BASIC OF HR

a) Nature and scope of HRM

Human resource management (HRM) is an approach to the management of people, based on four fundamental principles. First, human resources are the most important assets an

organization has and their effective management is the key to its success. Second, this success is most likely to be achieved if the personnel policies and procedures of the enterprise are closely linked with, and make a major contribution to, the achievement of corporate objectives and strategic plans. Third, the corporate culture and the values, organizational climate and managerial behaviour that emanate from that culture will exert a major influence on the achievement of excellence. This culture must, therefore, be managed which means that organizational values may need to be changed or reinforced, and that continuous effort, starting from the top, will be required to get them accepted and cted upon. Finally, HRM is concerned with integration getting all the members of the organization involved and working together with a sense of common purpose. CONCEPT OF HRM HRM is a strategic approach to the acquisition, motivation, development and

management of the organizations human resources. It is a specialized field that attempts to dividing an appropriate corporate culture, and introducing programmes which reflect and support the core values of the enterprise and ensure its success. HRM is proactive rather than reactive, i.e. always looking forward to what needs to be done and then doing it, rather than waiting to be told what do to about recruiting, paying or training people, or dealing with employee relations problems as they arise. The techniques for the application of HRM will include many familiar functions of personnel managers, such as manpower planning, selection, performance appraisal, salary administration, training and management

development. These will be overlaid by special programmes designed to improve communication systems, involvement, commitment, and productivity. Broadly, there are the three meanings attached to the concept of HRM. In the first place, persons working in an organization are regarded as a valuable source, implying that there is a need to invest time and effort in their development. Secondly, they are human resources which means that they have their own special characteristics and, therefore, cannot be treated like material resources. The approach focuses on the organizational life and introduce need to humanize

human values in the organization. And thirdly, human

resources do not merely focus on employees as individuals, but also on other social realities, units and processes in the organization. These include the role or the job a person has in the organization, the dydadic unit, (consisting of the person and his superior), the various teams in which people work, inter-team processes, and the entity of the total organization, In its essence, HRM is the qualitative improvement of human beings who are

considered the most valuable assets of an organization the sources, resources, and end-users of all products and services. HRM is, no doubt, an outgrowth of the older process and approach. But it is much more than its parent disciplines, viz. personnel management, and behavioural science. HRM is also more comprehensive and deep-rooted than training and development. Its approach is multi-disciplinary from the beginning to the end. It is a scientific process of continuously enabling the employees to improve their competency and capability to play their present as well as future expected roles so that the goals of the organization are achieved more fully and at the same time the needs of the employees are also met to an adequate extent. HRM is a production model approach to personnel management. The HRM model is characterized as being employee-oriented with an emphasis on the maximization of

individual skills and motivation through consultation with the workforce so as to produce high levels of commitment to company strategic goals. It is a resource to be used to its fullest capacity. It is an asset to be invested in. HRM is concerned with both the structure of work in a firm and with all the related employment practices that are needed to carry out the work. HRM is not simply about HR or `people practices, it is about the management of work and people in the firm. Managing people includes both individual and collective dimensions. The traditional personnel management is non-strategic, separate from the business, reactive, short-term, and constrained by a limited definition of its role as dealing with mostly

unionized and low level employees. The major attention of traditional personnel function is on personnel administration or management while the major attention of HRM is on developing people and their competencies. If personnel management is curative, HRM is preventive. The key distinguishing feature of HRM is its evolving strategic role. SCOPE OF HUMAN RESOURCE MANAGEMENT According to Dale Yoder, the scope of human resource management is very wide. It consists of the following functions: i) Setting general and specific management policy for organizational relationships, and establishing and maintaining a suitable organization for leadership and cooperation. ii) Collective bargaining, contract negotiation, contract administration and grievance handling. iii) Staffing the organization, finding, getting and holding kprescribed types and number of workers.

iv)

Aiding in the self-development of employees at all levels providing opportunities for personal development and growth as well as for acquiring requisite skill and experience.

v) vi) vii)

Developing and maintaining motivation for workers by providing incentives. Reviewing and auditing manpower management in the organization. Industrial relations research carrying out studies designed to explain employee behaviour and thereby effecting improvement in manpower management.

The Indian Institute of Personnel Management has described the scope of human resource management into the following aspects: 1) The Labour or Personnel Aspect : It is concerned with manpower planning,

recruitment, selection, placement, induction, transfer, promotion, demotion, termination, training and development, layoff and retrenchment, wage administration (remuneration), incentives, productivity, etc. 2) The Welfare Aspect : This aspect is concerned with working conditions and & salary

amenities such as canteens, crches, rest rooms, lunch rooms, housing, transport, education, medical help, health and safety, washing facilities, recreation and cultural facilities etc. 3) The Industrial Relations Aspect : This is concerned with the companys relations with the employees. It includes union-management relations, joint consultation, actions,

negotiating, collective bargaining, grievance handling, disciplinary settlement of industrial disputes, etc.

b) Manpower planning
The actual HRM process begins with the estimation of the number and the type of people needed during the coming period. After this only, can people be hired to fill the jobs.

In simple words, HRP is understood as the process of forecasting an organizations future demand for, and supply of, the right type of people in the right number. It is only after this that the HRP department can initiate the recruitment and selection process. HRP is a subsystem in the total organizational planning. Organizational planning includes managerial activities that set the companys objectives for the future and determine the appropriate means for achieving those objectives. HRP facilitates the realization of the companys objectives by providing the right type and the right number of personnel HRP, then, is like materials planning that estimates the type and quantity of the materials and supplies needed to facilitate the manufacturing activities of the organization. HRP manpower planning, personnel planning or employment planning. A few definitions of HRP are worth quoting here: .. includes the estimation of how many qualified people are necessary to carry out the assigned activities, how many people will be available, and what, if anything, must be done to ensure that personnel supply equals personnel demand at the appropriate point in the future. Specifically, human resources planning is the process by which an organization ensures that it has the right number and kind of people, at the right place, at the right time, capable of effectively and efficiently completing those tasks that will help the organization achieve its overall objectives. Human resource planning translates the organizations objectives and plans into the number of workers needed to meet those objectives. Without a clear-out planning, estimation of an organizations human resource need is reduced to mere guesswork. is variously called

FACTORS AFFECTING HRP Organizational growth cycle and planning Type and strategy of organization Environmental uncertainties Time horizons HRP Outsourcing Type and quality of forecasting information Nature of jobs being filed HRP essentially involves forecasting personnel needs, assessing personnel supply and matching demand-supply factors through personnel-related programmes. The planning process is influenced by overall organizational objectives and the environment of business. BARRIERS OF HRP Planners face significant barriers while formulating an HRP. The major ones are the following: 1. People question the importance of making HR practices future oriented and the role assigned to HR practitioners in formulation of organizational strategies. Their

argument is simple there are people when needed. Offer attractive packages of benefits to them to quit when you find them in surplus. When the task is so simple, why an elaborate and time-consuming planning for human resources? Thus goes the

argument. Surprisingly, management.

this perception about HRP is also held by the top

2. HR practitioners are perceived as experts in handling personnel maters, but are not experts in managing business. The personnel plan conceived and formulated by the HR practitioners when enmeshed with organizational plan, might make the overall strategic plan itself defective. 3. HR information often is incompatible with the information used in strategy formulation. Strategic planning efforts have long been oriented towards financial forecasting often to the exclusion of other types of information. Financial forecasting takes precedence over HRP. 4. Conflicts may exist between short-term and long-term HR needs. For example, there arises a conflict between the pressure to get the work done on time and long-term needs, such as preparing people for assuming greater responsibilities. Many

managers are of the belief that HR needs can be met immediately because skills are available on the market as long as wages and salaries are competitive. These managers fail to recognize that by resorting to hiring or promoting depending on short-term needs alone, long-term issues are neglected. 5. There is conflict between quantitative and qualitative approaches to HRP. Some people view HRP as a numbers game designed to track the flow of people across the departments. These people take a strictly quantitative approach to planning. Others take a qualitative approach and focus on individual employee concerns such as promotability and career development. Best results would accrue if there is a balance between the quantitative and qualitative approaches.

6. Non-involvement of operating managers renders HRP ineffective. HRP is not strictly an HR department function. Successful planning needs a coordinated effort on the part of operating managers and HR personnel.

c) Job Analysis and Design

Now, in order to achieve effective HRP, the duties involved and the skills required for performing all the jobs in an organization have to be taken care of. This knowledge is gained through job analysis. Job analysis was almost non-existent three decades ago. The major thrust behind job analysis has been the civil rights movement which requires that the factors governing hiring, firing and promoting should be job related. The only means of establishing this job-related factor has been to identify what the job entails and what an incumbent worker must possess to perform successfully on the job. Job analysis helps to establish this. MEANING AND DEFINITION In simple terms, job analysis may be understood as a process of collecting

information about a job. Mthe process of job analysis results in two sets of data: (i) (ii) job description and job specification

Job Analysis A Process of Obtaining all Pertinent Job Facts

Job description

Job specification

A statement containing items such as

statement

of

human

qualifications

necessary to do the job. Usually contains such items as Job title Location Job summary Duties Machines, tools and equipment Materials and forms used Supervision given or received Working conditions Hazards Education Experience Training Judgment Initiative Physical effort Physical skills Responsibilities Communication skills Emotional characteristics Unusual sensory demands such as sight, smell, hearing

A few definitions on job analysis are quoted below. 1. .. Job analysis is the process of studying and collecting information relating to the operations and responsibilities of a specific job. The immediate products of this analysis are job description and job specifications. 2. . Job analysis is a systematic exploration of the activities within a job. It is a basic technical procedure, one that is used to define the duties, responsibilities and accountabilities of a job.

3.

. A job is a collection of tasks that can be performed by a single employee to contribute to the production of some product or service provided by the organization. Each job has certain ability requirements (as well as certain rewards) associated with it. Job analysis is the process used to identify these requirements.

JOB ANALYSIS AND COMPETITIVE ADVANTAGE As will be explained later, job analysis has its impact on all functions of HRM. Job analysis, if properly done, will enhance the effectiveness of all HR activities. Specifically, job analysis benefits an organization in the following ways:
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Laying the foundation for human resource planning. Laying the foundation for employee hiring Laying the foundation for training and development Laying the foundation for performance appraisal Laying the foundation for salary and wage fixation. Laying the foundation for safety and wealth.

THE PROCESS OF JOB ANALYSIS Strategic Choices

q

Gather Information
q

Process Information
q

Job Description
q

Job Specification

Uses of Job Description and Job Specification

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Personal Planning Performance Appraisal Hiring Training and Development Job Evaluation and Compensation Health and Safety Employee Discipline Work Scheduling Career Planning

POTENTIAL PROBLEMS WITH JOB ANALYSIS Certain problems crop up while conducting job analysis. The major ones are described below: Support from Top Management : In most cases, top management support is missing. The top management should make it clear to all employees that their full and honest participation is extremely important for the process. This message is, often, not communicated..

Single Means and Source : This relates to the defect in the process of job analysis. There are many proven methods and sources of collecting data. All too often, analysts rely on only one of the methods when a combination of two methods might provide a better data. No Training or Motivation : This also relates to the defect in the job-analysis process. Job holders are a great source of information about the job. But they are not trained or motivated to generate quality data for job analysis. Further, job holders are rarely made aware of the importance of the data, and are never rewarded for providing accurate data. Activities may be Distorted : Where training and preparedness do not exist, job holders tend to submit distorted data, either intentionally or inadvertently. For example, employees are likely to speed up, if they know they are being watched.

JOB DESIGN The logical sequence to job analysis is job design. Job analysis, as was explained earlier, provides job-related data as well as the skills and knowledge expected of the incumbent to discharge the job. Job design, then, involves conscious efforts to organize tasks, duties, and responsibilities into a unit of work to achieve certain objectives. A clearer definition of job design is: . it integrates work content (tasks, functions, relationships), the rewards (extrinsic and intrinsic), and the qualifications required (skills, knowledge, abilities) for each job in a way that meets the needs of employees and the organizations. Factors affecting Job Design

y y y y y y y y y y y y y

Organizational factors Characteristics of Task Work Flow Ergonomics Work Practices Environmental factors Employee Abilities and Availability Social and Cultural Expectations Behavioural Elements Feedback Autonomy Use of Ability Variety

d) Recruitment and selection

Recruitment is understood as the process of searching for and obtaining applicants for jobs, from among whom the right people can be selected. It is the process of finding and attracting capable applicants for employment. The process begins when new recruits are sought and ends when their applicants are submitted. The result is a peel of applicants from which new employees are selected. Thus recruitment process is said to end with the receipt of applications in practice the activity extends to the screening of applications so as to eliminate those who are not qualified for the job.

Recruiting programme helps the firm in at least 4 ways :

y

Attract highly qualified and competent people

y y y

Ensure that the selected candidates stay longer with the company Make sure that there is match between cost and benefit. Help the firm to create more culturally diverse work force.

Factors governing recruitment External Supply and demand Unemployment rate Labour market Political Social Sons of sail Image Five steps in Recruitment 1) 2) 3) 4) 5) Planning Strategy development Searching Screening & Evaluation and control Internal Recruitment policy HRP Size of the firm Cost Growth and expansion

Internal sources of recruitment 1) 2) Present employees Employee referrals

3) 4)

Former employees Previous applicants

External sources of recruitment 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) Professional or trade association Advertisements Employee exchanges Campus recruitment Walk-ins & Write ins Consultants Contractors Displaced persons Radio & TV Acquisition and mergers Competitors E-recruiting

Selection
Selection is the process of picking individuals (out of the parcel of Job applicants) with requisite qualifications and competence to fill jobs in the organizations. It is the process of differentiating between applicants in order to identify (and hire) those with a greater likelihood of success in a job. Selection is generally done by the HR department often in consultation with the line managers. Selection is significant as it has its impact on work performance & employee cost.

Selection is an 8-step process. 1) 2) 3) 4) 5) 6) 7) 8) 9) Preliminary interview Selection tests Employment interview Reference & Background Analysis Selection Decision Physical Examination Job Offer Employment Contract Evaluation & Control

There are two alternative methods of selection: 1) 2) Participative selection Employee leasing

An participation selection, subordinates participate in selection of this co-employees. Employee leasing represents the leasing of employees by a client company from third party. Barriers of Effective Selection
y y y y y

Perception Fairness Validity Reliability Pressure

In our country, selection of blue coloured and white coloured employees is unsystematic. However, in the case of managerial personnel the process is fairly systematic.

e) Training and development

As the pace of technology and changes increases, organizations are required to train the employees, clients or customers increasingly more often more efficiently and at a lesser cost. In todays business world, people are the critical difference and sometimes the only difference between organizational success and factors. Training is the primary way to develop the people in firms. Organizations are also investing more in training. Human skills are more frequently the most important resource an organization has to offer. All the resources are transferable or easily copied by competitors, but an individual is a unique resource and trainings the key to making the best use of individual skills. Training is providing information and direction in a planned and structured manner to employees on how to accomplish a specify task related to organizational need and objectives. Training should lead to permanent

behavioural change and measurable improvement in fat performance. Although training is a single event, in reality it is planned continuous process which begins with identifying the learning that is required. In simple terms training and development refer to the imparting of specific skills, abilities and knowledge to an employee. Training refers to the process of imparting specific skills. Development refers to the learning opportunities designed to help employees grew. Mostly training is referred for

the lower level level.

of the organization while management is referred at the managerial

It is only attempt to improve current or future employee performance by increasing an employees ability to perform through learning, usually by changing the employees attitude or increasing his or her skills and knowledge. The need for training and development is determined by the employees performance deficiency, computed as follows :Training and development need = Standard performance - Actual performance. Training and development methods

On the job Orientation training Job instruction training Apprentice training Internship Job rotation Coaching

Off the job Vestibule Lecture Special study Films , TV Conference or discussion Case studies Race playing / stimulation Programmed instruction / laboratory

f) HRA.

HR audit is a tool which help assess effectiveness of HR functions of an organization. An HR audit is a tool for evaluating the personnel activities of an organization. The audit may include one division or an entire company. It gives feedback about the HR functions to operating managers and HR specialists. It also provides feedback about how will managers are meeting this HR duties. In short, the audit is an overall quality control check on HR activities in a division or company of an evaluation of how these activities support the organizations strategy. Benefits of HR Audit
y y y

Identification of the contributions of the HR department to the organization, Improvement of the professional image of the HR department, Encouragement of greater responsibility and professionalism among members of the HR department,

y y y y y y y

Clarification of the HR departments duties and responsibilities, Stimulation of uniformity of HR policies and practices, Finding critical personnel problems, Ensuring timely compliance with legal requirements, Reduction of HR costs through more effective personnel procedures, Creation of increased acceptance of the necessary changes in the HR department, and A thorough review of the departments information system.

SCOPE OF AUDIT 1. 2. 3. Audit of human resource function, Audit of managerial compliance, Audit of the human resource climate, and

4.

Audit of corporate strategy.

Audit of Corporate Surgery Besides function, compliance and satisfaction, audit may extend to corporate strategy also. HR professionals do not set corporate strategy, but they strongly determine its success. Corporate strategy helps the organization gain competitive advantage. By assessing the companys internal strengths and weaknesses and its external threats and opportunities, the senior management devises ways of gaining an advantage. Whether the company stresses superior marketing channels, service, innovation, low-cost production, or some other approach, HRM is affected. Understanding the strategy has strong implications for HR planning, staffing, remuneration, industrial relations, and other HR activities. APPROACHES TO HUMAN RESOURCE AUDIT Auditors may adopt any of the five approaches for the purpose of evaluation. (i) comparative approach, (ii) outside authority approach, (iii) statistical approach, (iv) may be

compliance approach, and (v) Management By Objectives (MBO) approach. It

stated that irrespective of the approach, the data for assessment are provided by HR research. The auditors prepare and submit an audit report which may be clean or qualified. The latter contains gap in performance and therefore contains remarks and remedial measures. A clean report is appreciative of the departments functions.

Performance Management System a) Definition and objectives

Performance management is an important HRM process that provides the basis for improving and developing performance and is part of the reward system in its most general sense.

Performance management is a strategic and integrated approach to delivering sustained success to organizations by improving the performance of the people who work in them and by developing the capabilities of teams and individuals contributors. Performance management aims to improve strategic focus and organizational effectiveness through continuously securing improvements in the performance of individual and teams. A clear focus on how each employee can contribute to the overall success of the organization lies at the heart of performance management system. Objectives of PMS
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Align individual and organizational objectives Improve organizational performance Improve individual performance Provide the basis for personal development Develop a performance culture Inform contribution performance pay decisions.

b) PMS PROCESS
Performance & Development Agreement

Performance Review & Assessment

Managing performance throughout the year

c) Methods of performance appraisal

y

Ranking - The term ranking has been used to describe an alternative method of performance appraisal where the supervisor has been asked to order his or her employees in terms of performance from highest to lowest.

Forced Choice Method - This appraisal method has been developed to prevent evaluators from rating employees to high. Using this method, the valuator has to select from a set of descriptive statements, statements that apply to the employee. The statements have been weighted and summed to at, effective index.

Forced Distribution - The term used to describe an appraisal system similar to grading on a curve. The evaluator had been asked to rate employees in some fixed distribution of categories. One way to do this has been to type the name of each employee on a card and ask the evaluators to sort the cards into piles corresponding to rating.

Paired Comparison - The term used to describe an appraisal method for ranking employees. First, the names of the employees to be evaluated have been placed on separate sheets in a pre-determined order, so that each person has been compared with all other employees to be evaluated. The evaluator then checks the person he or she felt had been the better of the two on the criterion for each comparison. Typically the criterion has been the employees over all ability to do the present job. The number of times a person has been preferred is tallied, and the tally developed is an index of the number of preferences compared to the number being evaluated.

Graphic Rating Scale - The term used to define the oldest and most widely used performance appraisal method. The evaluators are given a graph and asked to rate the employees on each of the characteristics. The number of characteristics can vary from one to one hundred. The rating can be a matrix of boxes for the evaluator to check off or a bar graph where the evaluator checked off a location relative to the evaluators rating.

Checklists The term used to define a set of adjectives or descriptive statements. If the rater believed the employee possessed a trait listed, the rater checked the item; if not, the rater left the item blank, rating score from the checklist equaled the number of checks.

Behavioral Anchored Rating Scales - The term used to describe a performance rating that focused on specific behaviors or sets as indicators of effective or ineffective performance, rather than on broadly stated adjectives such as average, above average, or below average.

Critical Incident Technique - The term used to describe a method of performance appraisal that made lists of statements of very effective an very ineffective behavior for employees. The lists have been combined into categories, which vary with the job. Once the categories had been developed and statements of effective and ineffective behavior had been provided, the evaluator prepared a log for each employee. During the evaluation period, the evaluator recorded examples of critical behaviors in each of the categories, and the log has been use to evaluate the employee at the end of the evaluation period.

Management by Objectives - The management by objectives performance appraisal method has the supervisor and employee get together to set objectives in quantifiable terms. The appraisal method has worked to eliminate communication problems by the establishment of regular meetings, emphasizing results, and by being an ongoing process where new objectives have been established and old objectives had been modified as necessary in light of changed conditions.

CCE a) Various motivational theories

1) Abraham Maslows Hierarchy of needs theory b) Physiological needs Hunger, thirst etc., c) Safety needs To feel secure and safe, out of danger d) Belongingness & love needs Affiliate with others, be accepted and belong e) Esteem needs To achieve, be component, gain approval and belong

f) Self-actualization needs Self fulfillment and realize ones potential 2) Alderfer theory Alderfers Hierarchy of Motivational Needs Growth Impel a person to make creative or productive effects on himself and his environment Relatedness Involve relationships with significant others Satisfied through using capabilities in engaging problems; creates a greater sense of wholeness and fullness as a human being. Satisfied by mutually sharing thoughts and feelings; acceptance confirmation, understanding, and influence are elements. Existence Includes all of the various forms of material and psychological desires When divided among people one persons gain is anothers loss if resources are limited.

3) Hygiene theory 1) SATISFACTION (MOTIVATION) : Five factors stood out as strong determiners of job satisfaction:
y y y y y

Achievement Recognition Work itself Responsibility Advancement

The last three factors were found to be most important for bringing about lasting changes of attitude. It should be noted, that recognition refeers to recognition for achievement as opposed to recognition in the human relations sense.

2) DISSATISFACTION (HYGIENE): The determinants of job dissatisfaction were found to be:

y y y y y y

Company policy Administrative mpolicies Supervision Salary Interpersonal relations Working conditions

4) McClellands Theory of Needs: According to David McClelland, regardless of culture or gender, people are driven by three motives:
y y y

Achievement, Affiliation, and Influence.

Since McClellands first experiments, over 1,000 studies relevant to achievement motivation have been conducted. These studies strongly support the theory.
y

Achievement : The need for achievement is characterized by the wish to take responsibility for finding solutions to problems, master complex tasks, set goals, get feedback on level of success.

Affiliation : The need for affiliation is characterized by a desire to belong, an enjoyment of teamwork, a concern about interpersonal relationships, and a need to reduce uncertainty.

Power : The need for power is characterized by a drive to control and influence others, a need to win arguments, a need to persuade and prevail.

5) Theory of x and Theory of Y: Douglas McGregor observed two diametrically opposing view points of managers about their employees, one is negative called Theory of X and one is positive called Theory of Y a) Theory of X : Following are the assumptions of managers who believe in the Theory of X in regard to their employees.

y y y y

Employees dislike work; if possible avoid the same. Employees must be coerced, controlled or threatened to do the work. Employees avoid responsibilities and seek formal direction Most employees consider security of job, most important of all other factors in the job and have very little ambition.

b) Theory of Y : Following are the assumptions of managers who believe in the Theory of Y in regard to their employees.
y y

Employees love work as play or rest Employees are self directed and self controlled and committed to the organizational objectives

y y

Employees accept and seek responsibilities Innovative spirit is not confined to managers alone, some employees also possess it.

Theory of X assumes Maslows lower level needs dominate in employees. Whereas Theory of Y, assumes Maslows higher level needs dominate in employees. 7) Goal Setting Theory : :Edwin Locke mproposed that setting specific goals will improve motivation. Salient features of this theory are the following:
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Specific goal fixes the needs of resources and efforts It increases performance Difficult goals result higher performance than easy job Better feedback of results leads to better performance than lack of feed back. Participation of employees in goal has mixed result Participation of setting goal, however, increases acceptance of goal and involvements. Goal setting theory has identified two factors which influences the performance.

These are given below: o Goal commitment o Self efficiency

Goal commitment: Goal setting theory presupposes that the individual is committed to the goal. This commitment depends on the following:  Goals are made public  Individual has an internal locus of control  Goals are self-set  Self-Efficiency : Self Efficiency is the belief or self confidence, that he/she is capable of performing task. Persons with high self-efficiency put up extra-efforts when they face challenges. In the case of low self-efficiency level they will lessen or even abandon when meeting challenges.

8) Reinforcement Theory : This theory focus its attention as to what controls behavior. In contrast to goal setting theory, which is cognitive approach focus attention on what initiates behavior. Behavior, as per cognitive approach is initiated by internal events. Reinforcement theory argues that behavior is reinforced and controlled by external events. The classical conditioning proposed by Pavlov which we have already studied in our earlier lessons explains that in a better way. 9) Equity Theory : This theory of motivation centers around the principle of balance or equity. According to this theory level of motivation in an individual is related to his or her perception of equity and farness practiced by management. Greater the fairness perceived higher the motivation and vice versa. In this assessment of fairness, employee makes comparison of input in the job (in terms of contribution) with that of outcome (in terms of compensation) and compares the same with that of another colleague of equivalent cadre.

b) Competency mapping
Competency mapping identifies the individuals strengths, weaknesses in order to help them better understand themselves and to show them where career development efforts need to be directed. Competency mapping is a process of identifying key competencies for an organization and / or a job and incorporating those competencies throughout the various processes i.e. job evaluation,

training, recruitment, etc. of the organization. Mapping competencies to stand up and learning curricula is the work of Human Resource or Corporate Learning and Development professionals within the organizations. Preparation for Competency Identification: 1.Who are the people for whom the assessment center is intended ? 2. What is the assessment center intended to achieve? 3. Who are the successful people who can define what behaviors lead to success in the organization ? 4. Are the behaviors and the performances that are valued as leading to success, now the same as those which will be in the future? Validating the Competencies: Methods: 1. Convert the competency definitions and the associated behaviors into a questionnaire. 2. Present the competency definitions along with accompanying behaviors to the top management and a representative sample of the population. Discussion and suggestion. Data from both the methods are analysed. Competencies are the Future: Testing for competencies rather than Intelligence. David Mc celland, (1973) Need for Competency Mapping:
y

Individual characteristics or competencies can identify high performers.

Organisations are recognizing the value of a workforce that is not only highly skilled and technically adept, but more importantly a workforce that can learn quickly, adapt to change, communicate effectively and foster interpersonal relationships.

The emphasis is on potential or what the person can being to the organization, rather than a set of narrowly defined tasks based on job requirements.

Competency is a measurable pattern of knowledge, skill, ability, baheaviors and other characteristics that an individual needs to perform work roles or occupational functions successfully.

c) Various structures, cultures, business technologies & their implications in an organization

Once a group of people has established an organization to accomplish collective goals, organizational structure evolves to increase the effectiveness of the organizations control of the activities necessary to achieve its goals. Organizational structure is the formal system of task and authority relationships that control how people coordinate their actions and use resources to achieve organizational gosls. The principal purpose of organizational structure is one of control: to control the way people coordinate their actions to achieve organizational goals and to control the means used to motivate people to achieve these goals. At Microsoft, for example, the control problems facing Bill Gates were how to coordinate scientists activities to make the best use of their talents, and how to reward them when they developed innovative products. Gates solution was to place scientists in small self-contained teams and to reward them with stock in Microsoft based on team performance. Narayan Murthy started his company with a small group of entrepreneurs. The company had no strategic alliances initially. But today that is not the case. Marketing hard for American customers and partners was the first thing they did. They also lobbied with the Indian Government. They managed their environment well through organization design. What part of the Infosys structure m managed these challenges?

For any organization, an appropriate structure is one that facilitates effective responses to problems of coordination and motivation problems that can arise for any number of environmental, technological, or human reasons. As organizations grow and differentiate, the structure likewise evolves. Organizational structure can be managed through the process or organizational design and change. Organizational Culture At the same time that organizational structure is evolving, so it organizational culture. Organizational culture is the set of shared values and norms that controls organizational members interactions with each other and with suppliers, customers, and other people outside the organization. An organizations culture is shaped by the people inside the organization, by the ethics of the organization, by the employment rights given to employees, and by the type of structure used by the organization. Like organizational structure, organizational culture shapes and controls behavior within the organization. It influences how people respond to a situation and how they interpret the environment surrounding the organization. At Microsoft, Bill Gates attempted to create values that encouraged entrepreneurship and risk taking to build an organizational culture in which innovation was a valued activity. The small-team structure was helpful because scientists were continually meeting face to face to coordinate their activities and to learn from one another, which encouraged them to experiment and to find new ways of solving problems. The cultures of organizations that provide essentially the same goods and services can be very different. For example, Coca-Cola and PepsiCo are the two largest and most successful companies in the soft drinks industry. Because they sell similar products and face similar environments, we might expect their cultures to be similar. But they are not. CocaCola takes pride in its long-term commitment to employees; its loyal managers, many of whom spend their entire career with the organization; and its cautious and cooperative approach to planning. By contrast, PepsiCo has a highly political and competitive culture in

which conflicts over decision making cause frequent disputes, and often turnover, among top managers. Like organizational structure, organizational culture evolves and can be managed through organizational design and change. 1. Technology is the combination of skills, knowledge, abilities, techniques, materials,

machines, computers, tools, and other equipment that people use to convert raw materials into valuable goods and services. 2. Technology is involved in an organizations input, conversion, and output processes.

An effective organization manages its technology to meet the needs of stakeholders, foster innovation, and increase operating efficiency. 3. Technical complexity is the extent to which a production process is controllable and

predictable. According to Joan Woodward, technical complexity differentiates small-batch and unit production, large-batch and mass production, and continuous-process production. 4. Woodward argued that each technology is associated with a different organizational

structure because each technology presents different control and coordination problems. In general, small-batch and continuous-process technologies are associated with an organic structure, and mass production is associated with a mechanistic structure. 5. The argument that technology determines structure is known as the technological

imperative. According to the Aston Studies, however, organizational size is more important than technology in determining an organizations choice of structure. 6. According to Charles Perrow, two dimensions underlie the difference between routine

and nonroutine tasks and technologies: task variability and task analyzability. The higher the level of task variability and the lower the level of task analyzability, the more complex and nonrouting are organizational tasks. 7. Using task variability and analyzability, Perrow described four types of technology:

craftswork, nonroutine research, engineering production, and routine manufacturing.

8.

The more routine the tasks, the more likely an organization is to use a mechanistic

structure. The more complex the tasks, the more likely an organization is to use an organic structure. 9. James D. Thompson focused on the way in which task interdependence affects an

organizations technology and structure. Task interdependence is the manner in which different organizational task are related to one another and the degree to which the performance of one person or department depends on and affects the performance of other. 10. Thompson identified three types of technology, which he associated with three forms

of task interdependence: mediating technology and pooled interdependence; long -linked technology and sequential interdependence; and intensive technology and reciprocal interdependence. 11. The higher the level of task interdependence, the more likely an organization is to use

mutual adjustment rather than standardization to coordinate work activities. 12. Advanced manufacturing technology consists of innovations in materials technology

that change the work process of traditional mass production organizations. Innovations in materials technology include computer-aided design, computer-aided materials management, just-in-time inventory systems, flexible manufacturing technology, and computer-integrated manufacturing.

d) Issues of hierarchy & bureaucracy in an organization.

The shape of the hierarchy determines how decision making takes place. It also determines how motivated people will be to pursue organizational goals. Designing the hierarchy should be one of

managements major tasks, but, as we have seen, it is a task that many organizations to not do well or fail to consider at all. 1. The height of an organizations structure is a function of the number of levels in the hierarchy, the span of control at each level, and the balance between centralization and decentralization of authority. 2. As an organization grows, the increase in the size of the managerial component is less than proportional to the increase in the size of the organization. 3. 4. Problems with tall hierarchies include communication, motivation, and bureaucratic costs. According to the principle of minimum chain of command, an organization should choose the minimum number of hierarchical levels consistent with the contingencies it faces. 5. The span of control is the number of subordinates a manager directly manages. The two main factors that affect the span of control are task complexity and task interrelatedness. 6. The shape of the hierarchy and the way it works are also affected by choices concerning horizontal differentiation, centralization versus decentralization, differentiation versus integration, standardization versus mutual adjustment, and the influence of the informal organization. 7. The six principles of bureaucratic theory specify the most effective way to design the hierarchy of authority in an organization. 8. Bureaucracy has several advantages. It is fair and equitable, and it can promote organizational effectiveness by improving organizational design. However, problems can arise if bureaucratic principles are not followed and if managers allow the organization to become too tall and centralized.

PAC

DISCIPLINE AND DISCIPLINARY ACTIONS :

No organization can stand / survive without discipline. It has to be from top to bottom if the low-lead managers need to be disciplined then it is the senior should be an example for them. Industrial Employment (Standing Orders) 1946 lays down the rules and regulations / misconducts.
y

Willful In-subordination of a lawful and reasonable order (ie) one is not following the instructions of a superior

Willful slowing down in performance of work OR instigating others to work at a slow rate. There should be a yardstick to measure the speed rate of the performance workers

deliberating working at a slow rate. The performance is hampered where a group of workers do this same thing, it becomes a misconduct. For handling them, either negotiate with them for their requirements or increase their salary. Put a notice which states that wages are to be paid in consideration of work performance not for mere physical presence. Supreme Court Notice.
y

Going on a illegal strike OR Instigating workmen to commence or continue an illegal strike.

Mere participation in the strike can lead to disciplinary actions on the individual but if he instigates the strike then one take harsh actions on him. Conciliation Officer Under Industrial Disputes Act for the settlement of the strike. Mediating Officer. Circumstances where the strikes become illegal :

After the conciliation process is over, there should be a wait for 7 days and then only they can issue their case in the court, otherwise it is illegal. Lock-out = Employees refers to this, they dont allow the workers to work. If the matter of lockout or strike is under the Industrial Tribunal : One cant go for strike they have to wait for 2 months otherwise it is considered to be illegal. Under an agreement (bilateral) or settlement (with the help of a conciliation officer) or award (decision of a court). Taking Commissions Dealing with Absenteeism. Habitual Absence without leave for more than 10 consecutive days or over-staying the sanctioned leave without proper or satisfactory explanation. His name is cancelled from the muster roll and kept in the substitute list. (Badli list) occurs mostly in textile mills (rate of absenteeism is high) as the working conditions are adverse. Theft, Dishonesty in connection with the employees business or property. Theft of property of another employee within the organization in the premises/ Commission of an act. Subversive of discipline on good behaviour on the premises of the establishment. Sleeping while on duty. Dismissed and justified. misconduct. Abusing his superiors. Show Cause Notice is issued. On account of your sleeping the company has lost valuable production time. Filing a Charge sheet Supreme Court has taken as a serious

Since the misconduct alleged against you, you have no explanation to offer management then will be free to charge any reprehend on you. Misconducts :
y y

and the

Engaging in trade or business within the premises of the establishment. Collection of money within the premises of the establishment without the permission of the manager.

y y

Canvassing for union membership within the premises of the establishments. Collection of union subscription within the premises of the establishments without the permission of manager except in accordance with any law for the time being enforced.

Habitual negligence OR Gross negligence or from habitual negligence of work. Habitual Neglect of Work : Late coming on not less than 4 occasions in a month. 15 minutes late is permitted or else half-day leave Habitual breach of standing orders. Incorrigible person cannot be corrected. Failure to use safety equipment provided by the employer or interference with safety device. Failure accept any charge sheet or any other communication served in accordance with the standing orders. Carrying of lethal weapons in the premises of the establishments. Distribution or exhibitions of pamphlets, handbills or posters in the premises of the establishments without the permission of manager.

Sexual harassment at the place of work. Bombay Industrial & Regulation (Standing overe rule) What are the punishments under standing order?
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Censure or warning. Fines Subject to the payment of wages act.

y y y

Rules and regulations are to be approved by the State Government. No fine should be collected from a child below 15 years. The fine that is collected from the employees by the employers is to be used for the welfare of the employees.

y y

Suspension by way of punishment with loss of wages. Dismissal without notice. Discharge = 1 month prior notice . All terminal benefits are given.

Workmen = Any person (including an apprentice) employed to do skilled, unskilled, manually, clerical, technical, supervisory or operational for hire or reward if the terms and conditions of employment expressed or implied were fulfilled but does not include. NATURAL JUSTICE (1) (2) No man can be condemned unheard. No man can be a judge of his own case.

INDUSTRIAL DISPUTE ACT

A dispute or difference between employer and workmen regarding employment, non-

employment, But the organization has to pay substantial allowance. If it is 1st 50-90 days, 50% allowance. If it is 1 st 90 180 days (75 % of wages)

More than 180, then full wage. Prior notice is not supposed to be given in the case of strike but for the public utility consensus it is necessary. Model standing orders one can be suspended only for 4 days. Sec. 2(k) :(INTERPRETATION) There has to be a community of interest (substantial number of

employees) a single individual cannot raise his dispute so clarification was done and a new law came into existence. Sec 2(A) - Individual Dispute deemed to be an Industrial Dispute. Where the services of the workmen has dismissed, discharged, retrenched or terminated such a workmen can raise a dispute even though it is of an individual nature yet it shall be deemed as an industrial dispute. Complaints were normal from management and union. Therefore no change in her grade. Non-cognizable Warrant The person against whom the case has been charged cannot be arrested without a warrant. Sec. 36 Does not allow advocate to represent case if he has to then he has to take non -

objection from the other side. Sec. 33 Protected workers : Unions has to give names of the workers who are protected. Criminal case based on the presumption of innocence. `Probability of doing / committing the mistake Steps in a disciplinary action process:

Never have a workmen as 1) Preliminary Investigation Do it by oneself. 2) Show Cause Notice.

EMPLOYEE STATE INSURANCE CORPORATION ACT (ESIC ACT)

y y

Enacted in the year 1948. Contains schemes of integrated social security legislations and the benefits that are from cradle to grave.

y y

Applicable to factories, plantations, mines, shops, establishments Factory premise including preinets where manufacturing process is going on i) ii) with 10 people with power 10 or more people without power

y y y

Applicable throughout India. Better implemented in implemented zones. Which is decided by the State Government. Benefits = Medical Benefits : (i) (ii) (iii) Domiciliary treatment (outdoor patients) Diagnostic test (X-ray, blood test, CT scan) Hospitalization (where major operations can be done)

y y

If these facilities are available in certain areas only there ESIC is implemented. Union - Central : Earnings are divided State : : Sources of income

Concurrent:
y

Central as well as State can take the decision.

Under constitution , the State government is responsible for taking the decisions.

Whatever expenses by the patient / employee , 7/8th of the expenses incurred by the State government is reimbursed by ESIC.

In Chakan area, ESIC is not implemented, as facilities are not available at that places.

Employee: A person who is drawing wages up to Rs.15,000/- under this Act.

y y y y

Form No. 01 has to be filled (Employer does that) Get registered under this Act (i.e.) your establishment. Inspector checks whether this establishment exists or not. The Regional office will register the establishment and then will allot a Code No. to it. Later on, it will be identified by this code only.

The moment it is registered, find out how many people are registered under this act. (1) (2) (3) (4) (5) Name of employee Name of employer Name of Gender Identification mark Nominee - Name : Address : (6) List of dependent family members. Father : Mother : Wife : Children : (7) Temporary identification certificate

PROVIDENT FUND ACT 1952

(Except Jammu and Kashmir)]

It is a retirement benefit applicable to any establishment employing 10 or more employees. The wage for PF is Rs.6500/-/ - 12% from employer (fixed). Employee can go maximum to 16 % but employer will always contribute 12%. Provision for voluntary application of the Act. Establishment where there are 8 or 10 employees can apply for PF voluntarily. There are some establishments which can contribute on 10%. 1) 2) Establishment where the act is voluntarily applied. Those establishment which have been declared as sick under the Company Sick Undertaking Act 1985 and refer to BIFR. 3) 4) Those establishment whose assets are less than the liabilities. Those establishment which are mainly engaged in the manufacturing of bricks, coir, jute, gum and beedis, they can contribute 10%. 5) PF was amended and they brought a new scheme. Employees Family Pension Scheme was brought in order that if the employee is lost his family should get the pension. Types of Pension 1) Superannuation Pension - a person is eligible for this pension if he is a member of Pension Scheme from 16 November 1995 for a period of 20 years or has superannuated for 58 years or more. 2) Retirement Pension - If he has been a member of pension scheme for 20 years or more and has retired from the services before completing his age of 58 years.

3)

Short Service Pension - A person has to be a member for at least 10 years from 16th November 1995 and less than 20 years.

\Compensation and Reward system

a) Performance based compensation system

Methods of operating Performance related Pay Agreed outcomes (targets) 1 `2 3 4 5 6 Performance measures Performance Rating Formula Performance pay

Pay increases are related to the achievement of agreed results defined as targets or outcomes. Scope is provided for consolidated pay progression within pay brackets attached to grades or levels in a graded or career family structure, or zones in a broad-banded structure. Such increases are permanent they are seldom if ever withdrawn. Alternatively or additionally, high levels of performance or special achievements may be rewarded by cash bonuses that are not consolidated and have to be re-earned. The rate and limits of progression through pay ranges or brackets are typically but not inevitably determined by performance ratings that are often made at the time of the performance management review but may be made separately in a special pay review. Some organizations do not base PRP increases on formal ratings and instead rely on a general assessment of how much the pay of individuals should increase by

reference to performance, potential, the pay levels of their peers and their `market worth (the rate of pay it is believed they could earn elsewhere). PRP has all the advantages and disadvantages listed for contingent pay. Many people feel the later outweigh the former. It has attracted a lot of adverse comment, primarily because of the difficulties organizations have met in managing it. Contribution-related pay schemes are becoming more popular.

b) Determining rates of pay

Any remuneration plan must be understandable, workable and acceptable. The remuneration scheme must have two components a base rate and the scope for increasing the base rate. The remuneration plan must be determined keeping in mind the requisites and the components. The persons responsible for determining a remuneration plan are advised to employ sequential steps as described below: Job Descriptions : Job descriptions are crucial in designing pay systems, for, they

help to identify important job characteristics. They also help determine, define and weigh compensable factors (factors for which an organization is willing to pay skill, experience, effort and working environment). Job Evaluation : The next step in pay fixation is to establish relative worth of jobs by employing job evaluation. A number of techniques are available to evaluate jobs. For example, in the point-ranking method of job evaluation, each job is analysed and defined in terms of the compensable factors an organization has agreed to adopt. Points are assigned to each degree of a compensable factor, such as responsibility.

Job Hierarchy : The points assigned to all compensable factors are aggregated. The total points scored will help establish the hierarchy of job worth, starting from the highest point total to the lowest point total. Pay Surveys : Job hierarchy being established, the next step is to establish pay differentials. Before fixing wage and salary differentials, prevailing wage and salary rates in the labour market need to be ascertained. Hence the relevance of pay surveys.

c) Wages and hour compensation d) Employee pension

Pensions are provided an income to employees when they retire and to their surviving dependant on the death of the employee, and deferred benefits to employees who leave. Schemes offered by organizations (occupational pensions), as distinct from state pensions, are funded by contributions from the organization and usually, but not always, the employee. Pensions are the most significant benefit and are a valuable part of the total reward package, but they are perhaps the most complex part. Pensions are provided because they demonstrate that the organization is a good employer concerned about the long-term interests of its employees who want the security provided be a reasonable pension when the retire. Good pension schemes help to attract and retain highquality people by maintaining competitive levels of total remuneration. But they can be expensive and funding problems can arise, especially in defined benefit (final salary schemes). The range and level of benefits from pension schemes depend on the type of scheme and the level of contributions. In general, schemes provide the following benefits.

Pension scheme benefits

y y y

Benefits on retirement Benefits on death Benefits on leaving an employer - individuals leaving an employer can elect to take one of the following options; a deferred pension from the occupational scheme thay are leaving, the transfer of the pension entitlement from the present employer to the new employer (but this is not always possible), or refund of their contributions, but only if they have completed less than two years membership of the pension scheme.

The main type of schemes are described below: Defined benefit (final salary) schemes Pension entitlement on retirement Employer and employee contributions Pension Fund Dependents Lump sum

Defined contribution (money purchase) schemes The main features of defined contribution schemes are as follows. Pension entitlement

Contributions Pension fund Dependents Lump sum Defined benefit

y y

A guaranteed pension is provided to employees. Benefits are defined as a fraction of final salary.

Communicating pension policies The pension benefits provided by employers should be developed as an important part of a coherent total reward package. Good schemes demonstrate that employers care about the future security and wellbeing of their employees, and pensions are a valuable means of gaining and keeping employee commitment to the organization. Younger and more mobile employees are often indifferent to pensions but the older they get the more thay are concerned, and these mature employees contribute largely to organizational success. Careful consideration needs to be given to telling employees about the scheme. They need to know how it works and how it benefits them it is too easy for employees to take pensions for granted. It is particularly important to communicate the reasons for any

changes, and staff should be involved in discussing the reasons for the proposed arrangements and given the opportunity to comment on them.

e) Designing base pay structure

The first decision to make is where to place grade boundaries which, as described below, is usually informed by a job evaluation exercise. Decisions on grade boundaries will be influenced by considerations affecting the number and width of grades. Further options exist on the pay structure concerning the differentials between grades, the degree to which there should be overlap between grades, if any, and the method of pay progression within grades. In broad -banded structures there is also choice on the infrastructure the use of reference points or zones), and in career or job family structures there are options concerning the number of families, the composition of families and the basis upon which levels should be defined. An analytical job evaluation scheme is usually the basis for designing a graded structure and it can be used in the initial stages of designing a broad-banded or career/job family structure. In the case of graded structures, decisions on the number and width of grades are generally based on an analysis of the rank order of scores produced by job evaluation. More rarely, the grade and pay structure design is conducted by means of a non-analytical job evaluation schemes, which defines a number of single grades.

MERGERS AND ACQUISITION PROBLEMS

The human resource issues in the mergers and acquisitions (M&A) can be classified in two phases the pre-merger phase an the post merger phase. Literature provides ample evidence of difference in between the human resource activities in the two stages; the pre-acquisition and post acquisition period. Due diligence is important in the first phase while integration issues take the front seat in the later. The pre acquisition period involves an assessment of the cultural and organizational differences, which will include the organizational cultures, role

of leaders in the organization, life cycle of the employees of acquired firms; the impact can range from anger to depression. The usual impact is high turnover, decrease in the morale, motivation, productivity leading to merger failure. The other issues in the M&A activity are the changes in the HR policies, downsizing, layoffs, survivor syndromes, stress on the workers, information system issues etc. The human resource system issues that become important in M&A activity are human resource planning, compensation selection and turnover, ,performance appraisal system, employee development and employee relations.

International HRM a) Hiring impatriates and expatriates managers

HRP having been done, the international HR manager must proceed with the job of

hiring the right number of people of the right type. The international HR manager must not only select people with skills, but also employees who can mix with the organizations culture. General Electric, for example, is just hiring people who have skills required to perform particular jobs, it wants to hire employees whose styles, beliefs, and value systems are consistent with those of the firm. As expatriates play a major role in international businesses, MNCs take great care in their selection process. A major problem connected with expatriates is their premature return to their home country. Popularly called expatriate failure, expatriate failure results in considerable losses to MNCs. One of the reasons for expat failure is his/her inability to adjust to host country culture. These difficulties typically include an inability to converse well in the local language, problems in obtaining certain products and food supplies of personal preference, home sickness and so on. In this stage the curve hits bottom and is

characterized by what is called culture shock. Culture shock is explained in terms of its disruption to established routines of behaviour. Factors in Expatriate Selection
y y y y y y

Technical ability Cross-cultural suitability Family requirements Country-cultural requirements Language MNC requirements

Performance Management One of the most challenging tasks of IHRM is managing the performance of a firms various international facilities. While recruitment, selection, and training and development rend to focus on pre-assignment issues, performance management looks at post-assignment performance-related issues. Performance management may be understood as a process that enables an MNC to evaluate and facilitate continuous improvement of individuals, subsidiary units, and corporate performance, against clearly-defined, pre-set goals and targets. Obviously, performance

management is comprehensive in as much as it includes assessment of the performance of not only individuals but the activities of the firm and its subsidiaries too. An MNC has its own strategies and goals, and specific expectations for each of its foreign affiliates in terms of market performance and contribution to total profits and competitiveness. A subsidiarys performance needs to be assessed in terms of its fulfillment

of its headquarters expectations. However, while evaluating a subsidiarys performance, the constraints within which it functions in a host country need to be taken note of. Assessment of a subsidiarys performance is also complicated by the physical distance involves, time-zone differences, the frequency of contacts between the corporate head-office staff and the subsidiary management, and the cost of the reporting system. Developments in sophisticated communications systems that have wired the globe such as Internet, fax machines, teleconferencing systems, and e-mail do not fully substitute for faceto-face contacts between subsidiary managers and corporate staff.

b) Role of global HR managers

Globalization of business has probably touched the HR manager more severely than any other functional head. The HR executive needs to give international orientation to whatever he or she does employee hiring, training and development, performance review, remuneration, motivation, welfare, or industrial relations. International orientation assumes greater relevance as businesses get increasingly interlinked across nations. IHRM is the interplay among the three dimensions HR activities, types of

employees, and countries of operation. 1. The three broad activities of global HR namely procurement, allocation and utilizing cover all the six activities of domestics HRM. The six functions of domestic HRM are - HR planning, employee hiring, training and development,

remuneration, performance management, and industrial relations. These six functions can be dovetailed with the three broad activities of IHRM. 2. The three national or country categories involved in IHRM activities are the host country where a subsidiary may be located, the home country where the company has its headquarters, and other countries that may be the source of labour or finance. 3. The three types of employees of an international business are host country nationals, parent-country nationals, and third-country nationals. Thus, for example, IBM which employs Australian citizens in its Australian operations, often sends US citizens to Asia-Pacific countries on assignment, and may send some of its Singaporean employees to its Japanese operations. DOMESTIC HRM AND IHRM COMPARED Several factors differentiate IHRM. The main characteristics of IHRM are: 1. 2. 3. 4. 5. 6. More HR activities, Need for a broader perspective, More involvement in employee personal lives, Changes in emphasis as the workforce mix of expatriates and locals varies, Risk exposure, and More external influences.

c) Industrial relations
The last component of IHRM is labour or employee relations. From a strategic perspective, the key issue in international employee relations is the degree to

which organized labour can limit the choices to integrate and consolidate its global operations. A firms ability to integrate and consolidate its global operations to realize experience curve and location economies can be halted by organized labour, constraining the pursuit of a global strategy. One issue relates to the responsibility of handling labour relations. Because national differences in economics, political, and legal system produce different relations systems across countries, MNCs generally delegate the management of labour relations to their foreign subsidiaries. However, a policy of decentralization does not keep the corporate office away from exercising some coordination over labour-relations strategy. The involvement of the MNC headquarters in host-country labour relations is influenced by several factors. First the labour-relations function is centralized and is coordinated by headquarters when there is a high degree of inter-subsidiary production integration. Labour relations throughout a system become crucial to corporate headquarters when transnational sourcing patterns are developed that is when a subsidiary in one country relies on another foreign subsidiary is a source of components or as an user of its output. In this context, a coordinated labourrelations strategy. The nationality of ownership of the subsidiary has an impact on who handles employee relations. Union use several tactics to deal with international business. By far the most common union tactic is strike. A strike is a concerted and temporary suspension of functions, designed to exert pressure upon others in the same unit. The very existence of the firm may be threatened by a prolonged strike. policy is one of the key factors in a successful global-production

Unions should be cautions before resorting to a strike. An MNC enjoys formidable financial strength. It can absorb losses in a particular foreign

subsidiary that is in dispute with a national union and still show an overall profit on worldwide operations. The bargaining power of an union may be threatened or weakened by the financial resources of a multinational. This is particularly evident when an MNC has adopted a practice of transnational sourcing and crosssubsidization of its products or components across different countries. Labour union seeks intervention from the International Labour Organisation (ILO), the United Nations Conference on Trade and Development (UNCTAD ), the European Union (EU), and Organisation for Economic Co-operation and

Development (OECD). The ILO has identified a number of work-plate related principles that should be respected by all nations. These are freedom of

associations, the right to organize and collectively bargain, abolition of forced labour, and non-discrimination in employment. In 1997, the ILO adopted a code of conduct for MNCs. The code has been influential in drafting of the OCED guidelines for MNCs. These voluntary guidelines cover disclosure of information, competition, financing, taxation, employment and industrial relations , and science and technology.

d) Performance management in IHRM EMPLOYEE ENGAGEMENT a) Career development

In organizational development (or OD), the study of career development looks at; how individuals manage their careers within and between organizations and, how

organizations structure the career progress of their members, it can also be tied into succession planning within some organizations. In personal development, career development is: . the total constellation of psychological, sociological, educational, physical, economic, and chance factors that combine to influence the nature and significance of work in the total lifespan of any given individual.[1] The evolution or development a career informed by (1) Experience within a specific field of interest (2) Success at each stage of development and (3) educational attainment. . the lifelong psychological and behavioral processes as well as contextual influences shaping ones career over the life span. As such, career development involves the persons creation of a career pattern, decision-making style, integration of life roles, values expression, and life-role self concepts.

A career development strategy might include the following activities:

y y

A policy of promoting from within wherever possible; Career routes enabling talented people to move from bottom to top of the organization, or laterally in the firm, as their development and job opportunities take them;

Personal development planning as a major part of the performance management process, in order to develop each individuals knowledge and skills;

Systems and processes to achieve sharing and development of knowledge (especially tacit) across the firm;

Multi-disciplinary project teams with a shifting membership in order to offer developmental opportunities for as wide a range of employees as possible.

b) Pay benefits c) Performance management d) Job satisfaction

The concept of job satisfaction is closely linked to that of engagement. Job satisfaction refers to the attitudes and feelings people have about their work. Positive and favourable attitudes towards the job lead to engagement and

therefore job satisfaction. Negative and unfavourable attitudes towards the job indicate job dissatisfaction. Morale is often defined as being equivalent to job satisfaction. Thus Guion (1958) defines morale as `the extent to which an individuals needs are satisfied and the extent to which the individual perceives that satisfaction as stemming from his [sic] total work situation. Other definitions stress the group aspects of morale. Gilmer (1961) suggests that morale `is a feeling of being accepted by and belonging to a group of employees through adherence to common goals. He distinguishes between morale as a group variable, related to the degree to which group members feel attracted to their group and desire to remain a member of it, and job attitude as an individual variable related to the feelings employees have about their job. Factors affecting job satisfaction The level of job satisfaction is affected by intrinsic and extrinsic motivating factors, the quality of supervision, social relationships with the work group and the degree to which individuals succeed or fail in their work. Purcell et al m(2003)

believe that discretionary behaviour that helps the firm to be successful is more likely to happen when employees are well motivated and feel committed to the organization and when the job gives them high levels of satisfaction. Their research found that the key factors affecting job satisfaction were career opportunities, job influence, teamwork and job challenge. Job satisfaction and performance It is a commonly held and a seemingly not unreasonable belief that an increase in job satisfaction will result in improved performance. But research has not established any strongly positive connection between satisfaction and performance. A review of the extensive literature on this subject by Brayfield and Crockett (1955) concluded that there was little evidence of any simple or appreciable relationship between employee satisfaction and performance. An updated review of their analysis by Vroom (1964) covered 20 studies, in each of which one or more measures of job satisfaction or employee attitudes were correlated with one or more criteria of performance. The median correlation of all these studies was 0.14, which is not high enough to suggest a marked relationship between satisfaction and performance.