important assets of an organization; a business cannot be successful without effectively managing this resource." One way to realize the importance of HR is to envision an organization with neither a productive workforce nor the type of support that human resources planning and management provides- Integrating Human Resources: Human resources serves the needs of the organization, top to bottom, including every member of its workforce. Therefore, integration of human resources functions with overall organizational goals is an HR principle that cannot be overlooked. The importance of integrating HR and company objectives builds on the previously mentioned principle: stressing the importance of human resources. Human resources activities that are merely an extension of management are signs of poor planning and failure to embrace forward-thinking ideas that improve the company's profitability. An "Entrepreneur" magazine article appropriately titled, "Integrating the Human Resource Function with the Business" reinforces this proposition when it states: "It is not enough for the human resource function to be responsive to management, "customer-oriented," or even aligned as partners with management." That said, a holistic approach to the integration principle of human resources planning ensures human resources will be fully committed to and a part of organizational goals- Processing HR: Human resources information technology (HRIT) contributes greatly to the functionality and accuracy of human resources activities. Many organizations purchase sophisticated human resources information systems (HRIS) that minimize, or even eliminate, human error in processing employment data. Smaller organizations sometimes rely on outsourcing their HRIS needs for managing processes such as recruitment, payroll and compensation. Technology supports an important principle of human resources planning -- human resources data processing in the most efficient and accurate way possible.Centralizing HR Functions: Tying together the principles of human resources planning requires centralizing the HR functions. Systematic processes and organization adds a component to HR that employees will appreciate. A one-stop shop for meeting the needs of the employer and employees unifies human resources activities and adds value to department functionality. Centralization involves the decision-making, staffing and organizing of HR functions; however, it also addresses the need for physical resources such as an applicant processing area, private conference and interviewing space, and storage for employment and medical-related files. Human planning stages: 1. Reconciling future resourcing needs with future HR plans. 2. Considering and applying HR policy so as to have an impact upon the flows of human resources in an integrated way. This includes the pattern of engagement of staff and their movement through the organisation and the stages of exit.3. Assessing the effectiveness of the HR policies in accessing, creating and using human resource capability. The stages of HR planning process: 1. Investigation and analysis: The organisation must gather knowledge about: The external environment and labour market, looking at for example, national training plans and the location of markets- The internal environment and labour market: the age and gender balance of the workforce, the number of employees, wastage rates and so on- The organisations systems, resources, culture, practices and industrial relations- Commercial performance requirements such as sales targets, product mix, market segments and profits. 2. Determination of demand: Demand forecast is the process of estimating the future quantity and quality of people required. The basis of the forecast must be the annual budget and long term corporate plan, translated into activity levels for each function and department. Demand forecasting must consider several factors both external as well as internal. The external factors are competition, economic climate, laws and regulatory bodies, changes in technology and social factors. Internal factors include budget constraints, production levels, new products and services, organizational structure and employee separations. 3. Determination of supply: Supply forecasting measures the number of people likely to be available from within and outside an organization, after making allowance for absenteeism, internal movements and promotions, wastage and changes in hours and other conditions of work 4. Decision-making: The organisation must then make plans to balance supply and demand of skills. The influences will include skill levels, development and the cost effectiveness of accessing a wider skill base. The areas in which decisions will be taken include: - recruitment - retirement and redundancy - selection and assessment outsourcing - promotion and reward - development and retraining - organisation development and culture - the type of employment contracts performance management - employee relations. Professionalism in HR Planning is vital for organisational success. The first aspect of professionalism is understanding the customer requirements and providing customer satisfaction. Professionalism is integrated with HR planning stages and requires that HR practices be fair, open and transparent. Today, there is a legal obligation for organisations to ensure equality in the areas of race, disability, age, sexuality, gender and religion. Professionalism in this area requires the adoption of formalism in capturing customer requirements and selection criteria, and checking adherence against the agreed criteria. This applies to all aspects of HR practices including recruitment, selection, promotion, and separation. Professionalism is also enhanced by engendering, within the organisation as a whole, a culture of equality and respect. One way to promote this is to ensure workforce diversity training is provided to all levels of staff. Competencies: This paper examines competencies and competency use in competency-based human resource management (CBHRM). Considerable confusion has arisen with respect to the use of competencies in both the private and public sectors. Several researchers (Antonacopoulou & Fitzgerald, 1997; Austin et al., 1996; Lado & Wilson, 1994) have expressed concern about the lack of clarity with respect to specific competency issues. What follows is a discussion of these issues and an exploration and clarification of their respective roles in the strategic management of human resources in the public sector. CBHRM identifies and assesses different competencies that make up an individual's overall competence and matches them with required job

and/or organization competencies Knowing which competencies are required as compared to which competencies are available to an organization can help inform and direct HRM interventions related to compensation, recruitment, promotion, training, and organizational culture. Competency-Based HRM Advantages, CBHRM models can:- directly link individual competencies to organizational strategies and goals- develop competencies profiles for specific positions or roles, matching the correct individuals to task sets and responsibilities- enable continual monitoring and improvement of competency profiles- facilitate employee selection, evaluation, training, and development- assist employers in hiring individuals with rare or unique competencies that are difficult and costly to develop- assist organizations in ranking competencies for compensation and performance. Therefore, any investment an organization makes in competency model development work has benefits beyond the usefulness of the results for HRD purposes.'' outcomes. Competency-based HRM Disadvantages: However, less valid and reliable competency-based HRM models can result in negative outcomes. For example, they can:- develop less meaningful competencies in organizations without clear visions of their goals or strategies- be quite expensive and time-consuming to administer- reduce core organizational competencies understanding as a result of poor employee buy-in- preserve the organizational status quo and in adequately address soft, integrative and/or innovative competencies such as intercultural or cross-cultural competency- add nothing in organizations that have difficulty in differentiating between successful and unsuccessful performance and when the competencies are too ''generic"Conclusion: Competencies and competency-based human resources management (CBHRM) are in common practice in many organisations. To survive in a turbulent and dynamic business environment organisations have to adopt competency based human resource management practices, which are vital to productivity and performance excellence. Human Resource Management in the organisation have to give keen importance to these process since competency determine the organisation effort to compete with quality and quality. Employees in the organisation are more concerned about their advancement in their career. In addition to the competency consideration career also to be considered by the Human Resource managers in the individual planning level. Career-based and competency-based approaches of Human Resource Management have productive result in the productivity and business surplus in many organisations. Human Resource Managers have to look more in the area of CCHRM (Career Competency Based HRM) effort as a panacea to productivity and quality assurance in the wake of acute business competition. Introduction; Organisations in the modern days are undergoing heavy transformation in the wake of industrialization and globalization. Here, Human Resource Management practices are getting wider acceptance in the developmental and transformational process. Organisation management is giving more push in understanding and developing the competency of employees and make use the tool competency mapping, for the improvement of productivity and in maintaining a positive work culture. This application of the competence approach covers the operational areas of human resource management in the organization viz., selection, remuneration, vocational training, evaluation and promotion. The competency mapping works at the enterprise level than outside realm. The objective behind this effort is to identify the best, better and good and average effort on the part of the individual workers and support the best effort, encourage the better effort, empower the good effort and train the average effort of the workers towards the best performance. Competency-based methodology was pioneered by Hay-McBer company founder David McClelland, a Harvard University psychologist in the late 1960's and early 1970's (Czarnecki, 1995). Competence and Competency: The word competence is having several meanings. Some consider competence as job based while some others consider it as individual based. Dubois (1993), a leading expert in the applied competency field, defines competence as "the employee's capacity to meet (or exceed) a job's requirements by producing the job outputs at an expected level of quality within the constraints of the organization's internal and external environments." Boyatzis (1982), competency as "an underlying characteristic of the person" which could be "a motive, trait, skill, aspect of one's self-image or social role, or a body of knowledge which he or she uses". Person based competencies" includes further Self-Confidence, Creativity, and Cognitive Capacity competencies etc. While some other authors strongly argued that competence is related to the job and area of expertise. These conflicting arguments are still continuing. While this author likes to indicate that there is no right answer to the question what is a competency? What is important is that organizations adopt a definition that makes sense, meets its needs, and is used consistently in HR operations and applications. Competencies are general descriptions of the abilities necessary to perform successfully in areas specified. Competency profiles create skills, knowledge, attributes and values, and express performance requirements in behavioral terms...The review of competency profiles helps managers and employees to continually reassess the skills and knowledge needed for effective performance. Competencies dominantly compared as general description of the abilities that are necessary to perform a task effectively. Competency lies on the many factors in the work performance. It may relate to the routine works, non-routine works, team efforts, control, coordinating and guiding workers, allocation of resources, analysis, diagnosis, design, planning, execution and evaluation. Competency is "a cluster of related knowledge, attitudes, skills and other personal characteristics that Affects a major part of one's job, Correlates with performance on the job, Can be measured against well-accepted standards, Can be improved via training and development" (Source: Scott Parry 1998, Project Management Competency Development Framework, PMI). A competency is what a successful employee must be able to do to accomplish desired results on a job. Competencies are built up over time and are not innate. It typically takes experience on the job to build competencies. Knowledge, Skills and Abilities (KSAs), by contrast, might be brought into the job by entry-level employees. Competence Levels: Different activities required different competency levels in the discharge of responsibilities and duties associated with the functions. Many competencies like behavioral competency, Knowledge competency, motivational competency, language (communication), value competency etc are required for effective performance. The behavioral competency involves member's attitude and feeling towards the work and work performance that results in good or poor performance. The

behavioral competency is closely related to motivational competency. How an individual worker thinks about the work organisation and work performance. The knowledge competency involves the awareness; knowledge and expertise related to the job, technology and procedures related to work. The language competency is related to individual workers ability to understand and communicate the things precisely in a two way process. Competency Mapping: A competency is something that describes what, where, how and when a job to be done as per the requirement of the organisational objectives. Competency mapping is a process of identifying key competencies for a particular position in an organisation, and then using it for job-evaluation, recruitment, training and development, performance management, succession planning, etc. Competency mapping process is designed to consistently measure and assess individual and group performance to accomplish the objectives of the organization and it further help to fulfill the expectations of customers. It is used to identify key attributes (knowledge, skills, and behavior attributes) that are required to perform effectively in a job classification or an identified process. Competency mapping involves two sets of activities. One is related to the work activities and work process and the other is related to the individual and group performance. It is about identifying preferred behaviors and personal skills, which distinguish excellent and outstanding performance from the average. Steps in Competency Mapping: Understanding the core competencies that required for the organisation is the initial steps in the competency mapping. Many competencies are required for the organisation in the effective performance of various functions. While certain competencies like, decision-making skill, communication skills, problem solving skills, team-building skills etc are included under core competency areas. These skills are essential in all the functional areas of management. Methods like brainstorming and participative focus group discussions etc can realize the core competencies required for the managers. After the identification of the core competencies the next step is to relate these competencies with various functions in business management. Since the core competencies varied in marketing, finance, purchase, operations management, production etc, the competencies required to perform different connections also varied. For this effort the position and responsibilities of each functional person need to be assessed into. A job analysis is to be done in the initial stages. By understanding the core responsibilities and core competencies, the job description viz., written document of the functional responsibilities, to be prepared in relation to different positions and departments. The job description and the cop potencies identified are the base upon which the training and development programmes, mentoring programmes and coaching to be extended to the members by the superiors in the organisation. The Human Resource management needs to prepare a plan of action for each individual member considering the actual competency and the expected competency. This process creates awareness in the individual about his behavioural traits in detail, and helps him chalk out an individual development plan. By forecasting the expected performance the impact analysis of the process can be done. The competency mapping process also has to make provision of career development. The core competencies that required to perform higher responsible jobs also to be identified and members should expose to such requirements. Example: Apple Core Competencies: Company executives wanted employees to be highly focused on a few key competencies: for example, user friendly interfaces, powerful software architectures, and effective distribution systems. However, senior executives recognized that measuring performance along these competency dimensions could be difficult. As a result, the company is currently experimenting with obtaining quantitative measures of these hard-to measure competencies. Use of Competency Mapping: Competency mapping can play a significant role in: Recruitment and selection-Performance managementTraining and Development- Succession planning- Job enrichment and job enlargement- Organizational development analysis, Example of making performance management Competency Based: According to Dubois D. D., Rothwell W. J the organization's leaders need to be willing to support change in this area of critical importance to organizational performance. It requires a major change in their thinking about performance management. They must commit resources to the systematic assessment of employees' competencies, plan and make available job-specific training opportunities and coaching, set performance goals and develop work plans, monitor performance, collaborate with employees on a planned schedule regarding their performance, and deliver both good and bad news about performance in an open and supportive manner. They must also create and implement an ongoing communication strategy for keeping all employees informed about the features, processes, and benefits of the competency-based system. First ExampleA Model for Competency-Based
Performance ManagementNext, we take a look a competency-based approach to performance management, using the steps to guide the discussion.Step 1: Define the work and the competencies required to perform it The first step in competency-based performance management is to define the employees' work by means of effective work analysis. In most cases, this includes naming the specific outputs or results that employees are expected to produce. These outputs or results must align with the organization's strategic goals or objectives, and the relationship must be made very clear to the operating manager and the employee. If the work is not considered strategic meaning that the outputs or results do not contribute directly and overtly to the organization's successthen there is little justification for completing it, and it should be eliminated from the employee's list of required tasks . After this process of elimination is completed, the work that remains is therefore strategic to the organization's success. Employees who are performing unnecessary tasks can be reassigned to activities that are meaningful both to them and to the organization. Process improvement alone is a significant reason for undertaking work analysis. Also key to our approach to performance management is the identification of the competencies employees must have and use in appropriate ways to produce the expected measurable outputs or results.Steps 2 and 3: Identify the employees to do the work and

assess employee competencies Next, employees are identified to perform the work, generally using selection methods . The degree to which they possess and can consistently demonstrate the key competencies required for successful performance is determined through the application of competency assessment methods.Step 4: Identify and document competency gaps Competency gaps for which development is needed are identified and documented.Step 5: Prioritize employee development needs priorities for developing employee competencies are determined, and a plan for developing the competencies is prepared.Step 6: Establish work goals, plans, and standards with the employees After reviewing the plans, operating managers and employees establish goals, plans, and standards to which both parties agree. Standards set a minimum expectation for measurable results. Goals establish desirable targets.Step 7: Implement competency development activities Employees begin training or engaging in other learning activities to acquire or build the competencies identified in Step 1 and work toward accomplishing work goals or objectives.Step 8: Monitor performance As employees continue to accomplish their work goals or objectives over the performance period, operating managers monitor their performance and provide feedback. Work goals and plans are formally reviewed according to schedule and are modified as warranted. To be most effective, these reviews should include discussion of how employees use their competencies to achieve the expected work results as agreed in Step 6. This approach to performance management builds and enhances the organization's competency bench strengthits competency pool. The competency development plan may be modified as necessary.Step 9: Conduct performance reviews Competency-based performance management utilizes both temporary reviews and performance period reviews. Planned temporary reviews enable both employees and managers to address issues that could affect successful performance. This type of review can be an advantage for employees, providing scheduled opportunities to inform managers of roadblocks to performance that could affect their ability to produce the expected outputs or results. Use of interim reviews eliminates surprises for employees and their organizations. When the performance period ends, managers and employees meet to review employee performance over the entire period and complete a performance appraisal. The Advantages and Challenges of Competency-Based Performance ManagementThe benefits of applying a competency-based approach to performance management can be dramatic. The process encourages frank and no adversarial communication between employees and their managers. It is not unusual for employees to express their concerns in performing work that is not aligned with their competency strengths or interests. And it is not only the less productive employees but often excellent performers as well who will express these concerns. It also gives employees the opportunity to convey their interests and satisfaction in performing work that is aligned with their competencies. In a competency-based approach, employees' work results are aligned with achievement of the organization's strategic objectives, and the contributions of the results are identified in specific, and usually measurable, terms. Work that is identified as nonstrategic and can be eliminated allows available resources to be used in other, more productive ways. The approach affords the opportunity to identify and develop needed competencies. In turn , competency assessment results provide training needs assessment data that can be used to plan and deliver employees' training in a targeted manner. It also gives employees information that is essential for their life and career development and provides them with opportunities to plan to meet their needs Outputs or results expectations and metrics for employees are clarified at the outset of the performance period in a competency-based approach. In addition, the approach is an incentive and retention tool especially for exemplary or high performers as they value the recognition and rewards that such a system could bring to their work situation. They appreciate knowing what is expected of them because they can then create ways to exceed performance expectations. In summary, a competency-based performance management approach establishes a work environment in which the roles, relationships, and responsibilities of both managers and employees are well defined and clearly stated. This straightforward and mutually understood system builds trust as it ensures accountability and improves performance. The decision to adopt a competency-based performance management system does present challenges, however. The organization's senior managers must provide strong, long-term support for the project and act as role models for the process. Required resources need to be available over the long term . Managers will face increased workloads as a competency-based approach requires them to provide employees with additional and more effective feedback as well as accept responsibilities for addressing performance obstacles. There must also be a strong alignment between the organization's strategic direction and the benefits and costs of adopting this system. Managers need to accept responsibility to problem solve. And the organization must be willing to commit project resources to communicating the competency-based approach to all employees, even if the system is planned for only a small segment of the organization. Employees are likely to be curious about a system that will affect their performance and work lives. Managers must be trained on their roles and responsibilities as well as how to use the system to carry them out. Competency-based training should be consistent with the corporate culture, which means that vendor training is not always appropriate for designing and developing an organization's competency-based performance management system. The organization should be prepared to design, develop, and deliver the necessary training for its own competency-based performance management system.http://flylib.com/books/en/2.309.1.57/1/

Unite 4: Introduction: The main features of the performance management systems will be outlined. Therefore the main order of PMS will be delineated and then served
with specific features in the same chronological order. The two different approaches people based approach and process based approach- are outlined first, because the strategic choice of one of them will make the reader seeing it from a different perspective. Performance based hiring is a new tool of PMS and is additionally outlined in the appendix 2. The reader needs to have basic HR knowledge to fully understand the topic. Definition Performance Management: The objective target of performance management is a systematically, multidimensional performance-measure, -navigation and control; additionally the pursuit of different performance areas (e.g. employees, teams, departments and processes) with the target of continuous improvement of the performance of individuals and the organization. In the performance management learning effects and employee motivation must be established and maintained. Performance management systems have various features to achieve the objective targets. The main features however are:1. Objective setting 2. Ongoing review of objectives 3. The development of personal improvement plans linked to training and development 4. Formal appraisal with feedback. 5. Pay review 6. Competence-based organizational capability review. Comparing the process based and the people based approach In the performance management there are two general different approaches to improve performance, the process approach and the people approach. The idea of the people approach is that high performance will only be reached by focusing on the people. Which means having the right people for a particular job in the right quantity, trained right in skills required, effectively led and motivated, then people automatically work right and effective. People will fulfil the job. The process approach has a predetermined set of outcomes, which will be achieved by analysing the work required and then constructing the most efficient workflow of activities. The job evaluation is based on process terms, which is an impersonal set of working activities. The job fulfils the people. Objective setting and measuring (referring to 1.) The setting of objective in PMS basically asks three questions, secondly these objectives need to be measured and reviewed. The three questions are: What is the nature and scope of the performance management objectives and measurements? How well-defined and linked are performance management objectives to corporate objectives? How are they linked into individual and organisational capability resources? (Scrit pg. 191) Thereby there is the people focus of main importance. The motivated staff will reach the objective more efficient, the motivation from this point arises from hard factors, like reward money, development, job and career satisfaction and employment security. Possible performance objectives are financial improvements, quality targets, and productivity targets, developing skills and getting good customer feedback. To achieve these objectives best PMS have three core activities consisting of to develop competence (people need to have the abilities and capabilities to carry out the tasks), to meet the targets and to create an

appropriate corporate culture. A further fragmentation to meet these objectives is carried out by three other dimensions: Productivity/ output related objectives, job related objectives and person-related objectives. The last two are interrelated to performance as well, because they tell how to achieve a better performance, basically by good selection & delegation and rising motivation & communication. Balanced Score Card (BSC) what you get is what you measure (referring to 2., 3.and 6.): Following Leopold, Harris and Watson the Balanced Score Card was established in 1992 by Robert S. Kaplan and

David Norton, which is a concept to measure activities within an organization to achieve specified visions and strategies, to give managers a comprehensive overview concerning performance and efficiency of a company. The new element does not only focus on the financial perspective, furthermore on human aspects, which are the drivers of the results, so that the company can focus on long term interests. The BSC allows constant reviews of objectives set. The BSC is a management system which consists of quantitative and measurable operating numbers, which describe the performance of an organization out of four different perspectives. Each perspective of the BSC pursuits a particular vision and strategy. Furthermore each BSC objective has a specified vision inherent. The BSC makes people performance measurable and controllable, further it is a tool to prove the value and the abilities of employees and set targets from different dimensions. The vision could be: improve customer service = number of after-sales persons / total number of employees; then benchmark with the strongest competitor. To improve quality we could measure = products sent back / total products sold. Then a further division of that operational numbers into further operational numbers. Supplementary the BSC is a pluralistic tool which recognises that various stakeholders of an organisation will have different ideas which measures are the important. The four perspectives of the BSC are: 1. the financial 2. customer 3. internal business and the 4. innovation and learning perspective. Team based structures (referring to 3.) Nowadays teams are considered to be a key-performance factor concerning knowledge based working and innovation. Therefore, the trend is moving from an individual focus to a team emphasis. The team emphasis has team performance related pay inherent to meet a better cooperational approach within teams; otherwise the team consists of individuals each having its own (selfish) interests in a project. This new HR approach provides a more dynamic team which can be much more independent to meet wider organizational objectives. Personal Development Plans (PDP) (referring to 3.) Referring to Leopold, Harris and Watson The personal development plan (PDP) is a document and a process that encourages employees to carry out a systematic diagnosis of their requirements for development, to screen these development requirements in a form that will encourage line managers and training specialists to provide the resources and support needed to achieve them, a ongoing record comparing their learning targets against their achievements and provide others with a systemic profile of their competencies and achievements. (Script pg. 198) Performance Appraisal Responsibility( reffering to 4) Performance appraisal is the process the managers like to work on least, there could be many reasons for this, the major reasons for that is, lack of understanding of the importance of appraisal process and training regarding the appraisal process which can bring in the managers interest in the appraisal process and there can be lack of support in the field of training and development programme also managers need support in implementing the appraisal process. But this can be changed by the support of Human resource manager to support the implementation of the process, they should train the managers so that they can conduct the successful appraisal process there has to be review by the HR for the format used in the appraisal so that managers can get the best output, HR managers can also assist the managers in developing the individual development planning and program. 360 Degree Feedback System in Performance Appraisal: Managers should update their employees about the feedback regarding their work done in the organization weather it is previous task or the on-going task, as it makes the employee feel valued in organization, make them understand that they are the integral part of the organization. The feedback process will make employee learn new things about them self and other prospective of enhancing the skills, it will make employee know how their work is perceived by others. This process will enhance the relationship between the employee and manager and improved communication and this will make the more trust in between the manager and employee. This feedback process will make employee know where they are excelling and where they could improve it will make them know what they should continue to do and what should they change. Employee need to have opportunities to develop their skills and grow. The employee who learns new things and applying them in process is more likely to be retained and motivated. There are so many reasons for companies to use a 360 degree feedback system, this system is very accurate as the ratings from different perspectives provide a more complete picture of the eligible employees capabilities than just one perspective, this process has richer understanding of the performance of the contestants as it provides them to gain valuable insight on how they have performed and it is perceived across different departments. This process is easy and fast to implement in a cost effective way. Advantages of the 360 degree system: 1) It provides the more comprehensive view of employee performance than the other methods. 2) It increases the credibility of the appraisal process as it includes feedback from different departments. 3) The feedback from other process can help to enhance the staffs development. 4) They can directly report their problems to their managers rather than going through the normal process. Disadvantages of 360 degree system: 1) This process is very time consuming and more complex on administration. 2) It may create the environment of suspicion among the employees as the process involves different department in the process. 3) Lack of confidentiality as sometimes this process is outsourced to different outside companies and there is always a threat of disclosing sensitive information. Top-down schemes: The most traditional form of appraisal, this emphasizes both subordinate feedback and the lead on objective setting coming from the top. The problems often cited with this form are: It stresses traditional organizational hierarchies-There may be a lack of impartiality, and favoritism- There can be a lack of full knowledge of the employee in flatter structure. Self-appraisal: If employees understand their objectives and the criteria used for evaluation, they are in a good position to appraise their own performance. Many people know what they do well on the job and what they need to improve. If they have the opportunity, they will criticize their own performance objectively and take action to improve it. Paul Falcone, vice-president of HR at Nickelodeon, said, The fascinating thing is that employees are usually tougher on themselves than you will ever be.18 Also, because employee development is selfdevelopment, employees who appraise their own performance may become more highly motivated. Self-appraisal provides employees with a means of keeping the supervisor informed about everything the worker has done during the appraisal period.19 Even if a self-appraisal is not a part of the system, the employee should at least provide the manager a list of his or her most important accomplishments and contributions over the appraisal period. This will prevent the manager from being blindsided when the employee complains, perhaps justifiably, You didnt even mention the Bandy contract I landed last December! As a complement to other approaches, self-appraisal has great appeal to managers who are primarily concerned with employee participation and development. For compensation purposes, however, its value is considerably less. Some individuals are masters at attributing good performance to their own efforts and poor performance to someone elses. Upward appraisal: it has been increasingly used to reflect the growing trend for organizations to recognize that they have a duty to provide effective working systems for employees. In upward appraisal, in a modest way, employees are invited to provide managers with a rating on such dimensions as effective communication, involvement in decision-making, clarity of objectives and goals, and so on. Often this rating is completed anonymously although more recent trends show managers conducting this process in staff focus groups as a basis for getting feedback on a range of management issues that impact upon staff. Peer appraisal: involves members of teams evaluating each other. One of the arguments for this type of system is the pressure to treat internal working relationships as internal customer relationships using similar feedback systems to external customer feedback techniques. this method of feedback can often be further developed into full service level agreements. It is however complex to run in order to get the multiple channels working and assimilated. There are also sensitivities involved and careful development of staff is required in using such schemes. Multi-directional appraisal: Also called 360degree appraisal, there are key similarities here with peer appraisal. However, the key difference is that multi-directional appraisal deliberately sets out to collect data from outside the immediate team and often from

external customer feedback. Its key advantage is to overcome the criticisms of impracticalities and lack of knowledge of a single appraiser. As we have seen, it can be complex and, of course, it does expose staff to potentially hostile views, which may be outside of their total control. The term 360degree appraisal refers to the various sources of data: boss, peers, customers and reporting staff, in order to achieve a more comprehensive understanding of the performance relationships. Pay Review: The annual pay review gives employees the chance to increase their income. Thereby, outcomes and jobfulfilment play a major role. Does the employee perform better than expected or in comparison to others at same the stage his or her income can increase by a certain percentage. The annual pay review is another tool of hard skill performance based motivation. Performance management is an ongoing process: It is not just a set of forms, an annual ritual or check box process to meet corporate reporting requirements; and, it is not just the system that feeds into an employee recognition or bonus scheme. It is about everyday actions that employees need to display to improve performance. To be effective it must dynamic and operate in real-time, allowing employees to continually adjust and improve their performance, as required. To be effective, the performance management process must be firmly linked to and rooted in the organizations core strategy and business goals. Strategy involves the formulation of the organizations mission, goals, objectives and action plans for achievement. Every employee must share in this. The key is to clearly articulate each employees goals, objectives and competency requirements in a way that will facilitate the successful achievement of the organizations strategy. In performance management, strategic and business goals should be cascaded throughout the organization. Employees should be able to see a direct link between what they must achieve and the organizations vision, strategy and goals. These should be reflected in each employees performance plan as well as in the competencies needed for success. To ensure that there is complete coverage of all of the important strategic elements, organizations often use performance frameworks for designing strategy. The one most commonly used is The Balanced Score Card in which Vision and Strategy for the organization is considered from 4 perspectives: Financial; Customers; Internal Business Processes; as well as, the Learning and Growth needed to achieve the vision as well as to adapt and improve. Companies will build goals into their performance management system that are aligned with each quadrant of the balanced scorecard. For example, the IT department might have business goals related to supporting customers (Customers quadrant), providing results within budget (Financial), creating software solutions to support processes (Internal Business Process) and ensuring it has the talent to create innovative software solutions (Learning and Growth). These goals for the IT department would then be cascaded down to each group and individual performance plan. Looking more closely, competencies translate the strategic vision and goals for the organization into the actions or type of behavior employees must display for the organization to be successful. Competencies effectively form a bridge between how the employee needs to behave and the success of the organization. It is sometimes hard for employees to relate their work and performance to the organizations overall success. Competencies help them see how their attention to quality or their concern for the customer contributes to the success of their organization. They in turn feel more valued knowing the importance of their role. This helps drive change in an organization - by reinforcing those key competencies people need to be successful in their jobs. No matter what type of performance management process is put in place, there are always three fundamental stages in the performance management cycle: -Planning: During this stage the manager and employee meet and agree on not only what the employee must accomplish and to what standard (e.g., sales goals), but also the competencies needed (e.g., Customer Focus; Organization; Product Knowledge; etc.) to effectively accomplish the performance objectives. To achieve optimal performance, it is also important to define what learning and development the employee may need to address any gaps in competency. -Progress Review: Throughout the cycle, both the employee and manager track the employees performance and development. Both address the question of whether there are improvements required; and if there are any barriers to effective performance that must be addressed in order for the employee to perform the work to the required standard. As necessary, the employees performance plan is adjusted to address any changing circumstances. -Evaluation: At the end of the review period, both manager and employee reflect on the employees accomplishments against the work goals and standards that have been agreed to at the beginning of the cycle. They also consider what has been learned by the employee during the period that can be effectively applied within the employees current role or beyond in future jobs. They come to an agreement on how well the employee performed during the cycle and what needs to be considered in terms of future work goals and standards to be achieved in the next cycle. A formal rating or evaluation of the employees performance may be conducted by the manager, particularly if key decisions affecting the employees employment, rewards or compensation must be made. How Competencies are Incorporated: Typically competencies are incorporated in the performance management process in order to provide a description of the type and level of behavior the employee must display to achieve the key goals / objectives and standards. In other words, performance outcomes represent what must be accomplished and the competencies elaborate how they must be accomplished. Evaluation of the relationship and contribution of performance management systems with strategic human resource management principles: Therefore the evaluation will be drawn alongside the features of PMS outlined to give a specified answer. Furthermore the SHRM principles were manly already included in task one, but they will be partially reviewed to the essential extent to give a fair evaluation. Performance management systems (PMS) are part of the strategic human resource management. SHRM serves the changed environment, which is global and moving faster then ever. Global competitors can imitate everything, with the exception of highly motivated, high skilled and highly flexible staff, which are main principles of SHRM to achieve. The SHRM principles rely heavily on attempting to manage and form corporate cultures. This in turn relies on attempts to align individual staff culture with individual culture. The range of issues included within PMS, for example, reward, development and so on, and the style of delivery, such as involving or judging will influence this culture. (Script pg.186) One key driver for SHRM is the fact that work is becoming more insecure, therefore the PDP as the feature of PMS ensures the development of people and thereby as the people sustainability within the organization. Furthermore PDP can be seen as an application assistance in the case of redundancy. Thirdly, it recognises the employees performance, which the employee will be proud of and therefore more motivated. PDPs can also be used for annual pay review, where the employee can achieve a higher income which pushes the motivation again. Lastly, this system improves the skills though out self-control and a individuality focus is met as well. From this perspective the key concern of SHRM is solved via PMS. As a pluralistic system SHRM also recognizes the external environment and its stake holders. The balanced score card responds to the external environment with operational numbers. Thereby customers are respected as well; e.g. to improve the point of sales with investment in business equipment and give a better climate & working environment. However, the BSC has the learning and growth perspective inherent, which is also the development of people for long-term sustainability. The measures of the BSC provide information of firms performance targets (Script pg. 14; 18 key practices) and it links the business strategy with the HR department (best fit view). The BSC however can be used vice versa as a hard controlling tool to improve short term profits and run down everything to the as much as necessary point, which would be the total opposite side of SHRM. One focus of SHRM is to develop people, make them responsive to changes and regular feedback on performance from many sources (Script pg. 14; 18 key practices). The 360 appraisal does this by giving regular feedback on performance from various perspectives. The employee

also gets to know fields he or her needs to improve. Fields where he or her is good at will motivate and possible recommendations show where to work on to improve his or her development. On the other hand it can be said that the 360 appraisal pushes weaknesses which confront the strengths based approach as a new approach of SHRM. SHRM should have the presence of work-improvement teams and the presence of problem solving groups (Script pg. 14; 18 key practices). Team based structures approach of PMS makes teams stronger throughout a pluralistic view, to move away from the individual perspective. The Teams will work more closely together and develop better communication channels within it. The last feature of PMS outlined in this assignment performance based hiring suits the aim of SHRM to attract best technical/ professional talent (Script Life cycle model pg. 8). PMS & SHRM: Definition: Performance management is about directing and supporting employees to work as effectively and efficiently as possible in line with the needs of the organization (Williams 2002). Performance management helps organizations sustain or improve performance, promote greater consistency in performance evaluation, and provide high-quality feedback. Performance management helps organizations link evaluations to employee development and to a meritbased compensation plan. Moreover, it form a basis for coaching and counselling, permits individual input during the evaluation process, and allows for a blend of qualitative and quantitative expectations of job demands and factors that reveal how well the job is done (Gilley and Maycunich, 2000). Some managers oppose any form of performance management system, claiming that communication between people, getting people to talk to one another, is all that is needed. This is not realistic, even in micro businesses, but it does enable managers to avoid confronting incompetence, and everyone else to avoid accountability.Conclusion: PMS have a major role within the SHRM to achieve its objectives. Both follow similar principles or the same; in the areas where PMS can have its impacts. Using the right mix and intensions of strategies it even can be said it suits SHRM almost perfectly. Nevertheless in an objective evaluation the contribution can only partially be agreed. Many features of PMS have another side of the coin, using them in short terms vice versa, taking the process based approach, pushing to much the weakness rather than the strengths of employees, using the measures to built up pressures and using the pay performance review to threaten the job security. The relationship and contribution depends on the administrator or manager that decides the basic HR strategy. Link to SHRM: In the recent years, Strategic Human Resource Management (SHRM) increased in popularity among researchers, practitioners, and managers. SHRM can be defined as the process of linking the human resource functions with the strategic objectives of the organization in order to improve performance. Performance management is the integration of performance appraisal systems with broader HRM systems as a means of aligning employees work behaviours with the organizations goals. Thus, a performance management system consists of the processes used to identify, encourage, measure, evaluate, improve, and reward employee performance at work (Sims, 2002). As an instrument of strategic human resource management (SHRM), a system of performance management is predicted on the need to take the wide, strategic goals of the organization, and translate them into goals for smaller groups and individuals (Mabey et al 1998). PMS supports the achievement of SHRM. The key assumptions that enable it to support SHRM are: - Control of the input and output of staff against objectives predetermined by the organisational system - Development of staff to achieve performance enhancement and in support of performance objectives. - To align the attitude, values and policies of employees with the organisational needs and objectives.Why PM systems problematic: Performance management usually involves performance appraisals and employee development. According to a Watson Wyatt survey, only three out of ten workers agree that their companys performance management system helps to improve performance. Less than 40 percent of employees said their systems established clear performance goals, generated honest feedback or used technology to streamline the process. Although these results suggest that organizations have poorly designed performance management systems, difficulties generally arise because performance management is a highly personal and often threatening process for both managers and employees. Managers are reluctant to provide candid feedback and have honest discussions with employees for fear of reprisal or damaging relationships with those employees that they consider valuable to the organization. On the other hand, employees feel that their managers lack the skills needed to provide guidance and coaching necessary for employee improvement. Both managers and employees also complain that performance management is too bureaucratic and a waste of time. They often go through the process, just because. In order for an organizations performance management system to be effective, a purpose must be decided upon and communicated throughout the organization. The PM becomes problematic when we have: Poorly Trained Managers Effective PM doesn't just happen and organizations shouldn't assume that managers know how to conduct them effectively, even if they have many years of experience as managers. In fact, since the process can differ from organization to organization, it is important that training is provided to introduce managers to the philosophy of PMS at the organization, including a review of the forms, the rating system and how the data gathered is used. Training should take place regularly as a refresher both for new and veteran managers.- Inconsistent Ratings: Inter-rater reliability is generally very low between managers at any organization. What one manager considers to be "acceptable" performance, another may consider "not meeting expectations." This can be a challenge for any organization and is made more of a challenge in situations where the criteria used are subjective and not based on any measurable performance outcomes. Lack of Outcome-Based Measures: PMS that ask managers to rate employees on subjective criteria such as "customer service skills" or "leadership ability" lack specific outcomes that can be tied to measurable results. The best PMS provide the ability for both managers and employees to judge performance based on measurable outcomes that are objective; level of sales, safety records and evaluations from customers are all measurable ways of providing insight into an employee's performance.-Not Used for Performance Improvement: The purpose of PMS is not only to provide input to employees about how they're doing, but also to provide the organization with an indication of areas of employee strength and opportunities for improvement. Unfortunately, few companies actually aggregate and use the results of performance management system for performance improvement efforts. By analyzing results and taking advantage of both best practices in areas where employees are performing well and opportunities for improvement in areas where they're not, organizations can receive maximum value from their PMS efforts. Weaknesses of Human Resources Performance Management:-Management and employees see performance management differently.-The former treats performance management as a management tool. Employees consider it as acknowledgment and as a way to reward them. This creates conflicts.- It is probable that it is the performance appraisal system under question, not the management of employee performance, The following are some of them: Vague rating methods Some tasks are not easy to measure or impossible to measure Performance standards are not clearly defined Evaluation is often deferred There is no objectivity in making value judgment on performance Assessors often fail to discuss with employees Evaluation results are used to discipline employees Employees are not given the opportunity to comment on the assessment results. Most organisations today list as their major HR concern difficulties in getting and keeping skilled staff. As routine jobs have been automated or moved offshore those that remain have become more complex, requiring above average abilities. In most organisations performance management is primarily an annual event, a form completed prior to the end of the financial year. The form is filed and in most cases will not be touched again until the next review the following year. The performance appraisal may or may not be referred to at the annual pay review. It is not surprising then that research consistently indicates that most performance management systems are of poor quality and poorly executed. The company needs to have some pre-requisites before implementing PMS. This will make the PMS more efficient and adequate to the company. Pre-requisites of effective performance management systems:

Some studies has shown that performance management systems are not satisfactory in most businesses. Simply adopting a new system, new templates and new procedures is not enough to make performance management effective. There are some basic pre-requisites at an organisational level: 1. Clear purpose :To achieve this every organisation must have a clear idea of critical success factors, as well as a performance management culture, meaning an emphasis on individual accountability and results. In order to develop the capacity to perform, there must also be a comprehensive capability analysis, especially where there is a known knowledge and skills gap in the industry or organisation. The performance management system must be able to identify, facilitate and track individual development and succession planning. 2. Business performance management culture: If performance is not monitored at the organisational level, then reviewing the performance of individuals is meaningless. A business performance management culture means that senior management values and insists on measurement of those business factors that are critical to the success of the organisation. 3. Alignment means of ensuring the effort of every individual is aligned with the organisation, that each individual understands their contribution and its importance. This is easier said than done, often there are conflicts between departments such as operations and sales. 4. Fairness Perceptions of fairness are based on comparisons. Typically staff compares their inputs, such as expertise and effort, their job performance and their compensation with others. The key factor in ensuring that staff feels their compensation is fair is procedural justice. Staff needs to feel that the method used to determine relative pay is fair. 5. Meaning: A performance management system must be seen to accomplish its purpose; to communicate expectations, reward top performance, and address skills and knowledge gaps. That means the system must be capable of capturing accurate and relevant data with sufficient frequency to enable objective reporting. This enables decisions on the basis of facts rather than opinions or even personal preferences. 6. Commitment: There must be commitment to performance management from all levels. Senior management and Human Resources staff, if the organisation has HR staff, must require proper and regular use of the programme. Requirement to use alone is not sufficient, the integrity of the system must be monitored and reports published. 7. System integrity Designing a performance management system is only the first step. Once designed and introduced there must be a mechanism for ensuring that the system is working. This means ensuring that the system is being used according to the defined procedures, and with the correct frequency. Twelve steps to successfully implementing a performance management system: Step 1 Check that strategy and values are clear: The organisation must publish clear values and promote them to every individual staff member. It isnt necessary to hang them in the foyer . they are not for visitors. Values inform, or in fact may derive from, strategy. A value proposition is a statement of those specific factors that make your products and services more desirable than those of the competition. It may be better technology, customer service, it may be value, it may be responsiveness, it may be marketing and sales expertise that give you the advantage. Whatever the factors may be, again there is a need to keep them in focus as a priority for everyone. Step 2 Outline organisational objectives: All organisations have objectives. They should not be secret. Staff must be aware of how their role contributes to the achievement of these objectives. Individual staff doesnt need to know the details of sales budgets but they do need to know the organisational objectives are, for example, to improve the customer retention rate, to increase sales, to acquire new customers. If the organisation shows to the employees the organisational objectives and the hierarchy of contributing objectives, they can select personal objectives that will align to the organisational ones, and they will understand the importance of their contribution. Step 3 Update job descriptions: A frequently quoted reason for not having job descriptions is that people will do only what is written there. That may be true of some people, especially if they become disillusioned at work. Probably the most frequent reason for not using job descriptions, and for not referring to job descriptions in performance reviews, is the difficulty in keeping them up to date. Job descriptions need to be written precisely, so that they communicate the activities and the results that are expected. Generally the more senior the role the more emphasis on results rather than tasks, and vice versa for more junior roles. The job description must also make clear how the accountability will be measured. The language you use plays a huge part in determining peoples behaviour at work. Vagueness gives staff the opportunity to blame their managers, departmental systems, each other, the environment, and to avoid individual accountability. The job description should include an outline of key tasks in each accountability, phrased as activities, starting with verbs. Step 4 Ensure everyone has a current job description: Quality job descriptions are the first line of defence. Ensure each individual has a current job description, and that it is readily accessible to them. Over time people drift away from their original understanding of requirements so that little by little critical aspects of the job can be overlooked. It is essential that job requirements are reviewed regularly. not just once a year. Step 5 Performance Planning: While the job description is an overview of day to day performance requirements, organisations often have specific periodic and short term objectives and budgets they wish individuals and teams to achieve. It is well established that staff with goals outperform those who have no goals. The best way to manage goals is within an individual performance plan. If you use a team approach, then it is the team which is held accountable, rather than any one individual. Just as with the job description the performance plan needs to be carefully written, or it will be worthless. Step 6 Plan for feedback: Feedback must be objective. The ability to give unbiased feedback is dependent on the quality of the expected results and measures in job descriptions and objectives. If expectations are vague then you cannot give meaningful feedback. There are many ways of capturing the data you need for feedback. The supervisor relationship is central. Of course you can.t give feedback if you don.t know what the staff member is doing. There must be a regular but informal process of observing performance. Step 7 Have a clear methodology to deal with poor performance: It is vital then that managers have a diagnostic system for analysing the causes of poor performance, with a view to first identifying and eliminating environmental factors. If after a structured analysis the reasons for the poor performance are personal factors, the poor performance must be confronted. The system must meet the legal requirements of documentation, non discrimination, fair procedures, such as giving staff the right of reply, and a realistic opportunity to improve. Step 8 Plan to align the consequences: With the shortage of skilled staff today in many roles and industries it is vital to retain top performers. There must be a transparent and systematic means of differentially rewarding top performers if they are not to be disillusioned. Step 9 Evaluation: Competency evaluation is a development strategy. Obviously people need skills and knowledge in order to undertake work activities, and any review of performance should include an evaluation of the required capability and development needs- Step 10 Evaluation processes: How often should a review take place? So long as there is ongoing informal feedback an annual review is sufficient. We have seen that most staff are sceptical of the review process. To gain staff confidence the review process must be totally open and transparent with strict adherence to clear evaluation criteria.-Step 11 Implementation: The best system in the world is useless if no-one uses it. Resistance to change is part of the culture in most organisations. The best change management strategy is multifaceted, including communication and education supported by regulation and example. Senior management must make performance management a requirement and itself part of the review process. It goes without saying that they should not exclude themselves, but be clearly seen to actively use and support the performance management system. Most staff are untrained in performance management concepts. The first step is to educate staff and managers about the importance of performance management. Next the performance management procedures and documents need to be fully explained and guidelines distributed. For staff an effective system means clearer expectations, feedback and recognition based on actual results, and therefore a more enjoyable, rewarding and less stressful workplace. For managers it means their area of responsibility will have fewer staff problems, better staff satisfaction and retention rates, improved staff productivity and performance and better business results. In turn they can expect to be appropriately recognised and rewarded.-Step 12 Ensuring the integrity of the performance management process: This

means regular checking on the level of performance management activity, the amount of dialogue and recording of objective performance data and subjective feedback. It means checking the quality of job descriptions and the alignment of objectives. It means checking that performance reviews are conducted as scheduled and according to procedures and the quality of comments and ratings there in. Unit 5: An employee reward is any recognition in the form of a tangible or intangible award, prize, or incentive that acknowledges an employee's contribution to organizational success. Making decisions about employee rewards is key to establishing a total rewards strategy and aligning HR strategy with the organization's strategic objectives. It may be particularly important to reward exemplary performers, who can be as much as 20 times more productive than their fully successful counterparts. Total rewards can be understood as an employee's salary, benefits, and short- and long-term incentives, and rewards or recognition for achieving specific performance goals (Schiffers, Young, & Shelton, 1996). Although CEOs and other senior executives are most interested in those total rewards that directly affect the financial bottom line, salary and benefits are only part of a much broader range of incentive and reward methods. Total rewards could be regarded as everything employees perceive as valuable that results from their relationship with an organization and which the organization uses to attract, retain, and motivate them. Total rewards vary greatly from one organization to another, since it is important to develop a strategy that fits within the corporate culture. Rapid changes in the business environment have prompted many decision makers to examine the effectiveness of their reward systems. Lawler (2000) suggested moving away from a one-size-fits-all philosophy and using individualized systems, which enable organizations to offer incentives in forms that appeal to employees. Bratton and Gold (1999, p. 238) defined reward in the following terms, Reward refers to all forms financial returns and tangible services and benefits employees receive as part of an employment relationship. According to Thompson and Martin (2005, p. 229) reward are an important motivator, but it is important to appreciate that an individual may feel rewarded by things other than money or promotion. The demands and responsibility of a job, and the freedom that people are given to decide how to do things, can be rewarding. According to Stephen Taylor (2000) as cited in Thorpe and Homan (2000, p. 11), there are two key questions, which an organisation has to ask when formulating reward strategies and policies, they are: how much should be paid to each employee and what form should that payment take? There is nevertheless a large choice of payment systems and methods available for management to choose from and many methods of determining pay levels available for manages to choose from. However, Taylor (2000) as cited in Thorpe and Homan (2000, p: 12).states the principal determining factor when deciding on rewards for employees of the organization are the objectives the organization has for their HR policies and reward systems in particular. In the context of the studies Armstrong and Lybrand (1992, p. 41) states that reward strategy is concerned with: - developing a positive, performance orientated culture; underpinning the organisations values, especially those relating to excellence, innovation, performance, teamwork and quality; conveying a message to prospective high-calibre employees that the organisation will satisfy their reward expectations; ensuring that the right mix and level of reward are provided in line with the employees and the environment in which the business operates; linking reward policies, systems and procedures to the key business and human resources strategies for innovations, growth development and the pursuit of excellence; also developing a strong orientation toward levels of performance throughout the organisation by recognising successful performance and increase in levels of competence, thus contributing to the processes of empowering, enabling and energizing all employees; and indicating to existing employees what types of behaviour will be rewarded and how this will be place, thus increasing motivation and commitment and improving performance.In the same vein, Armstrong (2001) also states in order for organisations to achieve their strategic objectives it must have a skilled, competent, committed and well motivated workforce which is supported by a reward strategy that: - flows from and fits the business strategy; links reward to performance; aligns individual and organisational competencies; integrates with other human resources management and development strategies; and evolves from consultation with key stakeholders. What are the main strategic reward options available to organizations? Types of reward are important in terms of motivation where by different types of reward may motivate an individual. Motivation can take the form of money-related or non-money related an individual may become motivated by security driven knowing that they have a lifetime /permanent job as compare to those that prefer to become motivate by money-related issues such as cost of living or perks offered by the organisation. On the other hand there are employees whose motivation stems from employability driven that is motivated through the use of training and development or personal career path, in comparison to those that are contribution driven, believing performance related pay or merit bonus are better form of motivation. Attitudes toward reward programs have changed in recent times. For many years, reward programs were viewed primarily as a necessary evil to attract and retain competent employees. Today, organisations acknowledge the important role reward programs play in contributing to business success. Put simply, an effective total rewards strategy enables organisations to deliver the right amount of rewards, to the right people, at the right time, for the right reason. Organisations now have a broader understanding of the concept of rewards' largely as a result of better understanding of their human capital strategy, or the people' side of business design the selection, development, deployment, motivation, management and retention of people to carry out the business strategy. Human capital strategy has many components: how work is processed, how information and knowledge are shared, how decisions are made and how people are managed. It also includes the types of employees (characteristics, skills, education, attitudes, etc.) and how those people are rewarded. Each organisation's human capital strategy is unique because it is based on their own business strategy and business context. A reward strategy must be deliberately created to support this human capital strategy. Organisations are realizing they can't merely replicate the reward practices of other organisations (ie: taking a best practice' approach) but need to figure out what works specifically for them ie: a best fit' approach. The definition of rewards has also changed. Previously broadly defined as the base salary employees collected every fortnight or month, the concept of rewards has expanded to encompass the overall value proposition that the employer offers to the employee. It's a total package which includes:- Remuneration (including base pay, short-term incentives and long-term incentives). Many human resource and business leaders once believed that pay represented the total solution for attracting talent, motivating high performance, reducing turnover and a host of other human resource challenges. However, remuneration is just part of the picture. Other reward program elements can be just as important, if not more important, to employees. - Benefits (including superannuation, cars, work/life and other benefits). Benefits account for an increasing part of the reward package, and employees recognise this. They look closely at the company's superannuation plan and other benefits, and select elements in their remuneration packages aligned to their needs. And not only do needs and preferences vary from employee to employee, they also change over time.- Careers (including talent build or buy strategy, training and development, and career opportunities). HR professionals, while trying to determine the right combination of pay and benefits, sometimes overlook an equally important reward component: careers. To employees, careers represent the future value of staying with an organisation. Many will even forgo higher salaries and better benefits for the opportunity to learn and grow and advance their careers. (Reference: Ken Gilbert) Strategic rewards embrace everything that employees value in the employment setting, and the term refers to the complete bundle of all employee reward elements. What makes these rewards strategic is the care employers must take to align their design and effects with strategic objectives. One view of

Strategic Rewards as depicted here shows four quadrants of a strategic rewards framework: Compensation: Base salary, variable pay, job evaluation, performance management, paid time off Benefits: Health care, retirement, saving, other insurance Development & learning: Training, career development, learning experiences work environment: work /life balance, leadership, performance support, organizational climate ( graph). The top two quadrants, compensation and benefits, cover the areas that we traditionally think of as rewards the employer provides. These are sometimes referred to as transactional rewards because they include the tangible results of the agreement between the employee and employer. In this agreement, or transaction, the employee agrees to provide time, labor and skills in return for salary and benefits. Therefore, these rewards are readily viewed in terms of having a monetary value, such as the employee's base salary or the Federal Employees Health Benefits Program. Transactional rewards play an important part in an employee's decision about where to work and whether to stay with an organization. The bottom two quadrants, development and learning and the work environment, cover areas that are increasingly recognized as critical contributors to employee satisfaction. They are sometimes referred to as relational rewards because they tend to represent the relationship (vs. the transaction) between the employee and employer. They are important additional rewards that can significantly enhance an employee's desire to remain with an organization. These rewards: can emphasize the importance of the employee to the organization; can influence the employee's sense of loyalty; are rarely seen in terms of their cash value, but have an equally important impact when an employee is trying to decide whether to accept other employment or remain with an agency. represent those program areas where agencies have the greatest amount of flexibility to design programs specific to the needs of their employees. To many employees, a supportive and engaging work environment is at least as important as health care benefits and pay. For example, dependent care support, flexible work schedules, opportunities to telecommute, flexible leave programs, meaningful employee involvement, and well-trained supervisors providing quality leadership may make all the difference in the world when a person with a hard-to-find skill is considering your job offer or when an employee with valuable institutional experience is considering a competitor's offer Example: Many agencies have adopted this approach to help them manage their workforce. The Defense Contract Audit Agency (DCAA) and the National Credit Union Administration (NCUA) use strategic rewards to help attract and retain skilled employees. As the Defense Department's audit agency, DCAA's human resources managers were faced with the challenge of hiring 600 entry-level auditors within 1 years. To make the agency more attractive to potential hires, managers reinvented the way they recruit. In addition to streamlining their recruitment process, they also put emphasis on the training new hires will receive, the tuition reimbursement program, recruitment bonuses, and a 3- to 5-year career ladder. In addition to actively recruiting new employees, DCAA's managers worked to retain its current workforce. To do this, it created a work environment of trust, teamwork, and mutual respect by using effective communication and leadership at all levels. NCUA implemented a merit pay system that links annual pay raises directly with employee performance appraisals. The agency uses a variety of awards to recognize its employees for their contribution to its organizational goals and objectives. Using the strategic rewards approach, NCUA has created programs that allow its employees to work from home, receive reimbursement for certain home-office expenses, participate in one of three flexible work schedules, and receive travel bonuses (i.e., a cash award to recognize employees who volunteer to be in a travel status for more than 50 days a year). NCUA uses its strategic rewards as part of its recruitment program. The agency works hard to create a work environment that is family-friendly as well as challenging .Reference: U.S. Office of Personnel Management Compensation: Compensation is critical to an organization's total rewards system. According to WorldatWork, compensation comprises the elements of paysuch as base pay, variable pay, and stockthat an employer provides to an employee in return for services rendered (Worldat Work Glossary, n.d.). Traditional approaches to compensation rely on information about what people do, their length of employment, and the relationship between their pay and that of others in the organization. In managing compensation, employers usually weigh three factors: external equity, internal equity, and individual performance. They ensure external equity by considering labor market conditions that exist outside the organization and preserve internal equity by assessing relationships among jobs based on the relative worth to the organization. In evaluating individual performance, employers determine an employee's effectiveness at achieving results. This often creates a threefold challenge for HR practitioners who must establish externally competitive wages , salaries, and benefits within a system that also recognizes the different value of various jobs and provides incentives and rewards for individuals. This view was verified by a study of nearly 750 HR and compensation managers with U.S. organizations (O'Neal, 1996). The same study found, however, that employers are beginning to shift their compensation programs toward more flexible systems that allow managers to reward employees for applying competencies, achieving higher performance levels, and making more contributions to organizational success. The existence of so many different pay plans demonstrates the widespread dissatisfaction among many managers with traditional approaches to compensation management. It also shows a great willingness to experiment with new approaches. And yet, despite so much experimentation, few managers are satisfied with any one approach.
Job-based pay: There are a number of different approaches to compensation, but perhaps the most familiar is job-based pay. Two approaches to job-based pay, automatic step progression and the merit range are perhaps the most traditional methods of providing pay changes within a grade (Bremen & Coil, 1999).Automatic step progression calls for a series of incremental increases within the pay grade. The merit range sets a minimum, midpoint, and maximum within a range, and workers are eligible for periodic pay increases, often on an annual basis. Merit pay is sometimes called "pay for performance," although that would not be an accurate description at most organizations, where job outputs have not been made clear or explicit. True pay for performance, which rewards genuine productivity, is not possible unless job outputs are known and measurable. Job-based pay is not a perfect solution to compensation. One important drawback is that it often does not reward workers for improving their skills or knowledge. In addition, it does not support the corporate culture, encourage worker participation, or enhance worker flexibility (Sherman, Bohlander, & Snell, 1998). Skill-based pay HR practitioners have been experimenting with many new approaches to wage and salary administration. One such approach isskill-based pay, for which organizations create levels based on the acquisition of skills linked to the mastery of various work processes (Bremen & Coil, 1999). In this approach, pay corresponds to a worker's demonstrated ability to perform the processes. Organizations may analyze the work and then determine the knowledge and experience needed to perform it. As skills are acquired , individual pay is adjusted. This approach very often fosters an increased interest in skill acquisition and is helpful for workers who enjoy their jobs but are interested in new challenges (Tyler, 1998). A skillbased pay system presents HR practitioners with many challenges. One centers on establishing a method of measuring skill acquisition and deciding how much to pay for it. Organizations must also determine exactly which skills should be acquired in order to receive increased pay (Tyler, 1998). Other challenges include limited advancement available for an employee who has acquired all the indicated skills, pay tied to skills that either are not used regularly or are no longer used, and the costly updates required as work processes change (Bremen & Coil, 1999). Alternative compensation The meaning of this term seems to be evolving. Nadel (1998) interprets it as processes that meet the intrinsic needs of workers, develop strategies that appeal to workers while meeting strategic business needs, and communicate to workers that they are valued. He includes many initiatives within this category, such as employee training; tuition reimbursement; flexible work arrangements; worker-friendly environments, perquisites, amenities, and conveniences; and a positive management attitude (Nadel, 1998). Incentives Incentives, which are meant to encourage desired performance, are either monetary or nonmonetary. Monetary incentives are sometimes called "extrinsic rewards," and nonmonetary incentives are often referred to as "intrinsic rewards" (Rothwell & Kazanas, 1998). Monetary incentives A true pay-for-performance plan attempts to link job results with pay. Incentive pay is one such approach. Profit sharing is a form of incentive pay in which a percentage of a company's profits is shared with workers. Another form is gain sharing, in which workers share in the money derived from achieving particular goals. Small group incentive pay and team-based pay apply to specific groups that attain desired results and achieve their goals. With long-term incentive pay, workers who reach set goals are usually rewarded through some type of stock program, and a lump-sum payment plan distributes incentive pay, usually to high performers, for achieving desired results. Incentive pay may also be stock based. Stock-based pay is sometimes linked to the overall performance of the organization. Lump-sum bonuses are a one-time incentive. Bonuses can be used for a variety of reasons, including fostering skill development or encouraging

workers to relocate for a lateral move (Tyler, 1998). Nonmonetary incentives Nonmonetary rewards for good performance include sincere praise, organizational and employee partnerships, learning and development opportunities, time off, task force or other assignments, assistance with personal chores, gifts, and recognition of achievements in company or industry publications . This type of incentive can be applied to groups, teams, or individuals and may become project based as well. Nonmonetary awards help to create a working environment in which employees are truly engaged and feel good about themselves and their work for what is often very little cost (Coil, 1999). In the past, nonmonetary and low-cost incentives were used by a limited number of organizations, but today's workers are less inclined to want pay increases and bonuses and may prefer incentives of greater personal value. In virtually every chapter of this book, we have mentioned change and its impact on HR management systems. Change has affected workers' values and consequently their reward preferences. Organizations must recognize these changes and adapt to them. Recognition and Rewards Recognition can be a very effective means of rewarding behavior and emphasizing the importance of both contributions and performance. Informal employee recognition can be of little or no monetary value and includes praise, certificates, plaques, news articles, and ongoing programs such as employee of the month. Formal recognition is often more organizational in nature, usually requires management approval, and costs substantially more than informal recognition (Bowen, 2000). Gainsharing, short- and long-term incentive programs, and stock option programs are examples of formal recognition awards.[3]Traditionally, some organizational leaders have held that a "fair" salary and a "good" benefits package are sufficient compensation for employee contributions to organizational success. In a similar manner, the traditional HR management approachprobably driven in large measure by the opinion of senior leadershas been to focus on providing employees with a competitive compensation and benefits package. In addition, traditional reward strategies are not always well defined or geared to measurable outputs or results. Instead, leaders and their direct reports tend to become caught up in the performance of work activities. Strange as it may seem, a major success factor in any reward process is whether the organization has developed and communicated the expectation that its employees produce concrete, observable results. A traditional system often does not single out exemplary performers for special recognition or reward. On the contrary, exemplary performers may be punished for their achievements. Exemplary performers stand out from their peers because they accept difficult challenges or achieve outstanding results with the same or less resources than others. Supervisors recognize the ability of exemplary performers and their willingness to go the extra mile and consequently assign more work to them than to their peers. A high-performing employee recently summarized this situation by saying, "The better I perform, the harder I'm expected to work. I think there's something wrong with that, don't you?" There seems to be some truth to the saying that the reward for exemplary performance is not more money but more (or harder) work! Providing more work could be seen as punishment, not reward. Reward programs are administered in various ways by organizations that have a formal reward system in place. In some cases, and especially in team-based organizations, a committee of peers reviews accomplishments. Other reward processes may be managed by a single decision maker, a committee of decision makers, the CEO or president, or an executive committee.

What should organizations consider when developing reward strategy? STRATEGIC APPROACH TO REWARD By Olof van Schalkwijk Reward is one of the key levers available to an organization to influence the behaviour, motivation and the commitment of its staff. In fact the overall approach to reward sends strong messages to all employees about what is important to the business. There is no one best practice in terms of reward, only a best practice for the specific organization given the variables impacting on it. Some of these variables are specific to the organization, others relative to the industry while others are national and even international initiatives (particularly if the company is a multinational). Critical elements/variables to be considered before developing a reward strategy: -Understanding the organization, its position in its life cycle, strategy, critical success factors and culture.- Understanding the workforce and its demographics.- Knowing the perceptions and values of stakeholders relative to remuneration.- Understanding the market in which you compete for skills, the areas of shortage and demand for scarce talent.- Understanding the environment in which the company operates. Although rewards must be broadly aligned with the vision and strategic direction of the company, the realities of the situation as mentioned above, must be taken into account to ensure corporate strategy is successful transformed into a viable operational plan. Most strategies fail through poor implementation. An effective reward strategy, balances strategic and operational goals, ensuring short term actions dont negate long term opportunities and that the organization can attract, retain and motivate the quality of people it needs people with the necessary skills, experience (and/or potential to develop these skills) to achieve its goals. Components of a reward strategy include: Paying for Performance: A remuneration strategy should ensure significant differentiation in reward between top performing employees and others, and a remuneration mix that is customized in a way that recognizes the preferences of different employee groups. The defensibility of pay is always enhanced within the company and without, when linked to performance and as such should be integral in any reward policy. Rewards perceived as an entitlement regardless of performance are neither cost effective nor motivational. Differentials in pay levels, increments and incentives favoring the good performers will drive positive behavior. Guaranteed pay: Guaranteed pay should be driven by market competitiveness (scarcity), internal equity, and individual performance. Whereas for example, competent performance could be linked to median rates, upper quartile guaranteed package rates should be reserved for outstanding performers rather than those with long service. To retain their position as outstanding performers, achievements should exceed the norms on a sustained basis with enhanced standards each year, rather than an historical once off achievement. The achievement bar for outstanding performance should be set high. Market competitiveness represents rates relative to the economic community your organization may draw people from, or lose them to. Short term incentives: Variable pay is an essential component of any reward strategy. Not only are they a mechanism for recognising work well done, they can ensure highly competitive earnings relative to the market. Whereas fixed pay levels inflate payroll and cannot easily be reduced, variable pay is more flexible and can be aligned to possible fluctuating individual and company performance and budgetary constraints. The combination of reasonably competitive guaranteed pay, (as opposed to highly competitive), and an aggressive incentive scheme will motivate good performers and ensure optimum payroll spend. Long term incentives: Executives and management should have a balance between short and long term reward as they need to focus on both operational and strategic issues. To emphasize the value placed on long term rewards as evidenced by market practice, a recent analysis by LMO found that CEOs of major organizations were allocated shares, in good years, up to 15 times the value of their guaranteed annual pay. (The overall norm over 3 years was closer to 6x guaranteed pay). This does not take the appreciation of share values into account at time of vesting, otherwise these multiples would be appreciably greater. The alignment of managements and the companys medium to long term interests remains the underlying value proposition for long term incentives. There has however been some fall-off in the practice of offering of share options due to tax and cash flow implications arising from new legislation. This has given rise to other options such as endowment policies, phantom shares, banked bonuses etc. Performance Management: Reward linked to performance remains an effective and defensible strategy, an important consideration with the spotlight on executive pay and good governance. In this respect a key success factor is to create a performance focused culture and a defensible credible performance measurement process. The challenge is to develop an environment where people know and understand the purpose and value of their work. Yet in many instances companies pay lip service to the concept and formal performance management programs are not always a success: Performance management is one of the tools for creating a more efficient and profitable business that has often historically been viewed as ineffective, highly political, and a time-consuming chore. Yet there is not a single company that would not welcome a system that can deliver: Clearly articulated goals so employees and managers understand expectations.- Valid information on just how well they are doing. -Fair and equitable reward linked to performance. Tactful and just-in-time feedback on areas in need of improvement. -Identification of opportunities for personal development. To be effective the management of performance needs to be a formalized process with performance measures updated at least annually, formal reviews held regularly and development plans agreed and monitored. This requires senior managements commitment and active participation. Personal Development: A key reward broader than remuneration, is the extent to which employees can grow in the job the extent to which their skills are enhanced in order to qualify for greater job challenges. Practice has shown that personal development, work challenge and opportunities for career progression are all motivators that play a major role in the attraction and retention of staff. How to integrate reward management with SHRM: Integrated reward management is an approach to reward management that provides for reward policies and practices to be treated as a coherent whole in which the parts contribute in conjunction with one another to ensure that the contribution people make to achieving organizational, departmental and team goals is recognized and rewarded. It consists of a related set of activities that impinge and impact on all aspects of the business and the HRM practices within it. In an integrated approach each individual element of reward supports the other to reinforce organizational objectives. Integration takes three forms: - Strategic integration: the vertical integration of reward strategy with business strategy. - HRM integration: the horizontal integration of reward strategies with other HR strategies, especially those concerned with high performance, engagement, talent management and learning and development. - Reward integration: the internal integration of reward to ensure that its various aspects cohere and that a total reward philosophy is adopted that means a full range of mutually supporting financial and non-financial rewards is used. Integrated reward management is an approach according to which, as suggested by White (2005), each single element of reward supports and reinforces one another in order to help organisations achieving their intended objectives. But,

as suggested by Armstrong (2010), this integration has not to be pursued just considering reward practices and policies, i.e. just considering reward integration, but also considering the vertical and horizontal integration opportunities. The concept of vertical integration relates to the need to integrate and align reward strategy to the business overall strategy, whilst the horizontal integration underscore the importance of integrating reward strategy with HR strategies, in particular with those concerned with engagement, talent management, L&D and high performance (Armstrong, 2010). Strategic reward as an attitude of mind rather than a set of prescribed techniques. It is based on a belief in the need to be forward looking to plan ahead and make the plans happen. It is visionary in the sense that it is concerned with creating and conceptualizing ideas of where the reward policies and processes of the organization should be going. But it is also empirical management that decides how in practice it is going to get there. An important characteristic of strategic reward is that it is systematic in the sense that it is based on analyses of the organizations internal and external environment, its business needs and the needs of its stakeholders. It is conducted within a framework of articulated beliefs and values, and it is goal-orientated the desired ends and the means of attaining them are clearly defined. It takes account of the business strategy and what can be done by reward to further its achievement. Importantly, it is a key instrument in achieving an integrated approach to reward management, one in which the various aspects of the reward system cohere and are linked to other HR practices so that they are mutually supportive. It focuses on implementation it is about getting things done rather than just thinking about what needs to be done. Finally, strategic reward is based upon a philosophy expressed in the form of guiding principles. Strategic reward management is based on a well-articulated philosophy a set of beliefs expressed through guiding principles that are consistent with the values of the organization and help to enact them. These include beliefs in the need to operate in accordance with the principles of distributive and procedural justice. Reward strategies the past have sometimes focused exclusively on business needs and alignment. Yet unless employees see and experience fairness and equity in their rewards, the strategy is unlikely to be delivered in practice.The philosophy recognizes that reward management is a key factor in establishing a positive employment relationship, one in which there is mutuality the state that exists when management and employees are interdependent and both beneft from this interdependency. Such a relationship provides a foundation for the development of a climate of trust. Guiding principles A reward philosophy can be expressed through a set of guiding principles that defne the approach an organization takes to dealing with reward. They are the basis for reward policies and provide guidelines for the actions contained in the reward strategy. Importantly, they can be used to communicate to employees how the reward system operates and takes into account their interests as well as those of the business.Reward guiding principles will be concerned with matters such as:- operating the reward system justly, fairly, equitably and transparently in the interests of all stakeholders;- developing reward policies and practices that support the achievement of business goals;- rewarding people according to their contribution;- ensure that salaries and benefits remain competitive when compared with comparators within our industry sector, so that we can retain and attract staff of the highest quality;- reduce the previous focus upon grades in favour of broader bands so that personal development can be encouraged;- Aegon UK motivate staff sufficiently so that they will ensure the company remains successful, thereby allowing for continued competitive levels of reward for superior performance. What are the main features of Lawlers model on strategic issues in reward management? In his review of the strategic role of reward and organizational development, Lawler (1984) laid down a nine-point framework for taking strategic decisions. These nine points will be used as a basis for analysing past decisions and laying out future policy. We shall briefly summarize these below. They are divided into structural and process aspects, which confirm the point we have been making throughout this module. This is that effective HR strategy is more than policy choices it involves a style and approach to implementation as a basis for building commitment, ownership and learning in the process. It is likely to create Longer term HR benefits. According to Lawlers (1984: p131 to 146 adapted) model the strategic issues in a reward system are as follows: Base of rewards: Job based, person based, skill based increasingly, the emphasis on performance related pay is based upon individual contribution within a job. Person centered pay has been one of the central developments in pay policy in recent years, in order to achieve a better balance between the job demands and individual contribution. As organisations are required to respond to market forces, services and products, they require new skills and knowledge. Hence, several organisations have used skill based pay to encourage and support wider investment in training and development. So organisations have to balance the reward base between the following:- Job: the impersonal determination of generic skills/knowledge derived from the job definition.- Person: the contribution an individual makes to the job performance, reflecting the potential and growth of the jobholder- Skills: the level of training and skill enhancement to meet organisational objectives. Performance and incentivisation scope for progression: Individual, group or organisational criteria. This is a key agenda item for all organisations. Should they offer additional incentives over and above the base reward? What form should this take? How do they link incentives to the achievement of specific strategic business outcomes as part of aligning reward to business strategy? In some cases incentives are seen less as addons but are being included as a specific management strategy to reduce fixed pay and replace it with a higher element of variable pay that reflects organisational performance. The question we have to ask is what are the best incentives for organisations and individuals? We need to complete the picture. It is important that both employees and the organisation mutually gain from incentives to achieve commitment Market position: Position in sector: upper/mid/lower quartile. organisations are often faced with significant external turbulence within labour markets. For example recent trends include IT specialists, accountants, specialist insurance activities, electronics engineers and so on. Organisations often have to face paying what the market demands and to ignore internal fairness and relationships. Therefore, reward strategy needs to determine the following questions: How responsive is pay to external change? How far do we have separate policies for

different staff categories? How flexible are internal structures to allow for pay progression? How do we collect external pay information and how does that inform decision making? Internal versus external comparison: Internal v external equity.: Clearly organisations need to demonstrate the ability to attract and retain as well as grow or progress employees through the reward strategy. As we have seen, person based pay or personal contribution requires a matching against internal and external benchmarks. To make informed decisions on reward, organisations need to conduct pay and benefit surveys. The objectives of such surveys are as follows:- Maintaining competitive and cost effective pay and benefit rates.- Providing guidance for internal differentials between jobs by reference to national and regional labour markets.- Gaining information required to make adjustments to levels of pay and benefits. HR strategists, therefore, need to understand and be informed about the following:- Concept of market rate.- Sources and methods of collecting data.- Methods of presenting data to achieve appropriate levels of analysis.- Developing ongoing strategic relations to support reward decisions through pay association. Centralised versus decentralized reward: centralised determination offers the prospect of creating internal equity and the ethos of a strong corporate culture, it has the disadvantage that it is normally associated with standardisation of pay grades based on job evaluation. As we have seen, these can limit innovative and flexible responses to employee contribution within job performance. On the other hand more localised responses are normally associated with a more responsive business focus and the market. It also allows scope to reward creative behaviour and assist with retention of key skills and talents in a way that centralised or systems based approaches can fail to achieve. Degree of pay hierarchy: Number of structures. All reward systems depend upon a certain degree of pay hierarchy. Managers receive higher pay than professional staff, who in turn receive higher pay than administrative staff. The basis of this is job demand described earlier. In certain cases organisations have distinctive salary structures for each job category:- Management: a minimum maximum scale, with progression based on individual performance.- Skilled or professionally qualified staff: a minimum maximum scale, with progression based upon organisation results and individual performance.- Administrators: job rates, with progression based upon company performance. This type of structure, often with more levels than this example, reinforces traditional power relationships and organisational structures related to promotional steps. It is rarely used in organisations operating in the new economy sectors, and, generally, organisations are moving away from hierarchical power relationships and are reducing visible status differences both in pay and non pay benefits. In pay terms the trend has been to reduce the degree of hierarchy in pay systems by enhancing overlap and progression opportunities.Trends in salary structures: Reward and compensation schemes must, in order to achieve equity, attempt to include a reference to: - Individual contribution based upon performance. -An evaluation of job complexity. There are a number of ways of creating a salary structure. The most typical for the purposes of illustrating trends in the strategic management of this element of the reward mix is a graded

scale. The main features of a graded structure are as follows: 1. Jobs are allocated a salary grade based upon an assessment of the three criteria above contribution, market and job complexity. 2. A salary grade or band. Jobs within a grade are broadly similar in demand. A band will contain important control features: a maximum salary, a minimum entry point, a target or market point at the midrange and a percentage range between the top and the bottom. Employees would need to obtain promotion to move from one grade to another. 3. Each grade will have a relationship with other associated grades within the structure. The rate of salary progression within a band has been a subject of critical review in recent years. Today, salary progression is generally driven by performance (and is not automatic at annual reviews). Organisations have also adopted flexibility to accelerate increments to reflect higher performance or market pressures. Advantages of graded structures: -Job levels can be readily assessed and recognised. -Effective control of salary budgets. -Transparent systems that are less biased in decision making. Disadvantages of graded structures: -Often seen as inflexible to individual contribution. -Considered by some to be unreceptive to market pressures for certain jobs. Reward mix: -Pay is normally seen as the most central feature of the Reward Strategy. However, increasingly, employees in western economies are paying greater attention to certain benefits such as pensions.-Organization tends to have a balance of pay and benefits and use them strategically to increase the company performance.- In organisations, benefits are normally associated with promoting retention over a longer term. One further area of reward mix to consider is benefit flexibility. To what extent is it feasible to administer choice? How attractive is employee choice? At face value, giving staff choices and influences over their reward is attractive under the heading of involvement and motivation. One overarching trend in reward and benefit is to harmonize benefits across all staff groups. Armstrong & Murliss (1989, p.257-8) have identified six categories of benefits addressing different employee and employer needs: 1.Pensions or deferred salary to employee (and family, in the case of bereavement) based on employee and employer contributions to the fund, built over a lengthy period of employment. 2.Personal security: sick pay, accident and life assurance, health screening and private medical insurance. 3. Work life balance which is currently much in the public eye in western economies; holidays, child care benefits, maternity and paternity leave, career breaks, flexible working hours, variable contracted flexible and home working. 4.Financial assistance to support recruitment and retention; relocation costs, subsidised home mortgage loans, payment of fees, discounted staff uniform, company products, low interest loans, telephone allowance. 5.Benefits related to status and job performance such as company cars, subsidised catering and sports and leisure facilities, travel and petrol allowances. 6.Intangible benefits such as the nature of the job and organizational culture supportive to employee development. Process issues: In the discussion of process issues, the 1st strategic issue to be considered is communication and transparency. As communicating pay objectives to employees clearly is important in achieving positive human resource results, the existing culture of companies usually decides how open the dialogs are. Traditional companies adopt a closed system and keep salary ranges unknown for purposes of pay review. Other companies with open systems often publicise the salary structure and criteria for which salary increment can occur. Open systems tend to instil confidence and fairness into employees as decision-making becomes more transparent and criteria are made known. The 2nd strategic issue concerns with employees degree of involvement in pay decisions. A company aiming to achieve a team-based operating culture and high employee involvement in all aspect of human resource management should consider allowing employees to be involved in determination of job salaries too. Companies adopting close-based systems usually applies HR policies onto its employees and ultimately, companies have to decide whether leveraging highly on employees trust and commitment or otherwise, is more suited to the companys culture. Reward systems consequences/integration: Integrated reward management is an approach according to which, as suggested by White (2005), each single element of reward supports and reinforces one another in order to help organisations achieving their intended objectives. But, as suggested by Armstrong (2010), this integration has not to be pursued just considering reward practices and policies, i.e. just considering reward integration, but also considering the vertical and horizontal integration opportunities. The concept of vertical integration relates to the need to integrate and align reward strategy to the business overall strategy, whilst the horizontal integration underscore the importance of integrating reward strategy with HR strategies, in particular with those concerned with engagement, talent management, L&D and high performance (Armstrong, 2010). Unite 6: The main features of a learning organization and why they are important to SHRM. Examples: In today's knowledge economy the attraction, retention and growth of talent is fundamental to achieving competitive advantage and high performance. Organisations pursuing a high performance culture recognise the criticality of Learning and Development in the context of the development of human capital and organisational capability more generally. A learning organization is the term given to a company that facilitates the learning of its members and continuously transforms itself. Learning organizations develop as a result of the pressures facing modern organizations and enables them to remain competitive in the business environment. A learning organization has five main features; systems thinking, personal mastery, mental models, shared vision and team learning. THE MAIN FEATURES: According to (Peter Senge, 1994) a learning organization exhibits five main features: systems thinking, personal mastery, mental models, a shared vision, and team learning. Systems thinking: This is a conceptual framework that allows people to study businesses as bounded objects. Learning organizations use this method of thinking when assessing their company and have information systems that measure the performance of the organization as a whole and of its various components. Personal mastery: The commitment by an individual to the process of learning is known as personal mastery. There is a competitive advantage for an organization whose workforce can learn more quickly than the workforce of other organizations. A learning organization has been described as the sum of individual learning, but there must be mechanisms for individual learning to be transferred into organizational learning. Mental models: The assumptions held by individuals and organizations are called mental models. To become a learning organization, these models must be challenged. Individuals tend to espouse theories, which are what they intend to follow, and theories-in-use, which are what they actually do. Similarly, organizations tend to have memories which preserve certain behaviors, norms and values. Shared vision: The development of a shared vision is important in motivating the staff to learn, as it creates a common identity that provides focus and energy for learning. Team learning: The accumulation of individual learning constitutes Team learning. The benefit of team or shared learning is that staff grows more quickly and the problem solving capacity of the organization is improved through better access to knowledge and expertise. Team learning requires individuals to engage in dialogue and discussion; therefore team members must develop open communication, shared meaning, and shared understanding. More recently, Burgoyne (1999) has responded to criticisms of the LO model by stressing that the key features are:- Companies need to be aware of internal politics and question existing practices and beliefs. -Managers need to be aware of where the collective learning process and knowledge reside in peoples heads, in technology or in archives.- Strategies are required to enable collective learning, and centralisation may be the answer.- The organisation must create its own development tools. -Interests of stakeholders must not be in conflict.- Issues of ownership of competence and intellectual property must be addressed.- Processes are needed to deal with interaction between tacit and explicit knowledge. Why is it important to organisations: (Senge1994) mentioned that these features encourage organizations to shift to a more interconnected way of thinking. Organizations should become more like communities that employees can feel a commitment to. Therefore, they will work harder. Moreover, they improve quality of outputs as well as corporate image, and being better placed to respond to external pressures and having better knowledge to link resources with customer needs. Finally, motivate organization to increase the rate of change. Why

is it important to SHRM: These features help to create a culture of development in the induction with recruitment and selection processes, provide feedback on performance, develop the contribution of workforce which enhances performance, and they enhance managerial experience by career development.
Problems of learning organisation:

Some organizations find it hard to embrace personal mastery because as a concept it is intangible and the benefits cannot be quantified; personal mastery can even be seen as a threat to the organisation. In some organisations a lack of a learning culture can be a barrier to learning. Resistance to learning can occur within a learning organization if there is not sufficient buy-in at an individual level. This is often encountered with people [2] who feel threatened by change or believe that they have the most to lose. They are likely to have closed mind sets, and are not willing to engage with mental models. In addition, organizational size may become the barrier to internal knowledge sharing. When the number of employees exceeds 150, internal knowledge sharing dramatically decreases because of higher complexity in the formal organizational structure, weaker inter-employee relationships, lower trust, reduced connective efficacy, and less effective communication. In our discussion of Senge and the learning organization we point to some particular problems associated with his conceptualization. These include a failure to fully appreciate and incorporate the imperatives that animate modern organizations; the relative sophistication of the thinking he requires of managers (and whether many in practice they are up to it); and questions around his treatment of organizational politics. It is certainly difficult to find real-life examples of learning organizations (Kerka 1995). There has also been a lack of critical analysis of the theoretical framework. Focuses mainly on the cultural dimension, and does not adequately take into account the other dimensions of an organization. To transform an organization it is necessary to attend to structures and the organization of work as well as the culture and processes. Focusing exclusively on training activities in order to foster learning favors this purely cultural bias Popular models of organizational learning (such as Dixon 1994) assume such a link. It is, therefore, imperative, that the link between individual and collective learning and the organizations strategic objectives is made. And according to the study pack, they are three view problems of HRD learning: The wider environment: As with our previous discussions about SHRM, HRD cannot be entirely divorced from the environmental context. Organisations sit within a national and international context. This external context will be shaped by factors such as the wider value placed upon educational and training by the state, employers and individuals. There will be a need to address deficiencies in each area, and pressures to cut costs.The evaluation of learning and development: thinking organisations will realise that learning and development is vital to organisational development, competitiveness, growth, market leadership and, in some cases, survival. It is also a key factor in employee motivation. However, the evaluation of the effectiveness of the learning and development can be hard to quantify. It should, however, be noted that learning and development is only effective when the curriculum and learning initiative are appropriate and focused to business objectives and current culture. The value placed on HRD by staff: HRD is not seen neutrally by staff and often it is accepted rather than embraced enthusiastically. Sometimes managers create barriers by a failure to motivate trainees with effective and inclusive diagnosis. At other times the failure to allow learning to be transferred into workplace practice leads to low motivation and dilution of the up skilling and developmental outcomes. There is still a lack of clear evidence of strategic linkage in HRD terms with that of the business. Therefore, strategic outcomes and further long term commitment to development are hard to achieve. COCLUSION: Organizations do not organically develop into learning organizations; there are factors prompting their change. As organizations grow, they lose their capacity to learn as company structures and individual thinking becomes rigid when problems arise, the proposed solutions often turn out to be only short term (single loop learning) and re-emerge in the future. For a developmental activity to be deemed strategic organizations need to shift the focus from training to a learning approach: Nowadays, organisations have to deal with several challenges and difficulties such as changing business environments, hard and increasing competition between firms, unpredictable economic conditions and the increasing chase for talents. In order to respond to these problems and to succeed, organisations are beginning to centre their attention on HR. The companys HR and more specifically its people are now considered as an asset and a source of competitive advantage. Organisations are training and developing their employees in order to exploit the whole potential of their HR. This provides the employees with skills, knowledge and abilities that will lead to positive results. However, experts, managers and employees are starting to think that training is no longer enough. In order for the organisation to keep its competitive advantage and to maintain its employees competitive, it must adapt a learning approach to human resources development.Let us first define the two terms: According to Donaldson and Scannel (2000), training is an attempt to transfer skills and knowledge to trainees in such a way that the trainees accept and use those skills in the performance of their jobs while learning is a lifelong process in which experience leads to changes within the individual. According to Sims 2002, Training is considered as planned learning experiences that teach employees to perform their current jobs. Training focuses on present jobs. Learning is a change in behavior resulting from experience. Learning is the act of acquiring knowledge or skill. It is a mental activity by which skills, habits, ideas, attitudes, and ideals are acquired, retained, and utilized, resulting in the progressive adaptation and modification of behavior. Based on the definitions above, we can assume that training is more focused on short-term acquisition of knowledge, skills and abilities. Trainings are planned learning activities. It is clear that training is not enough to ensure the success of the organization and it is enough to keep the workforce at pace with the changes in the business environment. Training alone is not enough to develop and prepare the employees for their present and future responsibilities. Organisations are beginning to adapt a learning approach to employee development. Organizations must encourage learning through both formal and informal circumstances. Organizations must encourage employees to continue learning inside and outside their work settings. Thus, Human Resource Development (HRD) and lifelong learning emerged. HRD is the field of study and practice responsible for fostering of long-term, work related learning capacity at the individual, group, and organizational levels. As such, it includes but is not limited to training, career development, and organizational development. According to Nadler and Wiggs (1986) HRD is a comprehensive learning system that releases the organizations human potential; a system that is both experience and experiential, on-the-job experiences that are keyed to the organizations reason for survival. From the discussion above, it can be said that HRD is primarily a learning approach to employee development. As such it facilitates organizational learning through training and development of individuals, groups, and organization as a whole. HRD is composed of a series, a lifelong learning that aims to increase the capability of the employees and the organization through performance based activities. HRD can then be described as a comprehensive learning system designed to enhance individual performance for improving organizational efficiency. In Strategic HRM and Organisation Development context, Training and Learning are characteristically different: Training adds to the knowledge and skills for doing a particular job, Fills the gap between the required and the actual knowledge, skills required to complete a job. Training can be of different types, Job oriented and vocational in nature. Short term activity designed especially for operatives. it is mainly the initiatives of the management, and the result of external motivation. It aims to meet the current requirements of the job and the individual-a reactive process. Apprenticeship is a typical example. Learning is a behavioral process which is continuous from birth to death. It is mostly informal, but there could be formal phases as well. From learning to talk, walk, run etc, to learning to operate a computer, fly a plane to learning to socialize, to lead a group, to move an idea, the list is infinite and touches upon all that we acquire from birth to death.

Unite 7: Introduction: First the terms industrial relations (IR) and employee relations (ER) will be defined to give a more detailed suit to the term employment partnership. Moreover case examples will be outlined to describe the development of partnerships in different countries, these developments lead to new perspective of partnerships which are defined as well. The last part concerns a discussion of the relationship between theory of partnerships and SHRM and a further discussion of problems arising recently between SHRM and partnerships. 3.1 Industrial Relations (IR) Industrial relations are the relations between employer and trade unions. Trade unions represent the employees collectively. The base of this relation has collective bargaining and agreements inherent, with the main issue to positively influence the employee contracts. The industrial relation is bound to highly formalized rules and procedures, and formal authority for negotiation and solving conflicts. The procedures permit formalized discussions to take place and work strikes. Employees are confident with work strikes and built confidence that their interests will be appropriable represented. Through this procedure the relationship between managers and employees will become of an ill-nature. Furthermore, each change in expectation is formally discussed and argued or vetoed. (Script pg. 352) 3.2 Employee Relations (ER) Employee relations can be seen as the positively expanded of industrial relations. ER focuses on the same relations like IR employee, union members and managers. The shift between both ER and IR- is the diversification (e.g. works councils) from the collective bargaining process. The individual is more empowered, which managers would argue improves the quality of dialogue and understanding in the workplace. The unions accept the employees right in order to develop direct employee communication channels, more involvement and various attempts to develop higher employee commitment and motivation. This further developed approach of industrial relations focuses more on the long term sustainability of organizations and long term job security. Employee relations should avoid the negative influences of industrial relations. 3.3 Development of IR to ER and Employment Partnership (EP): 3.3.1 UK perspective: By 1969 the number of strikes reached a record level of 3,000 and a loss of seven million working days, because of the domestic empowerment of trade unions facing the development of globalization and new attitudes towards job security and working conditions. By 1979 the union membership increased to 13 million, in some industries the membership went up to 75% and over. A further reason for this development was the non-existence of formal rules of collective bargaining. The winter of discontent inherited 29 million working days lost. Europe had a high acceptance of social partnership between unions and employers, thereby not only debating wages and productivity, but also training improvement in the case of Germany. Japan had even a wider sense of interrelationship between unions and employers, having unions organized at an organizational level, which worked in co-operation focusing with the employer the organisations objectives. In respond to these developments Britain adopted this attempt and introduced the Advisory Conciliation and Arbitration Service (ACAS) to support individual and collective labour management processes. Both employees and unions rejected legal interaction preferring the historical voluntarist approaches. ER shifted later in some cases from collectivist to an individual relationships to management, e.g. direct communication rather then through representatives. However, the 1980s and 1990s saw a downfall of union and employee control, as managers responded to market pressures by part-time employment, new technology, new lean working practices, downsizing, outsourcing functions and enhancing flexibility, structurally, in terms of skill acquisition and cognitively, with respect to flexible mindsets and approaches to learning. 3.3.2 US American Perspective: The US Department of Labour acknowledges the wider recognition and acceptance in the USA of the dominance of the universalistic principle for best practise represented through a high performance work system led by a strong management tradition. Union membership recognizes an ongoing decrease and there are many examples of the so called managing through partnership. Furthermore unions are involved in the organizations strategies. Employees themselves have an impact on reducing directly design and engineering costs and improve processes thereby time efficient. Additionally, employees receive instead of wage concessions shares, which are described as managing the partnership strategically melting business and employee objectives together. However, US America cannot avoid the global pressures, within the global competition. Organizations will always try to suit pressures, at a certain level of pressure whereby cost efficiency must be achieved at a level of non-conformity with partnership, e.g. changing the location of production or in the case of UPS hiring part-time worker to avoid more costs for employee pensions. These methods and these mentioned above in the last section of the UK perspective give organizations flexibility, which is a key issue in the SHRM. In this way we see flexibility as a potential threat to collaborative and partnership ER. 3.4 Partnerships: There are two different kinds of partnership, the employerunion partnership and the employer-employee partnership. The employer-union partnership is a contract of a win-win strategy relationship. The unions major interest is to maintain and increase job security and the level of wages. The employers major concerns are strikes, which display a bad picture to the organizations stakeholder and have enormous costs inherent. The contract between employer and union ensures certain conditions for employees, e.g. job security in the first priority, further working conditions, training and development. The TUC sees partnership as requiring job security and quality of working life and as being long term. The employer-union partnership from this perspective can be seen as the employment partnership. The employer-employee partnership first appeared in the USA as outlined above. Thereby the partnership can be seen as voluntary in a deterministic environment, same as the employer-union relationship. It can be said that this partnership is an arrangement between both parties. The advantage for the employer is less involvement of a union in first place. The advantage for the employee is a better working environment and a better job security. The benefits for the organization go partially along with SHRM more to that later. 3.5 Partnership Agreements: The Involvement and Participation Association (IAP) launched a project in 1992: Towards industrial partnership: A new Approach to relationships at Work. The document set up included three commitments and four building blocks: The Commitments were: 1-Parties subscribe to the success of the enterprise. 2- Building trust and greater employee involvement. 3- Recognising the legitimate role and responsibility of the parties. The building blocks were: 1- Employees need to employ security and employers need to maximise job / organisational flexibility. 2-Success should be shared by the organization and its employees. 3-Staff should be widely informed and consulted at the company level on matter affecting their employment. 4-Employee interests (voices) need representing. The employers commitment is seen as a long term commitment and not as a variable approach based upon power in the market. These partnership agreements fulfil an optimum of accommodation of what I first defined as the employer-employee partnership. A similar approach is the New Industrial Relations concerning IR or the partnership between union and employer. 3.6 Fit of the new Partnerships to SHRM in the Contemporary Theory: The high developments of the competitive markets lead to new pressures. SHRM is serving new competitive advantages. Partnerships push organizations (voluntaristic approach) towards the SHRM, with few exceptions. Two of the main concerns are job security and flexibility; both SHRM and partnerships want to achieve the same objective, whereby SHRM has a much deeper understanding of how to, while partnerships simply arrogate in their principles that this should be maintained. Therefore unions have tools of pressures to achieve this, but they can also provide the required know-how. The first way -building up pressures- make the fit of partnerships to SHRM vice versa, e.g. strikes provide de-motivation and struggles with shareholders with both harm the organization harming in three dimensions; costs, demotivation scheme and turnover. SHRM uses different practices at different stages, which also include in the decline phase of the life cycle model plan and implement workforce reductions and reallocation. Which is not a target of relationships, but relationships expect organizations to tell employees by the right time redundancies. SHRM takes this forward by implementing PDP, which is a document that also helps at switching companies in the case of redundancy. Furthermore PDPs are part of the development and training programs. Development and training are mentioned in partnership agreements as

well. The career consulting service from SHRM is a further way forward respecting concerns of redundancies. Both partnerships and SHRM pursuit an improved individual acting of the employees, which provides responsibility coming alongside with motivation motivation scheme, thereby, also meant in partnership terms the communication between management and employee. Sturgeon ratios should be communicated internal before external, which gives an advanced and more rapid response. Success related pay is the next issue of concern of new partnerships, where US American companies brought up the idea of relating a part of the income to shares/the share price in some cases they even receive share as an additional payment. The SHRM accomplishes this by annual pay reviews, performance pay methods or success related team-pay. SHRM considers the development of careers e.g. PDPs help to develop these. Furthermore from 18 key practices success related pay is respected by the profit related bonuses. Another main point concerns organizational climate to maintain labour peace and employee motivation and morale in the SHRM. Partnerships can be seen as a tool to provide these by having responsive and direct communication channels and avoiding work strikes. There are many points covered by partnerships concerning the fit to SHRM, but partnerships can have negative influences turning back to relationships in critical phases of the organization. Then SHRM responds to the change environment, sometimes driven by hard pressures so it is unavoidable in some cases to break the partnership by the hard use of SHRM, which are the responses of the decline stage of the life cycle model. The 18 key practices include no compulsory redundancies, but when there are compulsory and in large numbers unions will appear to negotiate and harm the organization even further. Partnerships are a way forward of IR and ER, nevertheless they also harm the speed of response, through meetings sessions and regulations outlined above. 3. 7 Fit between SHRM and Relationships a Discussion in Reality: Literally spoken every relationship can be stressed. The relationships and the different understandings between managers and unions appear to stress the objectives until finding a new content to reconstruct the relationships. In business developments there are appearing always to be waves, ups and downs of different systems and approaches some of them appear because of change (as outlined above), some of them because of a overstressing (which will resumed later to) and some of them with the reason of new market/ new organization with substitute products. Different stages of developments in the organizations, concerning their management behaviour will constantly influence partner- and relationships, because of missing knowledge of the new area and within that the market entry barriers have to be overtaken; thereby, misunderstandings appear or the financial inability to built up SHRM. Recently call centres in the UK were/are in conflict with partnership, IR and ER. SHRM is stuck in the middle, on the one hand there is no SHRM in the case of BT call centre worker having 19th century management style, impossible targets, stress and understaffing, rather then pay (script pg. 410) etc, on the other hand tighter cost control and attract best professional talent (life cycle model) have led to outsourcing (seen as a feature of SHRM). Outsourcing is done to reduce risks (internal equity effects) and focus on core competencies. And it has to be cheaper then self-production or service. The service in fast developing areas meeting pressures at high level through a price driven competition. Nevertheless BT must now follow the history of IR, ER and relationships. This will be a process similar to the development of other industries starting from the 1970s until now, but faster. BT is in conflict with partnerships and SHRM and the other way around. This conflict situation will become a IR in first stage facing pressures of unions involvement and then the development, because realization come step by step with a certain development of BT. Lastly referring to the case of BT, that a quantitative comparison shows more SHRM practices as problems, the problems of replacement and recruitment cost could be done by half automation, whereby the call centre employee figures the problem and relates it to the right topic and a non-human would answer the question, but this would fall into conflict in redundancy perspective of relationships which might be un-avoidable in the future to maintain service quality and low replacement and recruitment costs. However, SHRM aims in the main points to the similar objectives as relationships. Conclusion: The fit of SHRM with partnerships can be partially agreed. Viewing the relationship between those will lead to different opinion, whereby partnerships can be seen a voluntaristic in a deterministic world its better to have partnerships rather then hard industrial relations. However there are features in the frameworks of SHRM that particularly do not fit with partnerships e.g. to decrease recruitment costs. SHRM considers a global perspective, whereas partnerships try to improve the home economy this can be related to income effects. Nevertheless partnerships are an improvement of the old relations and will continue to get more flexible, but in a competitive world a world of pressures- there will always be contradictions between those, which my old professor said: combing those is like the quadrature of cycles. Employee Empowerment: To be able to produce the target oriented result in an organization factors like employee empowerment and the marketing factors like penetrating prices cannot be forgone. Big organization uses the human resource tactics like employee empowerment as it plays a major role in the organization. Employee empowerment acts as the major factor behind the increased interest of the employee towards the work and to perform their best. The empowered employee of the organization is always the prime asset of the organization, who always performs their best and gives the targeted result. In the bigger organizations and HR friendly companies employee are always given the topmost priority, so that they can feel they are the part of the organization and with the feeling of being recognized they perform to their best level. Here employees are involved in the decision-making and policy management this will result in the overall performance that company offers to their customers and the major factor in the improvement of the quality management of the system. The reason for applying the employee empowerment are the factors like highly competitive IT market and recession also played a major role in it, as it provide the assurance towards the job and the confidence of the company towards the employee and then employee can perform better to give their best for the company. While applying the employee empowerment culture in the organization, the organization has achieved their multiple objectives, like they got the employee who are highly motivated towards the organization and they perform the way that it in the end result in the good service and trust of customers towards the organization. One of the other employee empowerment feature is to apply the scheme of e-sops or stock option for the employee who perform well, if the employee are awarded with the options of stock then the employee feel them self to be the part of the organization this is one of the factor that the companies can implement in their culture of HR practice to make them more employee friendly. This employee empowerment scheme is one of the most successful and highly appreciated by the employee and managers across the different companies around the world either they are small firm or the big firm The other thing that contributes in the growth of the organization or the growth of their new product, it is the practice or strategy that is employed by organization in order to capitalize the place for their new product that is launched in the market, the price is placed that much low for the new product that it will penetrate in to the market place and capture a significant part of market. Coaching, Mentoring and Knowledge Sharing: HR has to take care of the employee development program in the organization, they have to make sure that every employee should get the desired training they, as per the requirement of the industry and according to the experience. Heads of every department has to make a database and requirement sheet as per the demand of the employees, what they want to learn, what they should learn and what they have the expertise in, management can schedule the programs accordingly. Team leading and mentoring plays as important role as it is played by the module training and coaching. A good mentor or a leader can get the best output from the team and employees. If there is a lack of leading qualities then it start producing the sense of dissatisfaction among the subordinates and the junior team members. So to be a good mentor one should have to understand the team requirement and issues and try to give them the solution accordingly. Mentoring is directly relates to the leadership skills within the organization and employees. When we

think of the leadership development proposal or program then the first thing that comes in to the mind is why we need a leadership development program the answer is very simple:- A leadership development program will help individuals to work in the high risk situations and will allow them to develop leadership skills in the adverse condition. The organization for which we are going to propose the leadership development is the I-touch. I-touch is the UK based organization and is once the leader in mobile and digital entertainment. A program is built for the leadership development having several steps like: 1. Establish common set of values for leadership:- Every member of the I-touch organization has given the chance to evaluate the organization and give their feedback regarding the organization and this will prompt them to make the right decision. This concept will generate the model of sharing and discussing, what is right. 2. Investing early in leadership training: - Early investment doesnt mean putting money in the development program of the I-Touch. But this is the concept which emphasizes management to go to the junior leaders of the organization and bring them in front to learn as they are the one who are most receptive to learning. This will give I-Touch the advantage of having many junior people and will make the competition in the organization. 3. Giving experiential training: - For the employees to generates the understanding of the organization and how the different functional areas works of the I-Touch, a formal training course of the leadership is required. This will be more realistic and relevant in terms of their approach toward the business of the organization and how the organization performs in the high risk situations. 4. Generating decision making skills: - Learning from the previous failures of the organization, and acknowledging that errors and risk are part of the organization, the leader will be prepared with the decision making ability and giving them the situation for crucial thinking 5. Encouraging Employee of leadership: - Employee of the I-Touch will be given a self-directed task that will increase their confidence and will encourage them to develop leadership attitude inside them. 6. Partner with outside expert for better ideas: - A seminar is conducted in which leaders and managers from the other organization of the same field as I-Touch are invited to give their views about the leadership and how one allow them to being in the innovative ideas rather than using the rejected and old ideas. After completing all the initial process for the leadership program in the Organization. All the employee of I-Touch, who took part in the leadership development program are given an Experimental test/ Training: After that training After Action Reviews is done to improve the learning and improvement to occur within the organizational environment of the I-Touch The goal of this Leadership development program in the I-Touch is to realize the people the increased demand of service from the company and bring in the pre prepared leaders. Employee of the I-Touch after this program will be sent to the leadership role much faster and they are given the high responsibility. After completing this program the leadership expectation of the professional in I-Touch got increased and they become more eager to represent organization. From this process we can learn that leadership is not the born feature, it can be learned and taught, if proper guidance and support is provided. Knowledge sharing is the part of the HR process, which helps them to keep a pace of the organization. Knowledge sharing help to reduce the dependency on a single employee, with the help of knowledge sharing a kind of atmosphere is created in the organization in which every employee knows the task of the every other employee and in his or her absence they can perform that task. Unite 8: The organizational development process (Beckard): The change process: organisational development process: Change is a complex process. However, organisations need to try to make sense of change for management and employees, so it is frequently programmed into a series of steps or stages. Wide involvement in and communication of the change project can assist with employee understanding of what and how change can be achieved. BECKARD Organisational development (OD) FEATURES sets these stages in a neat future oriented way. According to study pack, Beckards organisational development process has 3 features that consist from 7 steps: 1. Determine the future state: where do we want to be? STEP 1: Agree organisational purpose and mission: is determined by the trigger for change. Internal triggers for change could be: Restructuring of business units and job structure, Quality improvements, Revised service levels, Development change and Product innovation. External triggers for change could be: Internationalisation, Market driven triggers: product, cost and customer technology driven and Competitive restructuring, joint ventures, mergers and so on.

2. Diagnosing the present state: where are we now? Step 2: Assess the outer and inner context: What sort of information do we need to understand the present state? The following is a checklist of data to be collected and evaluated in order to assess the extent to which we need to change now or in the future: Outer context forecasting the impact on internal activities: The economy - Suppliers availability and quality Government policy - Existing competition and new entrants - Customer needs/expectations - Shareholder perspective - Public opinion - Legal environment - Media concerns and values Technology - Market and product innovation. Inner context: Skills and knowledge of people and their adaptability - Culture and relationships - Learning ability Flexibility and work methods - Business process efficiency - Structures and job design - Competence.

Step 3: Gathering data: Price (1987) introduces an interesting way of ordering the data gathering process. The data collection cube suggests that we need to understand strategic pressures, emerging and core tasks that add value and the association of attitudes and culture that will achieve these. In other words, it addresses the what and how aspects of employee contribution. The Organisational Development process demands that understanding peoples perceptions and

feelings will help us to judge their likely reaction to our intended change, which will inform us of the likely issues we need to address in the strategy. Step 4: Gaining involvement: The OD approach, as we saw in the unit on learning organisations, is to advocate a participative approach where the speed of change permits. Therefore, how we conduct the diagnosis will, it is argued, affect the overall outcome of the change itself and commitment of staff to the outcomes. In itself the process of involvement and participation is likely to send cultural signals about what the organisation wants from its staff and how it wants them to behave and perform. So how can we best maximise the involvement of staff in the diagnosis of the present state?Pugh (1993) identifies six rules for maximising involvement in the change process: Rule 1: Work hard at establishing the need for change as a basis for building commitment and acceptability. Rule 2: Think out and think through the change, looking at the change from the recipients point of view, for example, the impact upon relationships, power, resources, job content/interest, and job autonomy/authority. Rule 3: Invite change through informal discussions to get feedback and participation. Rule 4: Positively encourage those concerned to give their objections. Surfacing problems early enables organisations to deal with them before they start to hinder the change strategy in progress. Rule 5: Be prepared to change yourself. This is another take on unlearning by managers and avoidance of groupthink that we came across before. Rule 6: Monitor the change and reinforce it. Part of this relates to the communication we came across earlier. Communication of successes and using HR policies to reinforce or stabilise the change are critical, for example, new development appraisal and performance systems can reinforce learning based cultures. Pugh (1993) recognises implicitly the role of subculture and interest groups and the need to focus on reaction and sources of resistance. Pugh (1993) assumes that employees only partly align their votes with the corporate goal. The whole change process is about surfacing non-corporate views and attempting to resolve them to the mutual benefit of the individual and the organisation. The gathering of data, surfacing these issues and including them in the diagnosis, is critical to the success of the change process. 3. Managing the transition Step 5: Targets for change That can be framed around the choice and levels we discussed earlier in the unit. step 6: Implement change and developmental activities Two models illustrate the generic approach for these steps. Remember that in organisation wide strategic change, we are likely to employ a range of techniques directed toward different levels and groups, depending upon such factors as recognition of the need for change, resistance and support for change. Sequence and timing of interventions is important. Step 7: Evaluate and reinforce change You may have gathered already that however problematic culture change may be in organisations, success is likely to emerge from two important factors: Carefully planned design of strategy. Importance of the process how we implement to secure involvement and commitment to change, and to promote the individual and collective need to change.

What distinguishes HR led change from project based change is the OD philosophy that supports change. It assumes that change is not only technically complex, but requires a high degree of emotional involvement in the process. Example: British telecom is an organisation that implemented the Beckards organisational development process in order to make radical changes (that include deregulation, liberalisation, and technology) which would help the organisation to quality of service, customer response time, ease of customer contact, control costWhat do we mean by Culture in SHRM: Culture is frequently described as a set of shared meanings that influence or determine behaviour.The possibility that managers can design and develop an effective corporate culture is often at the heart of the strategic implementation debate. For example, it presupposes that organisations can in some way align individual and group values within the organisation, which will positively influence commitment to the organisation. In this sense, the potential impact on organisational performance is enormous. The idea that culture can be owned and managed is a contestable factor, but certainly as an idea, it sits at the heart of current organisational thinking about how to enhance performance. The argument for organisational analysis is that all organisations have cultures, culture builds consensus and unity of purpose, which can motivate staff. Therefore: 1. Individual and group performance will increase through consensus 2. Managers should attempt to manage culture. TRADITIONS IN CULTURE: Japanese organisations and their particular styles of managing. This involves team working, continuous improvement, consensus decision making, multi skilling and high emphasis on development and empowerment. American include individualism, self reliance, family values within organisations, accountability, entrepreneurship, emphasis on informal client and committed action, and keeping things simple in decision making, communication and tasks. You should also note the close relationship that structural control, coordination and job design can have as an influence on culture, particularly through: Standardisation of jobs and flexibility of job and thinking. Formalisation of communication channels and flows. Division of labour between departments or teams.

Terms and conditions and the degree of rules and the ability to work beyond contract. The components and levels of culture, focusing on the models of Bate (1992) and Hofstede (1980): Purpose: The models of Bate (1992) and Hofstede (1980) are ways of describing attitudes and behaviours that permeate organisational life. The diagnosis and management of culture is about understanding and trying to influence behaviour to secure superior commitment and flexibility and enhanced performance. Bates model of culture identified a relationship between organisational culture and effective organisational problem solving. He devised a model of culture based upon the following: - Unemotionality The extent to which personal relationships are explored and evaluated, the ability to surface and resolve conflict. - Depersonalisation Avoidance of blame culture and the impact on problem solving and performance enhancement. - Subordination The degree of accountability, empowerment and involvement of staff in management functions. - Conservatism Receptiveness to change and to learning and experimentation. - Isolationism Personal and group territory and willingness to develop interdisciplinary/agency/organisation problem solving approach - Antipathy The degree of adversarial relationships: unitary/plural and alignment with organisation goals. Hofstedes (1980) model of culture : (America: H H L L, Asian: L L H H) 1. Power distance (PDI) This is the extent to which members of society and organisations accept or highlight the distribution of power and authority, for example, clear status and hierarchy as opposed to equality and empowerment. 2.Uncertainty avoidance (UAI) This the degree to which members of society and organisations feel threatened by change and ambiguous situations, and set up planning systems to avoid uncertainty, for example, rulebased procedures and careful planning as opposed to flexible, responsive, risktaking behaviour. 3.Individualism (IDV) This is the extent to which people believe that the wellbeing of the family (organisation family) is more important than their own interests. 4.Masculinity (MAS) This is the extent to which achievement through successful acquisition of possessions, money and promotion prevail over the caring and nurturing values of social relations. For example, performance related pay, individualism and the success of individual objectives as opposed to teams, learning and organisation based reward.Strong and weak culture: Strong culture often results from a stable group or organisational membership, or very clearly defined ways of working that can be taught to new members, where this group has learnt to cope with and possibly survive some difficult working problems. Strong cultures are often associated with positive values. For example, the shared experience and effective internal adaptation of working methods that members accept can often lead to higher levels of performance. Weak cultures are associated with shifting membership with few shared experiences, with little alignment or commitment or shared values. Arguably it will be easier for organisations with weak cultures to shape their cultures and change their focused and corporate viewpoint. Culture changes the opportunities and difficulties: Etzioni (1988) made the point that there were three employee cultural orientations to employment achieved through structural design: Coercion: I have to work for the organisation. Economic: I work at a transactional level wages for job defined output. Personal involvement: I value the work I do and the organisations product or service. I am committed to going beyond contract to achieve personal and organisational goals. These motivations are important, and the aim of SHRM is to move employees towards the third model personal involvement orientation, where employees bring to bear their full engagement. Why is culture important: A common platform where individuals work in unison to earn profits as well as a livelihood for themselves is called an organization. A place where individuals realize the dream of making it big is called an organization. Every organization has its unique style of working which often contributes to its culture. The beliefs, ideologies, principles and values of an organization form its culture. The culture of the workplace controls the way employees behave amongst themselves as well as with people outside the organization.----The culture decides the way employees interact at their workplace. A healthy culture encourages the employees to stay motivated and loyal towards the management.------The culture of the workplace also goes a long way in promoting healthy competition at the workplace. Employees try their level best to perform better than their fellow workers and earn recognition and appreciation of the superiors. It is the culture of the workplace which actually motivates the employees to perform.-----Every organization must have set guidelines for the employees to work accordingly. The culture of an organization represents certain predefined policies which guide the employees and give them a sense of direction at the workplace. Every individual is clear about his roles and responsibilities in the organization and know how to accomplish the tasks ahead of the deadlines.

No two organizations can have the same work culture. It is the culture of an organization which makes it
distinct from others.The work culture goes a long way in creating the brand image of the organization. The work culture gives an identity to the organization. In other words, an organization is known by its culture.

The organization culture brings all the employees on a common platform. The employees must be treated
equally and no one should feel neglected or left out at the workplace. It is essential for the employees to adjust well in the organization culture for them to deliver their level best.

The culture gives the employees a sense of unity at the workplace. Certain organizations follow a culture
where all the employees irrespective of their designations have to step into the office on time. Such a culture encourages the employees to be punctual which eventually benefits them in the long run. It is the culture of the organization which makes the individuals a successful professional. -----Every employee is clear with his roles and responsibilities and strives hard to accomplish the tasks within the desired time frame as per the set guidelines. Implementation of policies is never a problem in organizations where people follow a set culture. The new employees also try their level best to understand the work culture and make the organization a better place to work.

The culture develops a habit in the individuals which makes them successful at the workplace.