FORWARD .................................................................................................................................... 6
1. HUMAN RESOURCE PLANNING ........................................................................................ 7
1.1 HUMAN RESOURCE PLANNING MODEL.................................................................. 8
1.1.1 Forecasting Demand .................................................................................................... 8
1.1.2 Forecasting Supply .................................................................................................... 10
1.1.3 Determining Manpower Gaps .................................................................................. 11
1.2 CRITICAL FACTORS FOR SUCCESS OF HR PLANNING .................................... 12
ANNEXURE 1: AN EXAMPLE OF MANPOWER ESTIMATION PROCESS IN AN
OLD ORGANISATION ......................................................................................................... 14
2. ORGANIZATION DESIGN, JOB ANALYSIS AND COMPETENCY ............................ 16
2.1 INTRODUCTION ORGANISATION STRUCTURE .................................................. 17
2.2 DIVISIONALISATION OF STRUCTURE ................................................................... 18
2.2.1 Product Divisionalisation .......................................................................................... 18
2.2.2 Territorial Divisionalisation...................................................................................... 18
2.2.3 Functional Divisionalisation...................................................................................... 19
2.2.4 Strategic Business Unit .............................................................................................. 19
2.2.5 Line and Staff Organisation Structure .................................................................... 20
2.2.6 Project Organisation Structure ................................................................................ 21
2.2.7 Matrix Organisation Structure................................................................................. 23
2.3 JOB ANALYSIS: OVERVIEW ....................................................................................... 24
2.3.1 Purpose of Job Analysis ............................................................................................ 25
2.3.2 Job Analysis Information Hierarchy ....................................................................... 26
2.3.3 Importance of Job Analysis ...................................................................................... 27
2.3.4 Components of Job Analysis ..................................................................................... 27
2.4 JOB DESCRIPTION ........................................................................................................ 29
2.4.1 Definition .................................................................................................................... 29
2.4.2 How to Develop a Job Description ........................................................................... 29
2.5 INTRODUCTION TO COMPETENCY ........................................................................ 33
ANNEXURE – 1: HR COMPETENCE AUDIT .................................................................. 34
3. TALENT ACQUISITION ...................................................................................................... 40
3.1 INDIAN OVERVIEW ...................................................................................................... 41
3.2 UNDERSTANDING TALENT ACQUISITION ............................................................ 42
3.2.1 Talent Acquisition - As a Strategy............................................................................ 43
3.2.2 Typical Talent Acquisition Process .......................................................................... 44
3.3 RECRUITMENT .............................................................................................................. 45
3.4 MODES OF RECRUITMENT ........................................................................................ 46
3.5 FACTORS AFFECTING RECRUITMENT .................................................................. 47
3.6 RECENT TRENDS IN RECRUITMENT ...................................................................... 47
3.6.1 Outsourcing ................................................................................................................ 47
3.6.2 Poaching/Raiding ....................................................................................................... 48
3.6.3 E-Recruitment ............................................................................................................ 48
3.7 RECRUITMENT VS SELECTION ................................................................................ 49
3.8 SELECTION PROCESS .................................................................................................. 49
3.8.1 Preliminary Interview ............................................................................................... 51
3.8.2 Cognitive Ability Test ................................................................................................ 51
3.8.3 Psychometric Testing................................................................................................. 52
3.8.4 Selection Interview..................................................................................................... 53
3.8.5 Salary Negotiations .................................................................................................... 58
3.8.6 Physical / Medical Examination ............................................................................... 58
3.8.7 Reference Check ........................................................................................................ 59
3.8.8 Offer Letter ................................................................................................................ 60
3.9 RECRUITMENT CHALLENGES IN AGRIBUSINESS ............................................. 60
ANNEXURE 1: DETAILS ON THE PSYCHOMETRIC TESTS ..................................... 63
PREDICTIVE INDEX ....................................................................................................... 63
MBTI.................................................................................................................................... 64
BELBIN TEAM INVENTORY ......................................................................................... 67
FIRO-B ................................................................................................................................ 69
ANNEXURE – 2: SAMPLE BEHAVIORAL EVENT INTERVIEW QUESTIONS ...... 72
ANNEXURE 3: COMPETENCY BASED INTERVIEW QUESTIONS ........................... 73
CORE COMPETENCIES ................................................................................................. 73
ROLE SPECIFIC COMPETENCIES .............................................................................. 75
4. PERFORMANCE MANAGEMENT SYSTEM ................................................................... 77
4.1 WHAT IS PERFORMANCE ........................................................................................... 78
4.2 OBJECTIVES OF PERFORMANCE APPRAISAL..................................................... 79
4.3 KEY COMPONENTS OF A PERFORMANCE APPRAISAL SYSTEM .................. 79
4.3.1 Identification of Key Performance Areas (KPAs) .................................................. 79
4.3.2 Setting of goals & objectives every year for the next year ..................................... 79
2
4.3.3 Identifying behavioural dimensions critical for managerial effectiveness ........... 80
4.3.4 Periodic review of performance on G&O set and behavioural dimensions ......... 80
4.3.5 Performance review and discussions........................................................................ 81
4.3.6 Identification of development needs & development of action plan for future .... 81
4.3.7 Team /Organisation level normalisation.................................................................. 82
4.4 TRADITIONAL PERFORMANCE APPRAISAL METHODS .................................. 83
4.4.1 Confidential Report Method ..................................................................................... 83
4.5.2 Essay Appraisal Method ........................................................................................... 84
4.5.3 Straight Ranking Method ......................................................................................... 84
4.4.4 Paired Comparison .................................................................................................... 85
4.4.5 Critical Incident Method ........................................................................................... 86
4.4.6 Checklist Method ....................................................................................................... 87
4.5 MODERN METHODS OF PERFORMANCE APPRAISAL ...................................... 87
4.5.1 Forced Distribution ................................................................................................... 87
4.5.2 Behaviourally Anchored Rating Scales (BARS) ..................................................... 89
4.5.3 Management by Objectives (MBO).......................................................................... 91
4.5.4 Balanced Scorecard ................................................................................................... 93
4.5.5 Assessment Centres ................................................................................................... 95
4.5.6 360 Degree-Feedback................................................................................................. 98
4.6 RATING ERRORS ......................................................................................................... 101
4.6.1 Halo / Horn Effect .................................................................................................... 101
4.6.2 Central Tendency Error.......................................................................................... 101
4.6.3 Leniency Error ......................................................................................................... 102
4.6.4 Recency (or Primacy) Effect .................................................................................. 102
4.6.5 First Impression Error ............................................................................................ 102
4.6.6 Similar-to-me effect ................................................................................................. 103
4.6.7 Attribution Error ..................................................................................................... 103
4.6.8 Stereo typing............................................................................................................. 103
4.6.9 Status Effect ............................................................................................................. 103
4.6.10 Spillover / Past Performance Effect ..................................................................... 104
4.6.11 Strictness Error ...................................................................................................... 104
4.7 LIMITATIONS OF PERFORMANCE APPRAISAL ................................................ 104
4.8 CHARACTERISTICS OF AN EFFECTIVE PERFORMANCE APPRAISAL
SYSTEM ................................................................................................................................ 105
3
4.9 ADMINISTERING OF PERFORMANCE MANAGEMENT SYSTEM IN LARGE
ORGANISATIONS ............................................................................................................... 108
ANNEXURE 1: SAMPLE GOALS & OBJECTIVES SHEET ........................................ 112
5. COMPENSATION MANAGEMENT ................................................................................. 120
5.1 DEFINING COMPENSATION ..................................................................................... 121
5.2 COMPENSATION MANAGEMENT IN HRM .......................................................... 123
5.3 OBJECTIVES OF COMPENSATION MANAGEMENT .......................................... 123
5.4 PHASES OF COMPENSATION MANAGEMENT ................................................... 125
5.5.1 Job Analysis.............................................................................................................. 126
5.5.2 Job Evaluations ........................................................................................................ 126
5.5.3 Wage and Salary Surveys........................................................................................ 130
5.5.4 Pricing jobs ............................................................................................................... 131
5.6 COMPENSATION STRUCUTURE ............................................................................. 133
5.7 CHALLENGES IN TODAYS SCENARIO .................................................................. 135
ANNEXURE 1: HUMAN TOUCH...................................................................................... 135
ANNEXURE 2: STEPWISE REPRESENTATION OF COMPENSATION PROCESS139
6. ENGAGEMENT AND WORKPLACE MOTIVATION................................................... 142
6.1 RELATIONSHIP BETWEEN EMPLOYEE ENGAGEMENT AND
PERFORMANCE ................................................................................................................. 144
6.2 DEFINITION OF EMPLOYEE ENGAGEMENT – THE HEWITT MODEL ........ 144
6.3 ENGAGEMENT DRIVERS ........................................................................................ 145
6.3.1 The Gallup Organization’s Model.......................................................................... 146
6.3.2 Employee Satisfaction Survey................................................................................. 147
6.4 NON- MONETARY REWARDS .................................................................................. 148
6.5 IMPORTANT THEORIES ON MOTIVATION ......................................................... 149
6.5.1 Need Hierarchical Theory ....................................................................................... 150
6.5.2 Herzberg’s Motivation & Hygiene Theory ........................................................... 150
6.5.3 Adam’s Equity Theory ............................................................................................ 151
6.5.4 Vroom’s Expectancy Theory .................................................................................. 151
7. TRAINING AND DEVELOPMENT ................................................................................... 154
7.1 ESSENTIAL COMPONENTS OF TRAINING ........................................................... 155
7.2 TYPES OF TRAINING .................................................................................................. 155
7.3 TRAINING CYCLE ....................................................................................................... 156
7.4 TRAINING DELIVERY ................................................................................................ 160
4
ANNEXURE-1 ....................................................................................................................... 163
ANNEXURE-2 ....................................................................................................................... 164
ANNEXURE-3 ....................................................................................................................... 165
ANNEXURE-4 ....................................................................................................................... 166
ANNEXURE-5 ....................................................................................................................... 168
8.1 FEEDBACK .................................................................................................................... 170
8.2 COACHING .................................................................................................................... 171
8.3 MENTORING ................................................................................................................. 173
8.4 EMOTIONAL INTELLIGENCE.................................................................................. 176
8.5 CAREER MANAGEMENT AND DEVELOPMENT ................................................. 177
8.6 JOB ROTATION ............................................................................................................ 177
8.7 UNDERSTUDY ............................................................................................................... 178
8.8 CAREER PATHING ...................................................................................................... 179
8.9 SUCCESSION PLANNING ........................................................................................... 181
9. HUMAN RESOURCE INFORMATION SYSTEM .......................................................... 183
9.1 WHAT IS HRIS? ............................................................................................................ 184
9.2 WHY HRIS IS IMPORTANT? ..................................................................................... 184
9.3 LEVELS/TYPES OF HRIS : HRIS PYRAMID .......................................................... 189
9.4 HOW TO DEVELOP AN HRIS FOR AN ORGANISATION ................................... 191
9.5 COMPONENTS OF HRIS DEVELOPMENT IN AN ORGANISATION ................ 192
9.6 REPORTS GENERATION............................................................................................ 193
9.7 SECURITY ISSUES ....................................................................................................... 195
ANNEXURES ........................................................................................................................ 196
5
FORWARD
This book has been written by a few HR professionals who have long work experience in
industries related to Indian Agriculture. An attempt has been made by the authors to
make the book as contemporary as possible. A lot of examples, formats etc. have been
included in this book which will help you relate better with your experience.
Human Resource Management is one of the most exciting areas of management. As a
matter of fact, HRM is the responsibility of both line and HR Managers and therefore, no
matter in which role you will work in an organization, you will find HRM inescapable.
As you grow in your career, you will have many people to manage. Therefore an
understanding of HR concepts and practices will surely help you in dealing with your
people issues better.
Currently there is a shortage of talent in every industry. The situation is even worse in
Rural and Agriculture-related industries. Therefore HR, as a management discipline,
assumes considerable importance …… Attracting and Retaining talent in these industries
would become the top priority in every HR Manager’s agenda. This book echoes these
concerns and hence has dedicated a substantial portion to these issues.
The Authors wish you an enriching learning journey. Their efforts would be amply
rewarded if this book becomes useful to you at any point in your professional life!
Last but not the least; the Authors dedicate this book to their all important ‘You.’
Authors
6
1. HUMAN RESOURCE PLANNING
Human Resource Planning (HRP) is a process of systematically reviewing human resource needs
to ensure that the required number of employees, with the required skills, experience and
competencies, is available for the right jobs at the right time at the right cost.
This process is preceded by strategic planning. During the strategic planning process, top
management and the executing authority determine the department’s strategic objectives and how
they are to be achieved. Human resources play a critical role in the strategy implementation
process because their commitment and competencies will largely determine whether or not a
department will be able to achieve its objectives.
The link between strategic planning and human resource planning can be illustrated as
follows:
External Environment
Internal Environment
Strategic Planning
Strategic objectives
Action Plan
Financial
Requirements
Physical Requirements
7
Human Requirements
HR planning links people management to the organization's mission, vision, goals and objectives,
as well as its strategic plan and budgetary resources. Thus, the three key elements of HRP
process are:
a) Forecasting the demand for labor,
b) Performing a supply analysis, and
c) Balancing supply and demand considerations.
1.1 HUMAN RESOURCE PLANNING MODEL
FORECAST DEMAND
Considerations
- Product/service demand
- Economics
- Technology
- Financial resources
- Absenteeism/turnover
- Organizational growth
- Management philosophy
Techniques
- Trend analysis
- Managerial estimate
- Delphi technique
FORECAST SUPPLY
Internal
BALANCE SUPPLY
AND DEMAND
Recruitment (Shortage)
- Full – time
- Part-time
- Recalls
Reductions (Surplus)
- Terminations
- Layoffs
- Demotions
- Retirement
- Staffing tables
- Markov analysis
- Skills inventories
- Management inventories
- Replacement charts
- Succession planning
External
- Demographic changes
- Education of workforce
- Labor mobility
- Government policies
- Unemployment rate
1.1.1 Forecasting Demand
A key component of HRP is forecasting the number and type of people needed to meet
organizational objectives. Since it’s an open system that we exist in, a variety of organizational
factors, including competitive strategy, technology, structure, and productivity can influence the
demand for labor. For example, utilization of advanced technology is generally accompanied by
less demand for low-skilled workers and more demand for knowledge workers.
Let us consider few of the main factors, which can help us, forecast demand of human resources
in an organization.
8
a) Organizational decisions: HR planning needs to take into account the rest of the
organization’s strategic plans, sales and production forecasts and new ventures to be more
accurate. For example, If Britannia Industries Ltd. expects higher demand for biscuits and bread,
the long-term HR plan must take this into consideration. Likewise, if it tries to venture into other
lucrative fields such as milk-based products, confectionary items the demand for people
possessing requisite skills in those areas in the next couple of years should be looked into
carefully. Furthermore, where plans are changed, the effect of the changes must be estimated.
Proposed expansion, contraction or diversification of the organization’s activities will obviously
affect the demand for labor in general or for particular skills. This may be estimated by market
research, competitive analysis, trends in technological advances and so on.
b) Workforce factors: Demand is also influenced by the internal in and out flux of the
employees through retirements, terminations, resignations, deaths and leaves of absence, etc.
These actions by employees become fairly predictable, once you spend more and more time with
the organization or a certain industry. The above factors will affect how much labor will be
required, given the expected productivity or work rate of different types of employee and the
expected volume of business activity. Note that productivity will depend on capital expenditure,
technology, work organization, employee motivation and skills, negotiated productivity deals and
a number of other factors.
Considering the above factors HR planners analyze the demand on the basis of the
following:
a) Workforce analysis to determine the rate of influx and outflow of employee. It is through this
analysis one can calculate the labor turnover rate, absenteeism rate, etc. Qualitative methods go a
long way in analyzing the internal flow created by promotions, transfers etc.
b) Workload analysis, with which one can calculate the numbers of persons required for various
jobs with reference to a planned output. This takes into consideration factors such as absenteeism,
and idle time, etc. Both quantitative and qualitative techniques are utilized for accurate results.
c) Job analysis: Job analysis helps in finding out the abilities or skills required to do the jobs
efficiently. A detailed study of jobs is usually made to identify the qualifications and experience
required for them. Job analysis includes two things: job description and job specification. Job
9
description, thus, is a factual statement of the duties and responsibilities of a specific job. It gives
an indication of what is to be done, how it is to be done and why it is to be done. Job specification
provides information on the human attributes in terms of education, skills, aptitudes and
experience necessary to perform a job effectively.
1.1.2 Forecasting Supply
Once an organization has forecast its future requirements for employees, it then goes on to the
next search that is from where can it fulfill its requirements. It therefore needs to determine if
there are sufficient numbers and types of employees and how many are eligible for the reasonable
positions. Supply analysis thus, involves planning for procurement: who, from where, how and
when of recruitment. It scans the internal and external environment for the best-fit candidate for
the positions in question. Thus, there are two source of supply- internal and external.
a) Internal sources: The most popular approach to be followed by all managers is to look within
the organization among its cadre first. Until and unless the opening is not related to immensely
diversified field of which the existing workforce might not possess requisite skills, and the cost of
training may be working out to be high, it is easier to go in for an internal source for recruitment
because it is cost saving in many ways to utilize what is already available to the organization.
A profile of employee in terms of age, sex, education, training, experience, job level, past
performance and future potential is continuously maintained for use whenever required. Thus, if
the requirements in terms of growth/diversification, internal movements of employees (transfer,
promotions, retirement, etc.) are determined in advance then the data can be very useful. But
while provisioning for the above corporate movements, one must keep an eye on the internal
movement, such as, attrition, absenteeism, promotion, etc of the workforce as we have discussed
earlier, through the workforce analysis. In addition to workforce analysis, the organization needs
to maintain replacement charts or succession plans. Regular manpower audits are the best option
to keep track of the available talent in terms of skills, performance and potential.
10
An internal supply analysis is done with
(i) Staffing tables/manning charts, which are pictorial representations of all organizational jobs,
along with the numbers of employees currently occupying those jobs and future employment
requirements.
(ii) Skill inventories that list each employee’s education, past work experience, etc.
(iii) Replacement chart that helps us derive the profile of job holders, department-wise and
reveals those who could be used as replacements whenever the need arises.
b) External sources: It is only when the cost of procuring the labour from internal sources is
more and also the present staff cannot be spared for the future assignment, the company can refer
to the external market. For this, they need to keep themselves updated regularly on what is
available now, what will be available later. Whether the skills required in future will be easily
available or certain training, for instance need to be incorporated. For example, a company in the
present scenario wanting to start its BPO operations in India may not have problem which a
company 10 years back would have faced, as there are ample requisite skills available in the
market. Not only skilled labor but also they are motivated to join such company for fast earnings.
Thus, HR planners need to keep themselves abreast of the Labor market conditions such as local
employment, trends of relevant categories of employees, competition for such skills, availability
of part time labour, migration trends of labor, etc.
1.1.3 Determining Manpower Gaps
The final stage is to balance out the demand and supply gap. A comparison chart is developed to
find what is available and to what extent it can fulfill the demand forecast. This exercise helps us
to have an idea of the quantitative and qualitative gaps in the workforce. A reconciliation of
demand and supply forecasts will give us the number of people to be recruited or made redundant
as the case may be. This forms the basis for preparing the manpower plan.
In this process a company always needs to keep repeating this step as it operate in a changing
environment. Changes in product mix, union agreements, and competitive action are some of the
important things that need special attention. The human resource requirements, thus identified are
translated into a concrete manpower plan, backed up by detailed policies, and other human
11
resources instruments and strategies (for example, recruitment, selection, training, promotion,
retirement, replacement, etc.).
The manpower plan is further divided into the following resultant operational plans:
a) Recruitment plan to show how many and what type of people is required and when they are
needed.
b) Redeployment plan to help chart out the future movement in terms of training and transfers.
c) Redundancy plan will indicate who is redundant, when and where; the plans for retraining,
where this is possible; and plans for golden handshake, retrenchment, lay-off, etc.
d) Training plan to chart out if training is required. If yes, when and to which level; whether it
will be done in-house, done in phases or included as part of a formal induction program. This
includes the cost and benefit analysis of all the options available.
e) Productivity plan will indicate reasons for employee productivity or reducing employees’
costs through work simplification studies, mechanization, productivity bargaining, incentives and
profit sharing schemes, job redesign, etc.
f) Retention plan will indicate reasons for employee turnover and show strategies to avoid
wastage through compensation policies, changes in work requirements and improvement in
working conditions.
g) Check/reviews points The success of the entire exercise is dependent upon frequent reviews
so that none of the factors are left out and changes are constantly taken care of the important thing
is to clearly demarcate point for periodical checks to incorporate deficiencies and periodic
updating of manpower inventory based on training and performance reviews, in the light of
changing circumstances.
1.2 CRITICAL FACTORS FOR SUCCESS OF HR PLANNING
a) Integral to strategic planning - HR planning must be dealt with as an integral aspect of your
department’s strategic planning process. Those who are involved in HR-planning must have a
deep understanding of the overall strategic plan, vision, mission, and objectives of your
department.
b) Commitment from leadership - It is essential that the leadership of the department is
committed to human resources as a strategic asset.
c) Senior Management should lead - The senior management of a department should lead the
HR planning process. This is critical for the successful implementation of human resource
12
matters. Their performance agreements should reflect their responsibilities. The Head of Human
Resources should be the lead person to set the process in motion and to see it through to its
conclusion.
d) Suitable planning techniques - The planning techniques selected should suit the department
and its specific circumstances.
e) Adequate resources allocated - Adequate resources and time must be made available to
undertake the planning process.
13
ANNEXURE 1: AN EXAMPLE OF MANPOWER ESTIMATION PROCESS IN AN OLD
ORGANISATION
This is an example of the manpower estimation exercise undertaken in three dairy unions which
are about 30 years old.
Systematic approach to eliminate non-value adding processes
In the first stage various methods were used to identify the non-value adding activities and
eliminate them to reduce the extra manpower and thus extra costs. The methods used were:
a) Benchmarking – Benchmarking is a systematic process of evaluating and comparing the
capability of one organization with others for optimizing the organizations processes. In
this case an internal benchmarking was done based on the best practices of three dairy
union viz. Dairy 1, Dairy 2 and Dairy 3. The activities in all the dairy plants with
throughput of 1 lakh litre per day (LPD) were identified. The number of manpower in
each activity was studied. The minimum required manpower has been taken as the
benchmark figure and the total benchmarked number was arrived. It was found that
productivity can be significantly increased by implementing Job-rotation and Multitasking.
b) Zero-basing – In this process all activities are listed considering a new organization with
updated technologies and process. It was done to eliminate non-value adding activities
and redesign processes like order execution and procurement. It was found that
productivity can be significantly improved by using enablers like Information
Technology and Automation.
c) Outsourcing – It is process to appoint a third party agency to execute non-critical
unskilled jobs. It was found that productivity can be significantly increased by
outsourcing unskilled jobs (like sachet filling, crate washing and can cleaning) and noncritical jobs (like transportation, housekeeping, cash collection and indent punching).
Comparative Table showing number of Production staffs at the three dairy unions:
Activity
Dairy 1
Dairy 2
Dairy 3
Best Practice
Ideal*
Leave Reserve/Off Reserve/Reliever
34
12
22
12
6
RMRD
9
6
8
6
6
Loose Milk Filling
4
2
-
2
2
Sachet Filling
16
21
20
16
0
Cold Storage
4
6
8
4
6
Dispatch
5
-
2
2
2
Crate washing
2
4
5
4
0
Tanker Duty
4
3
1
1
0
Miscellaneous
2
-
2
-
-
ETP
3
-
-
-
-
Products
6
4
3
3
3
RMRD Testing
2
5
-
2
2
Total
91
63
71
52
27
Excess compared to ideal
64
36
44
-
-
*Ideal figures arrived after benchmarking, zero-basing and outsourcing
Based on the above comparison, the manpower saving at Dairy 1 was about 57% on the ideal
figure basis ( ideal figure is arrived after benchmarking, zero-basing and outsourcing). The detail
of the same is shown in the figure below:
275
74
All savings are a result of
comparison with benchmarked
processes of ideal dairy
23
Savings in manpower
Drivers-14, Sweepers-2, Sachet
filling-18, Crate washing-2, Tanker
duty-4, Order execution-7,
marketing-14
61
Savings in manpower
Personal Deptt. -2
Milk value billing -1
Office attender -7
P&I staff - 13
As-Is
Benchmarking
117
Zero-basing
15
Outsourcing
To-be
Notes
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16
2. ORGANIZATION DESIGN, JOB ANALYSIS AND COMPETENCY
The organisation design is one of the results of Manpower planning process. In this section the
overall process of organisation design including organisation structure, job analysis and job
description is covered.
2.1 INTRODUCTION ORGANISATION STRUCTURE
One could argue that no other topic has undergone as much change in the past decade as that of
organising and organisational structure. Traditional designs are being questioned and re-evaluated
in the search for designs that match changing environments and strategic directions. Before we
move into the details of organization structure, we need to understand a few concepts, which have
been explained below:
Organising - Organising involves determining the work to be completed in order to achieve the
organization’s goals, appropriately dividing the work between staff and setting up the
mechanisms to coordinate activities. You will remember that organising is one of the four
functions of management. Organising in its broadest sense is about the process of making the
organization’s structure appropriate to its objectives, strategy, resources and environment.
Organisational Structure - Organisational structure represents the formal channels through
which the company is managed and depends greatly on the mission and strategy. Obviously,
specific organisational designs vary from organisation to organisation.
An organisation's structure determines what jobs employees do, how they are grouped and,
therefore, how they interact with each other. It determines the number of levels in the
organisation and the control structures.
Organisational design- Organisational design is another expression for organization structure;
but the word ‘Design’ is very important. It represents that an organization has to be designed to
be smartly responsive to the needs of business. Over the last decade there has been a broad trend
towards more 'organic' designs for organisations. Emphasis has been laid to create designs around
the customer and hence these designs essentially involve pushing down authority to the lower
echelons of the structure. With decentralized authority, organisations are more responsive to
address the changing needs of the marketplace than did the 'mechanistic' types of organisations,
which were dependent on centralized authority and layers of bureaucracy.
17
2.2 DIVISIONALISATION OF STRUCTURE
There are different bases on which various divisions in an organization can be created. The three
traditional bases are product, territory and function. Later, many organisations have moved from
these bases to create division on the basis of strategic business units. In each of these bases,
functions involved and, therefore, departments created are different.
2.2.1 Product Divisionalisation
In this form, each major product or product line is organized as a separate unit. Each unit has its
own functional structure for various activities necessary for the product. Multi- product
organisations use this as basis for divisionalisation. This is appropriate specially when each
product is relatively complex and large amount of capital is required for each product. The
product requires different types of efforts as compared to others in terms of marketing and / or
production. For example, Century Mills have separated divisions for textile, cement, and
shipping. Reliance Industries limited has six product divisions: textile, polyester, fiber
intermediates, polymer, chemical, and oil and gas – each being a huge business and having a
distinct customer base. Therefore, the organization structure around products in both Century
Mills and Reliance make an eminent sense.
2.2.2 Territorial Divisionalisation
In this form, regional offices are established as separate units. Each regional office has its own set
of functional departments and operates under the strategic policies and guidelines established by
corporate management. This is useful for those organizations whose activities are geographically
spread such as banking, transport, insurance, etc. For example, Life Insurance Corporation of
India runs its life insurance business on the basis of territorial divisionalisation in which the entire
geographical area of the country has been divided into five zones- Eastern, Central, Northern,
Southern and Western. Each zone has further been divided into appropriate number of divisions,
for example, Northern Zone into four divisions located at Jalandhar, Chandigarh, New Delhi, and
Ajmer. Each division has a number of branches at different places covered by the division
concerned.
18
2.2.3 Functional Divisionalisation
In an organization, you often come across are functions like Finanace, HR, Marketing and
Advertising, Purchase, Sales, Production, Maintenance, R & D etc. which are invariably
populated with employees with certain degree of expertise in these areas. An organization can be
structured around these functions. For example, a small, one product manufacturing unit may be
structured around these functions only.
2.2.4 Strategic Business Unit
Strategic Business Unit (SBU) is a profit or cost centre within a larger organization that has a
degree of independence in operational management and it is controlled, not by bureaucratic rules
but through its ‘bottom-line’ performance. In multi-product or multi- geographic area companies,
divisions are created in the form of various strategic business units (SBUs). SBU concept was
evolved by General Electric Companies (GEC) of USA to manage-its multi product business.
The fundamental concept in SBU is to identify the independent product/ market segments served
by an organisation. Since each independent product/ market has a distinct environment, an SBU
should be created for each such segment. Thus, different SBUs are involved in distinct strategic
business areas with each area serving the distinct segment of the environment. For example, GEC
was earlier having nine product groups and forty-eight strategic business units, many of which
crossed group, division, and profit center lines. For instance, three separated divisions in food
preparation appliances were merged in a single SBU to serve houseware market. In creating
SBUs, following features become important:
1. Each SBU is managed as a portfolio of the organisation with a clearly-defined product/
market segment and clearly defined strategy.
2. Each SBU develops its strategy tailored to its needs with aligning it to corporate
capabilities and needs.
3. Each SBU is allocated resources- both physical and human- according to its needs and
contributions to the achievement of organizational objectives.
In India, many companies have organized their businesses on the concept of SBU. In fact, most of
the companies in information technology sector which are engaged in development of softwares
for different purposes and for different customer segments have adopted this approach.
19
Organisation Structure is often a combination of business, territory and product
divisionalisation. The schematic structure below represents this:
President
Strategic Business Units
Vice President
Chemical
Vice President
Fertilizers
Vice President
Dairy
Territorial Departmentalization
Kota Plant
Manager
Mumbai Plant
Manager
Bangalore Plant
Manager
Product Departmentalization
Consumer
Products
Industrial
Products
Industrial
Products
Consumer
Products
Consumer
Products
Industrial
Products
2.2.5 Line and Staff Organisation Structure
In any organization structure, we notice that there are certain functions or departments like
Production and Marketing which are responsible for the direct objectives of an
organization.These functions are called line functions. There are some other functions like HR,
Accounts etc. which support and facilitate the line functions in attainment of business objectives.
Such support functions are Staff functions. Whether a function is line or Staff largely depends
upon it’s role with respect to the attainment organizational objectives. For example, in a
manufacturing organization R&D is a staff function, whereas it is a line function in ICAR (Indian
Council of Agricultural Research). Similarly recruitment is a staff function in most of the
organizations but it is a line function for an organization like Banking Service Recruitment Board
(BSRB) or Union Public Service Commission (UPSC).
20
Line and staff functions in an organization structure are shown in the Figure given below:
Line and staff organization structure
Secretary
Public Relation officer
General Manager
Manager-Finance
Manager - Personnel
Manager production
Manager marketing
Production Engineer
Sales Officer
Foreman
Sales Supervisor
Worker
Salesman
The position as well as department in bold and italic is staff and other is line. These staff
specialist may provide services to a particular position, department, or organization as a whole.
2.2.6 Project Organisation Structure
Since change has become the only constant factor in the modern day business environment,
organizations are compelled to take up various activities on project basis. This involves adding
the required structure for the new project one and eliminating the project structure which is no
more necessary. The project work can be managed through two forms of organization: pure
project organization and matrix organization. The pure project organization is suitable for taking
small number of larger projects with long duration so that a separate division can be created for
each project. The projects for small duration can also be handled by Matrix organization – a form
of organization we will introduce to you little later in this chapter – without creating any long
term commitment in terms of employing additional people.
In a Project organization various divisions are created only for the life time of a project. When a
particular project is completed, the concerned division may disappear. Managers engaged in the
21
Project are moved to some other projects or are assigned with other responsibilities or in the
worst case scenario, are separated from the organization. Invariably during the execution phase,
the frontline employees are hired on a fixed duration basis. Major project organizations in India
are L & T, HCC, BHEL etc.
Middleton observes that “a project organization can also be the beginning of an organization
cycle. The project may become a long term or permanent effort that eventually becomes a
programme or branch organization. The latter, in turn, may become separated from the parent
organization and be established as a full-fledged division, functionally organized.”
The establishment of project organization calls for appointment of a project management team
which is responsible for the completion of the project. The Project Head prescribes what is to be
done, when it is to be done, and how much resources are required. The functional personnel are
drawn from various functional departments.
The functional manager decides who in the
department will perform the task and how it will be done. Thus, project manager is a unifying and
focus point for the project activities.
General Manager
Project -A
Quality
Control
R&D
Project - B
Contract
admistration
Scheduli
ng
Quality
control
R&D
Purchasing
Purchasing
Contract
administration
Engineering
Engineering
MANUFACTURING
There could be a situation in an organization, when a project manager really does not have
vertical authority on the personnel drawn from various functional department unlike a divisional
manager who has line authority over the people working in various functional department
22
Scheduli
ng
assigned to his division. In the absence of any vertical authority, the project manager must
convince the functional people so that they help him to complete the project within time. In such
a situation, project manager faces an authority gap. He has responsibility for completing the
project but does not have direct authority over the people associated with his project. Project
organization structure can be presented as drawn above.
2.2.7 Matrix Organisation Structure
Matrix organization structure is a combination of product/territorial and functional
divisionalization. As a result, a matrix structure necessitates a dual reporting relationship – one
reporting to their Functional Head and another to the Product or the Territorial Head. For
example the Regional HR Head of Eastern Region of a company, will have reporting to the
overall Region Head based in Kolkata and the
HR Head of the company, who is based in the
Head Office in Mumbai.
A matrix organization structure is presented below of a leading fertilizers and chemical company
of India:
General Manager
Production
Marketing
Finance
Personnel
Prod
.
Mktg
Fin.
Pers.
Prod
Mktg
Prodd
Fin.
Pers
d
d
Mktg
rodd
Fin.
Pers
d
d
Mktg
Fin.
Pers
d
d
Chemical
Fertilizer
Consumer
Products
Hydrobrom
ic Acid
Prod
Prod
23
2.3 JOB ANALYSIS: OVERVIEW
Job Analysis is a process to identify and determine in detail the particular job duties and the
identification of knowledge, skills and attitude required to perform the job duties in an optimum
manner.
The Job; not the person: An important concept of Job Analysis is that the analysis is conducted
of the Job, not the person. While Job Analysis data may be collected from incumbents through
interviews or questionnaires, the product of the analysis is a description or specifications of the
job, not a description of the person.
Job Analysis should collect information on the following areas:

Duties and Tasks The basic unit of a job is the performance of specific tasks and duties.
Information to be collected about these items may include: frequency, duration, effort,
skill, complexity, equipment, standards, etc.

Environment This may have a significant impact on the physical requirements to be able
to perform a job. The work environment may include unpleasant conditions such as
offensive odors and temperature extremes. There may also be definite risks to the
incumbent such as noxious fumes, radioactive substances, hostile and aggressive people,
and dangerous explosives.

Tools and Equipment Some duties and tasks are performed using specific equipment
and tools. Equipment may include protective clothing. These items need to be specified
in a Job Analysis.

Relationships: This includes supervision given and received and relationships with
internal or external people.

Requirements The knowledge, skills, and abilities (KSA's) required performing the job.
While an incumbent may have higher KSA's than those required for the job, a Job
Analysis typically only states the minimum requirements to perform the job.
Job analysis is a systematic approach to defining the job role, requirements, responsibilities,
evaluation, etc. It helps in finding out required level of education, skills, knowledge, training, etc
for the job position. It also depicts the job worth i.e. measurable effectiveness of the job and
contribution of job to the organization. Thus, it effectively contributes to setting up the
compensation package for the job position.
24
2.3.1 Purpose of Job Analysis
The purpose of Job Analysis is to establish and document the 'job relatedness' with other HR
processes such as training, selection, compensation, and performance appraisal.
1) Selection
Job Analysis can be used in selection procedures to identify or develop:

job duties that should be included in advertisements of vacant positions;

appropriate salary level for the position to help determine what salary should be offered
to a candidate;

minimum requirements (education and/or experience) for screening applicants;

interview questions;

selection tests/instruments (e.g., written tests; oral tests; job simulations);

applicant appraisal/evaluation forms;

orientation materials for applicants/new hires
2) Determining Training Needs
Job Analysis can be used in training/"needs assessment" to identify or develop:

training content

assessment tests to measure effectiveness of training

equipment to be used in delivering the training

methods of training (i.e., small group, computer-based, video, classroom...)
3) Compensation
Job Analysis can be used in compensation to identify or determine:

skill levels

compensable job factors

work environment (e.g., hazards; attention; physical effort)

responsibilities (e.g., fiscal; supervisory)

required level of education (indirectly related to salary level)
25
4) Performance Review
Job Analysis can be used in performance review to identify or develop:

goals and objectives

performance standards

evaluation criteria

length of probationary periods

duties to be evaluated
2.3.2 Job Analysis Information Hierarchy
Job Analysis is nothing but gathering of information. The hierarchy of information that job
analysis seeks are shown in the figure:
1. A Job Element is the smallest segment unit into which work can be divided. Putting the
tomato on a hamburger is an example of an element in the job of a fry cook at
McDonald’s.
2. A task is distinct work activity carried out for a distinct purpose. Examples would
include typing a letter, preparing a lecture, or unloading a mail truck.
3. A duty is a number of tasks. Counseling students is a duty if a college instructor.
4. A position refers to one or more duties performed by one person in an organisation.
There are at least as many positions as there are workers in the organisation; vacancies
may create more positions than employees. Examples of positions include Supervisor –
Grade IV, Accounts Payable Clerk I.
26
5. A Job is a type of position within the organisation. If a large insurance company employs
sixty life insurance actuaries, then there are sixty positions, but just one life insurance
actuary job.
6. A job family is a group of two or more jobs that either call for similar worker
characteristics or contain parallel work tasks as determined by job analysis. At the
previously mentioned insurance company, service clerks and policy correspondents
represent two jobs that frequently are placed in a common job family because they have
many similar worker characteristics.
7. An occupation is a group of similar jobs found across organisations. Electrician,
accountant, and service maintenance engineers are some examples.
8. A career represents a sequence of positions, jobs, or occupations that a person has over
his or her working life.
It is important know the aforesaid information as job analysis begins at the level of the element
and attempts to build understanding of jobs, occupations, and careers.
2.3.3 Importance of Job Analysis
Job Analysis forms the basis for demand-supply analysis of manpower requirement, recruitments,
compensation management, and training need assessment and performance appraisal.
2.3.4 Components of Job Analysis
Job analysis is a systematic procedure to analyze the requirements for the job role and job profile.
Job
analysis
can
be
further
categorized
27
into
following
sub
components.
a) Job Position / Role
Job position refers to the designation of the job and employee in the organization. Job position
forms an important part of the compensation strategy as it determines the level of the job in the
organization. For example management level employees receive greater pay scale than nonmanagerial employees. The non-monetary benefits offered to two different levels in the
organization also vary.
b) Job Description / Job Specifications
Job description refers the requirements an organization looks for a particular job position. It states
the key skill requirements, the level of experience needed, level of education required, etc. It also
describes the roles and responsibilities attached with the job position. The roles and
responsibilities are key determinant factors in deciding the job specifications i.e. the level of
experience, education, skills, etc required for the job.
c) Job Worth / Evaluations
Job Worth refers to estimating the job worthiness i.e. how much the job contributes to the
organization. It is also known as job evaluation. Job description is used to analyze the job
worthiness. It is also known as job evaluation. Roles and responsibilities helps in determining the
28
outcome from the job profile. Once it is determined that how much the job is worth, it becomes
easy to define the compensation strategy for the position.
Therefore, job analysis forms an integral part in the formulation of compensation strategy of an
organization. Organizations should conduct the job analysis in a systematic at regular intervals.
Job analysis can be used for setting up the compensation packages, for reviewing employees’
performance with the standard level of performance, determining the training needs for
employees who are lacking certain skills.
2.4 JOB DESCRIPTION
2.4.1 Definition
Job descriptions are written statements that describe the:

Duties,

Responsibilities,

Most important contributions and outcomes needed from a position,

Required qualifications of candidates, and

Reporting relationship and coworkers of a particular job.
Job descriptions are based on objective information obtained through job analysis, an
understanding of the competencies and skills required to accomplish needed tasks, and the needs
of the organization to produce work.
Job descriptions clearly identify and spell out the responsibilities of a specific job. Job
descriptions also include information about working conditions, tools, equipment used,
knowledge and skills needed, and relationships with other positions.
2.4.2 How to Develop a Job Description
The process of developing a job description helps you articulate the most important outcomes you
need from an employee performing a particular job. A job description is also a communication
tool that tells coworkers where their job leaves off and the job of another starts.
A well-written job description tells an employee where their job fits within the overall department
and the overall company. Well-written job descriptions help employees from other departments,
29
who must work with the person hired, understand the boundaries of the person's responsibilities.
Finally, the job description is an integral piece of the performance development planning process.
Your goal in hiring is to find the brightest, most competent, flexible, reliable, multifaceted
employees you can find.
A job description, if not viewed as a straight jacket, helps your successful recruiting in several
ways. A job description:

causes the manager of the position and any other employees already performing the job to
agree on the responsibilities and scope of the position,

helps Human Resources know the knowledge, skills, education, experience, and
capabilities you seek in your new employee, so an effective recruiting plan is formulated,

informs candidates about the duties and responsibilities of the position for which they are
applying,

informs employees who are assisting with the interview process about the questions to
ask candidates and what you seek in the new employee, and

may protect you legally when you can demonstrate why the candidate selected for a
position was your most qualified and culturally suited applicant.
Examples of Job Description – A specimen Job description of a Farm Produce Collection
Center Incharge in an Agriculture company will be as follows:
Example 1: Farm Produce Collection Center (FPCC) Incharge
Activities/ Tasks
Measurable
Output
1
Annual sourcing plan with Monthly, Weekly, Daily Rolling
Fill rate
Plans at FCC level to maintain a smooth system for receipt and
dispatch of Fruits & Vegetables (F&V).
2
Decision on procurement pricing at FCC
Competitor
price analysis
3
To identify farmers and maintain good relationship with
Repeated
farmers.
Farmers
4
Procurement from Orchards linked to various FCCs
Fill rate
5
Administrative control on FCC activities.
% deviations
30
6
Arranging labour for daily operations.
Labor cost
7
Upkeep & maintenance of premises.
Maintenance
Cost
8
Liaison with local administration and people.
Customer
satisfaction
Index
9
Security of premises & material.
% losses
10
To ensure Quality procurement
Acceptance %
11
To ensure the farmers receives payments timely
Customer
satisfaction
Index
12
To ensure proper handling and reduce wastage.
Competencies:
1
Teamwork & collaboration
2
Decision making
3
Customer service orientation
4
Innovation & creativity
5
Commitment to excellence
6
Result orientation
Educational Qualification:
B.Sc / M.Sc Agri
Experience:
4-8 years of experience in F&V handling
31
% Wastage
Example 2 - Agriculture Produce Processing Center (APPC)
Activities/ Tasks
Measurable
Output
1
2
3
To arrange for collation of the city requirements and make a
Operational
monthly & weekly plan of F&V processing.
Efficiency
To establish Management control systems in the APPC and
Performance
manage performance of each product line.
Management
To comply with statutory requirements under Factories Act,
% Compliance
Contract Labour Regulation and Abolition Act, PFA Act etc.
as may be applicable from time to time.
4
To ensure product quality is maintained and retained in cold
% Wastage
storage, ripening chambers, etc.
5
To ensure optimum inventory management.
Inventory
Management
6
To be able to meet unforeseen contingencies
Market
Intelligence
7
8
9
To indemnify the company from all legal implications and
No. of
operational risk to the extend possible.
deviations
To ensure inventory replenishment at every stage of the
Inventory
process.
Management
Equipment maintenance mgmt / history cards for equipments
Maintenance
Cost
Competencies:
1
Excellent project management skills
2
Technical Knowledge and Analytical
3
Strong coaching and people development skills
4
Empowers others by instilling a sense of ownership
5
Project and commercial thinking
6
Strategic Thinking.
7
Teamwork and Collaboration
32
Educational Qualification:
BE / B- Tech / Diploma in electrical
Experience:
8-10 years of experience in related industry.
2.5 INTRODUCTION TO COMPETENCY
Competencies of an individual are his knowledge, skills, attitude and motives related to his job
role. The relative levels of these factors determine how good or bad he is on his job against the
performance standards and compared to others.
Competencies can be broadly broken down into two categories: behaviour based and work based.
Behaviour-based competencies are personal characteristics/attributes that contribute to effective
job performance e.g. interpersonal skills, team management skills, motivation etc. Work-based
competencies are specific skills and abilities required to perform the job to a specific standard
e.g. the use of spreadsheet software, fluency in spoken Japanese, management of a budget etc.
Competency with HR Functions
The concept of Competency applies to the full range of HR functions. An HR Professional needs
to have a good understanding of competencies required for a position. This helps him to write an
effective Job Specifications.
Ask right questions during interviews – in the end of this chapter (Annexure 2) as well as in the
subsequent chapter we have covered ‘Competency based Interview” Technique.
Set effective Goals and Objectives – you will know more about G & O, when we cover
Performance Management System
Measure his performance against pre-decided Key Performance Indicators (KPI)
Assess Training and Developmental Need
One needs to do a very detailed study to arrive at the competences of a role holder vis-à-vis the
competencies required for the role. We have given a sample audit format in the Annexure: 1, for
assessing the HR competence of people performing HR function in an organization. This will
help you understand the concept better (as well as the overall gamut of HR function):
33
ANNEXURE – 1: HR COMPETENCE AUDIT
Rating 5 - Has this competence in abundance
Rating 4 - Has this competence adequately
Rating 3 - Has this competence but can develop some more
Rating 2 - Needs to develop this competence substantially
Rating 1 - Does not have this competence, needs to start developing it
HR competence Audit
HR knowledge:
Knowledge of HR philosophy, policies, practices and systems
Knowledge of performance appraisal system practices
Career planning and development system and practices
Knowledge of organizational diagnoses, interventions
Knowledge of learning theories
Knowledge of training methods and systems.
Knowledge of organisational structure and how they function.
Knowledge of group dynamics and group function
Knowledge of links between organisational goals, plans, policies, strategies, structure,
technology, systems, people management systems, styles, etc.
Knowledge of power dynamics and networking in the organisation
Organisational plan, manpower and company requirements.
Knowledge of social violence research methods.
Knowledge of job analysis, job enrichment, job redesign and job evaluation
Manpower planning methods.
Knowledge of role analysis techniques.
Knowledge of employee relation practices.
Knowledge of role of reward
Knowledge of the methodology of behaviour modification and attitude change.
Knowledge of quality circles.
Knowledge of recent development in management systems
Knowledge of personality theories and management
Understanding of personal and managerial effectiveness
Knowledge of interpersonal relations and factors affecting them
Knowledge of what constitutes organisation health and methods of surveys
34
Knowledge of instruments and measurement of human behavior
Knowledge of personal growth and its methods
Knowledge of turnaround strategies
Knowledge of creativity and problem – solving techniques
Knowledge of conflict management techniques and strategies
HR skills:
Influencing (Communication, persuasiveness assertiveness, inspirational and other skills needed
to influence) top management
Influencing skills needed to influence line manager
Articulating HRD philosophy and values
Designing skills for developing HRD systems
Communication skills: Written (ability to communicate views, opinions, observations suggestion,
etc. clearly to make an impact)
Communication skills: Oral, etc,
Skills to monitor the implementation of HR systems (designing questionnaires, data gathering,
feedback and persuasion)
Interpersonal sensitivity
Ability give and receive feedback
Counseling skills (Listening, rapport building, probing and exploring)
Conflict management skills
Ability to inspire others by arousing their values and superordinate goals
Leaderships and initiatives
Creativity
Problem – solving skills
System designing skills
Task analysis / Job analysis skills
Organisational diagnosis skills
Process observation and process sensitivity skills.
Personal Attitudes and Values
Empathy and understanding
Positive and helpful attitude to others
Faith in people and their competencies
Introspective attitude
Openness ( open to others’ suggestions and likes to be open in expressing his or her own views)
35
Interpersonal trust
Productivity
Respect for others
Self – confident; faith in one’s own competencies
Sense of responsibility
Sense of fairness (constant desire for objectivity and resistance to being impressionistic)
Self – Discipline (desire to set examples)
Honesty (Desire to be sincere and honest)
Willingness to experiment
Learning orientation
Willingness to treat every experience as a learning opportunity
Perseverance
Work motivation (desire to be involved in an d work harder for the organisation)
Superordination (an attitude that he or she is working for larger goals)
Empowering attitude: A tendency to respect others and a willingness to empower them, by not
being overly concerned about a personal power base.
Stress tolerance (ability to cope with stress, frustration, hostility and suspicion)
Analysis
These three areas –HR professional knowledge, HR skills and personal attitude and values- are
the true depiction of the competency of an HR professional. A 5-point scale ranging from having
competency in abundance to having no competence on each element and its scores would indicate
where we stand vis-à-vis HR capabilities. The competency of a professional is determined
through his or her level of knowledge, capacity to utilize skills and personal attitudes and values
towards the HR function (Chanda & Kabra, 2000).
ANNEXURE – 2: POSITION FULFILLMENT
Recruitment – Competencies are the basis to determine who should be interviewed and
evaluated.. As you know, interview and selection is often a costly and time-consuming effort. The
cycle time as well as cost can be reduced to a large extent through proper understanding of what
competencies a candidate can bring to the job. With well defined competencies of the job
positions at your end, you will be able to decide which CVs should be short-listed and what
questions to be asked to the candidates.etc. During the interview,
Qualification – Competencies give us an indication on the required qualification for effective
performance on the job.
36
Selection – While selecting an individual, competency assessment is used to determine the best
person to fill the position.
For position fulfillment it is important to have competencies with definitions and ratings. In case
of competencies like creativity, learning orientation, flexibility, analytical skill etc. candidates
can be rated on a scale as shown in the table below:
SAMPLE COMPETENCY ASSESSMENT FORMAT
37
Once the competencies are identified, a list of interview questions along with the competency
rating sheet is needed to elicit information about relevant behavior. An interview panel may probe
further to get the relevant information, for example as given in table.
Table: Selection Interview Questions
Describe an incident in which your workload was to heavy.
How did you handle the situation?
Tell me about a situation when you were trying to accomplish something and did not have ready
access to the necessary resources. How did you get them?
Describe a situation in which you had to juggle more than one task. Hoe did you handle them?
Which one did you handle first and why?
How did you manage time and task?
Tell me about a situation when your planning was not helpful. What happens then, and how did
you recover?
Tell me about a time when you had to deal with two people asking you to work on different
projects that requires more than 100 per cent of your time. How did you resolve the situation?
State an example when you were not able to achieve the goal. What did you do?
Describe a situation where your performance was excellent. What were the circumstances? What
did you do? How did the people respond?
An interview rating form provides a continuum of unacceptable to acceptable behavior examples,
with three to six behavior examples for each competency. Interviewers may use a structured
rating form to bring in objectivity along with focus in the interview, relating to what is the
standard that is needed for a position. To give an example , for assessing a candidate on his
listening skill, or ‘Developing Others’ (as given below) the definition of competencies needs to
be clearly marked out. The competency is marked on a point scale with an ‘above’ and ‘below’
standard. Also given below is some space for the respondent to explain why a certain standard
has been chosen. This helps evaluators to focus on the behavior needed for a particular position
without assessing mere feelings.
38
39
Notes
_____________________________________________________________
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_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
____________________________________________________________
40
3. TALENT ACQUISITION
3.1 INDIAN OVERVIEW
Over the last 15 years, Indian industry has worked hard on putting the basic building blocks of
competitiveness into place. It has worked strongly to improve operational efficiency, quality,
productivity and customer orientation.
Today, Indian industry is competitive; and, it is acquiring a global footprint. It is now time for
Indian industry - as indeed India - to set sights on a new and higher trajectory of competitiveness
and globalization.
The Context

The Indian economy has never had it so good.

For the last three years of close to 9% growth.

Outstanding performance in the services and industry sectors, both growing at over 11%.

The macro economic indicators of the nation extremely sound.

Investment as a percentage of GDP at a record high.
In the industry and services sectors, innovation, education and dynamism are the order of the day.
Indian
industry
is
today
resurgent,
confident
and
global
in
its
aspirations.
This is the good news
To catch up with the next wave of growth, the Indian economy
has to rise to the occasion by
meeting expectations of customer both in India and overseas and facing increasing competition
from all parts of the globe. But the one of the emerging challenges that the Indian industry is
beginning to grapple with - be it in small, medium or large sectors - is that of talent acquisition
and retention. While all sectors seem to be doing extremely well, they also have begun to
experience the crunch of people and talent availability …… a possibility of shortage of talent in
the supply side could stymie India’s economic growth and make it’s competitive edge blunt.
41
India's Reality

320 million children in India are between the age of 6 and 16. Out of this only 10% will
pass school and go beyond.

Approximately 280 million people live below the poverty line and nearly 400 million
people in India, live below $2 a day.

India's per capita income is at $460, while Sri Lanka is $833 and US is at $30,000.

40 million unemployed people and this numbers are growing. In the next 5 years, the
figure could reach to as much as 60 million people, more than entire populations of
France, Italy and UK.

90% workforce in the unorganized sector.

30% casual labour with no regular source of income.

India has the youngest population in the world. The median range is 24 and every other
population in the world is getting older.

2.5 mn graduates passing out of colleges each year without skills connecting to
employment. Mismatch between educational system output and Industry's manpower
requirements.
India's Opportunity
The correction is not impossible because India also faces a unique opportunity. It has the
youngest population in the world; its median age in 2000 was less than 24, compared to 38 for
Europe and 41 for Japan. Even China had a median age of 30. Alternatively viewed, this means
that India has the unique opportunity to complement what an ageing rest of the world needs the
most - productive workers. India in 2025 will have a dependency ratio of 12.1, i.e., for every 100
working-age adults there will be slightly more than 12 persons who are above the age of 65. For
China the ratio will be 19.4, for Japan 49, for Europe 33.2.
3.2 UNDERSTANDING TALENT ACQUISITION
Just as Customer Acquisition describes the overall strategic process around identifying market
sectors, targeting client prospects, running direct marketing campaigns, selling and receiving the
order (i.e. acquiring a new customer), Talent Acquisition involves all the activities around
finding, attracting and engaging highly talented individuals into your organization.
42
3.2.1 Talent Acquisition - As a Strategy
Historically organizations have not treated the recruitment process as one of strategic importance,
but of late many have woken up to the reality that the world has changed dramatically. No more
can the organization pick and choose between several good candidates for one position. Global
connectivity through internet has tipped the scales in favor of the highly talented individual
looking for a new opportunity. Candidates can now advertise their desire to change jobs within
minutes of making the decision of changing the organization and receive enquiries about their
talent
and
interest
within
hours
of
placing
their
CV
on
the
net.
Potentially, it is feasible that a high quality employee for any reason (bad appraisal, inappropriate
or negative response from boss, extra workload stress etc.) can post his CV/Resume up on a
particular job - site at midday today, receive three interested requests for contact with third party
recruiters or headhunters within hours, be interviewed for an outstanding role (possibly with one
of the competitors) tomorrow, receive an offer in writing the following day and resign that
afternoon (within 2 days).
On the other hand, if the Internet has enabled this process for candidates, it has also brought
significant advantages for organizations.
Direct access to the candidate market
Now organizations can go direct to the candidate market, thereby cutting the time it takes to find
the right people and also dramatically reducing their recruitment costs. However, simply posting
up jobs on various jobs boards is not the answer.
Best Practice Process
Talent Acquisition needs to be addressed at the most senior levels within all organizations - big or
small, public or private. This means that Talent Acquisition needs to fit seamlessly with the
overall organizational strategy. It needs to have the appropriate level of resources behind it; it
needs to be monitored and reported on at all board meetings and it needs to involve many people
within the organization who attribute to it the importance that the organization requires.
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The realities of today's demographics and competition pressure have elevated the issue of talent
attraction and retention to become one of the critical leadership concerns. Given the projected
labor market and demographic trends, an organization's approach to talent acquisition can become
a key differentiator and a source of competitive advantage.
The changing market has revealed that prevailing "one size fits all" HR practices are no longer
effective. Organizations must develop specific people strategies for their most critical segments
that directly align with and support the business strategy. While individual approaches are
customized to the needs of each organization, all approaches are based on key critical success
factors.
3.2.2 Typical Talent Acquisition Process
The steps involved in a typical talent acquisition process are as under:
1) Identify the manpower requirement and establish job description and job specification for
the position.
2) Develop strategy to attract and acquire the required talent. The strategy involves
identification of target group, mode of advertising the position, compensation to be
offered as per market etc.
3) Notify the position to suitable candidates through various channels like recruitment
consultancy firm, job portals, reference hunting or cold calling.
4) Shortlist the profiles.
5) Call the short listed candidates and put the through the selection process. The selection
process typically involves a Cognitive Ability Test, Psychometric Testing, followed by
the interviewing process.
6) The selection process yields a shortlist of probable candidates against each position.
7) The most suitable candidate identified though the selection process is called for salary
negotiation. If the negotiations fail, the other probable candidates may be considered
sequentially based on their position in the merit list and an agreement is reached
regarding compensation and date of reporting.
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8) The candidate is then formally offered the position by way of an offer letter, which
broadly explains the position; compensation offered and expected date of reporting of the
candidate. The offer is however contingent upon candidate’s medical fitness.
9) A satisfactory medical fitness report validates the offer and the candidate is issued a
formal appointment letter upon joining the organization.
3.3 RECRUITMENT
The recruitment and selection are the two most crucial activities under Talent Acquisition. There
is a thin line of difference between recruitment and selection, which we will discuss in the later
part of this chapter.
Recruitment is the first step among the HR processes towards creating competitive strength and
strategic advantage for the organizations. Recruitment process involves a systematic procedure
from sourcing the candidates to arranging and conducting the interviews and requires many
resources and time. A general recruitment process is as follows:
1. Identify vacancy
2. Prepare job description and person specification
3. Advertising the vacancy including that for ‘Walk-in’ interviews
45
4. Managing the response i.e. capturing the whole range of responses, creating different
folders, seeking clarifications from candidates if necessary, answering queries of
candidates, handling reference candidates, managing at times solicitations of influential
people like politicians and bureaucrats etc.
5. Short-listing
6. Arrange interviews
7. Conducting interview and decision making
The recruitment process is immediately followed by the selection process i.e. the final interviews
and the decision making, conveying the decision and the appointment formalities.
3.4 MODES OF RECRUITMENT
Every organization has the option of choosing the candidates for its recruitment processes from
two kinds of sources: internal and external sources. The sources within the organization itself
(like transfer of employees from one department to other, promotions) to fill a position are known
as the internal sources of recruitment. Recruitment candidates from all the other sources (like
outsourcing agencies etc.) are known as the external sources of recruitment.
SOURCES OF RECRUITMENT
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3.5 FACTORS AFFECTING RECRUITMENT
The recruitment function of the organisations is affected and governed by a mix of various
internal and external forces. The internal forces or factors are the factors that can be controlled by
the organisation. And the external factors are those factors which cannot be controlled by the
organisation. The internal and external forces affecting recruitment function of an organisation
are:
FACTORS AFFECTING RECRUITMENT
3.6 RECENT TRENDS IN RECRUITMENT
The following trends are being seen in recruitment:
3.6.1 Outsourcing
HR outsourcing is an arrangement in which one organization (client organization) hires the
services of people from an outside firm (intermediary or service provider or contractor).
Outsourced employees remain in the roll of their company (intermediary firm) but work for the
client organization, often in the premises of the latter. The trend of outsourcing is on the rise as it
gives the required flexibility of calibrating, from time to time, its employee number to the
business requirement. Furthermore, it saves organizations from complying with the stringent
conditions of retrenchment under Industrial Disputes Act, 1947.
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The outsourcing firms help their client organizations by the initial screening of the candidates
according to the needs of the latter and creating a suitable pool of talent for the final selection by
the organisation. Outsourcing firms develop their human resource pool by employing people for
them and make available personnel to various companies as per their needs. In turn, the
outsourcing firms or the intermediaries charge the organisations for their services.
Advantages of outsourcing are:
1. A Company need not plan for human resources much in advance.
2. Operational flexibility and cost advantage.
3. Turning the management's focus to strategic level processes of HRM
4 Company is free from salary negotiations, weeding the unsuitable resumes/candidates.
5. Company can save a lot of its resources and time
The major limitation of outsourcing is while outsourcing is an effective strategy for recruitment
into jobs involving low-end skills and mass requirement of people; it is difficult to recruit
outsourced employees in core and critical roles of an organization.
3.6.2 Poaching/Raiding
“Buying talent” (rather than building it) is the latest mantra being followed by the organizations.
Poaching means employing a competent and experienced person already working with another
reputed company, most likely with the competition. A company can attract talent from another
firm by offering attractive pay packages and a meaty role.
Indian software and the retail
industries are facing the severe brunt of poaching today. It has become a challenge for human
resource managers to face and tackle poaching, as it weakens the competitive strength of the firm.
3.6.3 E-Recruitment
Many organizations are currently making effective use of Internet as a source of recruitment.
Known otherwise as E- Recruitment, the use of internet has improved the speed and efficiency of
recruitment by leaps and bounds. Most of the big companies advertise job vacancies through
worldwide web. The job seekers send their applications or curriculum vitae i.e. CV through e
mail using the Internet. Alternatively job seekers place their CV’s in worldwide web, which can
be drawn by prospective employees depending upon their requirements.
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3.7 RECRUITMENT VS SELECTION
Both recruitment and selection are the two phases of the employment process. The differences
between the two are:
1. Recruitment is the process of searching the candidates for employment and stimulating them to
apply for jobs in the organisation WHEREAS selection involves the series of steps by which the
candidates are screened for choosing the most suitable persons for vacant posts.
2. The basic purpose of recruitment is to create a talent pool of candidates to enable the selection
of best candidates for the organisation, by attracting more and more employees to apply in the
organisation WHEREAS the basic purpose of selection process is to choose the right candidate to
fill the various positions in the organisation.
………………………………………………..
3. Recruitment is a positive process i.e. encouraging more and more employees to apply
WHEREAS selection is a negative process as it involves rejection of the unsuitable candidates.
4. Recruitment is concerned with tapping the sources of human resources WHEREAS selection is
concerned with selecting the most suitable candidate through various interviews and tests.
5. There is no contract of recruitment established in recruitment WHEREAS selection results in a
contract of service between the employer and the selected employee.
3.8 SELECTION PROCESS
Selection is the process of choosing the most suitable persons out of all the applicants. In this
process relevant information about applicants is collected through a series of steps so as to
evaluate their suitability for the job to be filled. Selection is a process of matching the
qualification and experience profile of applicants with the job requirements. The better ‘fit’
between the two, the higher is the possibility of selection.
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The selection process of a progressive and professional organization typically involves the
following:
1) Preliminary Interview
2) Cognitive Ability Test
3) Psychometric Test
4) Selection Interview
5) Salary Negotiation
6) Physical Examination
7) Reference Check
8) Offer Letter.
Flow chart of Selection Process
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3.8.1 Preliminary Interview
First of all initial screening has to be done to weed out totally undesirable / unqualified
candidates. It is essentially a sorting process which can be done even through a telephonic
interview, wherein the essential information about the nature of the job and organization can be
shared with prospective employees. Necessary information is also elicited from the candidates
about their education, skills, experience, communication skills, salary expectation, etc. If the
candidate is found suitable, he is selected for further screening. Preliminary interview saves time
and efforts of the company and the candidate. It avoid the unnecessary waiting for the rejected
candidate and waste of money for further processing of an unsuitable candidate It is the first
contact of an individual with the organization. Therefore, the interviewers should be courteous,
receptive and informal, particularly when the candidate is being turned down.
3.8.2 Cognitive Ability Test
The Cognitive Abilities Test is an assessment of a range of reasoning skills. The test looks at
three types of reasoning ability:
1. Verbal (words, numbers and shapes or figures)
2. Quantitative and
3. Non-verbal reasoning.
The verbal reasoning assesses reasoning processes using the medium of words (e.g., opposites,
relationships, deduction, and categorization). It is not an assessment of reasoning with words, nor
wider language skills such as speaking, listening or writing.
The quantitative tests use numbers as the symbols process is the same as for verbal reasoning).
The non-verbal tests looks at reasoning processes but use shapes and figures.
A certain cut off qualifying mark is decided as a minimum requirement for a position or a group
of position.
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The Wonderlic Personnel Test (WPT) is an example of Cognitive Ability Test is a twelveminute, fifty-question intelligence test used to assess the aptitude of prospective employees for
learning and problem-solving in a wide range of occupations.[1] The score is calculated as the
number of correct answers given in the allotted time. WPT measures verbal, numerical and
spatial capabilities. This highly culture based test is one of the most widely used psychological
instruments all over the world. It attempts to screen the candidates for certain jobs within the
shortest possible time. It may be termed as a quick IQ test. A score of 20 is intended to indicate
average intelligence (corresponding to an intelligence quotient of 100; a rough conversion is
accomplished via the following formula: IQ = 2WPT + 60).
3.8.3 Psychometric Testing
Psychometrics is the field of study concerned with the theory and technique of educational and
psychological measurement, which includes the measurement of attitudes and personality traits.
The field is primarily concerned with the study of differences between individuals and between
groups of individuals.
It involves two major research tasks, namely:
(i)
The construction of instruments (i.e. the test questionnaire) and procedures for
measurement;
(ii)
The development and refinement of theoretical approaches to measurement.
Origin and background
Much of the early theoretical and applied work in psychometrics was undertaken in an attempt to
measure intelligence. Francis Galton is often referred to as the father of psychometrics, having
devised and used mental tests.
More recently, psychometric theories have been applied in the measurement of personality,
attitudes, beliefs etc. Measurement of these unobservable phenomena is difficult, and much of the
research and accumulated art in this discipline has been developed in an attempt to properly
define and quantify such phenomena.
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The following psychometric tools are used by most organizations in combination or as a single
application:
1) Predictive Index [PI]
2) MBTI
3) Firo – B
4) Belbin
For details on psychometric tests, please refer to the Annexures at the end of this chapter.
3.8.4 Selection Interview
The interview is the most critical step in talent acquisition as the decision to select or reject the
shorlisted person’s candidature is made during this step. The recruiters employ following
approaches to evaluate the candidate’s suitability for the job:
a) Behavioral Event interview (BEI)
b) Competency based interview (CBI)
a) Behavioral Event interview (BEI)
What is a Behavioral Interview?
A behavioral interview is a structured interview that is used to collect information about past
behavior. Because past performance is a predictor of future behavior, a behavioral interview
attempts to uncover your past performance by asking open-ended questions.
Each question helps the interviewer learn about your past performance in a key skill area that is
critical to success in the position for which you are interviewing. The interview will be conducted
face-to-face whenever possible.
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What Can Be Expected From A Behavioural Event Interview?
Behavioural Event interviewing is a process by which an interviewer gains specific understanding
of the knowledge, skills and attributes brought by a candidate. The questions asked relate
specifically to competencies necessary to be effective in the position being filled, and require the
interviewee to provide depth around specific capabilities.
Traditionally, interviewers ask candidates questions requiring general knowledge or personal
awareness, but these often have very little to do with the open position. Questions requesting a
description of strengths, weaknesses and personality characteristics, while at times valuable,
rarely relate specifically to the knowledge, skills and attributes necessary for a specific position.
General questions also encourage memorized answers and rarely are the interviewee asked to
back up what was said. For instance, in discussing his/her greatest strength, a candidate might
say, “I’m motivated, hard working and I get along well with everyone.” In this general format, the
interviewer must project whether the candidate is a good fit.
General questions typically generate only positive responses. In behavioral interviews, the
interviewer also wants to know the potential negatives to understand the circumstances in which
the candidate will not be able to demonstrate the required competencies.
In a behavior-based interview, if motivation and self-direction are important for successful
performance in the position, the interviewer could ask: “Tell me about a time you went above the
call of duty to complete a project.” Or, “Describe a situation where you had to complete work
with little or no direction from superiors or colleagues.” Here, the interviewee will be asked to
prove his/her personal motivation with an actual story, rather than just saying, “I’m highly
motivated.”
If the interviewer needs to determine how well the candidate gets along with others, she could
say: “Tell me about a time you worked with a team of people that could not agree on a project’s
objectives” or “Tell me about a time you dealt with a particularly difficult customer.”
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Since the best predictor of future behavior is an individual’s past behavior, behavior-based
interviewing allows an interviewer to learn, with concrete examples, whether the person has the
competency and whether they can apply it in this situation.
Using the STAR Technique
In a behavioral interview, the interviewer will ask questions about your past experiences. A useful
way to prepare for this style of questioning is to use the STAR technique. The STAR technique is
away to frame the answers to each question in an organized manner that will give the interviewer
the most information about your past experience. As you prepare to answer each question,
consider organizing your response by answering each of the following components of the STAR
technique:
 What was the Situation in which you were involved?
 What was the Task you needed to accomplish?
 What Action(s) did you take?
 What Results did you achieve?
A set of sample of BEI questions has been given in Annexure – 2 for your reference.
b) Competency based interview (CBI)
 Introduction
The use of competencies by organizations is becoming very widespread. One use of
competencies is for behavioral interview questions. It behooves the career counselor and
their clients (e.g., job applicants) to understand the reasons for, and approach to, this type
of interview and to prepare accordingly. It is harder to “wing it” in a competency-based
interview and, therefore, analysis of one’s background and capabilities are essential for
preparing for a competency-based interview.
 Why Are Organizations Using Competencies More Now?
A competency can be defined as a cluster of the knowledge, skills and attributes (KSAs)
or personal characteristics an individual must possess and appropriately use for optimum
success performing specified work.
55
As organizations evolve and create new strategic plans to meet ever-changing business
challenges, they are also defining their ideal talent profile. Talent profiles are based on
competencies, so interviews and the selection process must be aligned.
Organizations are moving or changing so fast that there is less time than ever to hire “green”
talent and develop those employees to meet company expectations and fit the company culture
over several years. And, hiring the wrong person today is costly in recruiting and hiring costs and
in lost productivity. Competencies predict performance better than experience, technical skills,
aptitude or personality. Traditional (non-behavioral) interviews do not predict performance.
By clarifying what specific behaviors and practices make for employee effectiveness, competency
models increase the likelihood of placing the right people into the right jobs.
Organizational talent management today requires aligning multiple human resource functions
including selection, development, performance management and succession management. The
most effective way to align these functions for the benefit of the organization and employees at
all levels is through use of competency models.
How Do Organizations Benefit From Using Competencies?
Competency-based human resource systems ensure that the people who get hired have the
relevant competencies and potential to succeed. It has been estimated that the wrong hire costs
1.5 times that person’s annual salary. And that doesn’t measure the frustration of an individual
trying to succeed in the wrong job. Competency-based systems can also be used to provide
appropriate development to help employees realize their potential and to provide appraisal,
feedback, and coaching to improve productivity. In addition, competencies provide employees
with an objective, defined target for development and realistic career goals.
Competencies become operational only if defined by behaviors, so interviewers, applicants,
managers and employees can apply the model in the work setting. A behavioral description is a
statement of the observable actions that indicate the presence of an underlying competency.
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How Do Interviewers Ask Questions to Identify Candidates’ Competencies?
Many organizations are now preparing interviewers by creating competency-based interview
guides with questions that probe for the competencies needed for the open positions. Next follows
some examples of competencies and sample questions that an interviewer might use in a
behavior-based interview.
For an “Accountability” competency (depending upon its definition and the behaviors the
organization wants the worker to demonstrate), an interviewer might say to a candidate: “Tell me
about a time that you had too much work to complete and too little time to meet your deadline.”
Here, the interviewer may be trying to gain insight into several issues. Does the candidate take
responsibility for the work assigned; can or does the candidate delegate the work; how does the
candidate structure his time to get the necessary tasks completed? Does the candidate make
excuses for not achieving the objective or do they achieve the objective even under difficult
conditions?
For an “Analysis” competency (depending upon its definition and the behaviors the organization
wants the worker to demonstrate), an interviewer might say to a candidate: “Give me an example
of when you had to make an important decision about your work with a huge amount of data.”
Here the interviewer is seeking a specific example of how the candidate researches an issue, how
they sort out the critical information from the rest to support their decision-making.
For a “conflict resolution” competency (depending upon its definition and the behaviors the
organization wants the worker to demonstrate), an interviewer might say to a candidate:
“Describe how you successfully handled a situation with a particularly difficult customer.”
For a “Problem Solving” competency (depending upon its definition and the behaviors the
organization wants the worker to demonstrate), an interviewer might say to a candidate:
"Describe a recent problem you encountered on the job and tell me how you went about solving
the problem." Here the interviewer wants to understand the candidate’s approach and whether it
fits with the culture and the position being filled.
Another question might include: “Tell me about a time when you did not have the necessary
resources to accomplish a task. What did you do?” If problem solving is a competency for the
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successful performance of the job, the interviewer needs to explore the candidate’s thinking and
the actions they would take to solve a problem.
A set of sample Competency Based Interview (CBI questions) has been given in Annexure – 3 for
your reference.
3.8.5 Salary Negotiations
The situation in which a salary is negotiated could vary depending on whether the individual is a
candidate with a certain degree of work experience, applying for a position in a company, or is a
candidate with no prior work experience, applying for an entry level position in an organization.
Another situation could be an employee looking for career advancement in his current
organization. The details of each of these situations might be different. While negotiating
compensation, the HR Managers keep in mind the following aspects:
1. The maximum limit within the salary band for the position the candidate is considered
2. The perceived value the candidate is likely to bring into the company - whether it is
worth meeting or going close to the expected salary of the candidate?
3. .What is the salary range of employees already within the organization who have
comparable qualification and experience?
4. What is the expectation of other candidates, who could be considered as alternatives?
5. How much does competition pay for such a candidate?
6. Does the candidate possess some rare skills and experience? Is there a big gap between
demand and supply of the talent profile under consideration?
3.8.6 Physical / Medical Examination
The applicants who have crossed the above stages are sent for a physical examination either to the
company’s physician or to a medical officer approved for the purpose. Such examination serves
the following purposes:
1. It determines whether the candidate is physically fit to perform the job. Those who are
physically unfit are rejected.
2. It reveals existing disabilities and provided a record of the employee’s health at the time
of selection. This record will help in setting company’s liability under the workmen
Compensation Act for the claim for an injury.
3. It prevents the employment of people suffering from contagious diseases.
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4. It identifies candidates who are otherwise suitable but require specific jobs due to
physical handicaps and allergies.
3.8.7 Reference Check
Prior to making a job offer, a prospective employer needs to check candidate references. Through
reference check employer can check job performance, work ethic, and attendance at work,
attitude and other criteria that are important to a company when making a decision on whom to
offer the job to.
Typical Reference Checking Format
(Verify that the candidate’s reference checking permission signature is on your employment
application before starting the interview.)
 Name:
 Reference Name:
 Company Name:
 Company Address:
 Company Phone:
 Dates of Employment: From:____________________ To:_____________________
 Starting Position: ________________________ Ending: ___________________
 Starting Salary: _________________________ Ending: ___________________
 What does your company do?
 Please describe your reporting relationship with the candidate? If none, in what
capacity did you observe the candidate's work?
 Reason for Leaving:
 Please describe the key responsibilities of the candidate in his/her most recent position.
 How many reporting staff did the candidate manage? Their roles?
 Tell me about the candidate’s most important contributions to the achievement of your
organization’s mission and goals.
 Describe the candidate's relationships with his/her coworkers, reporting staff (if
applicable), and supervisors.
 Talk about the attitude and outlook the candidate brought to the workplace.
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 Describe the candidate's productivity, commitment to quality and customer
orientation.
 What are the candidate's most significant strengths?
 What are the candidate's most significant weaknesses?
 What is your overall assessment of the candidate?
 We are hiring this candidate to (job title or quick description).
 Would you recommend him/her for this position? Why or why not?
 Would you rehire this individual? Why or why not?
3.8.8 Offer Letter
The job offer letter is provided to the candidate when selected for the position. Most frequently,
the candidate and the organization verbally negotiate the conditions of hire and the job offer letter
confirms the verbal agreements.
3.9 RECRUITMENT CHALLENGES IN AGRIBUSINESS
Agribusiness, as a concept, encompasses the whole range of activities from agro inputs
manufacturing to marketing the staples, fruit and vegetables and semi-processes food items for
the ultimate consumer.
During last few years, Agri-retail has emerged as a new face of Agribusiness. India continues to
be the top destination for retail development and investments. The rural and semi urban markets
offer huge opportunities to retail players. With several industry heavyweights entering the food
retail segment agri-retail has become the latest hot sector in India. Companies such as Tata, ITC,
Reliance, Mahindra & Mahindra, Godrej, Ballarpur Industries, DSCL, and Bharti-Walmart etc all
have mega plans for the segment. Global giants like Carrefour and Tesco are also showing keen
interest to enter this food retail segment. According to a recent report by Ernst & Young, food
and grocery account for almost 54% of the total Indian annual retail business. However, food
retail continues to be dominated by small local stores in the unorganized sector and becomes most
remunerative venture area for the corporations.
With the entry of so many corporations in this segment, acquiring right talent has given sleepless
nights to the HR Managers. The whole industry has woken up to the reality of a huge shortage of
talent. ‘Buying talent” as a strategy from the industry has not met the complete manpower for the
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simple reason that Agri-retailing is still at a nascent stage. So, the Retail Players in the organized
sectors are also trying out options of hiring people from Agri-input industries. They are also
hiring young talents who have the potential to develop as future managers. It is evident from the
fact that during recent years many top retail players are visiting the campuses of
B- Schools
like IRMA, MANAGE, NIAM and IIMs (ABM course) and various Agriculture Universities.
Job market has undergone some fundamental changes with the entry of organized retail industry
in terms of skill set required, attrition rate, technology, sources of recruitment, competition in the
market etc. It is no wonder that attrition rate is at a all time high, HR professionals are constantly
facing new challenges in one of their most important function- Recruitment.
Some pertinent challenges can be summated as follows:
1. Supply and Demand: Agribusiness till now has been highly un-organized and
diversified so it becomes difficult to meet the manpower demand against the availability
of resources in the market. Various functions need specialized skills available at different
locations depending on the product availability and sourcing point.
2. High Cost: In their urgency to build new businesses, organizations tend to adopt “buy
talent” approach and this leads to the high manpower cost often to an unsustainable
extent. To keep the manpower cost low, organizations need to shift focus from “buy
talent” to “build talent”.
3. Educationally Qualified resources: Organizations face problem in recruiting
appropriately qualified staff at managerial levels as there are very few Institutes like
IRMA, NIAM, MANAGE etc. which offer courses in Rural/ Agribusiness management.
Resources easily available are Agriculture Graduates and Post Graduates but they possess
only subject knowledge and not managerial skills. So this leads to shortages at
managerial level due to the limited number of candidates with the requisite knowledge
and skills.
4. High Attrition rate: Candidates typically do not stay at organizations for long time and
there is a tendency to move from company to company to improve levels of responsibility
and remuneration.
Faced by high competition companies need to focus on their
corporate branding to ensure they are creating the right image and communicating this
effectively to prospective candidates. It is also important that they then deliver high
quality training and working conditions.
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5. Strategic Prioritization: Retail business is also referred as “penny business” as the profit
margin is low and the whole game is of volume. Till organization reaches a remunerable
volume it needs to focus on austerity measures and use financial acumen. Therefore,
strategic prioritization of positions and the time when they needs to be filled plays very
critical role in ensuring the feasibility, viability and growth of a business. Reviewing
staffing needs and prioritizing the tasks to meet the changes in the market becomes a
challenge for the recruitment professionals.
6. Adaptability: Most of the people with subject knowledge and expertise are working with
small companies operating in an un-organized sector at regional levels. It becomes
difficult for them to operate with same kind of freedom they enjoyed in past due to lot of
systems and operational procedures established in large corporations. This may lead to
dissatisfaction and ineffectiveness at employees end. So to overcome this, organizations
need to conduct continuous trainings etc to make the systems more employees friendly
and facilitative. More importantly, before recruiting a candidate it is required to check his
adaptability level and “can do” attitude through various psychometric test and BEI.
7. Process Compliance: When a candidate is hired from a small scale agriculture company,
it becomes difficult to ensure the recruitment process adherence in terms of verification
of salary certificate, appointment letters and other documents related to emoluments they
get, as many small companies pay to their employees
without any
supporting
documents. So, it becomes critical for an organization to conduct compensation survey
and establish a realistic compensation band.
8. Competencies of the recruiters and inadequate use of selection tools– There is hardly
any recruitment agency catering to the requirement of the companies in agri-business or
rural initiatives barring one exception of Ruralnaukri.com.
Moreover, many organizations in rural and agriculture sector, select their employees
based on interview only. Except a few organizations like ITC, Reliance Retail etc. most
of them do not use any other selection tools like Cognitive Test, Psychometric Test etc.
In most of these organizations, the interviewers are also not trained in techniques such as
BEI and Competency based Interview skills.
62
ANNEXURE 1: DETAILS ON THE PSYCHOMETRIC TESTS
PREDICTIVE INDEX
The Predictive Index (PI) was developed by pinpoints traits that make employees understandable
Arnod S. Daniels in 1953-54. PI is based on proven behavioral science techniques, it and
predictable. It is a management tool for predicting, describing and measuring the work behavior
and potential of individuals and groups at all organizational levels. It claims to provide
assessment of performance drives, management styles, capabilities, potentials, interests and
motivation. It also attempts to measure the effects of job demands, leadership styles, and
organization culture on individual performance.
The computer generated scoring of PI produces a graphic pattern with elements: self, selfconcept, and synthesis. The self measures the individual’s basic pattern of behavior, “doing what
comes naturally.” The self-concept measures the way individuals try to modify personal behavior
to satisfy the demands placed on them. The synthesis measures how individuals behave in their
environment. The inferences are drawn out of the check list on four broad factors- A, B, C & D.
The factors are explained as follows:
Factors
A
DOMINANT
B
EXTROVERTED
C
PATIENT
D
FORMAL
High
• Independent & Assertive
• Self-confident & Self-starter
• Individualistic & Competitive
•
•
•
•
•
•
•
Outgoing & Optimistic
Delegates authority
Enthusiastic & • Selling
Patient
Stable & Calm
Deliberate & Consistent
Steady
• Diligent & Attentive to details
• Precise & Organized
• Cautious & Conservative
63
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Low
Agreeable & Cooperative
Accepting of company policies
Accommodates the team
Serious & Introspective
Task oriented & Analytical
Imaginative
Reserved
Tense & • Restless
Impatient with routines
Intense
Fast paced
Informal
Freely delegates details
Non-conforming & Disorganized
The PI assesses four primary and two resultant personality traits in individuals. The four primary
traits are dominant (Factor-A), extroverted (Factor-B), patient (Factor-C), and formal (Factor-D).
The two resultant traits are response level (Factor-M) and subjectivity level (Factor-E).
Factor-A measures the drive for self-expression or level of assertiveness ranging from
“submissive” to “arrogant.” Factor-B measures the social drive or level of introversion or
extroversion from “withdrawn” to “gregarious.” Factor-C measures emotional tension or urgency
in an individual from “volatile” to “lethargic.” Factor-D measures an individual’s level of detail
or style in approaching work from “sloppy” to “perfectionist.” The resultant Factor-M score is
used to identify the “norm” relative to the measurements of the other factors. It is referred to as
the “response level” and is used to measure an individual’s stamina and capacity to adapt and
handle stress. Finally, Factor-E measures the tendency for an individual’s judgment to be
subjective versus objective (or emotional versus logical)
Samples Questions of PI - Each page has 86 adjectives, some examples of the adjectives which
are mentioned in the list of two pages are: helpful, relaxed, exciting, assertive, esteemed, calm,
popular, polite, attractive, trusting, amiable, diplomatic, etc.
MBTI
Fundamental to the Myers-Briggs Type Indicator is the concept of Psychological Type as
originally developed by C. G. Jung.
The typology model originated by Jung (and further developed by Briggs and Myers) regards
personality type as similar to left or right handedness: individuals are either born with, or
develop, certain preferred ways of thinking and acting. The MBTI sorts some of these
psychological differences into four opposite pairs, or "dichotomies", with a resulting 16 possible
psychological types. None of these types is "better" or "worse"; however, Briggs and Myers
recognized that everyone naturally prefers one overall combination of type differences. In the
same way that writing with the left hand is hard work for a right-hander, so people tend to find
using their opposite psychological preferences more difficult, even if they can become more
proficient (and therefore behaviorally flexible) with practice and development.
The 16 different types are often referred to by an abbreviation of four letters, the initial letters of
each of their four type preferences (except in the case of Intuition), for instance:
64

ESTJ - Extraversion, Sensing, Thinking, Judging

INFP - Introversion, iNtuition, Feeling, Perceiving
And so on for all 16 possible type combinations.
MBTI- The Basic Model
Perceive
The
Basic
Model
2 Kinds
of Mental
Processes
S
Sensing
N
Intuition
T
Thinking
F
Feeling
I
Introversion
E
Extraversion
P
Perceiving
J
Judging
Dichotomies
Judgments
2 Kinds
Of Mental
Orientations
Energy
Orientatio
n
Extraverte
d
Orientation
Note that the terms used for each dichotomy have specific technical meanings relating to the
MBTI which differ from their everyday usage. For example, people with a preference for Judging
over Perceiving are not necessarily more "judgmental" or less "perceptive".
The MBTI instrument does not measure aptitude, either; it simply indicates for one preference
over another. So someone reporting a high score for Extraversion over Introversion on the MBTI
assessment cannot be correctly described as 'more' or 'strongly' extraverted: they simply have a
clear preference.
65
Description of Dichotomies
Sixteen possible combinations
ISTJ
ISTP
INFJ
INTJ
ESTJ
ESTP
INFP
INTP
ISFJ
ISFP
ENFP
ENTP
ESFJ
ESFP
ENFJ
ENTJ
Sample Questions of MBTI – It has 124 questions and each question has two options. Some
example
Circle the letter (a) or (b) for the option that most accurately describes how you usually act, think
or feel.
1. My Best idea at work come from
a. An interchange of ideas and sharing with other
b. Quite thought on my own
66
2. When I Run a meeting, I am usually
a. Disciplined about following my prepared agenda
b. Flexible and open to whatever comes up
3. When handling a subordinates development, I am most likely to
a. Discuss a problem I have with his or her behavior
b. Dislike telling him or her unpleasant things
4. I prefer the place where I work to be
a. Structured with clear rules and regulations
b. More open-ended and Liassez - Faire
BELBIN TEAM INVENTORY
The Belbin Team Inventory, also called the Belbin Self-Perception Inventory or the Belbin
Team Role Inventory, is a test used to gain insight into an individual's behavioral type. It was
developed by Dr. Meredith Belbin after studying numerous teams at Henley Management College
The Belbin Team Role Inventory assesses how an individual behaves in a team environment. It is
therefore a behavioural tool, subject to change, and not a psychometric instrument. The test
includes 360-degree feedback from observers as well as the individual's own assessment of their
behaviour, and contrasts how they see their behaviour versus how their colleagues do. Unlike the
Myers-Briggs, which is conventionally used to sort people into one of 16 types by how clearly
they express their preference for 4 dichotomous types of behaviour, the Belbin Inventory scores
people on how strongly they express traits from 9 different Team Roles.
An individual may and often does exhibit strong tendencies towards multiple Roles. Belbin
himself asserts that the Team Roles are not equivalent to personality types.
67
68
Sample Questions of Belbin – There are total 7 Questions and support each question there are
several statements, one has ten (10) points to distribute amongst the statements , depending on
how much one agrees with each of them. Statements one disagrees with or is indifferent to will be
awarded zero points. One may not give negative points to any statement, nor is allowed to award
fewer than ten points in total.
Q. What I Believe I Can Contribute to a Team:
Statements
a) I think I can quickly see and take advantage of opportunities.
b) I can work well with a very wide range of people.
c) I can usually sense what is realistic and likely to work.
d) My capacity to follow through has much to do with my personal effectiveness.
e) My ability rests in being able to draw people out whenever I detect they have something of
value to contribute to group activities.
f) My technical knowledge and experience is usually my major asset.
g) I can offer a reasoned case for alternative courses of action without introducing bias or
prejudice.
h) Producing ideas is one of my natural assets.
i) I am ready to face temporary unpopularity if it leads to worthwhile results in the end.
FIRO-B
Fundamental Interpersonal Relations Orientation (FIRO) is a theory of interpersonal
relations, introduced by William Schutz in 1958.
According to the theory, three dimensions of interpersonal relations are necessary and sufficient
to explain most human interaction. The dimensions are called Inclusion, Control and Affection.
These categories measure how much interaction a person wants in the areas of socializing,
leadership and responsibilities, and more intimate personal relations. FIRO-B was created, based
on this theory, a measurement instrument with scales that assess the behavioral aspects of the
three dimensions. Scores are graded from 0-9 in scales of expressed and wanted behavior, which
define how much a person expresses to others, and how much he wants from others. Schutz
believed that FIRO scores in themselves were not terminal, and can and do change, and did not
encourage typology; however, the four temperaments were eventually mapped to the FIRO-B
scales, which led to the creation of a theory of Five Temperaments.
69
Schutz himself discussed the impact of extreme behavior in the areas of inclusion, control, and
affection as indicated by scores on the FIRO-B. For each area of interpersonal need the following
three types of behavior would be evident: (1) deficient, (2) excessive, and (3) ideal. Deficient was
defined as indicating that an individual was not trying to directly satisfy the need. Excessive was
defined as indicating that an individual was constantly trying to satisfy the need. Ideal referred to
satisfaction of the need. From this, he identified the following types:
Inclusion types.
1. the undersocial (low EI, low WI)
2. the oversocial (high EI, high WI)
3. the social (moderate EI, moderate WI)
Control types
1. the abdicrat (low EC, high WC)
2. the autocrat (high EC, low WC)
3. the democrat (moderate EC, moderate WC)
Affection types
1. the underpersonal (low EA, low WA)
2. the overpersonal (high EA, high WA)
3. the personal (moderate EA moderate WA)
In 1977, a clinical psychologist who worked with FIRO-B, Dr. Leo Ryan, produced maps of the
scores for each area, called "locator charts", and assigned names for all of the score ranges in his
Clinical Interpretation of FIRO-B:
Temperament by
Score
Inclusion
Control
Affection
Low e and w
The Loner
The Rebel
The Pessimist
Melancholy
"Image of
Phlegmatic
Intimacy"
Melancholy/
Tendency
Phlegmatic
"Now You See Him,
moderate e, low w Now You Don't"
Self-Confident
Tendencies
70
APS (all 3 areas)
Choleric
High e, low w
Now You See Him,
Mission Impossible
Now You Don't
Image/(Mask) of
Intimacy
"Mission
high e, moderate
w
The Conversationalist
Sanguine
Impossible" with
Living Up To
Phlegmatic/
Narcissistic
Expectations
Choleric
Tendencies
high e and w
Choleric
People Gatherer
Dependant-
(formerly, "Where are
Independent
the People?")
conflict
Phlegmatic
The Optimist
Sanguine
Phlegmatic
moderate e, high
w
Hidden Inhibitions
Let's Take a Break
Cautious Lover In Supine/
Disguise
Phlegmatic
Sanguine
Openly Dependant
low e, high w
Inhibited Individual
Person; (w=6:
Cautious Lover
Supine
Loyal Lieutenant)
Supine
low e, moderate w Cautious Expectation
The Checker
Careful
Phlegmatic/
Moderation
Melancholy
Phlegmatic
Warm
moderate e and w Social Flexibility
The Matcher
Individual/The
Phlegmatic
Golden Mean
Sample Questions of FIRO – B - It has 54 questions and each question has 6 options. One has to
select one option for each question which best applies to his / her behavior. Some example
questions are as follows:
1. I try to be with people
a) Usually
b) Often
c) Sometimes d) Occasionally e) Rarely f) Never
2. I let other people decide what to do
71
a) Usually
b) Often
c) Sometimes d) Occasionally e) Rarely f) Never
3. I join social groups
a) Usually
b) Often
c) Sometimes d) Occasionally e) Rarely f) Never
4. I try to have close relationships with people
a) Usually
b) Often
c) Sometimes d) Occasionally e) Rarely f) Never
ANNEXURE – 2: SAMPLE BEHAVIORAL EVENT INTERVIEW QUESTIONS
 Tell me about a time when you were on a team, and one of the members wasn’t doing his
or her share.
 Tell me about a time when you felt a need to update your skills or knowledge in order to
keep up with the changes in technology. How did you approach that?
 Describe a time when a customer got angry with you. How did you react? How did you
resolve the situation?
 Please give me an example of a time when you took the initiative to improve a specific
work process.
 Give me an example of a time when you surpassed a customer’s expectations.
 Tell me about a time when a customer requested special treatment that was out of the
scope of normal procedures. What was the situation and how did you handle it?
 Describe a time when you had to use logic and good judgement to solve a problem.
 Tell me about a time when you had to cope with a stressful situation.
 Give me an example of a time when you had to make a split second decision.
 Give me an example of a time when you used your fact-finding skills to solve a problem.
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 Describe a time when you put your needs aside to help a co-worker understand a task.
How did you assist them? What was the result?
 Tell me about a time when a customer requested special treatment that was out of the
scope of normal procedures. What was the situation and how did you handle it?
 Describe a time when you had to use logic and good judgment to solve a problem.
 Tell me about a time when you had to cope with a stressful situation.
 Give me an example of a time when you had to make a split second decision.
 Give me an example of a time when you used your fact-finding skills to solve a problem.
 Describe a time when you put your needs aside to help a co-worker understand a task.
How did you assist them? What was the result?
ANNEXURE 3: COMPETENCY BASED INTERVIEW QUESTIONS
CORE COMPETENCIES
Adaptability
 Tell me about a time when you changed your priorities to meet others' expectations.
 Describe a time when you altered your own behaviour to fit the situation.
 Tell me about a time when you had to change your point of view or your plans to take
into account new information or changing priorities.
Client Focus
 Give an example of how you provided service to a client/stakeholder beyond their
expectations. How did you identify the need? How did you respond?
 Tell me about a time when you had to deal with a client/stakeholder service issue.
 Describe a situation in which you acted as an advocate within your organization for your
stakeholder’s needs where there was some organizational resistance to be overcome.
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Communication
 Describe a situation you were involved in that required a multi-dimensional
communication strategy.
 Give an example of a difficult or sensitive situation that required extensive
communication.
 Tell me about a time when you really had to pay attention to what someone else was
saying, actively seeking to understand their message.
Organizational Awareness
 Describe the culture of your organization and give an example of how you work within
this culture to achieve a goal.
 Describe the things you consider and the steps you take in assessing the viability of a new
idea or initiative.
 Tell me about a time when you used your knowledge of the organization to get what you
needed.
Problem Solving and Judgment
 Tell me about a time when you had to identify the underlying causes to a problem.
 Describe a time when you had to analyze a problem and generate a solution.
 Tell me about a situation where you had to solve a problem or make a decision that
required careful thought. What did you do?
Results Orientation
 Tell me about a time when you set and achieved a goal.
 Tell me about a time when you improved the way things were typically done on the job.
 Describe something you have done to improve the performance of your work unit.
 Describe something you have done to maximize or improve the use of resources beyond
your own work unit to achieve improved results.
Teamwork
 Tell me about a time when you worked successfully as a member of a team.
 Describe a situation where you were successful in getting people to work together
effectively.
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 Describe a situation in which you were a member (not a leader) of a team, and a conflict
arose within the team. What did you do?
ROLE SPECIFIC COMPETENCIES
Developing Others
 Tell me about a time when you coached someone to help them improve their skills or job
performance. What did you do?
 Describe a time when you provided feedback to someone about their performance.
 Give me an example of a time when you recognized that a member of your team had a
performance difficulty/deficiency. What did you do
Impact and Influence
 Describe a recent situation in which you convinced an individual or a group to do
something.
 Describe a time when you went through a series of steps to influence an individual or a
group on an important issue.
 Describe a situation in which you needed to influence different stakeholders with
differing perspectives.
Innovation
 Describe something you have done that was new and different for your organization that
improved performance and/or productivity.
 Tell me about a time when you identified a new, unusual or different approach for
addressing a problem or task.
 Tell me about a recent problem in which old solutions wouldn't work. How did you solve
the problem?
Leadership
 Tell me about a time when you had to lead a group to achieve an objective.
 Describe a situation where you had to ensure that your "actions spoke louder than your
words" to a team.
 Describe a situation where you inspired others to meet a common goal.
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Relationship Building
 Describe a situation in which you developed an effective win/win relationship with a
stakeholder or client. How did you go about building the relationship?
 Tell me about a time when you relied on a contact in your network to help you with a
work-related task or problem.
 Give me an example of a time when you deliberately attempted to build rapport with a
co-worker or customer.
Resource Management
 Describe a situation in which you took a creative approach to resourcing to achieve a
goal.
 Tell me about a time when you had to deal with a particular resource management issue
regarding people, materials or assets.
 Describe the options you would consider to resource a project or goal if you did not have
the available resources within your own span of control.
 Describe a situation in which you established a partnership with another organization or
stakeholder to achieve a mutual goal. What steps did you take to ensure the partnership
was effective?
Self-Management
 Describe the level of stress in your job and what you do to manage it.
 Describe a time when you were in a high pressure situation.
 Describe a time when things didn't turn out as you had planned and you had to analyze
the situation to address the issue.
Strategic Thinking
 Describe a challenge or opportunity you identified based on your industry knowledge,
and how you developed a strategy to respond to it.
 Describe a time you created a strategy to achieve a longer term business objective.
 Describe a time when you used your business knowledge to understand a specific
business situation.
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Notes
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4. PERFORMANCE MANAGEMENT SYSTEM
Performance management system, which typically includes performance appraisal and employee
development, is the “Achilles’ heel” of human resources management. Performance management
involves enabling people to perform their work to the best of their ability, meeting and perhaps
exceeding targets and standards.
Performance management is the process of assessing progress toward achieving predetermined
goals. It is building on that process, adding the relevant communication and action on the
progress achieved against these predetermined goals.
Performance Management System enables a business to sustain profitability and performance by
linking the employees' pay to competency and contribution. It provides opportunities for
concerted personal development and career growth. It brings all the employees under a single
strategic umbrella. Most importantly, it gives supervisors and subordinates an equal opportunity
to express themselves under structured conditions.
4.1 WHAT IS PERFORMANCE
If due to the contribution of an individual:
a) the Actual Result > the Desired Results , then the performance is excellent
b) the Actual Result < Desired Result then it could constitute the performance improvement
zone.
Performance management and improvement in an organization usually is an annual cycle,
in which:
1. Performance planning where goals and objectives are established, in the beginning of the
appraisal year.
2. Performance coaching where a manager intervenes from time to time to give feedback
and adjust and calibrate performance.
3. Performance appraisal where individual performance is formally documented.
4. Post appraisal, rewards based on performance are determined.
78
5. Development programmes are designed to enhance performance in the current job
6. Identification of employees for taking up higher positions in an organization is made.
4.2 THE ROLE OF BOSS IN APPRAISAL PROCESS
A boss has an important role in the Appraisal. We briefly cover these aspects below:
- To jointly agree on what is expected of the subordinate and what way the boss can support him
to achieve the goals and objectives set
- - To know and communicate how well he is doing
- Give him guidance whenever needed in form of counselling, coaching, career planning etc.
- Take decisions pertaining to salary increase, promotion, change of role, relocation etc.
4.3 KEY COMPONENTS OF A PERFORMANCE APPRAISAL SYSTEM
4.3.1 Identification of Key Performance Areas (KPAs)
Performance should be appraised against certain goals and objectives (G&O).
These G&O
should have been agreed between the employee and his supervisor. The ideal way is that every
employee should sit with his reporting officer a year in advance and identify the areas of his
performance which are important to perform his role.
The critical functions associated with a given role may be called as key performance areas or key
function areas. After identifying key function areas, it is necessary for both, the employee & his
supervisor.
4.3.2 Setting of goals & objectives every year for the next year
In order to have a clear understanding of the expectations, it is useful to set goals or objectives
under each KPA. In order that an individual employee stays aligned to the company goals and
objectives, The ideal way to reach an employee KRAs is by cascading the company objectives
down to a unit level, then to a department level and then further cascading it to an individual
level.
79
4.3.3 Identifying behavioural dimensions critical for managerial effectiveness
A good performance appraisal system should also have a set of behavioural dimensions that are
critical for managerial effectiveness. These dimensions should be desirable for performing more
and higher managerial jobs. A few examples of such behavioural dimensions are given below:

Communication skills

Inter-personal skills

Problem-solving

Team work

Adaptability/Flexibility

Initiative

Decision Making

Leadership

Maturity
The behavioural dimensions vary from company to company. For example, the Tata Group has
identified 13 leadership competencies, which form the part of its appraisal system. Every
manager of the company is measured on these competencies. This has been done by Tata Group
to communicate to the employees as to what are the important behaviours that the Tata Managers
must display. This not only does bring a common understanding and standardization across the
organization, it also helps develop a common culture that is customer-centric and contribution
based. Behavioural dimension often varies with the level of individual in the organisation.
4.3.4 Periodic review of performance on G&O set and behavioural dimensions
Review discussion meetings should include the following:
- Review of progress on tasks and activities in relation to the employee’s performance plan;
- The developmental initiatives taken by the employee himself and those planned by the
management for the employee;
- Identification of variances in terms of delays, requisite quality and shortfall in help planned for
the employee, if any;
- Analyzing the causes of the delay, the problems faced and the solutions adopted;
- Preparation of action steps for solving identified problems and contingency plans for anticipated
problems.
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Periodic review meetings become meaningful only when they help pause, reflect, take stock and
strategize for any mid-couse correction either in the Goals and Objectives already set following
some change triggered by the organization or there is addition or deletion of certain tasks.
Further, the Reporting Officer may give a feedback for behaviour modification of the employee.
For each goal and behaviour, the appraiser has to do a rating. Ratings on performance and
behaviour are necessary in any appraisal system to generate data. These ratings also form a basis
for discussions and exchange of expectations. Some companies use expressions like “exceeds
expectations (EE)”, “Meets Expectations (ME)”, “Below Expectations (BE)”; some other use
scaling systems of 5 point, 10 point, etc.
In an organization which follows a transparent
appraisal system, these ratings give an opportunity for the employee to know why has the
reporting officer rated him at 3 or 4 on a rating scale of 0 to 5. If the employee disagrees with the
rating, he puts forth his point of view as to why the rating should be better. This leads to an open
discussion and information sharing. It also clarifies the actual situation to both the parties at times
leading to change in the original rating.
4.3.5 Performance review and discussions
People spend a lot of time in the organisation trying to achieve targets and perform task related
functions but they rarely spend any time to discuss how they are working. Performance appraisal
should provide opportunity where an officer & supervisor can sit together and share with each
other their problems, difficulties, perceptions, views, etc.
The three key elements of performance review meetings are:
- Feedback - Providing information on how a person has been doing.
- Measurement – assessing results against agreed targets and standards.
- Exchange of views - Ensuring that the discussion involves a full, free and frank exchange of
views about what has been achieved, what needs to be done to achieve more and what employees
think about their work the way they are managed and their aspirations.
4.3.6 Identification of development needs & development of action plan for future
Performance appraisal data is useful in identifying the training needs of employees. Constantly
poor performance on certain dimensions can be identified. Training & development activities
aimed at developing the employees on these dimensions can be planned. Development activities
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may take the form of organising internal training programmes, sponsoring for outside
programmes, delegating higher responsibilities, job rotation for acquiring new skills, etc.
4.3.7 Team /Organisation level normalisation
Normalisation is a process to rank individuals within a group or team on relative basis. For
example- For a group of ten individuals normalisation will help to rank and identify who the
‘best’ and ‘not-so-best’ individuals within the group are.
Normally the contribution of an
employee is a function of his performance (which is achieved by attaining goals & objectives)
and the leadership qualities he/she possesses. The employees are ranked on a relative basis so
that the contribution rating gets distributed in a pattern.
GOALS & OBJECTIVES
CONTRIBUTION
MATRIX
High Result
Orientation
(HRO)
Average
Result
Orientation
(ARO)
Low
Result
Orientation
(LRO)
LEADERSHIP
Highly
Very HIPOs
HIPOs
Under Achievers
Competent
A+
A
B
(HC)
(20%)
(10%)
(10%)
Moderate
HIPOs
Competent
A
(MC)
(10%)
Low
Competent
(LC)
Average
Achievers
B
(10%)
High
Placed OK
Achievers
C
B
(10%)
(10%)
At Risk
C
(10%)
High Risk
CUnsatisfactory
(10%)
The objective of doing the same is to plan the career/look after the employees who are your
Very HIPOs (Very High potential employees) OR your most critical manpower and look for
alternative routes for your employees who are not performing.
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The idea is to reward
suitably to your high performing employees and weed out your bottom 10% employees so
that fresh blood in form of new employees can be infused into the system.
Very HIPOs (A+): These employees are your best employees in terms of achievement of
goals and are highly competent. Very serious efforts need to be made to retain them as they
are the key people driving the business.
HIPOs (A): These employees are not the best but still are very critical for the operation of
the business. Out of these, one group of people are very high on achievement of goals and
the other group is extremely high on capability side.
High/Average/Under Achievers (B/B+): These are three categories of employees. One
group is very high on achievement of goals but totally lacks leadership qualities. Another
group of employees are average on result orientation and competencies. The third group of
employees are under achievers but do possess high competencies. The organization can
harvest these & pull them to the level of HIPOs, by training & development.
Placed OK / At risk (C): These employees are mostly passive to competition & lack a zest to
achieve above average results. Out of these, one group of people are at high risk as they are
the ones who are extremely low on achievement of goals and the other group is placed ok as
they perform averagely and are better on capability side.
High Risk / Unsatisfactory (C-): The organization has to do away with the unproductive
10% of the lot, in order to infuse new & innovative brains in the organization. These
employees are easy target for any layoffs or retrenchment requirement in case of any
restructuring.
The Performance Appraisal process closes after the normalization & the Goals & Objectives
for the next year are set along with the employee.
4.4 TRADITIONAL PERFORMANCE APPRAISAL METHODS
4.4.1 Confidential Report Method
This is a traditional form of performance appraisal, still being followed by the Government of
India and the State Goverments. A confidential report is a report on the subordinate by the
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immediate superior and covers a limited range of aspects like the candidate’s strengths,
weaknesses, major achievements or failures, information on some personality traits and
behavioural aspects. The confidential report system is usually a descriptive one and permits
a lot of subjectivity. This method is widely used for a variety of employee related decisions,
particularly transfers, promotions and redundancy management.
4.5.2 Essay Appraisal Method
This traditional form of appraisal, also known as “Free Form method” involves a description
of the performance of an employee by his superior. The description is an evaluation of the
performance of any individual based on the facts and often includes examples and evidences
to support the information. A major drawback of the method is the inseparability of the bias
of the evaluator.
4.5.3 Straight Ranking Method
This is one of the oldest and simplest techniques of performance appraisal. This technique
provides for an ordinal scoring; first, second, third and so on. In this method, the appraiser is
required to rank from the best to the poorest all the subordinates in the same work unit on the
basis of their overall performance or effectiveness. This technique is quite useful and simple.
However, it is difficult to assign relative ranking to those at the bottom.
STRAIGHT RANKING METHOD
List all the employees you want to rank. Put the highest ranking employee’s name
on line 1 and keep on ranking all the employees.
Highest-ranking employee
1. ____________________________
2. ____________________________
3. ____________________________
4. ____________________________
5. ____________________________
6. ____________________________
7. ____________________________
8. ____________________________
9. ____________________________
10. ___________________________
11. ____________________________
12. ____________________________
13. ____________________________
14. ____________________________
15. ____________________________
16. ____________________________
17. ____________________________
18. ____________________________
19. ____________________________
20. ____________________________
Lowest-ranking employee
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4.4.4 Paired Comparison
This is a better technique of comparison than the straight ranking method.
This method
requires the rater to appraise which of the two employees is superior, instead of having to
rank order all the employees in the same work unit. This method is widely used when the
group to be appraised is small.
Method of paired comparison; No. of persons to be compared, N = n (n – 1) / 2
If we compare 7 persons, we will have 21 comparisons and if we compare 15 persons, we
will have 105 comparisons. In this we see, if number of persons is roughly doubled, the
number of comparisons to be made rose by factor of five. The final ranking is determined by
the number of times an individual is judged better than the others.
The rater compares an employee with every other individually as shown in the following
diagram.
In the above example, Bhavana is preferred over Arup, so Bhavana has got “+” and Arup has
got “-“. Similar is the case, when Charles is compared with Arup. Whereas, Arup is
preferred over Dilip and Eeshwar. Overall Bhavana is judged better than all others as she has
got 4 “+”.
The biggest limitation of paired comparison method is that it is too cumbersome for large
numbers. A manager who wished to evaluate 20 subordinates using the paired comparison
would be faced with almost 200 decisions. The paired comparison asks raters to judge
ordinal position only — which one is better — with no allowance for an "equals" judgment.
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4.4.5 Critical Incident Method
In this method, a supervisor describes critical incidents, giving details of both positive and
negative behaviour of the employee. These are then discussed with the employee. The
discussion focuses on actual behaviour rather than on traits. While this technique is well
suited for performance review interviews, it has the drawback that the supervisor has to note
down the critical incidents as and when they occur. That may be impractical, and may delay
feedback to employees. It makes little sense to wait six months or a year to discuss a misdeed,
a mistake or good display of initiative.
For eg. “I saw Mishra closing the steam line valve at the instant the pipeline burst on 22 nd of
August, 2007. We could save a lot of lives due to his instantaneous action.”
Advantages of this method:

Data is collected from the respondent’s perspective and in his or her own words.

Does not force the respondents into any given framework.

Identifies even rare events that might be missed by other methods which only focus on
common and everyday events.

Useful when problems occur but the cause and severity are not known.

Inexpensive and provides rich information.

Emphasizes the features that will make a system particularly vulnerable and can bring
major benefits (e.g. safety).

Can be applied using questionnaires or interviews.
Disadvantages of this method:

First problem comes from the type of the reported incidents. The critical incident
technique will rely on events being remembered by users and will also requires the
accurate and truthful reporting of them. Since critical incidents often rely on memory,
incidents may be imprecise or may even go unreported.

The method has a built-in bias towards incidents that happened recently, since these are
easier to recall.

It will emphasize only rare events; more common events will be missed.

Respondents may not be accustomed to or willing to take the time to tell (or write) a
complete story when describing a critical incident.
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4.4.6 Checklist Method
A checklist represents, in its simplest form, a set of objectives or descriptive statements about
the employee and his behavior. If the rater believes strongly that the employee possesses a
particular listed trait, he checks the item; otherwise, he leaves the item blank. A more recent
variation of the checklist method is the weighted list. Under this, the value of each question
may be weighted equally or certain questions may be weighted more heavily than others. The
following are some of the sample questions in the checklist.

Is the employee really interested in the task assigned?
Yes/No

Is he respected by his colleagues (co-workers)
Yes/No

Does he give respect to his superiors?
Yes/No

Does he follow instructions properly?
Yes/No

Does he make mistakes frequently?
Yes/No
A rating score from the checklist helps the manager in evaluation of the performance of the
employee. The checklist method has a serious limitation.
The rater may be biased in
distinguishing the positive and negative questions. He may assign biased weights to the
questions. Another limitation could be that this method is expensive and time consuming.
Finally, it becomes difficult for the manager to assemble, analyze and weigh a number of
statements about the employee’s characteristics, contributions and behaviors. In spite of these
limitations, the checklist method is most frequently used in the employee’s performance
evaluation.
4.5 MODERN METHODS OF PERFORMANCE APPRAISAL
4.5.1 Forced Distribution
To eliminate the element of bias from the rater’s ratings, the evaluator is asked to distribute
the employees in some fixed categories of ratings like on a normal distribution curve.
It's a workforce-management tool based on the premise that in order to develop and thrive, a
corporation must identify its best and worst performers, then nurture the former and
rehabilitate and/or discard the latter. Jack Welch, retired Chief Executive Officer of General
Electric (GE), is most often associated with forced ranking, since GE used this performance
management tool to eliminate the bottom ten percent of performers each year. Many other
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companies and organizations have now realised the benefits of Forced distribution method.
Dick Grote, president of Grote Consulting and a performance appraisal expert, contends
"Managers would rather have a tooth pulled than have a performance conversation with a
subordinate….Dealing with poor performers is probably the most difficult job that anybody
with supervisory responsibility has". The general lenience with poor performers, which
translate to an unfair and bigger burden for good performers, is the primary reason that so
many companies have turned to forced ranking as a performance intervention. The result of
such a process is often brutally blunt: The top 20 percent of performers are amply rewarded,
and the bottom 10 percent is shown the door.
Jack Welch, General Electric’s former CEO, is often associated with a 20-70-10 distribution:
the top 20 percent is rewarded for best performance, the middle 70 percent is rated ‘average’
and the bottom 10 percent is coached for improvement. The ‘rank-and-yank’ system, also
associated with Jack Welch, automatically terminates employees in the bottom category,
allowing organizations to purge the worst performers.
Grote explains it really well- “In forced ranking you're evaluating the person in a different
way; it's now a relative comparison. You're no longer asking how good a job ‘X’ did against
his objectives. Now what you're asking is, how good a job did ‘X’ do compared to how well
‘Y’, ‘Z’ and ‘A’ did. That's a much more difficult one, and managers tend to be very reluctant
to say ‘X’ is as good as ‘Y’ but not as good as ‘Z’.”
There are several ways to do this. The most common being the identification of top 20%
workers in an organization, the vital 70% and the bottom 10%. The Forced Distribution
method on the other hand is used upon the Bell Curve and includes identification of the:
Distinguished 5%, Superior 20%, Fully Successful 50%, Needs Improvement 20% and
Unsatisfactory 5%.
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Creating a forced ranking system forces a company to articulate the criteria that are required
for success in the organization. General Electric Company (GE), for example, has identified
its four E’s: the set of criteria it uses to rank its managers and executives: high energy level,
the ability to energize others around common goals, the edge to make tough yes/no decisions,
and the ability to consistently execute and deliver on promises. These criteria were
determined over a period of several years and were the result of serious deliberation. Other
companies have settled on different criteria.
Demerits:
Forced ranking has its detractors. This technique of forcing managers to delineate
performance has been called brutal and Darwinian. One common criticism is that it pits
associates against each other, instead of fostering a collaborative work environment. On those
occasions when managers lead truly high-performing teams, someone still must be ranked
low, despite meeting performance plan goals. To replace that person with an unknown is
expensive.
4.5.2 Behaviourally Anchored Rating Scales (BARS)
This technique was developed by Patricia Cain Smith and Lorne Kendall. Behaviourally
Anchored Rating Scales (BARS) is a relatively new technique which combines the graphic
rating scale and critical incidents method. It consists of predetermined critical areas of job
performance or sets of behavioural statements describing important job performance qualities
as good or bad (for eg. the qualities like inter-personal relationships, adaptability and
reliability, job knowledge, etc). These statements are developed from critical incidents.
It is a series of continuous graphic rating scales arranged vertically. Behavioural descriptions
exemplifying various degrees of each dimension serve as anchors on the scale. The objective
is to design in such a way as to allow superiors to be more comfortable while giving
feedback. In this method, an employee’s actual job behaviour is judged against the desired
behaviour by recording and comparing the behaviour with BARS. Developing and practicing
BARS requires expert knowledge.
Steps in BARS development

Generate critical incidents: People with knowledge of the job to be probed, such as job
holders and supervisors, describe specific examples of effective and ineffective behavior
related to job performance.
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
Develop performance dimensions: The people assigned the task of developing the
instrument cluster the incidents into a small set of key performance dimensions.
Generally between five and ten dimensions account for most of the performance.
Example of performance dimensions include technical competence, relationships with
customers, handling of paper work and meeting day-to-day deadlines. While developing
varying levels of performance for each dimension (anchors), specific examples of
behavior should be used, this could later be scaled in terms of good, average or below
average performance.

Reallocate incidents: Another group of participants who are knowledgeable about the
job is instructed to retranslate or reclassify the critical incidents generated (in Step II)
previously. They are given the definition of job dimension and told to assign each critical
incident to the dimension that it describes best. At this stage, incidents for which there is
not 75 per cent agreement are discarded as being too subjective.

Scale the incidents: Each incident is then rated on a one-to-seven or one-to-nine scale
with respect of how well it represents performance on the appropriate dimension. A
rating of one represents ineffective performance; the top scale value indicates very
effective performance. The second group of participants usually assigns the scale values.
Means and standard deviations are then calculated for the scale values assigned to each
incident.

Develop a final instrument: About six or seven incidents for each performance
dimension – all having met both the retranslating and standard deviation criteria – will be
used as behavioral anchors. The final BARS instrument consists of a series of vertical
scales (one for each dimension) anchored (or measured) by the final incidents.
Table: An Example of Behaviorally Anchored Rating Scale (BARS)
Performance
Extremely
good
Points
Behavior
Can expect trainee to make valuable suggestions for
7
increased sales and to have positive relationships with
customers all over the country.
Good
6
Above average
5
Average
4
Can expect to initiate creative ideas for improved sales.
Can expect to keep in touch with the customers throughout
the year.
Can manage, with difficulty, to deliver the goods in time.
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Below average
3
Poor
2
Extremely
poor
1
Can expect to unload the trucks when asked by the
supervisor.
Can expect to inform only a part of the customers.
Can expect to take extended coffee breaks and roam
around purposelessly.
Because the above process typically requires considerable employee participation, its
acceptance by both supervisors and their subordinates may be greater. Proponents of BARS
also claim that such a system differentiates among behavior, performance and results and
consequently is able to provide a basis for setting developmental goals for the employee.
Because it is job-specific and identifies observable and measurable behavior, it is a more
reliable and valid method for performance appraisal.
Researchers, after surveying several studies on BARS, concluded that “despite the intuitive
appeal of BARS, findings from research have not been encouraging”. A specific deficiency
is that the behaviors used are activity oriented rather than result oriented. This creates a
potential problem for supervisors doing the evaluation, who may be forced to deal with
employees who are performing the activity but not accomplishing the desired goals. Further,
it is time consuming and expensive to create BARS.
4.5.3 Management by Objectives (MBO)
The concept of ‘Management by Objectives’ (MBO) was first given by Peter Drucker in
1954. It can be defined as a process whereby the employees and the superiors come together
to identify common goals, the employees set their goals to be achieved, the standards to be
taken as the criteria for measurement of their performance and contribution and deciding the
course of action to be followed.
Management by objectives can be described as “a process whereby the superior and
subordinate managers of an organization jointly identify its common goals, define each
individuals’ major areas of responsibility in terms of results expected of him and use these
measures as guide for operating the unit and assessing the contributions of each of its
members”. Practicing management scientists and pedagogues view it as a philosophy of
managerial practice; it is a method by which managers and subordinates plan, organize,
control, communicate and debate.
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The essence of MBO is participative goal setting, choosing course of actions and decision
making. An important part of the MBO is the measurement and the comparison of the
employee’s actual performance with the standards set. Ideally, when employees themselves
have been involved with the goal setting and choosing the course of action to be followed by
them, they are more likely to fulfil their responsibilities.
Six MBO Stages
1. Define corporate objectives at board level
2. Analyze management tasks and devise formal job specifications, which allocate
responsibilities and decisions
to individual managers
3. Set performance standards
4. Agree and set specific objectives
5. Align individual targets with corporate objectives
6. Establish a management information system to monitor achievements against objectives
Unique features and advantages of MBO
The principle behind Management by Objectives (MBO) is to create empowered employees
who have clarity of the roles and responsibilities expected from them, understand their
objectives to be achieved and thus help in the achievement of organizational as well as
personal goals.
Some of the important features and advantages of MBO are:

Clarity of goals – With MBO, came the concept of SMART goals i.e. goals that are:
Specific,
Measurable, Achievable, Realistic and Time bound.
The goals thus set are clear, motivating and there is a linkage between organizational goals
and performance targets of the employees.

The focus is on future rather than on past.
Goals and standards are set for the
performance for the future with periodic reviews and feedback.

Motivation – Involving employees in the whole process of goal setting and increasing
employee empowerment increases employee job satisfaction and commitment.

Better communication and Coordination – Frequent reviews and interactions between
superiors and subordinates helps to maintain harmonious relationships within the
enterprise and also solve many problems faced during the period.
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
MBO is a systematic and rational technique that allows management to attain maximum
results from available resources by focusing on achievable goals. It allows the
subordinate plenty of room to make creative decisions on his own
4.5.4 Balanced Scorecard
To evaluate the organisational and employee performance in Performance appraisal
management processes, the conventional approach measures the performance only on a few
parameters like the action processes, results achieved or the financial measures etc. The
Balanced scorecard –an approach given by Kaplan and Norton in early 1990’s - provides a
framework of various measures to ensure the complete and balanced view of the performance
of the employees. Balanced scorecard focuses on the measures that drive performance.
Balanced scorecard is a tool to execute and monitor the organisational strategy by using a
combination of financial and non financial measures. It is designed to translate vision and
strategy into objectives and measures across four balanced perspectives: financial, customers,
internal business process and learning and growth. It gives a framework ensuring that the
strategy is translated into a coherent set of performance measures.
The two basic features of the balanced scorecard are:

A balanced set of measures based on the four perspectives of balanced scorecard

Linking the measures to Employee Performance
The four Perspectives recommended by Kaplan and Norton for the managers to collect
information are:

Financial – The financial measures include the results like profits, increase in the market
share, return on investments and other economic measures as a result of the actions taken.
Few examples of KPI’s used are: Cash Flow, Return on Investment (ROI), Financial
Result, Return on capital employed, Return on equity, etc.

Customer - These measures help to get on customer satisfaction, the customer’s
perspective about the organisation, customer loyalty, acquiring new customers. The data
can be collected from the frequency and number of customer complaints, the time taken
to deliver the products and services, improvement in quality etc. Few examples of KPI’s
are : Delivery Performance to Customer - by Date, Delivery Performance to Customer by Quality, Customer satisfaction Index, Customer intimacy or Product leadership,
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Customer retention %, New customer acquisition, market share, short lead time, on time
delivery, Innovative products, etc.

Internal business processes – These are the measures related to the organization’s
internal processes which help to achieve the customer satisfaction. It includes the
infrastructure, the long term and short term goals and objectives, organisational processes
and procedures, systems and the human resources. Examples: Number of Activities,
Opportunity Success Rate, Accident %, Equipment Effectiveness %, After sales service,
Rejection %, Reduced time, etc.

Learning & Growth – The learning and growth measures cover the organisation’s
ability to learn, innovate and improve. They can be judged by employee skills matrix, key
competencies, value added and the revenue per employee.
Example: Employee
Satisfaction Index, Internal Promotions %, Employee Turnover, Gender/Racial Ratios,
etc.
Balanced Scorecard Approach to Measure Performance
Instead of relying on just one instrument or measure, using a balanced set of measures
ensures that all the aspects of the employees’ performance are covered and provide relevant
support for the decisions taken.
For each perspective of the following things are measured:

Objectives: the goals and the targets to be achieved

Measures: the standards which will be used to measure the actual performance and the
progress.
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
Action plans: the initiatives taken and the course of action to be followed to achieve the
objectives.
The balanced scorecard approach can be used and applied at both the individual and the
organisational level. In most of the organisations, the common practice of measuring the
employee performance refers to only the comparison of their action plans and behaviours
with the standards set i.e. without actually measuring the results of their actions like profits
and increase in market share. This conventional practice can lead to the appraisal of most of
the employees without any or little progress towards achieving the goals and objectives of the
organisation. Thus, the balanced scorecard gives the complete view of the employees and the
organisational performance and helps to align the employee performance/action plans with
the organisational goals.
Benefits of Balanced Scorecard
The benefits of the balanced scorecard approach in measuring performance are:

Gives the complete picture of the employee as well as the organisational performance.

It guides users in determining the critical success factors and performance indicators.

Strategic review or analysis of the organisational capabilities and performance.

Focusing the whole organisation on the few key things needed to create breakthrough
performance.

Integrating and directing the performance and efforts from the lowest levels in the
organisation to achieve excellent overall performance.
4.5.5 Assessment Centres
We can trace the existence of assessment centres back to 1942 when they were used by War
Office Selection Boards in USA. Their introduction stemmed from the fact that the existing
system was resulting in a large proportion of those officers it had predicted would be
successful being 'returned to unit' as unsuitable.
The assessment centre approach
subsequently adopted was an attempt to accurately elicit the types of behaviour that an officer
was required to display in order to be successful in their job. The tasks included leaderless
group exercises, selection tests and individual interviews by a senior officer, junior officer
and psychiatrist respectively. During the post war years this system was so successful that it
was introduced for selection to the Civil Service and a variation of it is still used for officer
selection in the armed forces to this day.
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Subsequently the use of assessment centres was taken up by the private sector especially the
giant American Telephone and Telegraph Company (AT&T) which began using assessment
centres for management selection in 1956 as well as Standard Oil Ohio, IBM, Sears and
General Electric.
Assessment centres typically involve the participants completing a range of exercises which
simulate the activities carried out in the target job. Various combinations of these exercises
and sometimes other assessment methods like psychometric testing and interviews are used to
assess particular competencies in individuals.
What can be called an assessment centre?
Assessment Centres consist of many multiples
•
Multiple competencies to be evaluated for in a candidate.
•
Multiple observers to eliminate the subjectivity & increase objectivity involved in the
process.
•
Multiple participants 18 -21 batch size
•
Multiple exercises like role plays, case analysis, presentations, group discussions etc
•
Multiple simulations: These could be creative, crisis or exploitative type simulations.
•
Multiple observations: Each observation is observed atleast twice.
Assessment centres are used for

Selection – Assessment Centres help organizations in getting the right people in.

Career development – The identification of the competencies possessed by the
individual helps organization decide his career plans.

Potential appraisal – Assessment Centres help organizations identify if the person can
handle the challenges offered in the next higher position.

Identification of high potential managers – This creates a pool of managerial talents &
multifunctional managers that would be available across the business group etc.

Succession planning – Identifying the right individual for critical positions such as CEO,
CFO etc is very important for the success of the organization.

Allocation of challenging assignments – Assessment Centres provide the organization
with the strengths and weaknesses of every participant. This helps the organization in
deciding the candidates who would have the necessary abilities to undertake the proposed
challenging assignments.
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
Management development – Assessment Centres provide ample opportunity to its
participants to reflect on one’s capabilities and to improve by observing others perform in
the AC.

Identification of training needs – Assessment centres provide candidates and
organization with concrete data on the improvement areas, which can be utilized, for
training.
Exercises in Assessment Centres:
Following are the most widely used exercises in Assessment Centres. Every exercise unveils
presence/absence of certain competency in the participant.
The competencies that are
normally evaluated through these different exercises are mentioned below:
Tool
Case study
Explanation
Requires candidates to read a large set of
Competency
Analytical skills, assimilation of information,
interview
information and then answer questions
prioritization of information, time-management,
relating to the subject matter
working under pressure
Competency-based
Includes personal history questions and
Analytical skills, business acumen, communication,
interview
problem-solving tasks and scenarios
interpersonal skills, personal attributes, teamwork
Fact-finding
Includes research and retrieval of
Communication, professional interaction
exercise
information on a given subject or
interaction with the interviewer to obtain
Group exercise
further information from them
Includes problem solving within a
Personal assertiveness, teamwork, Interpersonal
In-tray test
committee or team
Includes prioritizing documents, drafting
effectiveness, drive for result
Time-management, analytical skills, business acumen
Problem-solving
replies to letters, and delegating
Includes
importantbuilding
tasks a structure with limited
Analytical skills, creativity, lateral thinking,
task
materials
resourcefulness
Presentation
Involves a 10 to 15 minute presentation
Assimilation of information, presentation delivery,
on a pre-determined topic.
working under pressure
Psychometric/Pers
Includes a personality questionnaire
Agreeableness, behavioural interaction,
onality/ Aptitude
and/or numerical, verbal, and
conscientiousness, extroversion /introversion,
Tests
diagrammatic reasoning tests.
personal assertiveness, teamwork
Role-play exercise
Involves acting-out a business-related
Approach to business situations
situation
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Written exercise
Involves producing a concise written
Analytical skills, summarization, written
summary from a collection of
communication
documents.
Advantages of Assessment Centres:

Assessment centres not only help the organization in placing the right candidate for the
right job/assignment but also helps in developing the participants.

Assessment Centres can be customized for different kinds of jobs, competencies and
organizational requirements.

By involving the line managers in the procedure, assessment centres naturally gain
support from them in the management decisions.

Assessment Centres, even when conducted with selection purpose, do provide training to
participants in the process.

The validity coefficient is higher than most other techniques used for predicting
performance. This is so because it simulates real job challenges and evaluates the
candidate on the same.
Disadvantages of Assessment Centres:

Assessment Centres are very costly and time consuming.

Assessment Centres requires highly skilled observers as the observers may bring in their
own perceptions and biases while evaluating.

Those who receive poor assessment might become de-motivated and might lose
confidence in their abilities.
4.5.6 360 Degree-Feedback
360-degree feedback, also known as 'multi-rater feedback', 'multisource feedback', or
'multisource assessment', is employee development feedback that comes from all around the
employee. The feedback would come from subordinates, peers, and managers in the
organizational hierarchy, as well as self-assessment, and in some cases external sources such
as customers and suppliers or other interested stakeholders.
In this system the candidate is assessed by a number of assessors including his boss, direct
reports (subordinates), colleagues, internal customers and some times external customers. The
assessment is made on a questionnaire specially designed to measure leadership styles,
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managerial qualities, impact and other behaviors considered critical for performance. Such
feedback from multiple sources provides a credible picture and can be used for various
purposes like:

Providing insights into the strengths and developmental areas of the candidate in terms of
the effective performance of roles, activities, styles, traits, qualities, competencies
(knowledge, attitudes and skills), impact on others etc.

Enhancing role clarity and establishing increased accountabilities.

Identification of developmental needs and preparing development plans more objectively
in relation to the current or future roles and performance improvements for an individual
or a group of individuals.

Leadership Development.

Generating data for various personnel decisions (provided it is decided initially that the
feedback is not meant only for the person but also to be shared completely with the
organization).

Culture building and reinforcing other change management efforts and organization
effectiveness directed interventions. This may include: TQM efforts, Customer focus or
internal customer satisfaction enhancing interventions, Flat structures, Quality enhancing
and cost reducing interventions, process changes, etc.

Aligning individual and group goals with organizational vision, values and goals.

Planning internal customer satisfaction improvement measures.

Identifying strengths that can be used to the best advantage of the business.

Perception of feedback is more valid and objective, leading to acceptance of results and
actions required.

Encouraging more open feedback — new insights.
360 degree feedback is the most comprehensive appraisal where the feedback about the
employees’ performance comes from all the sources that come in contact with the employee
on his job.
360 degree respondents for an employee can be his/her peers, managers (i.e. superior),
subordinates, team members, customers, suppliers/ vendors - anyone who comes into contact
with the employee and can provide valuable insights and information or feedback regarding
the “on-the-job” performance of the employee.
360 degree feedback has four integral components:
1. Self appraisal
2. Superior’s appraisal
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3. Subordinate’s appraisal
4. Peer appraisal.
Self appraisal gives a chance to the employee to look at his/her strengths and weaknesses, his
achievements, and judge his own performance. Superior’s appraisal forms the traditional part
of the 360 degree appraisal where the employees’ responsibilities and actual performance is
rated by the superior.
Subordinates appraisal gives a chance to judge the employee on the parameters like
communication and motivating abilities, superior’s ability to delegate the work, leadership
qualities etc. Also known as internal customers, the correct feedback given by peers can help
to find employees’ abilities to work in a team, co-operation and sensitivity towards others.
Self assessment is an indispensable part of 360 degree appraisals and therefore 360 degree
Performance appraisal have high employee involvement and also have the strongest impact
on behavior and performance. It provides a "360-degree review" of the employees’
performance.
The results from 360-degree feedback are often used by the person receiving the feedback to
plan their training and development. The results are also used by some organizations for
making promotional or pay decisions, which is sometimes called "360-degree review”.
360 degree appraisal is also a powerful developmental tool because when conducted at
regular intervals (say yearly) it helps to keep a track of the changes in perception about the
employees. A 360 degree appraisal is generally found more suitable for the managers as it
helps to assess their leadership and managing styles. This technique is being effectively used
across the globe.
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Disadvantages of 360-degree feedback

Return on investment, for the time and energy required, is perceived to be minimal.

Transparent feedback can be adversely affected by emotions and ongoing peer conflicts.

Appraisees are not ready for honest and open feedback.

Some cultures rigidly avoid passing negative feedback, or information, to superiors or
elders.
Under the circumstances, 360 degree feedback should be used as a supplement to other
regular appraisal system used by the company. It should be limited to the senior and middle
management levels of managers, who impact a large number of people within and outside an
organization, including their own sub-ordinates.
4.6 RATING ERRORS
4.6.1 Halo / Horn Effect
Halo effect occurs when a rater attaches too much significance to a single factor of
performance and gives similar ratings on other performance elements. Thus overall
evaluation is significantly influenced by a single factor. Such a perception undermines the
importance of other elements and leads to an unbalanced performance assessment of the
individual.
For example a manager rates a worker very high on quality because of her immaculate
attention to details and lack of defects in her work. Then assuming the individual to be an
overall high performer based on the quality of her work output, the manager rates her very
high on efficiency, responsibility, punctuality, etc. without taking an objective look at her
performance in these areas.
4.6.2 Central Tendency Error
Some supervisors "play safe" by rating around the golden mean - the average. This may be
done to avoid the necessity to justify scoring across the two extremes as some systems expect
managers to specify additional comments as they give too high or too low ratings to
employees. This rating error is known as the central tendency bias. It is the huge amount of
central tendency experienced in organizations across globe, which necessitated the
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introduction of bell curve or normalization forcing a comparison between employees’
performance and classifying them into different categories. We have already discussed
normalization in the preceding section of this chapter.
4.6.3 Leniency Error
Some supervisors demonstrate a leniency bias and rate their subordinates very liberally which
may make even average performers seem like star performers, attaining very high
performance scores.
For example : Mohan rates all his employees higher than he feels they actually deserve , in
the assumption that this will cause them to live up to the high rating they have been given.
4.6.4 Recency (or Primacy) Effect
Performance appraisal involves assessment of employee performance for a specific period quarterly, annually etc. Employees may not perform uniformly throughout that period. It is
therefore very important to review performance demonstrated throughout the period under
consideration. However, recent events tend to overshadow the overall performance. Thus, a
person who has worked very hard and excelled throughout the year, but for some inadvertent
reasons had faced performance issues in the last weeks or month may at times get a poor
appraisal from the supervisor, showing a recency bias.
4.6.5 First Impression Error
The tendency of a manager to make an initial positive or negative judgment of an employee
and allow the first impression to colour or distort later information.
For example; A manager who was new to the workplace observed an employee performing
poorly (The employee was going through a bad phase of his life as his parents had just passed
away in a road accident). Within a month the employee’s performance had returned to his
previous high level, but the manager’s opinion of the individual’s performance was adversely
affected by the initial negative impression.
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4.6.6 Similar-to-me effect
The tendency of individuals to rate people who resemble themselves higher than they rate
others is called similar-to-me effect.
For example: Mr. Singh has passed out from BHU and managed to become the zonal head of
sales. He unwittingly rated Mr. Kumar who was also a pass out of BHU higher than his
performance warranted.
4.6.7 Attribution Error
The tendency to attribute performance failings to factors under the control of the individual
and performance successes to external causes.
For example: Ravi, a manager with a mixture of both excellent and mediocre performers in
his work group, attributes the success of the excellent group to his quality of leadership and
the failing of the mediocre group to their bad attitude and inherent laziness.
4.6.8 Stereo typing
The tendency to generalize across groups and ignore individual differences.
For example: Suresh, who is a salesman, is very quiet & reserved, almost meek. His sales
record is, however, one of the best in the company. But his boss rated his performance lower
than that of other sales people since he did not fit the mould, ignoring the results that Suresh
had produced.
4.6.9 Status Effect
The inclination to be affected by an individual’s status / position while rating the individual.
For example: Surbhi had a MBA degree from IIM, Ahmedabad and was selected for the
company’s fast track training programme. As a result his manager rated his performance as
superior when actually it was mediocre.
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4.6.10 Spillover / Past Performance Effect
Permitting an individual’s poor or excellent performance in a previous rating period to colour
the manager’s judgement about his/her performance in this rating period. Or in other words,
allowing past performance appraisal ratings to unjustly influence current ratings.
For example: Last year Shravan was rated star and received the highest performance rating.
This year again his supervisor rated him star, even though his performance this year was no
better than other employees who were rated as performing.
4.6.11 Strictness Error
People differ in their tendency to evaluate people or performance. Some supervisors are very
strict or conservative in their ratings and generally give low scores in their evaluations. This
tendency may make high performers attain somewhat average ranking and average
performers appear as poor performers. Raters with such tendency are known to have a
strictness bias.
4.7 LIMITATIONS OF PERFORMANCE APPRAISAL
In order to make a performance appraisal system effective and successful, an organization
comes across various challenges and problems. The main challenges involved in the
performance appraisal process are:

Determining the evaluation criteria
Identification of the appraisal criteria is one of the biggest problems faced by the top
management. The performance data to be considered for evaluation should be carefully
selected. For the purpose of evaluation, the criteria selected should be in quantifiable or
measurable terms.

Create a rating instrument
The purpose of the Performance appraisal process is to judge the performance of the
employees rather than the employee. The focus of the system should be on the development
of the employees of the organization.

Improper weightage
Sometimes proper weight age may not be given to the different qualities to be rated. It is
very important to give proper weightage
Refer the form attached….
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
Lack of competence
The competence of the rater to rate the subordinates is a big question mark. They should have
the required expertise and the knowledge to decide the criteria accurately. They should have
the experience and the necessary training to carry out the appraisal process objectively.

Errors in rating and evaluation
Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait influencing
the evaluator’s rating for all other traits) etc. may creep in the appraisal process. Therefore the
rater should exercise objectivity and fairness in evaluating and rating the performance of the
employees.

Resistance
The appraisal process may face resistance from the employees and the trade unions (in
factory situations) for the fear of negative ratings. Therefore, the employees should be
communicated and clearly explained the purpose as well the process of appraisal. The
standards should be clearly communicated and every employee should be made aware that
what exactly is expected from him/her.
4.8 CHARACTERISTICS OF AN EFFECTIVE PERFORMANCE APPRAISAL
SYSTEM
1. Appraisal System should be tailored to specific needs of the Organization
A company typically follows some strategies, tailored to its specific situation, to achieve its
various goals. The company needs to ensure that the activities of its divisions, departments,
other units and individual employees are aligned with and contribute to the firm's strategies
and goals. The performance appraisal system should be designed to fit the specific
requirements of the organization.
2. Rating factors should be objective and Concrete
Employers should seek to maximize the degree of objectivity in performance appraisals, and
to eliminate as much as possible the use of subjective factors. Dimensions such as initiative
and dependability can be expressed in terms of behaviours. If a rater can demonstrate, in
terms of employee behavior or work results, how and when the employee lacked a particular
quality, then the appraisal will be more meaningful to the employee and more likely to be
accepted.
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3. Appraisals should be free of bias
Performance ratings should not be influenced by race, sex, age or other factors. Unconscious
or conscious prejudices toward subordinates may affect supervisors' appraisals. While
prejudices are often deep-rooted, employers can, through explicit policy declarations,
punishment of unacceptable supervisory behavior, and training, help to counteract these
biases.
4. Procedures and administration should be uniform
A system's procedures and its administration should be standardized and uniform in their
application. This is especially important if information generated by the appraisals is to be
used to compare employees. If it is not, the system will be seen as unfair and as giving
preferential treatment to some employees and not to others. Periodic training of raters,
issuance of clear instructions, definitions of terms used in appraisals and close monitoring of
the system will help promote uniform administration.
5. The system should be easy to operate
The system must be easy to administer and managers should be able to use it without undue
effort. There should not be too many forms to complete; nor should they be burdensome to
fill out. The system should not interfere with on-going operations. If the system proves too
much of a burden for managers, they may see it as an imposition on their normal work
activities.
6. The system's results should be used in decision making
If nothing comes of performance appraisals, if they are merely recorded and placed in
personnel files never to be referred to again, the system will be perceived as a useless
exercise, as mere paperwork. For a system to be taken seriously it must be useful to line
management. Using appraisals as a basis for rewards, promotions, work assignments,
employee developmental activities, punishments and other personnel decisions will
demonstrate the importance and credibility of the system.
7. The system should provide a review process
To help ensure fairness in appraisal, some type of review mechanism should be established.
Providing a safety valve may reduce complaints and is likely to help strengthen employee
confidence in the system. Reviews of appraisals may be conducted automatically by superiors
one or two levels above the rating supervisor. The process of review must be publicized to all
employees.
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8. The system should be acceptable to users
Lack of user acceptance may well undermine a system. One way to increase acceptance is to
involve users in developing the system. Providing periodic feedback on performance also is
likely to promote acceptance of the system by ratees. Notifying them of performance
shortcomings when they occur and giving ratees the opportunity to correct weaknesses reduce
the possibility of surprises and resentment at the time of the annual performance review.
9. Performance ratings should be documented
The ratings given to ratees should be substantiated by the raters and the ratings must be put in
writing. The reasons for appraisals and specific instances of inadequate performance should
be recorded in writing. Requiring raters to document their ratings provide other benefits such
as motivating raters to give greater thought to their appraisals.
10. Raters should be trained and qualified
For Performance appraisal to succeed, raters must be trained in the philosophy of the system
and how to use the rating forms. Raters must be helped to develop skills for observing and
recording employees' behavior and for giving them appropriate feedback. Training that uses
role playing, behavior modeling through films and videotapes, and discussion is likely to be
more effective than training which relies on lectures. In addition, the training should be
bolstered by issuing written guidelines to which supervisors could refer.
11. Top Management Should Clearly Support the System
Top management must demonstrate clearly, through words and actions that it is behind the
system and is determined to see it succeed. Management's commitment may be manifested
through strong policy statements backed by incentives that reward managers who help make
the system a success and by penalties for those who are uncooperative or obstructive.
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Linkages & Outcomes
Set Goals & Objectives
O
U
T
C
O
M
E
S
Rewards
Performance
Appraisal
Town Hall /
Open House
Appraisal
Merit Salary
Increase
Training
Performance
Management
Talent Review Planning
Feedback
Program
360
4.9 ADMINISTERING OF PERFORMANCE MANAGEMENT SYSTEM IN LARGE
ORGANISATIONS
Performance management, in a human resource management, is the process of delivering
sustained success to organizations by improving capabilities of individuals and teams. It
supports the philosophical principle that people and not capital provide organizations with a
competitive advantage. However in large organisations, performance management presents
severe challenges in terms of practical implementation.
The hallmark of an effective Performance management system is the ability to define and
turn organizational strategies and plans into individual actions and record these actions into
quantifiable terms.
Process Flow of implementation of PMS
Implementing PMS involves a phased process and these processes can be broadly classified
into six phases.
Phase 1 - PLAN/DESIGN
Phase 2 - COMMUNICATE
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L
I
N
K
A
G
E
S
Phase 3 - TRAIN
Phase 4 - MONITOR
Phase 5 - CONSOLIDATE
Phase 6 - FEEDBACK
Phase 1 - PLAN /DESIGN
The performance management system must be a systematic process to implement, therefore,
planning becomes the most vital part.
In large organisations, generally there is a central team who drives the entire initiative. This
team along with the key business leaders and various stakeholders design the PMS system.
Nowadays, technology plays a vital role in a successful implementation of PMS.
In
organisations, where the number of employees is too large and is geographically spread
across various locations, technology/IT plays a major role. The appraisal form and the steps
to complete the process are uploaded on the common portal of the organization.
For
confidentiality purpose, an employee can login to this portal and can access his form only
after putting a password given to him/her. The system should be designed and supported by a
proper database and relevant authorisations in such a way that only the relevant stakeholders
are able to view the form.
The e-enabled system provides for setting of goals & objectives in the beginning of the year
with clear weightages, measures, targets which are broken quarterly or monthly. It follows a
top down cascading approach. Business Head first prepare his/her G&O. Before the next
level employees make their G&O, the G&O of business head should be visible to all of them.
Similarly it is drilled down to the last level. On a quarterly or monthly basis, an online
review mechanism is built in the system.
To bring in transparency in assessment, organisations have started recording of critical
incidents (achievements / struggles) by each supervisor against each of his team member.
The objective is to eliminate reliance on memory as primary method of evaluating an
employee. Time to time, the supervisor can keep on recording the critical incidents on the
portal under PMS category. In many organisations, the system also provides option of either
to share it with the employee or not.
While designing an e-enabled system for PMS, factors to be kept in mind are: Ease of
operation, network connectivity for geographically spread workforce, Confidentiality, whom
to contact in case of problem, FAQs about the process, etc. Before launching the system, it
should be thoroughly checked for ease of implementation. The e-enabled form should be
109
easy to operate, should provide facility of auto save, should be easily viewable and should be
easily printable. The system should be such that employees feel comfortable using the sytem
therefore training plays a vital role in making employees understand the process.
Phase 2 – COMMUNICATE
The implementation of performance management system fails largely due to the employees
and management of the organization not having fully understood why the initiative had been
created and what benefits both the employees and the organization were meant to derive from
it. Once the system is approved and is checked for its robustness, the communication strategy
should be implemented. This involves communicating the key features, benefits and impact
of the scheme.
The central team, driving the initiative, plays a crucial role as the communication should be
common across locations. For each business or location, employees are identified who act as
SPOCs (Single point of contact) for employees in their business or location. They also act as
the representative of the central team who is driving this entire initiative.
Phase 3 - TRAIN
The implementation of e-enabled performance management systems often necessitates
training.
Train the trainer
As a first step, the SPOCs are trained by the central team about the entire process. It becomes
necessary to train them as they will be implementing the performance management system
and drive it for their businesses or locations.
Employee/staff briefings
A briefing session for all participating employees (staff) can answer queries and concerns,
providing a solid foundation for successful implementation. Performance management
content can include the system structure, corporate rationale, expected benefits, requirements,
"how-to-do" in system, steps involved in the process, who is to do what, approaches and the
like.
Team leader and manager training
More extensive training is required for team leaders and managers who will conduct the
review discussions. This includes: identifying and writing performance objectives, adapting
corporate objectives to the individual/team, how to define the measures, discussion and
110
questioning
techniques,
HR
policies
(particularly
in
regard
to
compensation,
training/education support), handling salary discussions, etc.
Phase 4 - MONITOR
Phase 3 is generally the fore runner to the actual implementation. Once the process is
implemented a constant monitoring is required.
A careful monitoring of the implementation process is crucial to ensuring its sustained
effectiveness. This includes activities such as obtaining measurable outcomes in order to
provide a clear focus for monitoring and following through the process. Essential elements of
this include control and feedback in the form of both formal and informal mechanisms that
allow the process of implementation to be monitored.
This helps in collecting real time feedback and provides with the opportunity of constant
process improvement and timeliness of the entire process.
A user manual for every stakeholder, i.e., the employee, his supervisor, supervisor’s
supervisor, SPOC, etc. with step by step process is handy for smooth implementation of the
Performance management system.
Phase 5 - CONSOLIDATE
This phase involves the consolidation of the outcome of the entire process. On the basis of the
inference a clear demarcation is done between the high potential employees, performing
employees, average employees and below average employees/laggards. Business wise and
location wise performance rating of employees is normalized and a normal curve is arrived at.
The employees are categorized on the basis of their performance (E.g. Excellent, good,
average, below expectations, etc.)
Phase 6 - FEEDBACK
The communication post appraisal should not only include the Salary and compensation gains
but also include the following
- Performance areas to be improved
- The level of work performance expectation
- Identify and specify the support and resources to be provided to assist the employee.
- Specific possible consequences if performance standards are not met.
- Carrier progression chart
111
ANNEXURE 1: SAMPLE GOALS & OBJECTIVES SHEET
Goal & Objectives Sheet - FY (2008-09) for Processing Centre Incharge
CUSTOMER
GOALS
Timely supply of produce
with optimum quality
OBJECTIVE
TARGET
(Apr 1'08- Mar 31'09)
5
Nil
Tonnage handling of products
in each shift
5
90 MT/shift
10
More than 98%
5
>1%
Minimize Cost of
Dump %
operations & wastage
10
>4%
Efficient distribution of
No. of days of inventory at
resources to ensure
Processing Center
optimal utilization
5
>1 day
Cost control on
Utilities
% wastage of consumables
5
> 1%
Annual Plan & Budget
Accuracy of CPC budgerting
(Budget Vs Actuals)
5
> 2% deviation
Proper planning and
allocation of work
% Attrition due to ambiguity of
Role
5
Overall attrition > 8%
No. of Productivity reviews
conducted
5
Twice a month
No. of new initiatives taken
5
Total 16 (4 per quarter)
Timely Identification of No. of Job rotations done to
develop fungible resources
training needs
5
Total 8
5
2 trainings per month
7.5
100% compliance
7.5
100% compliance
% compliance to Safety and
Hygeine as per norms
5
100% compliance
Timely review of Quality
specifications with QA Team
5
Every quarter
Fill Rate as per PO % Fill rate
Profitability
Weightage
No. of times stoppage of work
due to breakdown
Maximize efficiency of
operations
Category Satisfaction Minimize Delivery time
Financial
MEASURE
No. of delivery delays Vs Total
deliveries
People
Increased efficiency
Optimum utilization of
manpower
To maximize
Productivity
Fully trained man power
Operations
Training as per
schedule
=
No. of training schedules
developed in coordination with
Training team
% compliance to SOPs for
Measure and maximize Implementation and each process
performance of each Compliance of
% Compliance to statutory
product line
operating procedures
requirements as may be
applicable from time to time
Ensure compliance to
quality norms
Ensure product quality as
per the defined norms Reduce wastage while
maintaining high
quality standards
TARGET
Q1 (Apr-June '08)
Q2(July- Sep '08) Q3 (Oct-Dec '08) Q4 (Jan-Mar'08)
Actual
Q1 (Apr-June '08)
Q2(July- Sep '08) Q3 (Oct-Dec '08)
Remarks
Q4 (Jan-Mar'08)
Performance Management Form
General Guidelines:
Section I – OBJECTIVE REVIEW & FEEDBACK - To be filled in by the employee and then discussed with the Immediate Supervisor
Section II – APPRAISER’S FEEDBACK, RECOMMENDATION & RATING - To be filled in by the Appraiser
Section III – OVERALL RATING – To be filled in by HR
Section IV – YOUR ASPIRATIONS AND DEVELOPMENTAL NEEDS - To be filled in by the employee & then discussed with Immediate Supervisor
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SECTION I - “OBJECTIVE REVIEW & FEEDBACK”
(To be filled in by the Employee and discussed with the Immediate Supervisor)
Supervisor to rate the member’s performance on a scale of 1 to 10.
No
Rating 1 & 2: Poor Performance, 3&4: Below Par, 5&6: At Par, 7&8: Above Par, 9&10: Excellent
Objectives
Self Review
Centre Head / Reporting Senior
Rating
1.
2.
3.
4.
5.
6.
Rating
II Other assignments/tasks that you would like to mention other than those stated in Section I.
No
Successful
Lapses (Assignments that did not fructify and
Learning’s from it)
III Any other activities that took up significant part of your time and efforts.
IV Specify the most important factors (Personal/Organisational/External) affecting your work
Facilitating
Hindering
V Any other feedback / comments
115
Section II
APPRAISER’S FEEDBACK, RECOMMENDATION & RATING
I Comments of the Reporting Senior:
Please write about the member’s personal & professional growth as experienced by you.
Immediate Supervisor:
Department Head:
Please rate the member’s performance on a scale of 1 – 10
1
2
3
4
5
6
7
8
Section III
II Trends in the Performance of the member compared to last Appraisal.
Declining
Stable
Improving
Comments on the Performance trend:
116
9
10
Section III
OVERALL RATING
(To be filled in by Internal HR)
1
2
3
4
5
6
7
8
9
10
(Rating 1 & 2 : Poor Performance, 3&4 : Below Par, 5 &6 : At Par, 7 &8 : Above Par, 9 & 10 : Excellent)
Section IV - “ASPIRATIONS AND DEVELOPMENTAL NEEDS”
Possible Career Development Options (please tick) :

Vertical Movement

Experience in another Business

Gain in-depth exposure in the existing role

Move into different role within the Department

If any other, please specify:

Have you experienced any career movements such as a role change, transfer, promotion and role enhancement during your
last one-year? If yes, has it been in tandem with your long-term aspirations?
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
Experience a new project

Relocation
YOUR TRAINING FEEDBACK / NEED FOR THE YEAR
Please give below the details of all the programmes attended by you during the period ……to……….
(Induction, Learning session, Seminars, Conferences or any other External or Internal training programmes)
Dates
1.
Nature of the
programme
Particulars of the programme
Facilitator
Effectiveness of the
programme
Please specify areas where you would need inputs by way of training (both professional & personal development). Also
specify what would be your efforts in developing yourself in these areas.
118
S No
2.
Training need
My commitment/efforts
Remarks (Immediate
Supervisor / Department
Head)
Do you have any professional membership? If, so give details.
Signature of the employee
119
Notes
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
____________________________________________________________
5. COMPENSATION MANAGEMENT
We are in the era of Talent Crunch. India’s growing economy is able to generate many jobs at
various levels, but due to shortage on the supply side, there is huge challenge in hunting,
recruiting and retaining talents in all the sectors. Due to shortage of talent, organizations are into
talent war. They are poaching on other company’s employees and offering mindless pay hikes
and fancy designations to on-board them. Even after offering high pays, companies are not sure
whether the employee will stay with them for a reasonable period of time.
In the given scenario when the availability of right talent is less and there are large number
competitors vying for the scarcely available talent, Compensation Management plays an
important role in attracting and retaining talents. In today’s economy compensation management
does not only mean paying salaries to employees at the end of the month. It is the process of
designing the low-cost pay structure that will be adequate, equitable, fair and competitive in the
market and thus attract, motivate and retain competent employees.
5.1 DEFINING COMPENSATION
Traditionally compensation meant the remuneration in terms of money for services rendered by
an employee to an organization. This has changed during the last decade1. Now compensation
includes both tangible and intangible benefits given to an employee. Tangible Benefits are
financial in nature and includes basic pay, variable pay, retrial benefits, stock options, interest
free loans, etc. Tangible Benefits are essential for attracting and recruiting employees. But on the
flip side, it can be easily copied by competitors. Intangible Benefits includes work environment,
job responsibilities, opportunities of professional development, etc., which essentially
supplements tangible benefits. Intangible Benefits needs and helps in retaining employees.
HayGroup combines both Tangible and Intangible Benefits and calls it ‘Total Rewards’ approach.
The same has been illustrated in figure 1.
1
An article on evolving thoughts on compensation is given as Annexure 1at the end of the chapter.
121
Figure 1: Components of Total Rewards
Responsibility
Base Pay
Financial
Rewards
and
Benefits
Meaningful
Work
Performance
Pay / Variable
Pay
Medical
Benefits
Total
Remuneration
+
Retiral
Benefits
Non-financial
rewards
arising from
work and
work
environment
Recognition
Opportunity to
use and
develop skills
Total Reward
Career
Opportunities
Share
Ownership
Quality of
work life
Case Study : WIPRO Technologies Ltd.
The governing theme in WIPRO is the well being of their employees. The benefits offered to them are
on par with the best available in the industry. Their compensation package is also among the best in the
industry and is aimed at not only attracting but also retaining the best talent. The package caters to all
positions across WIPRO. Rewards for each position are based on performance, potential, criticality and
market value.
WIPRO have a comprehensive medical assistance programme that covers anything employee or his
family may incur. The education assistance plan encourages employees to pursue course of their
interest. The policy of the company also includes a sabbatical to pursue higher studies related to
employee’s profession.
WIPRO’s responsibility towards new employees doesn’t stop at salaries and compensation only. They
provide interest free loans to cover housing deposits or the purchase of a two-wheeler as well as
contingency loans for marriage, illness or the death of a close family member. Besides these they offer
stock options to deserving employees through employee empowerment. The WIPRO Employee Stock
Option Plan (WESOP) allows employees to share in the success of the company.
WIPRO also take great interesting the personal well being of their employees. They have contracted an
external agency to take care of employees’ domestic chores such as bill payment and travel bookings so
that they may spend their time in more enjoyable endeavors. They also provide credit cards to all the
employees, transport to the development centres, and an onsite cafeteria.
These benefits are offered in addition to host of deferred benefits like provident fund, gratuity, and a
pension plan. All common processes like leave applications, travel planning, updating personal
information, etc., are automated through the extensive use of intranet-HR Web so that they need not
spend time and effort on routine activities.
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5.2 COMPENSATION MANAGEMENT IN HRM
Human Resource Management (HRM) consists of various activities like manpower planning,
recruitment, selection, training & development, performance management, career planning, etc.
Compensation Management is an integral part of HRM, which has a role in most of the above
mentioned activities, be it manpower planning, recruitment or performance management.
Every Individual has certain motivational needs in life. Abraham Maslow has defined it in the
form of a hierarchy. An individual expects his motivational needs to be fulfilled in exchange of
the contribution he makes to the organization. Those organizations which are able to fulfill all the
levels of motivational requirements of an individual are to a great extent successful in retaining
its employees. Compensation management to a great extent helps organizations in fulfilling
almost all of the motivational needs of its employees.
5.3 OBJECTIVES OF COMPENSATION MANAGEMENT
The basic objectives of compensation management are mentioned below:
(a) Acquiring right talent – Compensation needs to be high enough to attract right talents. Pay
levels must be decided on the basis of available supply and demand of the required skill in the
market.
(b) Retain competent employees – Compensation must be based on the contribution of an
employee. A high performing employee should be protected with competitive compensation
package. This is usually done by introducing performance based variable pay in the pay
structure, which ensures that high performers get compensation higher than the average or low
performers. Another way of doing it is to keep the compensation of high performers between 66 th
to 75th percentile in their respective pay grade and low performers below 50th percentile.
(c) Ensure equity – Internal as well as external equity should be maintained in terms of relative
worth of the jobs and their value in the outside market. Organizations do this by developing pay
grades and fixing salary bands (pay range) for each pay grades. This ensures that all the
employees at a particular grade will have compensation within a particular range. The process of
developing pay grades and pay ranges are discussed in detail in next section i.e. ‘Phases of
compensation management’.
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(d) Reward desired behaviours – Compensation structure should reinforce desired behaviours
and act as an incentive for those behaviours to be continuously repeated. This is done by
designing the appraisal system which evaluates employees on the desired behaviors and give
incentives accordingly.
(e) Control cost – A high manpower cost can reduce an organization’s competitiveness.
Compensation management helps in obtaining and retaining workers at reasonable cost. The jobs
requiring rare skill sets are priced higher than the jobs which require skills which are easily
available in the market. So a Product Manager of a commodity (which is a specialist role) will get
higher incentive than a Marketing Manager, as this skill is easily available in the market.
(f) Legal compliance – Compliance to the legal challenges imposed by the various labour laws is
a necessary part of compensation management. The Minimum Wages Act (1948), The Payment
of Wages Act (1936), The Payment of Bonus Act (1965), The Equal Remuneration Act (1976)
are some of the legal compliances which needs to be considered in compensation Management.
The Minimum Wages Act, 1948 – The act provides for the fixation of minimum wages in
certain employment. The appropriate government fixes the minimum wages for different
industries and reviews it at an interval not exceeding 5 years. The Act prescribes minimum wages
for certain sweated and unorganized sectors. The minimum wages can be fixed based on time of
work, or piece work at piece rate. For paying less than minimum rates of wages, the employer is
liable for imprisonment upto 6 months or with fine upto Rs.500 or both.
The Payment of Wages Act, 1936 – The objective of this act is to regulate the payment of wages
of certain classes of employed persons. The Act tries to protect the workers from irregular
payment of wages and abrupt deductions by the management. The Act is applicable to all
factories, industries, transport services engaged in carrying passengers or goods or both by road
for hire or for reward, air transport services, docks, inland vessels, mines, quarries or oil fields,
plantations, workshops, etc. It covers employees drawing average wage upto Rs.6500 per month.
It states that wages should be paid to the employees before the expiry of 7th day of the following
month, when less than 1000 persons are employed by the establishment. In the case of more than
1000 workers, payment should be made before the expiry of the 10th day of the following month.
For non-payment of timely wages, the employer is liable for fine not less than Rs.100, which may
exten to Rs.5000.
The Equal Remuneration Act, 1976 – This Act is applicable mostly to workers working on
daily wage basis. The objective of this Act is to provide for the payment of equal remuneration to
men and women workers. There should not be discrimination on the ground of sex. Remuneration
must be same across gender for same work or work of a similar nature and same in respect of
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skill, effort, and responsibility performed under similar working conditions. The Act also ensures
that there is no discrimination in the recruitment and promotion process.
The Payment of Bonus Act, 1965 – The objective of the Act is to maintain peace and harmony
between labour and capital by allowing the employees to share the prosperity of the establishment
reflected by the profits and by the contributions made by capital management and labour. It’s a
statutory liability of the employers of every establishment covered by the act to pay bonus. The
Act covers profit bonuses only. The Act is applicable to every factory wherein 10 or more
persons are employed with the aid of power and every establishment in which 20 or more persons
are employed without the aid of power on any day of the accounting year.
(g) Facilitate understanding – Last but not the least a compensation structure must be easily
understood by employees at all the levels of an organization. Employees should understand what
amount they will be getting in hand at the end of the month, what amount is deducted for retrial
benefits, insurance, or mediclaim, how incentive is linked to performance and how is it
calculated. A simple compensation structure which can be easily understood by the employees
can be a useful tool for hiring and retaining employees.
The above mentioned objectives form the guiding principle in determining the basis of different
phases of compensation management.
5.4 PHASES OF COMPENSATION MANAGEMENT
Phase I
Job Analysis
Phase II
Job Evaluation
Job Ranking
Phase III
Deptt. of Labour
Phase IV
Job Grading
Factor Comparison
Point System
Wage and Salary Surveys
Employer Associations
Professional Association
Pricing Jobs
Matching Job evaluation worth and Market worth
Pay range for each job
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Self Conducted surveys
5.5.1 Job Analysis
Job Analysis collects information about jobs to produce job and position description. This
information also helps to provide the basis for job standards.
With the job analysis information provided as part of the department’s information system,
compensation specialists have the minimum information they need to begin the next phase of
compensation management i.e. job evaluations.
5.5.2 Job Evaluations
Job evaluations are systematic procedures used to determine the relative worth of jobs. Each
approach to job evaluation considers the responsibilities, skills, efforts, and the working condition
of the job. The most common methods of job evaluation are: Job ranking, job grading, factor
comparison, and the point system.
Job Ranking – The ranking method requires a committee typically composed of both
management and employee representatives to arrange jobs in a simple rank order, from highest to
lowest. The committee members compare two jobs and judge, which one is more important or
difficult. Then they compare another job with the first two, and so on until all the jobs have been
evaluated and ranked.
The most obvious limitation to the ranking method is its sheer unmanageability in the situation
where there is large number of jobs.
Other drawbacks to be considered are the subjectivity of the method – there are no definite or
consistent standards which justify the rankings – and because jobs are ranked only in terms of
order, we have no knowledge of the distance between the ranks.
Job Grading – It is slightly more sophisticated method than job ranking, though still not very
precise. In this method each job is assigned a grade or class. These classifications are created by
identifying some common skills, knowledge, responsibilities – with the desired goal being the
creation of a number of distinct classes or grades of jobs. Examples might include shop jobs,
clerical jobs, sales jobs, and so on, depending on the type of jobs the organization requires.
Once the classifications are established, they are ranked in an overall order of importance
according to the criteria chosen, and each job is placed in its appropriate classification. The
standard description that most nearly matches the job description determines the job’s
grading/classification.
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The grading method shares most of the disadvantages of ranking approach, plus the difficulty of
writing classification descriptions, judging which jobs go where, and dealing with jobs that
appear to walk into more than one classification. An example of Job grading is mentioned below.
Job Grade
I
II
III
Standard Description
Job is carried out under clearly set out instructions. Decisions are of a routine
nature. Very little initiative required
Job is carried out under indirect supervision. Decisions are made relevant to the
workings of the specific job. Initiatives on a day-today basis.
Job is carried out with little or no supervision. Decisions are made over a set range
of issues under broad general directives of a superior officer
Job requires co-ordination of information from a wide variety of sources.
Decisions are generally required to be made on the basis of complex incomplete
information. The synthesis of acquired specialised knowledge and “know how” to
IV
deal with problems, people or situations is implied in this level. The demand level
would be in excess of work such as appreciation of or normative application of
University rules and procedures. A high level of responsibility and initiative is
implied in job functions assigned.
Job involves a designated responsibility for contributing to the process of policy
V
formation and/or a key role in helping to set or contribute to corporate objectives.
Decision-making is of a significant nature.
Factor Comparison – In this method the critical and compensable job components are compared
by a committee. The compensable components are those factors common to all the jobs being
evaluated – such as responsibility, skill, mental effort, physical effort, and working conditions.
Each factor is compared, one at a time, with the same factor for the other key jobs. This
evaluation allows the committee to determine the relative importance of each job.
The factor comparison method involves the following steps:
Step 1 – Determine the compensable factors
Step 2 – Determine key jobs
Step 3 – Apportion present wages for key jobs
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Compensable
or
Critical factors
Key Jobs
Secretary
Janitor
File Clerk
(Rs.)
(Rs.)
(Rs.)
Responsibility
3.50
2.00
1.50
Skill
3.00
2.00
1.50
Mental Effort
3.00
1.50
1.50
Physical effort
2.00
3.00
2.00
Working conditions
1.50
2.00
1.50
Total
13.00
10.50
8.00
Wage rate
13.00
10.50
8.00
Step 4 – Place key jobs on factor comparison chart
Step 5 – Evaluate other jobs
A Factor Comparison chart
Rate
Responsibility
3.50
Secretary
Skill
Secretary
3.00
Mental
Physical
Working
Effort
Effort
Conditions
Secretary
Janitor
2.50
2.00
Janitor
Janitor
1.50
File Clerk
File Clerk
Secretary
File Clerk
Janitor
Janitor
Secretary
File Clerk
File Clerk
1.00
Point System – It is used more than any other method. This system evaluates the compensable
factors of each job. But instead of using wage rates, as factor comparison method does, it uses
points. Although more difficult to develop initially, the point system is more precise than the
factor comparison method because it can handle critical, compensable factors in more detail. This
system involves six steps and is usually implemented by a job evaluation committee or by an
individual analyst.
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A Point System Matrix
Critical Factors
Levels
Minimum
Low
Moderate
High
25
50
75
100
20
40
60
80
5
20
35
50
20
40
60
80
a) Experience
45
90
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180
b) Education/ Training
25
50
75
100
a) Physical
25
50
75
100
b) Mental
35
70
105
150
a) Unpleasent
20
40
60
80
b) Hazardous
20
40
60
80
Responsibility
a) Safety of others
b) Equipment &
Materials
c) Assisting trainees
d) Product/Service
quality
Skill
Effort
Working Conditions
1000
Total Points
Step 1 – Determine critical factors. Add more details by breaking down these factors into subfactors.
Step 2 – Determine the level of factors, since the amount of responsibility or skill or effort vary
from job to job.
Step 3 – Allocate points to sub-factors starting from highest level. This allocation gives very
precise weights to each element of the job, e.g. If safety is twice as important as assisting trainees
(50) then it gets twice as many points.
Step 4 – Allocate points to levels. For simplicity, equal point differences usually are assigned
between levels, e.g. 100, 75, 50, 25 or 50, 35, 20, 5, depending upon the importance of each level
of each sub-factor.
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Step 5 – Develop the point manual, which contains a written explanation of each job element. It
also defines what is expected for various levels of each sub-factor. This information is needed to
assign jobs to their appropriate levels.
Step 6 – When the point matrix and manual are ready, the relative value of each job can be
determined. This process is subjective. It requires specialists to compare job descriptions with the
point manual for each sub-factor.
The match between the job description and the point manual statement reveals the level and
points for each sub-factor of every job. The points for each sub-factor are added to find the total
number of points for the job.
After the total points for each job are known, the job is ranked. This relative ranking is then
reviewed by department managers to ensure that this is appropriate.
The point method has been widely used because it is relatively simple system to use. Also it
considers the components of the job rather than the total job and is much more comprehensive
than either the ranking or classification method. But one major drawback to the point method is
the time needed to develop a system.
5.5.3 Wage and Salary Surveys
To determine a fair rate of compensation, most firms rely on wage and salary surveys. These
surveys discover what is the market worth for specific key jobs. The survey information can be
obtained from various sources like department of labor (sometimes these surveys are out of date,
so not used often), employer associations (a group of company of the same industry form this
associations and conduct the survey within their organization. But less used as in today’s
competitive talent market, organizations are not ready to share data with the competitors),
professional associations (like Hewitt Associates, Mercers, etc, which are independent
organizations).
The major problem with all these published surveys is comparability. Analysts cannot always be
sure that their jobs match the jobs reported in the survey. So while using survey data from other
sources, one should be sure about the sample of organizations taken, methodology used,
timeliness (a very old survey may not be relevant in today’s dynamic job market) and jobs
considered.
Self Conducted Survey
If needed information is not already available, the employer can undertake its own pay survey.
Employers with comparable jobs should be selected. Since surveys are expensive only key jobs
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are used. In the next phase, managers decide what information is needed for various jobs.
Information such as starting pay, base pay, overtime rate, vacation and holiday policies and
bonuses can also be included.
The results of the pay survey usually are shared with those participating in the survey in order to
gain their cooperation. Most surveys specify confidentiality, and data are summarized to ensure
anonymity.
5.5.4 Pricing jobs
In pricing jobs, the job evaluation worth is matched with market worth. Two activities are
involved in pricing jobs: establishing appropriate pay grades for each jobs and then developing
the pay range for each grade.
Establishing Pay Grades
Individual jobs having approximately the same job worth are grouped together to form a pay
grade. Although no set rules govern establishing pay grades, generally 11 to 17 grades are used in
small and medium-sized companies with fewer than 500 employees. However, a growing number
of employers are reducing the number of grades by broadbanding.
Broadbanding is the practice of using fewer pay grades with much broader ranges than in
traditional compensation systems. Combining many grades into these broadbands is designed to
encourage horizontal movement and therefore more skill acquisition. The primary reasons of
broadbanding are: creating more flexible organization, encouraging competency development,
and emphasizing career development.
However, a problem with broad banding is that many employees have become conditioned to the
idea that a promotion is accompanied by a pay raise and movement to a new pay grade. As a
result of removing this grade progression, the organization may be seen as having fewer upward
promotion opportunities available.
Pay Ranges
To decide on the pay ranges at each grade a market line (a graph showing the relationship
between job value, as determined by job evaluation points and pay survey rates) is drawn.
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Market Line
Pay survey hourly wage rates (Rs.)
Job Evaluation Points
Using the market line as a starting point, the employer can determine the minimum and maximum
pay levels for each grade by making market line the midpoint line of the new pay structure.
Typical Pay Range widths
Grades
% around midpoint
M4
+ 20-25%
M3
+ 16-20%
M2
+ 13-16%
M1
+ 11-15%
As the above table shows, a smaller minimum-to-maximum range should be used for lower
grades than for higher grades. This is done primarily because employees in lower grades tend to
stay in them for shorter periods of time and have greater promotional opportunities, in
comparison to higher grades where there are few possibilities of upward movements. In case of
broadbanding much wider ranges, often exceeding 100% may be used.
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Once pay grades and ranges have been computed, then the current pay of employees is compared
to the draft ranges. If the pay of a significant number of employees falls outside the ranges, then a
revision of pay grades and ranges may be needed. Also, once costing and budgeting scenarios are
run in order to assess the financial input of the new pay structure, and then pay policy decisions
about market positioning may have to be revised, by either lowering or revising the systems.
A step by step process of compensation planning is given in Annexure 2 at the end of this
chapter.
5.6 COMPENSATION STRUCUTURE
Compensation Structures in organizations are getting more and more complex and creative.
Organizations are devoting time and resources to make their compensation structures more
flexible and attractive to existing and potential employees. It is increasingly becoming one of the
attraction and retention tools available with an organization. Factors affecting compensation
structure of an organization are Company policies, Prevalent Industry norms and Market Trends.
Over the last decade the salary structure has moved away from a ‘monthly take home’ approach
to a Total Cost to Company (CTC) approach where all allowances paid to an employee and
benefits are included in it as well. And an annual figure is calculated rather than a monthly one.
Compensation has become a ‘Pay for performance’ phenomenon while earlier it was based on
seniority. It has become the single biggest factor influencing an employee’s decision to stay with
an organization or leave it.
Organizations are devising new and unique ways to allow employees to have a say in how they
are being paid so that compensation structures are tailor made according to individual needs and
wants.
Components of Employee Compensation, which are included in the CTC, are
A. Cash Components- They are the components which are being paid to an employee in
cash. They include
Basic salary

Provident Fund contribution

House rent allowance

Leave travel allowance
B. Non- Cash Direct benefits- these are allowances or entitlement of an employee. These
include:-
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
Accommodation

Car

Paid vacation

Medical benefits

Telephone……etc.
In some organization the total CTC is divided into two parts, Fixed Pay and Flexible Pay. The
organization only fixes the Basic Pay and the Provident Fund (this forms the Fixed Pay) and gives
the balance salary as Choice Pay (also know as Flexi Pay Benefits (FPB) or Cafeteria Pay).
Employees are allowed to choose from a menu of options to suit their individual requirement and
convenience and reduce tax liability. They can also change their selection, if required, at suitable
intervals.
Other related compensation trends
A. Variable Pay- Variable pay or bonus has gained importance over the last few years. It is now
in the region of 7-35% of the basic pay. But in certain professions like sales or investment
banking this figure can run up to 100-200% as well. Thus the increasing weight-age of ‘Bonus
Payouts’ is eclipsing the fixed pay components..
B. Equity Based Pay or ESOPs- Again Employees are given an option to opt for ESOPs.
Employer gives an option to employee to purchase shares at a pre-determined price in future. The
options vest over a period of time but are subject to certain conditions. Employee exercises his
options and company allots shares. This is a part of the CTC of an employee. And totally
voluntary on the part of them to exercise this options. It benefits the employee as they can create
wealth and be part owners of the company they work for. While for employers this is an excellent
compensation strategy, which requires no pay out by them, as the market pays the employees.
Also since the vesting takes place over a period of time, it also acts as a retention strategy for the
employee.
C. Target-Based Pay- In certain organizations especially consulting organizations, the
employees can actually choose their own CTC, which is directly proportionate to their targets. If
they chose a higher CTC they will also have to achieve a higher sales target. Many recruitmentconsulting organizations are using this format for their senior and top management employees.
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5.7 CHALLENGES IN TODAYS SCENARIO
The challenge today is to have a competitive compensation package and at the same time keep the
manpower cost low. The compensation strategy of an organization is a very strong and silent
message to the employees about the priorities of the organization. It is definitely not just about
the amount that you pay but also about how you use this to differentiate between employees.
Competent and high potential employees, who are outstanding performers, should be
differentiated from the regular and non performers. Rewarding and retaining the high performers
and getting rid of the non performers is one of the major tasks of a compensation management
team. In this growing economy with so much competition for acquiring right talent, that too in a
talent crunch situation is going to be a tough job. A lot of innovation in the area of compensation
management is required to overcome this challenge.
ANNEXURE 1: HUMAN TOUCH
An Effective Rewards-Based Compensation Program Always Helps Create an Employee Connect
(Nihar Shah and Shanti Naresh, The Economic Time,16TH,May,2008)
It is not just about the money. It is about money well spent and about trust well-earned. This is
the good news about employee rewards. Paying people is obviously not a choice. The crucial
choice lies first in choosing to invest in deeper bonds with employees. Then, it is about allocating
financial resources to nourish this bond. We have found that this approach can have handsome
payoffs for both companies and employees.
If it were only about the money, then businesses that could pay more would retain their
employees and grow, while companies that could not would lose their people and their business.
Both kinds of companies would try to pay the most they could and then focus on extracting more
from their people. These ideas make us wince, not because they are commonplace, and not
because they do not work, but because they assume a purely transactional and unnecessarily
combative view of human motivation. We have found that what works equally well, if not better,
is when companies choose to look at business as an endeavour of the heart and mind, as an effort
to create value and build a sustainable bottom-line in the process. If we were to to exten the same
logic to employee rewards, then companies would make the paradigm shift from an exchange of
financial currency to a building of human connection with one’s employees. Here we will offer
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you three key ideas, and some examples of how companies can build this connection so that all
stakeholders benefit.
Choosing between right and right for us
Our work with international and Indian companies suggests that the first step to building this
connection is to look at employee rewards as an investment rather than a cost. Second, it involves
extending the idea of total rewards to include benefits, work, lifestyles, and careers (see table
below), while ensuring that these innovations falls within the framework of the company’s values
and philosophy. Third, it suggests that paying the highest amount is not necessarily the best
strategy. Rather, the number that arguably matters the most is the employee satisfaction score on
the total rewards package.
Compensation
Benefits

Base Pay

Retirement

Guaranteed “bonuses”

Savings and other wealth creation

Short term incentives

Long term incentives

Financial allowances

Financial recognition programs

Life Insurance

Deferred compensation

Short and long term disability

Accident coverage

Job-related perquisites
programs

Medical/Dental/Vision/Prescription
drug, etc.
Development and Career
Work lifestyle

Performance Management

Time offs

Learning and development

Wellness programs

Career opportunity and pathing

Dependent care

Tuition reimbursement

Workplace flexibility

Mobility opportunities

Commuter programs

Workplace facilities and perquisites

Experiential rewards

Non-financial and status recognition
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Rewards as an investment
When companies choose to look at employee rewards as an investment, they make the important
shift by asking themselves, “What are we investing in?” As part of reaching out to their
predominantly young population, one of world’s most popular high tech companies decided that
they would build food, off all things, into their rewards package. They worked towards ensuring
that no employee would be more than 100ft away from food. This led to a famous set of
cafeterias that the employees were proud of. This cannot be dismissed ass a wasteful whimsical
investment. The company believed that when the employees have access to food that they like,
their productivity goes up, and their employee feedback had indicated precisely this.
Innovation and alignment in total rewards
Next, when companies choose to move beyond cash payments and embrace a concept of total
rewards, they can generate ideas that reinforce their core purpose as a company. A company in
the pharmaceutical space has invested hugely in employee wellness and benefits, thereby tying in
its rewards program with its mission. Or, in the case of an international technology conglomerate,
their rewards package actually saved them a significant amount of money. They choose to
reframe their costs occurring from office space investments as rewards challenge. They explored
the possibility of incentivising their people to work from home, with occasional face-to-face
meetings. A’hot-desking’ virtual working program began. It was not just the productivity
increases that this company rejoiced in, it was what the employees had to say. They felt more
trusted, less ‘watched’ As a result, they began to go the extra mile. The flexible work program
also became a great attraction for a number of prospective hires.
The satisfaction score
A number of companies choose to focus on obtaining a good satisfaction score from their
stakeholders, on their rewards programmes. Companies that do this well focus initially on
aligning their rewards programme with their values and philosophy while also monitoring their
employee pulse. One such company, a leading software player, chooses to have rewards package
that is so performance driven that they position guaranteed cash at the 50th percentile and the rest
falls under variable pay programme. Achieving this alignment, though, is not always easy. We
have worked with clients who have had to untangle far deeper issues related to company
philosophy and values. Companies that have built huge work forces of loyal employees often face
the classic questions: “How can we differentiate for performance and remain equitable? Do we
even want to differentiate for performance?” These companies then tilt towards analytical tools
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like conjoint analysis to understand the various reward tradeoffs that employees prefer. Some of
them, having found that all categories of employees are open to performance-based-pay, have
designed their rewards accordingly.
But, employees cannot restrict themselves to only two parameters: their employees’ views and
they own. The operating environment certainly plays an important role in the rewards scheme
design. Sometimes, tax and accounting laws allow employees to benefit most through cash
payments rather than through a variety of allowances and benefits. Also, employers have to
balance what they can afford with the kinds of returns they can expect to see over time, in light of
business profitability. Here they can balance their investments by allocating resources to a variety
of short-term and long-term incentives, so that they can factor in the level and contribution of
employees, the timings of payout as well as the spread of the return. In the case of a global IT
organization that we worked with, this balance was struck through a clear strategy to allocate a
higher variable pay spend to a segment of employees: higher performers and business drivers.
When the total reward package goes beyond compensation, and when the design of the package
considers the employer, employee, external and cost perspectives, companies can ensure that their
rewards package channellises and sustain one of the best, least replicable competitive advantages
there is: individual talent and commitment.
The Attrition answer:Alums, not foes
Does this imply that you will not loose valuable employees to companies that are paying better or
higher? No. it does not. Valued employees may still leave for “more money”. In other cases you
may want them to leave. But either way, if you have cared enough to structure a good rewards
package, the chances are that they will, not with animosity, but as alums and ambassador of your
employer brand, creating valuable goodwill.
A total reward is about letting people know that you are on their side. An approach that will pay
you rich dividends, whether they stay or leave.
Key Tenets for building a competitive total rewards framework
View rewards as an investment not a cost
Look beyond cash compensation to include benefits, careers, work lifestyles.
Focus on satisfaction scores with total rewards package
Align reward strategy with the company philosophy and values
Use voice-of-employees and related analytics to guide “trade-off” decisions
Respond to external environment, while identifying and nurturing what is unique to your
company Invest in communicating rewards package to your employees.
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ANNEXURE 2: STEPWISE REPRESENTATION OF COMPENSATION PROCESS
(a) Develop a program outline.

Set an objective for the program.

Establish target dates for implementation and completion.

Determine a budget.
(b) Designate an individual to oversee designing the compensation program.

Determine whether this position will be permanent or temporary.

Determine who will oversee the program once it is established.

Determine the cost of going outside versus looking inside.

Determine the cost of a consultant's review.
(c) Develop a compensation philosophy.

Form a compensation committee (presumably consisting of officers or at least including
one officer of the company).

Decide what, if any, differences should exist in pay structures for executives, professional
employees, sales employees, and so on (e.g., hourly versus salaried rates, incentive-based
versus non-contingent pay).

Determine whether the company should set salaries at, above, or below market.

Decide the extent to which employee benefits should replace or supplement cash
compensation.
(d) Conduct a job analysis of all positions.

Conduct a general task analysis by major departments. What tasks must be accomplished
by whom?

Get input from senior vice presidents of marketing, finance, sales, administration,
production, and other appropriate departments to determine the organizational structure
and primary functions of each.

Interview department managers and key employees, as necessary, to determine their
specific job functions.

Decide which job classifications should be exempt and which should be nonexempt.

Develop model job descriptions for exempt and nonexempt positions and distribute the
models to incumbents for review and comment; adjust job descriptions if necessary.

Develop a final draft of job descriptions.

Meet with department managers, as necessary, to review job descriptions.

Finalize and document all job descriptions.
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(e) Evaluate jobs.

Rank the jobs within each senior vice president's and manager's department, and then
rank jobs between and among departments.

Verify ranking by comparing it to industry market data concerning the ranking, and
adjust if necessary.

Prepare a matrix organizational review.

On the basis of required tasks and forecasted business plans, develop a matrix of jobs
crossing lines and departments.

Compare the matrix with data from both the company structure and the industry wide
market.

Prepare flow charts of all ranks for each department for ease of interpretation and
assessment.

Present data and charts to the compensation committee for review and adjustment.
(f) Determine grades.

Establish the number of levels - senior, junior, intermediate, and beginner - for each job
family and assign a grade to each level.

Determine the number of pay grades, or monetary range of a position at a particular level,
within each department.
(g) Establish grade pricing and salary range.

Establish benchmark (key) jobs.

Review the market price of benchmark jobs within the industry.

Establish a trend line in accordance with company philosophy (i.e., where the company
wants to be in relation to salary ranges in the industry).
(h) Determine an appropriate salary structure.

Determine the difference between each salary step.

Determine a minimum and a maximum percent spread.

Slot the remaining jobs.

Review job descriptions.

Verify the purpose, necessity, or other reasons for maintaining a position.

Meet with the compensation committee for review, adjustments, and approval.
(i) Develop a salary administration policy.

Develop and document the general company policy.

Develop and document specific policies for selected groups.
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
Develop and document a strategy for merit raises and other pay increases, such as costof-living adjustments, bonuses, annual reviews, and promotions.

Develop and document procedures to justify the policy (e.g., performance appraisal
forms, a merit raise schedule).

Meet with the compensation committee for review, adjustments, and approval.
(j) Obtain top executives' approval of the basic salary program.

Develop and present cost impact studies that project the expense of bringing the present
staff up to the proposed levels.

Present data to the compensation committee for review, adjustment, and approval.

Present data to the executive operating committee (senior managers and officers) for
review and approval.
(k) Communicate the final program to employees and managers.

Present the plan to the compensation committee for feedback, adjustments, review, and
approval.

Make a presentation to executive staff managers for approval or change, and incorporate
necessary changes.

Develop a plan for communicating the new program to employees, using slide shows or
movies, literature, handouts, etc.

Make presentations to managers and employees. Implement the program.

Design and develop detailed systems, procedures, and forms.

Work with HR information systems staff to establish effective implementation
procedures, to develop appropriate data input forms, and to create effective monitoring
reports for senior managers.

Have the necessary forms printed.

Develop and determine format specifications for all reports.

Execute test runs on the human resources information system.

Execute the program.
(l) Monitor the program.

Monitor feedback from managers.

Make changes where necessary.
Find flaws or problems in the program and adjust or modify where necessary.
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Notes
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6. ENGAGEMENT AND WORKPLACE MOTIVATION
The story of Infosys
Established in 1981, Infosys offers a complete range of software and consulting services. It is
today one of the most respected IT major internationally.
The sprawling campus of Infosys on the Hosur Road in the outskirt of Bangalore cannot escape
anyone’s notice. Spread over 20 hectare area the architecture of the glass and steel buildings is a
unique sight.
Each morning the majority of thousands of IT professionals employed in Infosys, Bangalore
arrive at the campus on shuttle bus service provided by the company. They have a host of options
for entertainment and relaxation from the moment they arrive at the campus. They can walk into
the spacious food courts for a mug of coffee or breakfast; start work-out in the gym or take a dip
in the Olympic size swimming pool. This does not end here – there are options like a mini golf
course, basket ball court, art gallery etc.
The workplace in Infosys has been designed to make the young engineers constantly charged and
committed. In order to save the employees from other day-to-day hassles there are ATMs,
helpdesks for travel and bill and credit card payments etc. Chartered Accountants visit the
campus regularly to help the employees fill their tax returns. There is also a clinic on the campus.
In Infosys, there is no difference between the top management members and a newly inducted
engineer when it comes to the common facilities. Everyone queues up in the cafeteria. Similarly,
they play an active part in social events to which employees’ families are invited.
In a path-breaking move, Infosys granted stock option to all employees which created 1773 rupee
millionaires at that point of time.
Infosys also is committed to learning and continuous development of it’s people. It has a very
well designed career management program for it’s employees. Grooming employees to be leaders
is a key theme in Infosys. The company has established an impressive Leadership Development
Centre in Mysore. The senior management spend a high percentage of their time here actively
assisting the general functioning of the Centre and also conducting workshops.
At the same time, Infosys has a strong performance orientation. It has a clear goal setting process
between the supervisor and the employee. Annual increment and variable pay have a clear
correlation with contribution. Infosys has been growing at a rate faster than the industry average
on a year-on-year basis. It is a great example of motivation and performance.
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6.1 RELATIONSHIP BETWEEN EMPLOYEE ENGAGEMENT AND PERFORMANCE
The Gallup Organization – one of the most leading HR and organization development consulting
organization in the world had conducted a survey in 36 companies seeking to establish a
correlation between employee engagement scores with business unit outcome data, such as
profitability, sales, employee retention, customer satisfaction etc. The correlation was positive :
highly engaged individuals were most often found in the high performance teams.
A joint study was published in 1997 by the University of
Sheffield, London School of
Economics and Chartered Institute of Personnel and Development in UK which was based on a
research conducted in medium- sized manufacturing companies. Researchers measured the effect
of HR practices in the companies, and used the same methodology to measure the impact of
technology; strategy; emphasis on quality; and research and development. HR was by far the
most influential, explaining 19% variation in profitability compared to research and development
which registered 6%, and technology which accounted for just 1 %.
6.2 DEFINITION OF EMPLOYEE ENGAGEMENT – THE HEWITT MODEL
Hewitt Associates – another great HR consulting company did a pioneering work on employee
engagement.
Put simply, engagement is a measure of the energy and passion that employees have for their
organization. It is to the extent to which the organization has captured the hearts and minds of its
employees. Engaged employees are those individuals who want, and who do actually take action,
to improve the business result of their organization. Hewitt observed three key behaviours in
employees that indicate high levels of employee Engagement. Engaged employees :

STAY - they have an intense desire to be a member of the organization.

SAY – they are passionate advocates for their workplace. They speak positively about
their organization to co-workers, potential employees, and customers.
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
STRIVE – they go beyond what is minimally required to produce extraordinary service
and results for customers and colleagues.
Hewitt Associate has identified the following factors as the engagement drivers :
6.3 ENGAGEMENT DRIVERS
People
 Senior Leadership
 Manager
 Co-worker
Work
 Intrinsic Motivation
 Influence
 Work Tasks
 Resources
Opportunities
 Career Opportunities
 Recognition
Quality of Life
 Work/Life Balance
 Physical Work Environment
 Safety
Procedures
 Policies
 HR
Compensation
 Pay
 Benefits
Drivers with the Strongest Relationship to Engagement, by Country
Country
Driver 1
Driver 2
Driver 3
Driver 4
India
Opportunities
Senior
Work Activities
Immediate
Leadership
US
Work Activities
Opportunities
Manager
Senior
Immediate
Leadership
Manager
China
Opportunities
Resources
Benefits
Work Tasks
Australia
Opportunities
Policies
HR
Recognition
Singapore
Work Tasks
Opportunities
Recognition
Policies
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6.3.1 The Gallup Organization’s Model
The Gallup Organization, after years of research, has come out with the path breaking Q12
Model of measuring employee engagement. These 12 questions which are asked to the
employees are very simple, non-threatening yet extremely powerful, as they help measure the
engagement level in an organization. We reproduce these questions here as these give an
indication at the factors that are important to employees. If the scores are higher, then the
engagement level in the organization is believed to be high. Here are the questions :
1. Do I know what is expected of me at work?
2. Do I have materials and equipment I need to do my work well?
3. At work, do I have the opportunity to do what I do best everyday?
4. In the last seven days, have I received recognition or praise for good work?
5. Does my supervisor, or someone at work, seem to care about me as a person?
6. Is there someone at work who encourages my development?
7. At work, do my opinions seem to count?
8. Does the mission/purpose of my company make me feel like my work is important?
9. Are my co-workers committed to doing quality work?
10. Do I have a best friend at work?
11. In the last six months, have I talked to someone about my progress?
12. At work, have I had the opportunities to learn and grow?
You may be wondering why there are no questions dealing with pay, benefits, senior
management, or organizational structure. The Gallup consultants while developing the model had
included questions related to all these aspects; but they disappeared at the analysis stage. While
these issues are important they are important to everyone in the organization – good, bad or
mediocre. Yes, if an organization is paying 30 % below the market average, it may have difficulty
in attracting people and retaining it’s good employees. But bringing it’s pay and benefits up to
market levels, while a sensible first step, will not take the organization very far. These kind of
issues can take you to the game, but they can’t help you win.
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6.3.2 Employee Satisfaction Survey
As an HR Manager, you may like to measure employee satisfaction level in your organization. A
model has been presented below which outlines a typical Employee Satisfaction Survey (ESS)
framework :
Employee Satisfaction Survey Model
What is the purpose of an ESS?
- - Development
- - Evaluation
- Measuring Organisation’s
practices
- Communication
How is data collected?
- - The survey is anonymous
- Structured questionnaire
given to all employees
- The data is sorted and
analyzed by an outside agency
- Comments are invited from
all employees
- Communication
How is feedback given?
-
-
-
- Percentage comparisons of
the data analyzed
- Comments edited and
presented as employees
- Extremities are focused on to
draw conclusions
How is success measured?
-
- Compare the results over
period of 3-4 years
- Look for changed satisfaction
levels
How is action taken?
What is assessed?
-
Who gives the inputs
-
- Management practices and
managers
- Attitudes
- Values
- Work environment
- Pay and benefits
- Culture
Who gets the feedback?
-
- All employees
-
Who is assessed?
-
- Top Management and senior
managers
- Managers and employees at
all levels
- The organization
-
- Focus on a couple of key
issues that effect employees
- Get a cross-cultural team to
analyze them and take action
- Monitor the change at regular
intervals
- Conduct the ESS regularly to
measure change
-
As you would have already understood that in order that an employee stays motivated and keeps
performing in a productive manner, the following factors are important :
1. The vision and mission of the company is known to every employee and efforts are made
to establish the connect between the employee’s role and the vision and mission of the
organization;
2. Every employee has a clear Job Description ( JD ) and he knows what he is expected to
do;
3. An employee is given feedback on his performance and contribution – good performance
and team behaviours are encouraged and unproductive and counter-productive
behaviours are actively discouraged;
4. A set of stretch goals is set in the beginning of the year which is difficult but potentially
achievable;
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5. Job content meets job-holder’s expectations;
6. An organization culture which is free, friendly and empowering and encourages people to
take risks and experiment and tolerates un-intentional mistakes;
7. The supervisors or bosses
play an important role in developing, mentoring and
encouraging their employees;
8. A communication framework is available which not only does inform an employee on
success stories as well as issues and concerns of the company but also makes the
employee’s voice heard;
9. The Reward System in a company clearly demonstrates a positive bias for contribution;
10. The organization is committed to continuous learning and development of it’s people.
11. The workplace in a company offers a fun atmosphere bringing in an element of
informality.
6.4 NON- MONETARY REWARDS
Motivation is not only about inspiring people to work harder; it is also an effective way of
retaining people and building loyalty. It has now been widely acknowledged that beyond a point,
money has a limited role to play as a motivator. Efforts have been made by several organizations
to make a workplace vibrant by taking into account the social and self esteem needs of
employees. We give below certain examples:
1. ‘You can Make a Difference’ Award at Colgate in order to encourage innovative ideas;
2. ‘Star of the Month’ Award by Reliance Retail for best performance of a Custom Service
Associate
3. Annual Performance Award by different companies;
4. NIS – Sparta, a leading training organization sends a gift cheque in favour of the spouse
on wedding anniversary;
5. NIIT gives a gift cheque on the birth of first child; gives a compulsory holiday on
January1 by designating it as “ Granny Gratitude Day”; gives a dating allowance to single
employees; uses the award – winning paintings drawn by employees’ children for the
company calendar.
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TYPES OF NON-MONETARY REWARDS
Non-monetary Rewards
-
Treats
- Free Lunches
- Festival bashes
- Coffee breaks
- Picnics
- Dinner with the boss
- Dinner for the family
- Birthday treats
-
-
Social Acknowledgement
- Informal recognition
- Recognition at office get-togethers
- Friendly greeting, smiles, e-mail
- Solicitation of advice, suggestions
- Membership of recreation clubs
- Use of company facilities for
personal projects
Knick-Knacks
- Desk accessories
- Company watches
- Tie-pins, brooches
- Diaries/Planners
- Calendars
- Wallets
- T-Shirts
-
Awards
- Trophies
- Plaques
- Citations
- Certificates
- Scrolls
- Letters of appreciation
-
Office Environment
- Redecoration
- office with a window
- Piped music
- Flexible hours
-
On the Job
- More responsibility
- Job rotation
- Special assignments
- Training
- Representing the company at
public foray.
-
Tokens
- Movie tickets
- Vacation trips
- Coupons redeemable at stores
- Anniversary, dating and birthday
allowances/presents
6.5 IMPORTANT THEORIES ON MOTIVATION
An individual’s own motivation level has been recognized as an important competency to
accomplish the tasks assigned to him. It is because, to excel in any goal accomplishment an
individual’s ‘ability to do’ has to backed up by his ‘love to do’. This ‘love to do’ is nothing but
his motivation. People with differing levels of motivation demonstrate different levels of
performance in an organization.
Considerable research has been carried out and a number of theories on what motivates people
have been propounded. A few important theories have been given below :
1. Need Hierarchical Theory by Abraham Maslow
2. Herzberg’s Hygiene - Motivation Theory
3. Adam’s Equity Theory
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4. Vroom’s Expectancy Theory
Need Hierarchical Theory
According to Maslow, a man has a hierarchy of 5 needs – Basic, Security, Social, Esteem and
Self- actualization. Maslow considered first two - Basic and Security needs as lower order needs
and remaining three as higher order needs of an individual. The differentiation between the two
orders being that while lower needs are satisfied externally by things such as wages, the higher
order needs are satisfied internally to the person.
Needs
Basic
Security
Social Needs
Esteem Needs
Self - Actualization
General Examples
Organizational Examples
Food, Water, Air, Sleep
Pay
Shelter, clothing, safety from Heath and Accident Insurance,
danger
Provident Fund and Pension,
ESI etc.
Love,
Affection, Peer group relationships ,
Belongingness
friendly atmosphere in an
organization
Recognition
Job Title
Achievement, Self-fulfilment
Challenging Job
6.5.2 Herzberg’s Motivation & Hygiene Theory
Frederick Herzberg’s Motivation and Hygiene Theory assumes that one group of factors,
motivators, account for high levels of job satisfaction and motivation. However, absence of
hygiene factors can cause dissatisfaction with work.
Motivators
 Achievement
 Recognition
 Work itself
 Responsibility
 Advancement
Hygiene Factors
 Interpersonal Relationships
 Company Policy/ administration
 Supervision
 Salary
 Working conditions
The implication of Herzberg’s research for management and HR practices is that even though
managers carefully consider and address hygiene factors to avoid employee dissatisfaction,
people may not be motivated to work harder.
150
6.5.3 Adam’s Equity Theory
According to J Stacy Adams, Equity serves as a motivator. People want to be treated with
fairness. Equity is defined as the perceived fairness of what a person gets compared to what he
does. Inputs are what a person brings to the organization, including educational level, age,
experience, productivity, and other skills and efforts. The items received by a person, or the
outcomes, are the rewards obtained in exchange of inputs. Outcomes could be both tangible and
intangible – pay, benefits, recognition, achievement, prestige etc.
The individual’s view of fair value is critical to the relationship between performance and job
satisfaction because one’s sense of equity is an exchange and comparison process. This means, an
individual not only compares his own outcomes to his own inputs but also he compares with his
peers and those outside his organization over their Outcome vs. Inputs. Whether he feels satisfied
or not would largely depend upon how he fares in this comparison.
6.5.4 Vroom’s Expectancy Theory
This theory states that individuals base decisions about their behaviours on their expectations that
one or another alternate behaviour is more likely to lead to desired outcomes. The three crucial
aspects of behaviour-outcome relationship are given below:
- Effort-Performance expectation refer to employees’ beliefs that working harder will lead to
performance. If people do not believe that working harder leads to performance, then their efforts
may diminish.
- Performance-Reward linkage considers individuals’ expectations that high performance actually
will lead to rewards. The performance-rewards relationship indicates how instrumental or
important effective performance is in producing desired results.
- Value of Rewards refers to how valuable the rewards are to the employee. One determinant of
employees’ willingness to exert effort is the degree to which they value the rewards offered by
the organisation.
This model of motivation suggests that individual’s levels of efforts (motivation) are not simply
functions of rewards. Employees must expect that they have the ability to perform the task well;
they must feel that high performance will result in receiving rewards; and they must value those
rewards. If all three conditions are met, employees will be motivated to exert greater effort.
151
EXERCISE – Among you, who have some work experience, can take up this exercise of
ranking the motivating factors in your company. But all of you must notice the statements
under Column 1 and 2 to understand the factors which are supposed to create a motivating
workplace.
Ranking Workplace Motivators
Motivator
Description
Economic Rewards
Money is an important motivator.
Compensation can be augmented by special
achievement incentives, Spot bonuses, and cashequivalent rewards.
Social and psychological meaning (recognition and
sense of accomplishment) outweighs additional
money and perquisites.
Promotions
Formal
Rewards
Example
Rank
Psychic High- visibility recognition and other rewards of
social significance are remembered for years.
Informal
Rewards
Psychic Positive feedback from managers, peers, and others
has a profound impact on motivation. It makes
people feel appreciated for what they do and who
they are, and for their unique abilities, skills, and
knowledge.
Opportunity to Grow Organization from a win-win partnership with
employees to maintain a talented work force.
Leadership
Goals
By presenting a clear purpose, a vision worth
striving for, and providing encouragement, leaders
imbue people with hope, enthusiasm and
determination.
Goals energize people, inspire exceptional effort,
provide a clear sense of work is expected, and offer
challenge.
Challenging
and The nature of work as a source of motivation varies
Stimulating Work
with personality. The work is as important a
motivator as money.
Autonomy
Fun
Freedom to act, to make decisions, to work
independently, is most valued by people. It is crucial
to self-worth, strongly influences the decision of
people to join and stay with an organization.
Many workplace are woefully devoid of smiles and
laughter, yet humor brightens the day infuses spirit
into the culture.
152
and
How Motivating Is Your Organization?
Directions: Use this exercise to identify ways your organization motivates employees. Check (+)
if motivation occurs and check (-) if improvement is needed.
+
-
Motivating factors in my company
The organization has clearly defined vision, mission, goals, and objectives.
Performance criteria are clearly defined and communicated to all employees.
Resources are provided to help employees attain their goals and objectives.
Rewards and recognition are a part of the culture.
A support network is in place so employees know where to go for assistance
when needed.
Whenever, possible, the organization takes advantage of employee expertise by
including them in meeting, discussions, and other fact-finding initiatives.
Timely information sharing, including learned, occurs at all levels of the
organizations.
Communication is open and encouraged.
The organization has a conflict resolution model available to all employees.
The organization celebrates the successes of its team and employees.
The organization supports personal growth with training opportunities and
tuition reimbursement.
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Notes
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7. TRAINING AND DEVELOPMENT
The competitive pressures facing organizations today require employees whose knowledge and
ideas are current and whose skills and abilities can deliver results. They need to learn how to
execute according to the Standard Operating Procedures (SOP) of the company, how to make
decisions on their own to serve the customer, work well with others, and sift through vast
amounts of information. In this context on the job training becomes all the relevant & necessary.
Training can be defined as a planned programme designed to improve performance and bring
about measurable changes in knowledge, skills, attitude, social behaviour and values of
employees for doing a particular job.
7.1 ESSENTIAL COMPONENTS OF TRAINING
Training programmes generally consist of 5 major components that constitute integral parts of a
training programme. Trainee is the important component among these five components. Trainings
should ideally be revolving around the training needs of the trainee. As all the components are
controllable, one needs to have optimum of each of them to conduct effective training
programme.
Trainee
Trainer
Training Context or Situation of business
Content
Training environment
7.2 TYPES OF TRAINING
Training can be classified in many ways. One of the most widely used method is based on the
location of training programme. There are different types of trainings to suit different kinds of
situations & objectives. Some of the common types of training are:
Class room training
On the job training
Computer based training/Self paced training
155
7.3 TRAINING CYCLE
A simple model of training process is as shown below:
Identification of
Training Needs
Creation of Competency
Gap Matrix
Design Document for
Content Development
Continuous Improvement Process
Evaluation
Training Rollout/Delivery
Program
Pilot
Development of
Content
Brief explanation of each of the above mentioned steps are as follows:
1. Identification of Training Needs: The process of identifying training needs.
Retail organisations now a days do variety of business in different formats which offer a wide
range of products like jewellery to agricultural produce. Although there are common training
themes that can be leveraged throughout the company, each department will have its own unique
set of training needs. The annexure 1 presents a snapshot of the typical training needs of a Store
Associate in an organised retail store.
2. Creation of Competency Gap Matrix: The training needs can be mapped into competency
dictionary for all roles in an organisation to identify the competency gaps that need to be bridged
through the training interventions.
Example : A fertilizer sales man knows about the fertilizers but has a gap in communication. We
can design a specific training programme for communication.
3. Design Document for Content Development: Based on the competency gap matrix, a high
level design document for content development can be prepared.
4. Development of Content: Once the content design document is meeting the requirements of
organizational goals the content process will begin one can also think of Subject Matter Experts
in developing contents.
Example: Let us design a training programme for Tractor Operators. The team that designs
content would consist of following team members as shown in picture below.
156
Tractor implements expert
Tractor Service Engineer
Content
Development Team
Tractor Sales Manager
Soil Scientist
To develop content for training tractor operators we need to set up cross functional team
consisting of a Training Content development expert, Soil Scientist, Tractor Sales Manager,
Service Engineer & Tractor implements expert.
The Content Development Team shall work in close coordination with the other team members to
finalise the Standard Operating Procedures (SOP’s), Training Needs and Competency Gaps to
design content, relevant to tractor operators.
5. Program Pilot: After developing the training content it necessary to validate the content
before we conduct the training programmes. During the pilot stage one needs to run a mock
training programme in the presence of all the team who were involved in the content
development. Any modifications to the content based on the sample run can be incorporated at
this stage.
6. Training Roll-out/ Delivery : This is the stage where you plan to train large no of employees
with the content developed. While we plan to roll-out we need to keep in mind the following
points
i) Schedule of training programme
ii) Venue
iii) Intimation to trainee & trainer
iv) Training infrastructure like class room, seating arrangement etc.
There is a separate section below on “training delivery”
157
7. Evaluation: The knowledge/Skill/Attitude acquired by the trainees to be evaluated at this
stage. There are different methods & levels to evaluate a training programme. Two common
methods or levels of training evaluation as:
i) Effectiveness of Training intervention for the organisation
ii) Use of training programme to trainees.
Kirkpatrick’s Model
One of the widely used methods of training evaluation was given by Kirkpatrick. This model
evaluates the training programme from both the above dimensions.
The figure below represents the Kirkpatrick’s Model for Training evaluation.
Reaction
Reaction
Whatdid
didthe
the
What
participants
feel
participants feel
about
the
program?
about the program?
TrainingFeedback
Feedback
Training
Form
Form
Learning
Learning
Effectiveness
Effectiveness
Business
Business
Impact
Impact
Whatdid
didthe
the
What
participants
participants
learnfrom
fromthe
the
learn
program- -knowledge,
knowledge,
program
factsetc.?
etc.?
facts
Havethe
theparticipants
participants
Have
ofthe
thetraining
training
of
program
applied
program applied
theacquired
acquired
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Kirkpatrick’s Model: This model evaluates training effectiveness at 4 levels as follows
1) Reaction: This stage is when we take the feed back of the trainees at the end of the training
programme.
Example: Ask trainees about what they like or dislike in the programme. Were they happy with
the ambience, food, training aids etc.
An annexure is attached to show a sample of feedback form
158
2) Learning / Retention: This is the second level of training evaluation. This measures how
much a trainee has retained from the training programme. One can conduct a written test at the
end of the training. It tests the understanding & memory of a trainee.
3) Effectiveness: We can measure the effectiveness of training at workplace. At this level we
measure weather a trainee is using what he has learnt in the training programme. Generally the
supervisors of an employee observe and record the findings on a evaluation sheet.
4) Business Impact: At this level we measure if the training programme is useful to the
organisation. Weather the training programme is giving more business & revenues. It is difficult
to measure the training effectiveness at this level.
Levels of Learning Organisation: Organisations learn at 3 levels as represented below
Organisation
Continuously builds the capability to regularly create market opportunities
Quickly capitalizes on market opportunities by identifying existing organizational capabilities
Defines emerging market demands to determine new capability requirements
Teams
Teams work together to share assumption, learn through dialogue, build new mental maps and
actively transfer their learning to others
Individual participants gain self understanding and develop skills for thinking and acting more
effectively
The organisation supports empowerment and gains problem solving and decision making
capabilities
Individuals
Individuals are willing to learn continuously, competencies, skills & knowledge
The organisation reward for learning new things
Key words are like Effective feedback
Teams gain effective members
159
7.4 TRAINING DELIVERY
Training can be delivered on a distributed learning platform which can include one or more of the
following methods
One to one training-OOT
Class Room Training-CRT
E-learning & video based learning-CBT(Computer Based Training)
On the Job Training-OJT
Web conferencing.
Outbound training.
One to One training-OOT: this method is to train an employee on a specific skill for a short
duration. This mode is very effective for skill transfer. It is expensive & time consuming.
Example: a) How to use a seed drill
b) Soil sample collection.
2) Class Room Training-CRT: This is the most commonly used method of training delivery
platform. Most of organisations use this mode for training their employees. To make class room
training effective one should have good training infrastructure and aids/tools like
a) Class room with right temperature, light & ventilation
b) Silent & clean environment around the training room.
c) Class room should have comfortable seating arrangement with writing facility
d) Writing board & markers
e) LCD projector with pointer
Example: i) Crop pattern planning training
ii) Integrated Pest Management training
iii) Irrigation methods training
3) E-learning/ Computer Based Training – CBT : With the advent of IT & ever increasing
literacy rate CBT has gained popularity. In this method one learns with the help of computers.
Cost effective, overcomes distance & locational constraints. Effectiveness of training is a
drawback & is one way.
160
Examples: 1) Package of practices training
2) Agro climatic zones understanding.
Internet learning portal
Internet learning portal is a web based, on demand point of entry into choices for learning. It is a
relatively inexpensive way to jump-start both education & training interventions. Organisation or
individuals can access a learning portal to
a) Find education & training resources
b) Participate in on line discussions
c) Find, Register & buy training
Advantages of learning portals
Provides organisations a ready virtual university covering large areas of interest
One can indulge in online knowledge sharing
Service is available on 24/7 basis
One can access from home or office or anywhere
Generally updated instantly
Provides just in time training programmes
Allows high speed upload & download facilities
You do not need IT support or trainer intervention
One can learn at his own pace of learning
4) On the Job Training – OJT: here an employee learns by doing. This method is more suitable
for skills training & is effective method. This method takes more time & expensive.
Example: 1) Tractor drawn implements use
2) Silk worm rearing.
Advantages of On the Job training
a) Does not require special training facilities
b) Does not require large training department
c) Takes less time to train
d) Does not require samples or equipments to train
e) Does not require a training expert
f) Cost effective for training an individual or small group
Challenges of On the Job Training
a) Some times disrupts the workplace
161
b) Experts may lack training skills
c) Experts may not follow procedures
d) Gives the trainer an extra workload
e) May lower productivity
5) Web conferencing: This is the latest method of on line training. Here the trainer speaks live on
a web camera & trainees are geographically distributed & learn on line. Once can interact with
the trainer. This method is relatively less expensive & some times interrupted by technical snags
like server malfunction & breaks in unlinking to studio etc.
This platform is being extensively used by
Reliance Web world for courses offered by IIMA, IIMC & IIML
Hughes network for courses offered by IIMB, XLRI
Indira Gandhi National Open University
Out bound Trainings: This mode of training is being used for imparting a specific Attitude or
Skill. Most commonly used for developing Team Spirit, Relation building Socialising etc.
Example: 1) Rive rafting
2) Trekking
Future Trends
Training departments need to develop a mechanism for creating cost effective, continuous stream
of problem specific training programmes.
Form alliances with other training organisations to collaborate on contents & other such things to
get access to more information & reduce cost.
More and more emphasis on technology aided learning like online & computer based Learnings.
Conclusion
Training is a continuous process & it is not just one time intervention. Training brings changes in
Knowledge/Skill/Attitude of a trainee. Training will have a specific objective & all the activities
in a training cycle should revolve around this objective. Training consists of 5 components viz.
Trainee, Trainer, Content, Context & Training environment. Training effectiveness can be
measured at different levels as per Kirkpatrick model. Class room method is the most widely used
mode of training & it needs the entire training infrastructure in the training room. Based on
Delivery mode trainings can be classified into different types. Training aims at developing
employees who inturn with positively contribute the organisation goals.
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ANNEXURE-1
Training needs identified
Number
Training Need
Training Program
Organisation Background
Induction
2
Products presentation
Introduction
2
HR Policies & Employee self Service
Employee Portal
2
Training hours
Refresher of Package of
practices
Introduction to Fertilisers, Seeds & Pesticides
Quality
Quality of Fruits & Vegetables
Farmer
Interaction with Farmers
Management
Evaluation
Certification
163
4
4
Relation
2
4
of
ANNEXURE-2
Competencies to be Trained for employees at a F & V consolidation center
Name
of
Positions
Mission Critical
Essential
Center Incharge
Operating Procedures
Quality
SAP
Product knowledge
Decision Making
Planning executive Product movement & Pricing
Post
Nice to Know
harvest
engineer
Equipment handling
Quality
Safety precautions
Shift Incharge
Good Manufacturing Practices
Quality
People management
Quality Executive
Quality
GHP
People management
SAP
Quality
Equipment handling
Negotiation, Local crop pattern
Quality
Decision Making
Inventory
Executive
Sourcing
Executive
TOTAL
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ANNEXURE-3
Individual Skill Assesment Sheet
Assesment Scale : Beginner=B, Intermediate=I, Expert=E
Using the scale provided, rate yourself in the following areas
Skills
B
I
Personal Computer Skills
MS Word
Power Point
ABC flowchart
Lotus Notes
E-mail
Internet
Business Areas
Administrative
Communication
Customer Service
Leadership
Quality
Sales
HR
Project Management
Statement of work development
Proposal writing
Pricing
Resource planning
Budgeting
Analysis
Crop planning
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E
Comments
Productivity
Fertiliser consumption
Irrigation
Seed production
Crop protection
Extension
Farmer Relation management
Cooperatives interation
Field visits
ANNEXURE-4
Training Techniques template
Sl.
No
Technique
Description
1
Induction Training
Orientation for new recruits
2
Stress management
Trainings to cope up with work related stress
3
Delegation
Sessions for understanding importance of decentralization
4
Negotiation
Role-play to develop bargaining skills
5
Audio Visuals
Use of films , videos, audios, slides etc
6
Self directed learning
Learning by own self
7
Programmed instruction
Methodical breakdown of tasks into small activities
8
On the Job training
Done at work site under supervision
9
Computer based training
Use of computers to learn
10
Simulation
Teaching by reaction of work situation under controlled conditions
11
Games
Structured tests of skills & aptitude
12
Ice-Breakers
Games to get team members to know each other
13
Leadership games
Exercises to teach different types of leadership
14
Skill games
Tests to develop analytical abilities
15
Communication games
Exercises to build bias free listening & talking
16
Strategic planners
Games to test ability to plan ahead
17
Team building games
Exercises requiring collaborative efforts
18
Creativity games
Tests to arrive at multiple solution
19
In-Basket exercises
Evaluating for response to imaginatory situations
166
20
Role play
Adoption of roles
21
Role reversal
Exercises to teach plurality of view points
22
Doubling
Brings out ideas which are often not expressed
23
Tag teams
One role play alternatively by two participants
24
Mirroring
Training with external perspective
25
Mono drama
Insight into a given interaction
26
Shifting physical positions
Highlighting of communication problems
27
Structured role playing
Role play with predetermined objective
28
Multiple role playing
Providing a common focus of discussion
29
Built in tension
Teaching the importance of resolving matters
30
Case study
Problem solving discussion
31
Shadowing
Working under senior to watch & learn
32
Coaching
Senior management leading subordinates
33
Out bound training
Adventure sports for teams
34
Grid programme
Determination of effective leadership
35
Brain storming
Discussions for developing innovative solutions
36
Lateral thinking
Thinking randomly to come up with new ideas
37
In-put- output technique
Suggesting solution specifically
38
Morphological analysis
Listing of alternatives
39
Garden technique
Steering a discussion to crystallize solutions
40
Attribute listening
Isolation, selection evaluation of a problem
41
Synectics
Probing subconscious mind to invoke intuition
42
Cross cultural training
Programmes to teach specifics of varied culture
167
ANNEXURE-5
168
NOTES
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8. DEVELOPMENT INTERVENTIONS (Other than Training)
Personal Development means creating opportunities for individual employees for acquiring new
knowledge, skills, attitudes, execution and leadership competencies etc. so that the need of
continuous improvement of an individual is met as well as the quality of human resources in an
organization augments.
Almost every Individual employee wants to develop in an organization. Classroom Training as a
developmental intervention has limited effect; people develop in an organization through multiple
means. Progressive organizations consciously create several development opportunities for their
employees. As a matter of fact, creating learning opportunities has been one of the most
important factors for attracting and retaining talent by the organizations.
How much an individual does benefit from the development opportunities largely depends upon
the quality and intensity of the interventions of an organization and the personal initiative of the
individual. So in personal development, an individual has a very important role to play.
Personal development includes feedback, coaching, mentoring, emotional intelligence, and career
management & development.
8.1 FEEDBACK
Feedback means informing people about how others perceive their actions and communications.
It may sound easy but many people are reluctant to give feedback because there is a chance that
the other employee may feel hurt. Under the circumstances, it is usually up to each employee to
solicit feedback by approaching others with questions, such as:

What should I do?

How would you handle this situation?

What do you think?

How would you rate this issue on a scale of 1 to 5?
170
Feedback should be sought from a person whose opinion an employee respects and who will
encourage the employee to improve his performance. Therefore, the credibility and integrity of
the person giving feedback are very important.
Managers and supervisors, while giving feedback should focus on behaviour not on the person.
They should give witnessable events as examples. The feedbacks should also be presented in a
manner that is perceived as an opportunity and not a threat.
While receiving feedback, an employee should :

Ask for clarification or verification of information that is not completely understood;

Remain objective about what is being said;

Decide whether the feedback is valid;

Provide an appropriate response like a ‘Thank you’ or paraphrasing the feedback
After receiving feedback, employees must convert the feedback into an action or proposal for self
– improvement.
8.2 COACHING
Coaching is an intervention designed to help employees gain competencies and overcome barriers
to improved performance. It is one-on-one suggestions relative to observable workplace situations
and usually given by a manager of the employee. It can be formal and planned or spontaneous
and “on the spot”.
A coach – whether he is a Manager in the organization or on the cricket ground – clarifies the
expectations associated with the job; provides training opportunities and resources required for
optimum performance; create conditions those are inspiring and providing feedback and praising
employee successes.
In his book ‘Coaching Skills’ Robert Lucas presents an eight-step process for coaching:
1. Establish reasonable goals with the employee: Goals should be attainable in terms of the
employee’s skills and abilities. Success indicators might be revenue or reduced costs,
quality, quantity or timelines.
171
2. Collect performance data: Gather large amounts of data regarding an employee’s
performance to ensure a thorough analysis of performance.
3. Analyze Performance: Analyze performance information to determine performance gaps
and ascertain the reasons e.g. knowledge, skill etc. which may have contributed to the
gap.
4. Review and modify performance goals, if needed after a discussion with the employee.
5. Identify developmental resources like training etc.
6. Develop an action plan with goals and resources defined.
7. Implement strategies: the employee should have the resources, tools, information
required to accomplish the goals.
8. Evaluate performance: Schedule follow – up sessions to discuss progress and provide
additional resources, if need be.
Even CEOs need a coach – this is a recent phenomenon called Executive Coaching. The
Executive Coaches are outsiders. As you know, people in the highest level of organizational
pyramid are very lonely. They need a sounding board to know how are they performing and how
can they do better. It is something akin to Tiger Woods having a coach….. as a matter of fact,
Tiger Woods considers his coach as the most important person in his life !
Below is given a table for assessing one’s coaching skill. As far as you are concerned, please
see the statements under the first column of the table – these statement shows what are
things does a coach need to do. When you really have an opportunity to coach someone –
may be, down a few years from now – you can assess yourself using this format.
Table: Assessing Coaching Skills
Direction: Use this table to assess your coaching strengths and areas for improvement. Rate
yourself on each statement Reflect on situations when you exhibited that behavior. Jot down ideas
for your own personal performance improvement based on your reflection. Be your own coach.
Yes
1. I provide frequent, timely, and feedback.
2. I ask open-ended questions and listen to the responses.
172
No
3. I never assume what motivates as employee. I ask.
4. I applaud employee successes.
5. I work with employees to develop measurable and attainable goals.
6. I provide the resources employees need to succeed.
7. I take time to discuss new ideas and initiatives with employees.
8. I solicit and follow up on employee suggestions.
9. I encourage creative problem solving.
10. I encourage open and honest communication.
8.3 MENTORING
Mentoring is one-on-one relationship between a more experienced employee (mentor) and a less
experienced employee (mentee).
Mentoring and coaching are often confused. Although
mentoring uses many of the techniques of coaching, it goes far beyond – it is a relationship in
which a mentor shares his personal experiences, wisdom etc.
Most of the organizations do mentoring for their high potential young managers. The mentors are
normally the senior people in the organization, who have had a demonstrated track record of
achievement in the organization. Mentors and mentees are usually chosen from different
departments. This helps establish a very congenial relationship between them.
A mentor plays four key roles in an organization:

Role Model : practice the values the organization endorses
173

Coach : clarify the organization’s culture and political structure so mentees can correctly
direct their efforts

Broker : help the mentees establish the contracts needed to succeed;

Advocate: recommend and support the mentee for projects and task groups.
Who should be chosen as a mentor? The criteria associated in choosing a mentor are the
following:
A mentor

should possess strong interpersonal skills

Has contacts and influence inside and outside the company

Recognizes others’ accomplishments

Has excellent supervisory skills

Willing to be available to mentee.
Why is mentoring required?

Attract and retain top talents

Upgrade the employee’s skills and knowledge

Promote diversity of thought and style

Develop leadership talent

Preserve institutional memory

Create inclusion

Foster a collaborative environment

Strengthens the competitive advantage of a company
At some point in life you would have mentored some one and some one else would have
mentored you. Reflect those experiences in mind and fill up the table given below. Most
importantly, the statements under Column 1, give you an insight on what actually the
Mentors do.
174
Table: What Mentors Do
Directions: Following is a list of things that mentors do. Use this list to determine if you would be
a good mentor. As appropriate for each one. Check “others have done this for me” or “I’ve done
this for others” or both.
Others have done I’ve done this
this for me
Set high expectations of performance
Offer challenging ideas
Help build self-confidence
Encourage professional behavior
Offer friendship
Confront negative behaviors and attitudes
Listen to personal problems
Teach by example
Provide growth experiences
Offer quotable quotes
Explain how the organization works
Coach mentees
Stand by mentees in critical situations
Offer wise counsel
Encourage winning behavior
Inspire their mentees
Offer encouragement
Assist with mentees’ careers
175
for others
8.4 EMOTIONAL INTELLIGENCE
Daniel Goleman, a psychologist in US, created the Emotional Intelligence framework. As a
matter of fact, this concept has attracted a lot of attention in the corporate world. But what is
emotional intelligence (EI)?
It essentially involves two things. First, the high EI person
recognizes and deals with the inner feelings and thoughts of others in an effective way. Secondly,
EI means the ability to understand one’s own impact on others and the high EI person knows how
to deal with the feelings of others. A high EI person manages his team very effectively.
Emotional Intelligence is critical to the success of organizations. According to Goleman, “the
more the leader exhibits competencies like initiative, nurture of others, team leadership, selfconfidence, drive to achieve, and empathy, the more positive the organizational climate. The
more inspired people are, the more loyal they are. It is an organization where the best people stay,
because they love what they do. And, the more an organization has that climate, the better its
business performance, as measured by profit growth, net operating income, growth in sales,
growth in earnings, attaining business goals.”
Goleman’s Emotional Competence Framework
Personal Competence
Social Competence
How we manage ourselves
How we handle relationships
Self- Awareness : Knowing one’s internal Empathy : Awareness of others’ feelings,
states, preferences, resources, and intuitions – needs, and concerns – understanding others,
emotional
awareness,
accurate
self- developing
assessment, and self- confidence
others,
service
orientation,
leveraging diversity, and political awareness
Self – Regulation : Managing one’s internal
states, impulses, and resources – self-control, Social skills :
trustworthiness, conscientiousness, adaptability responses
and innovation
in
communication,
Adeptness eliciting desirable
others
conflict
–
influence,
management,
leadership, change catalyst, building bonds,
Motivation : Emotional tendencies that guide collaboration,
or facilitate reaching goals – achievement, capabilities.
drive, commitment, initiative, and optimism
176
cooperation,
and
team
Many organizations are developing awareness of EI through workshops and training programmes.
It is being increasingly realized that a more emotionally intelligent workplace is able to leverage
it’s human capital in a much better way by fostering better team work, collaboration and thereby
harnessing it’s intellectual strengths.
8.5 CAREER MANAGEMENT AND DEVELOPMENT
Good organizations take responsibility of career management and development of their
employees. This is done to
i.
meet the aspiration of employees so that an organization is able to retain the best
talent; and
ii.
build multiple skills and competencies among the managers and employees
iii.
create a leadership pipeline in an organization
There are several ways the organizations create opportunities for their employees. A few are
included in this chapter to give you an overview. The areas we have covered under career
management and development interventions are:
1. Job rotation
2. Understudy
3. Career Pathing
4. Succession Planning
8.6 JOB ROTATION
Job rotation is an approach to management development where an individual is moved through a
schedule of assignments designed to give him or her, a breadth of exposure to the entire
operation.
Job rotation is also practiced to allow qualified employees to gain more insights into the
processes of a company, and to reduce boredom and increase job satisfaction through job
variation.
177
At the senior management levels, job rotation - frequently referred to as management rotation, is
tightly linked with succession planning - developing a pool of people capable of stepping into an
existing job. Here the goal is to provide learning experiences which facilitate changes in thinking
and perspective equivalent to the "horizon" of the level of the succession planning.
For lower management levels job rotation has normally one of two purposes: promotability or
skill enhancement.
In many cases senior managers seem unwilling to risk instability in their units by moving
qualified people from jobs where the lower level manager is being successful and reflecting
positively on the actions of the senior manager.
An organized and helpful way to develop talent for the management or executive level of the
organization is job rotation. It is the process of preparing employees at a lower level to replace
someone at the next higher level. It is generally done for the designations that are crucial for the
effective and efficient functioning of the organization.
Benefits of Job Rotation
Some of the major benefits of job rotation are:

It provides the employees with opportunities to broaden the horizon of knowledge, skills,
and abilities by working in different departments, business units, functions, and countries

Identification of Knowledge, skills, and attitudes (KSAs) required

It determines the areas where improvement is required

Assessment of the employees who have the potential and caliber for filling the position
8.7 UNDERSTUDY
An understudy learns the job through carefully watching the manager, to whom he is understudy.
The understudy gets an opportunity to understand the challenge of role and the ways and means
to approach to different issues and concerns. Currently a lot of top B-School graduates are taken
as Executive Assistants to the CEOs, which give them an opportunity to view the organization
178
from the top. After a stint as Executive Assistants, they are placed in line roles. This develops
these talented young managers into becoming ladders in future.
8.8 CAREER PATHING
A career path is a realistic, sequential and flexible line of progression through which an employee
typically moves during employment. Four types of career paths have been shown in the table
given below:
It is clear from the table that we need to understand a job thoroughly as well as its relationship
with others in the organization structure to design career path. Career path data should be
developed for each job based on:

Thorough job analysis i.e. job description and job specifications

Accurate historical trends and future projections – how many steps, can a role holder
move

Similarities to the career pathing of other jobs within comparable job categories and
families
Four Types of Career paths – There are four types of career path, which has been depicted
below in a pictorial form.
179
Tradition
Definition
Job progression upward from one job to the next
Features:
 Employee moves step by step to gain experience and preparation
 Straightforward move, clearly laid out; job sequence and preparation
 Movement based on tenure
 Flawed approach for today’s business due to mergers, acquisitions,
joint ventures(see Chapter 8);erosion of loyalty and job security
Network
Definition:
Job progression with both vertical and horizontal avenues for advancement
Features:
 Identifies vertical job sequence and horizontal job opportunities
 Capitalizes on education and broad avenues of experience
 Represent opportunities for employee development
 Increases employee loyalty
Lateral Skill
Definition:
Job progression that allows for lateral movement
Features:
 Employees can become revitalized and find new challenges,
opportunities, and creative endeavors
 Neither compensation nor benefits is associated here
 Promotions are not involved
 Employees become value-added commodities because they learn
different jobs
Dual Career
Definition:
A method of rewarding technical and professional personnel who want to
continue to contribute but who choose not to be elevated to the managerial
ranks
Features:
 Provides for progression in special areas –sales, marketing, finance,
HRM, engineering, etc
 Personal rewarded for specialized knowledge and personal
contributions as individual and team members
 Compensation comparable to what managers in other areas receive
 Retention rates high
180

Helps organization make smooth transition from within
8.9 SUCCESSION PLANNING
Succession Planning ensures that right people will be available from within the organization
to assume managerial and executive positions once the positions become available.
Succession Planning is a process of:

Identifying key individuals by their productivity and work ethics;

Developing these individuals through training, coaching, mentoring, job rotation etc.

Periodically tracking their progress and assessing their readiness to take up the job
for which they have been ear-marked.
The benefit of succession planning is that an organization is able to retain the top talents; it
becomes sure of the quality of the replacement and ensures that the top leaders in the
organization have the culture-fit.
For your clarity, we give a Replacement Table the organizations use for the Succession Planning
Process.
Replacement Tables- A Tool for Succession Planning
Replacement tables (see the example below) are one of the tools that succession planners use.
Replacement table shows position titles, Current occupants of the positions, Predicted
replacement needs (urgency), and the names and promotions potential of possible
replacements.
Directions: Review the example, then complete the blank form for high-profile managers in
your organizational unit.
181
Legend
Replacement Need
Potential for Promotion
A Need now
1.Qualified now
B Need within one year
2.Qualified within six month
C Need within 2-5 years
3. Qualified in one year
D. No anticipated need
4.Qualification uncertain but available.
Example:
Personnel Director
T.Desai
B
Khurana
Sonthosh
Ganguly
1
1
2
A
Chief Financial Officer B
M. patel
G.Soski
A.Ray
Compensation Director
N.Aggarwal
S Joshi
J Shah
K Kumar
Chief Executive Officer
J.Mosal
4
2
3
Srivastav
Mohanty
Thomas
D
Comptroller
Bharti
1
3
3
M Iyer
Balachandra
S. Singh
182
3
3
2
C
2
3
1
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9. HUMAN RESOURCE INFORMATION SYSTEM
A generation ago computers were first introduced into businesses and organizations to automate
clerical functions and routine transactions. Today, information technology (IT) is an integral part
of any manager’s daily life and forms the backbone for every managerial function of the modern
organization. Whether it be integrating ERP systems for operational control, improving customer
relationship management using data mining, launching a comprehensive web-based human
resource management system, or executing financial transaction in electronic markets, modern
information systems (IS) are the life blood of the organization – linking all the different functions
together in an integrated way and getting information to decision makers at the right time and in
the right format.
Information systems have long matured beyond their direct use as a tool for increasing the
efficiency of back-office operations. They have been used by long-established companies to
change their position in the market, and they have been used by innovators to create new
companies in markets, which formerly did not exist. Thus a HR manager of this century should be
acquainted with different facets of HRIS.
9.1 WHAT IS HRIS?
A human resources information system (HRIS) is the system used to acquire, store, manipulate,
analyse, retrieve, and distribute an organisation’s human resources information.
Definition: “A Human Resource Information System is a systematic procedure for collecting,
storing, maintaining, retrieving, and validating data needed by an organization about its human
resources”
An HRIS is not simply computer hardware and associated HR-related software; it also includes
people, forms, policies, and procedures and data. The purpose of the HRIS is to provide
information to facilitate or support strategic tactical & operational decisions.
9.2 WHY HRIS IS IMPORTANT?
In the evolution of organisations one thing that persisted over ages is the need for change. With
globalization of economies & technological advances this change became all the more important
to exist & sustain. Each and every sub function of an organisation undergoes changes to be
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innovative and efficient on quality, cost and time. Human resource function also needed to
undergo transformation to keep pace with the other functions.
Essential function of human resource management is to respond to the demands of internal &
external environment of an organisation. Internal requirement is to provide human resource for
various activities of the organisation. External requirement is to understand the labor market &
compliance with government policies.
HRIS is an operational tool in an organisation but can be used for strategic purposes as the
organisations mature over a period of time. Let us consider following two incidents to strengthen
our belief in HRIS.
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HR Planning and Analysis
 Organization charts
 Staffing projections
 Skill inventories
 Turn over analysis
 Restructuring costing
 Internal job matching

Equal
 Employment
HRIS interaction with
other HR functions



Applicant tracking
Workforce utilization
Availability analysis
Staffing
 Recruiting sources
 Applicant tracking
 Job offer refusal analysis
HR Development
 Employee training profiles
 Training needs assessments
 Succession planning
 Career interests.
HRIS
Compensation and Benefits
 Pay structure
 Wage/Salary costing
 Flexible benefit
administration
 Vacation usage
 Benefits usage analysis
Health, Safety and Security
 Safety training
 Accident records
 Material data records
Employee and Labor Relations
 Union negotiation costing
 Auditing records
 Attitude survey results
 Exit interview analysis
 Employee work history
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Incident-1
Mr. Ramesh Kumar was newly appointed as HOD of HR department for Laxmi Seeds Ltd. Laxmi
Seeds is a hybrid seeds company with 1200 employees. One morning CEO calls Ramesh & asks
for list of employees who hail form rural areas with their designation & gender. CEO was to
attend an unscheduled meeting with Rural Development ministry to get tax benefits for
employing rural women work force at officer & below levels. Ramesh had 3 team members in his
department & one of them was on leave. After numerous phone calls to various colleagues
Ramesh could not get this information. Laxmi Seeds maintains its employee records in personal
hard copy files & the best information he could get was “guesses”. Getting right figures for
Ramesh took almost 5 days. CEO was upset for not getting this information. This one incident
made Laxmi Seeds to think seriously about HRIS implementation.
How much time would an HRIS take to get the above information?
Incident -2
Tejas Fertilisers & Chemicals has its Urea production plant at Kota, Rajasthan with an installed
capacity of 1000 TPD employing 480 work forces. Due to high petroleum based naphtha prices
cost of production shot up & Tejas started recording marginal losses from November 2007. There
was an acute shortage of Urea in the market due to reduced production by most of the Urea
manufacturers. On June first Tejas factory workers went on strike demanding higher salaries.
During monsoon season Tejas can not remain idle even for one day. Management & Worker
unions sat down for discussion to call off the strike. Some of the aged workers were demanding
free Urea distribution to all the factory workers, but younger lot was interested more in salary
hike. Women workers were interested in reducing the working hours along with increased pay
hike. Most of the long serving employees were not interested in strike. Mr. Arjun Yadav the CEO
of the company was to decide quickly, which is the most economical option to satisfy all the
workers & resume work. Tejas has its employee personal files in their head office at Delhi. Can
HR manager help Arjun to take a decision? How much time HR manager needs to get the
relevant information that may help in calling off the strike.
Can HRIS help in this situation?
In the first incident had the information is available in time the problem could have been solved.
In the second incident if the employee data is available in the place of work probably strike could
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have been quickly called off & production would have started. These two incidents illustrate how
important is HRIS to an organisation. The ability to perform jobs faster is not only the motivation
for HRIS. Getting information & reports faster is indeed a goal of HRIS but not the only goal.
Another major goal is accurate information.
Thanks to revolution in IT almost all the processes in an organisation are getting automated one
by one. In these circumstances HR need to interact with all other internal & external departments
that necessitates HRIS.
HR sub functions
• Planning
• Staffing
• Training & Career development
• Performance Management System
• Compensation & Benefits
• Employee engagement
External Environment
• Legal
• Social
• Political
Internal Environment
HRIS
Business partners
• Different departments
• Trade unions
Strategic Partners
• Vendors
• Customers
• Competitors
• Share holders
• Directors/CEO
Fig. 1.2 : HRIS Interaction with other Systems
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9.3 LEVELS/TYPES OF HRIS : HRIS PYRAMID
There are 4 different levels of HRIS as shown in the HRIS pyramid below
KIND OF SYSTEM
GROUPS SERVED
STRATEGIC
LEVEL
SENIOR MANAGERS/CEO
ESS
DSS
MIDDLE MANAGERS
MANAGEMENT
LEVEL
MIS
KWS
KNOWLEDGE
LEVEL
KNOWLEDGE
WORKERS
AOS
OPERATIONAL LEVEL
OPERATIONAL
MANAGERS
TPS
Fig.1.2: HRIS Pyramid
1) Operational-level Systems: For operational / Execution level Managers
Examples: 1) TPS: Transaction Processing Systems – Issue of ID cards to employees
2) OAS: Office Automation Systems – Attendance punching & recording

Support operational managers by keeping track of the elementary activities and
transactions of the organization.

The important purpose of systems at this level is to answer routine questions and track
the flow of transactions through the organization.

Covers things such as sales, receipts, cash deposits, payroll, credit decisions, and flow
of materials.
189
2) Knowledge-level Systems: For knowledge workers like Architects, Statisticians, and
Designers.
Example: 1) KWS: Knowledge Worker Systems – Auto CADD, Simulation Studies
 Support knowledge and data workers in an organisation.
 The purpose of these systems is to help the organisation discover, organise and integrate
new and existing knowledge into the business.
 These systems, specially in the form of collaboration tools, workstations, and office
 These systems are the fastest growing applications in business today.
3) Management-level Systems – For Middle Managers to take review level decisions.
Examples: 1) MIS: Management Information Systems – Data of monthly review meeting
 Designed to serve the monitoring, controlling, decision-making, and administrative
activities of middle managers.
 These typically provide periodic reports rather than instant information on operations.
 Some of these systems support non-routine decision-making, focusing on less-structured
decisions for which information requirements are not always clear.
 This will often require information from out with the organisation, as well as from
normal operational level data.
4) Strategic-level Systems: For HODs, CEOs mostly for medium to long term planning
Example: 1) DSS: Decision Support System – Should we buy a new machine or not?
2) ESS: Executive Support System – Should we expand into new territory?
 Help senior management tackle and address strategic issues and long-term trends, both
within the organisation and in the external environment.
 Principal concern is matching organizational capability to changes, and opportunities,
occurring in the medium to long term (i.e. 5 - 10 years) in the external environment.
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9.4 HOW TO DEVELOP AN HRIS FOR AN ORGANISATION
An HRIS system can be obtained by updating an existing system or by developing a new system.
These existing systems may be generally payroll or other existing modules. One need not go for
automation of all the functions of HR at a time. Based on the size of the organisation, type of
industry and many such factors one can think of having HRIS function wise.
1) Updating the existing system: What ever the exiting basic manual or computerised information
is available can be developed in to an HRIS.
Advantages of updating the existing module:
i) It is cost effective
ii) Can be quickly developed as data are already in the system
Disadvantages are :
i) It will not be flexible and may not fit the exact requirements of the organisation
ii) Modifying the software will be difficult later on.
2) New system can be acquired in one of the following ways:
• Develop a new system from the scratch internally
• Adapt a system used by another group company or another company
• Use an external service
• Buy a vendor ( Vendor is a supplier of Software & hardware) system and modify it, or purchase
and use it
Advantages
i)
Fits well for the requirements of the organisation
ii)
Easy to upgrade for future needs.
191
Disadvantages
1) Costly
2) Some times you need to depend on the other party for service.
9.5 COMPONENTS OF HRIS DEVELOPMENT IN AN ORGANISATION
HRIS development has 3 essential stages like choosing the HRIS system, Hardware requirements
and Vendor service. In all these 3 cases you need to keep following points in mind while taking
decisions.
A) HRIS System
1) Is HRIS required?
2) What kind of HRIS is required?
3) What specific functions are expected form HRIS in the present business context?
4) Cost benefits analysis.
5) Which functions of HR needs automation now?
6) Should we go for automation of all the functions of HRIS?
B) Hardware requirement
1) What amount of storage is required?
2) What computer language it uses?
3) Can the system interface with the other system?
4) Is the system suitable for networked environment?
5) What provision the system should have for uploading and downloading data?
6) How frequently it has to be updated or serviced ?
C) Vendor Services
1) How long are they in business?
2) Is there any evidence of financial stability?
192
3) How they will support client?
4) How often the companies update the software?
5) How long the product is in market?
6) Who are the reference users?
7) What type of training support they provide?
8) What is the vendor’s commitment to research?
Some of the readily available HRIS products in market are:
i)
People Soft
ii)
SAP-Human Resource Management System
iii)
Oracle-HR module
9.6 REPORTS GENERATION
Once you implement HRIS and feed all your human resource information into system you can
generate different types of reports. There are different ways of classifying these reports. Most
prominent way is based on Periodicity and Complexity also known as based on Frequency &
Dimension.
1) Reports based on Periodicity/Frequency:
a) Extracts/Data dump ( raw information taken from computer or server with out any processing)
: Generally taken for routine activities. These reports may not have much analysis & calculations.
Examples : List of employees, Department wise headcount.
b) Production/Fixed reports: These are factory production reports. Many times taken per shift or
weekly or monthly.
Examples: Weekly work hours for each employee, Defects in products per shift per employee.
c) Library/Catalogue reports: These are generally taken at specific intervals like quarterly or
annually or at any other specified interval.
193
Examples: Quarterly attrition reports, Monthly wage bill.
d) Ad-hoc reports: These reports do not have any periodicity but generated as & when required.
Examples: List of employees whose birthday falls next week. List of employees who are getting
salary less than Rs.10000 per month.
2) Reports based on complexity/Dimension
a) Simple reports: Reports which are like raw data & are simple to understand. These reports
generally come with simple conclusions.
Examples: List of male & female employees, List of employees who were promoted previous
year.
b) Computation reports: These reports generally come with some calculations & conclusions.
These reports will have some basic analysis & conclusions.
Examples: Average salary of male & female employees, Air & Rail travel costs of employees in
marketing & production departments.
c) Comparison reports: These reports will process data, analyse, and mostly compare with time
dimension.
Examples: Month wise cost of production of different products in different shifts, No of monthly
new joinees with their salary & salary of existing employees when they joined & present salaries.
d) Statistical reports: These reports process data & analyse the data with statistical tools & present
conclusions.
Example: Relation between training & employee efficiency, Relation between salary revision &
attrition.
e) Graphic reports: These reports use analytical tools like statistics & calculations to present the
conclusions. Generally conclusions are graphically represented with summary like Pie charts,
histograms and other QC tools.
194
Examples: Percentage representation of salary differences for different roles in metros & mini
metros, Correlation between age and productivity in different shifts.
9.7 SECURITY ISSUES
One of the major disadvantages of Information Systems in general and HRIS in particular is its
susceptibility to thefts. Since large amount of information is stored in one place & one can easily
access it with some knowledge of IT. Yet one should plan for strong IT security measures to
minimize the chances of information getting into wrong hands. There are several ways of
protecting the HRIS like :
1) Having access control systems for classified data
2) Insulating with fire walls for the system at all entry points
3) Develop anti hacking alerts & self check measures
9.8 CONCLUSION
In today’s world one can not ignore the relevance of HRIS for an organisation. HRIS is a
transactional tool that can be used for strategic application. Requirement of HRIS for different
level of people is different. There are four various levels of HRIS to suit the needs of different
levels of employees. One buy a readily available HRIS package from market or develop
internally. HRIS helps us to generate various reports & conclusion that help in taking decisions in
an organisation. We need to protect HRIS from getting into wrong hands by adopting IT security
measures.
195
ANNEXURES
HRIS helps us to generate reports. Reports can be categorized as per the levels of HRIS as
discussed in chapter levels of HRIS. These reports help us in our decisions. Reports generated
generally use different formulas & calculations as presented below. This sections also shows the
sample formats of different common reports generated by HRIS.The reports differ from
organisation to organisation & situation.
Recruitment Efficiency : Time taken to fill vacancies
RE = Total calendar days from each requisition to accepted offer
No of openings filled
Turnover Cost: Cost to terminate
TC = Cost to hire + vacancy cost + Productivity loss
Employees lost
Employee turnover rate : Volunteer turnover
ETR= No of employees volunteered to leave
Total no. of Employees
Cost of Hiring
CH= Advertising expenses +Agency fee+ Recruiters pay +10% Miscellaneous
No of employees hired
Productivity
Manpower Productivity = No. of Tonnes of Fruits Sorted per day
No. of Workers employed per day
196
1) Manpower Supply & availability report location-wise
Manpower Vacancy report Location-wise
NEW STATE
NEW LOCATION
HO
Andhra Pradesh
Delhi / Ncr
Gujarat
Karnataka
Madhya Pradesh
Maharashtra
Punjab
Rajasthan
Tamil Nadu
Kerala
No. of positions
Filled
Vacancy
Gurgaon
200
80
120
Hyderabad
50
34
16
Vijaywada
50
21
29
Vizag
50
4
46
Delhi
80
11
69
Noida
50
42
8
Faridabad
50
5
45
Ahmedabad
80
7
73
Naroda
80
4
76
Bangalore
80
23
57
Belgam
50
12
38
Bhopal
80
34
46
Indore
50
23
27
Mumbai
100
85
15
Pune
80
65
15
Chandigarh
80
41
39
Jalandhar
50
22
28
Jaipur
80
33
47
Jodhpur
50
58
-8
Chennai
100
85
15
Madurai
80
70
10
Kochi
80
55
25
Coimbatore
80
20
60
1730
834
896
Grand Total
197
2) Manpower Supply & availability report department wise
Manpower Vacancy report Location wise
BUSINESS
Department
Category
No. of positions
Filled
Vacancy
Tractors sales
150
82
68
Irrigation pumps
150
75
75
Agricultural implements
250
137
113
550
294
Fruits
200
135
65
Vegetables
350
182
168
Dry Fruits
100
68
32
Spices
150
92
58
Pulses
130
123
7
Rice
120
50
70
Sugar
80
76
4
Non Veg
50
50
0
Food Business Total
1180
776
404
Grand Total
1730
1070
Category Total
Food Business
256
660
3) Manpower transfer report.
Employee Transfer Report
EC. No.
400321
Employee Name
Current
Designation
Present
Location
New
Location
Sr. Manager
Bangalore
Delhi
Deputy
Manager
Bangalore
Hyderabad
Manager
Bangalore
Mumbai
Ravi Nayak
400322
Pramod Desai
400323
Naveen Shetty
198
Role as per
Organisation
Structure
Seed
production
officer
Supervisor
Name
Transfer
Date
Pramod
Garg
1st April
2008
Farm
superdent
Pramod
Garg
1st April
2008
Kanva Kumar
Pramod
Garg
1st April
2008
4) Candidate job offer details report
Details Of Employee - As Per Offer Letter / Offer Initiation Document
Sr.No
Employee
Name
DOJ
12.11.1972
Dept/Function
as per offer
letter
Grade
Designation
22.05.2007
MT
Management Product
Trainee
development
12.11.1973
22.05.2007
M3
3 Pallavi Negi
12.07.1974
22.05.2007
M1
Sr. Manager
Asst.
Manager
4 Ram K
11.11.1968
22.05.2007
E1
Executive
Jerome
1 Joseph
Padma
2 Laxmi
DOB
City
Location
Chennai
Supply Chain
Delhi
Training
Human
Resource
Delhi
Mumbai
5) Medical insurance premium tracking report
Medical Insurance Premium details
SR NO.
EMPLOYEE
SUM
PREMIUM
NAME CATEGORY
ID
INSURED
(p.a)
LOCATION
1
2000342 Arvind
Saraf
Pesticides
200,000
1,862
BANGALORE
2
2000453 Vijay
Yadav
Seeds
200,000
1,862
BANGALORE
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7) Employee Personal Data.
Employee personal data
Employee ID
Full name
Grade
Location
Gender Age
Blood Group
1234
Raja Rao
M3
Bangalore
Male
34
A
1235
Ravi Kumar
M2
Bangalore
Male
33
B
1236
Kamal Suri
Bangalore
Male
36
O
1237
Laxmi M
M2
M3
Bangalore
Male
55
O
1238
Prabhu K
Bangalore
Male
32
A
1239
Suman Lakhani
M3
Mumbai
Female
26
B
1240
Ramesh K R
E3
Cochin
Male
28
AB
1241
Subhashini
Bangalore
Female
22
O
1242
Amandeep Kour
M2
M1
Ludhiana
Female
38
O
1243
Raju Yadav
Noida
Male
41
O
1244
Rajeev Khurana
Noida
Male
27
A
M3
M1
M1
8) Employee salary details report
Employee Salary Details
Sl No.
Name
Dept
Function
Grade
Basic
Incentive
Total
1
Pravin Shah
D&L
E2
576768
26767.92
603536
2
Prabal Malik
D&L
Business
Head
Mens
M3
1950000
210000
2160000
3
Smita Singh
HR
HR
M2
785103.96
73400.04
858504
4
Laxmi C
HR
M4
863553.96
63549.96
927104
5
Noel George
E3
700000
50000
750000
6
Charu Singh
Business
Process &
Quality
Business
Ops
HR
Business
Process
&
Quality
CEO
Office
M2
261669.96
39249.96
300920
200
9) Attrition by Performance
Departments
Pesticides
Fertilisers
Seeds
Agri Equipments
Supply Chain
Marketing
HR
Finance
Grand Total
Overall Attrition rate
ATTRITION Summary of defferent kinds of performers
Ratings
Very
Oustanding Good
Good
Average
Poor
1%
3%
4%
4%
2%
2%
2%
3%
1%
4%
1%
0%
0%
0%
5%
0%
2%
0%
0%
0%
0%
0%
0%
2%
4%
0%
0%
0%
3%
2%
0%
0%
2%
4%
0%
0%
0%
1%
0%
1%
4.00%
7.00%
10.00%
14.00%
18.00%
11%
201
Not covered Total
1%
15%
0%
12%
1%
7%
0%
2%
3%
9%
0%
5%
1%
7%
1%
3%
7.00%
NOTES
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