1283587490HRM Notes Various Topics August 2010
1283587490HRM Notes Various Topics August 2010
1283587490HRM Notes Various Topics August 2010
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HRM Issues. HRM has much to offer but there are reservations:
Ambiguous and flawed concept: all hype and hope; full of rhetoric not
reality; promising more than it can deliver.
Morality- workers must identify with aims and values of the bus. Their
involvement is on the company's terms. HRM may be a form of insidious
control. Executives preach that “what’s good for GM is good for America”.
“What’s good for the bus must be good for everyone in it”.
Job Description. Sets out job purpose, where it fits into the organisational
structure, context in which job holder functions and the principal
accountabilities of the job holder. These are derived from JA and are used for:
Defining the place of the job in the organisation and to clarify the job's
contribution to organisational departmental objectives.
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self description
Diaries and logs.
It helps to build flexibility into a job description by focussing on results. Need for
teamwork must be stressed. The Job Description must state job title, overall
purpose/objective of the job.
Instrumentality is belief that doing one thing leads to another e.g. that people
work for money. Rewards/penalties are attached directly to performance. It is
based on Skinner's [1974] principle of reinforcement in which behaviour is
assumed to be conditioned. It is also called the law of effects. It relies on
external controls.
Goal Theory [Latham and Locke, 1979]. Where goals are specific, difficult
but accepted so participation in goal setting is important. Feedback helps in
maintaining motivation. Demanding goals if acceptable lead to better
performance than easy ones [Erz & Zidon, 1984]. This is the principle of MBO of
the 1960s. MBO however failed because need for agreement, reinforcement and
feedback was not appreciated. And it was done bureaucratically. Goal theory is
now the basis for Performance Management.
Equity Theory [Adams, 1965]. Perceptions about how one is treated compared
to others [Reference
group or relevant other persons]. Equity is always a comparative process and it
has two forms:
Distributive Equity – fairness of rewards relative to contribution.
Procedural Equity/justice – how company procedures are operated e.g.
appraisal, promotion and discipline. This must recognize employee's
viewpoint, absence of personal bias, applying criteria consistently;
feedback on outcomes of decisions and explanation of decisions made.
Job Satisfaction refers to feelings and attitudes people have about their work.
Morale is often equivalent to satisfaction. It is affected by intrinsic or extrinsic
motivating factors, quality of supervision, social relationships. It is also
influenced by career opportunities, team work, and job challenge. It is
commonly held that job satisfaction leads to improve performance. But the
relationship may be in the opposite direction.
Job Engagement- people are interested even excited about what they do. But
people may like what they do without liking the organization especially
knowledge worker where the work is interesting in itself, has variety, give
autonomy, task identity and significance.
Job and Role Design. A job consists of a set of related tasks carried out by one
person. it is designed To fulfil a purpose. It remains unchanged whoever is in the
job. A role is the part people play in carrying out their work. Individual roles are
carried out by one person. Generic roles are essentially similar activities carried
out by a number of people. They may cover a whole occupation. It is described
in behavioural terms. It sets out outputs or outcomes.
Work provides an extrinsic reward [money] which satisfies basic needs but is
also instrumental in satisfying higher needs. However work also provides
intrinsic rewards under the control of the worker. A job embodies a number of
tasks, the different skills/competences used, range/scope of decisions, and
difficulty in predicting outcomes.
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Fully integrated jobs must contain all three task elements. To be intrinsically
motivating jobs must provide:
Feedback on performance preferably by self-evaluation. Ideally work should
be the complete product or significant part of it.
Use of abilities.
Self control – setting own goals and paths for achieving them.
Self Managing teams. These are allocated an overall task and given
discretion on how to do it. They enlarge individual jobs by giving a wider range
of skills [multi-skilling]. Decisions on work methods, planning, scheduling and
controlling work. Also distribution of tasks among members. It is accommodates
social/group factors. Performance – assessing one another's performance as
well as performance of the group as a whole.
Individuals generate, retain, and use knowledge [HC]; but this knowledge is
enhanced by interactions between them [SC] to generate institutionalized
knowledge possessed by the organization [OC]. Individual knowledge must be
captured through Knowledge Management processes. Both flows and stocks
matter. IC develops and changes over time usually when people act together.
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Knowledge Management.
Km is “any process or practice of creating, acquiring, capturing and using
knowledge wherever it reside, to enhance learning and performance in
organizations” [Scarborough Swan &Preston, 1999]. It focuses on firm-specific
knowledge and skills that are the result of OL processes. Knowledge can be
stored in databases, found in presentations, reports, libraries, manuals, policy
documents. It can be moved through IS and also through traditional methods
such as meetings, workshops, courses, video, tapes, written publications and
also intranet. There is both “knowing how” and “knowing what”. Knowledge is
multi-facetted and complex, situated and abstract, implicit/explicit,
distributed/individual, physical/mental, developing/static, verbal/encoded.
Knowledge is:
Embedded in technologies, rules and organizational procedures
Encultured as collective understandings, stories, values, beliefs.
Embodied into practical activity based competences and skills of key
embers.
Embraced as conceptual understanding and cognitive skills of key
members [Blackler, 1995]
KM involves:
1) Technical aspect which centralizes knowledge that is scattered across the
organization and codifying TK.
2) Social/Political aspect which collectivizes knowledge so that it is no longer
the exclusive property of one person or group.
3) Economic aspect – to intensify the creation and exploitation of knowledge.
KM Systems:
o Intranet
o Groupware information communication technologies
o Networks and communities of practice/interest
o w/workers sharing knowledge
How People Learn. Kim [1993]. Learning is the process of “increasing one’s
capacity to take action”. Training on the other hand is a way to promote
learning. People learn in teams and by interacting with managers, co-workers
and even people outside the organization. People learn by doing and by
instruction.
Reinforcement Theory – based on Skinner [1974]. Changes in behaviour
result from a response to stimuli/events and the ensuing consequences
[rewards/punishment]. Individuals can be “conditioned’ to repeat
behaviour through positive reinforcement e.g. feedback/knowledge of
results. This is a stimulus-response theory.
Cognitive Learning Theory involves gaining knowledge and understanding
by absorbing information in the form of principles, concepts and ‘facts’.
Experiential Learning. This is a personal “construction” of meaning through
experience.
Social Learning- effective learning requires social interaction. We all
participate in “communities of practice” –groups of people with shared
expertise who work together.
Kolb’s Learning Styles. This model describes how experience is translated
into concepts which then guide the choice of new experiences. Individual
must shift from being observers to participants. Trainees must also adjust
to these styles. Kolb’s model is a simple description of how experience
translates into concepts which then guide choice of new experiences.
Effective learning must involve a shift from being observer to being
participants, from direct involvement to objective analytical detachment.
Each person has his own learning style. Trainers must adjust to learning
styles of trainees and not stick to their won preferred approaches.
The styles are not exclusive so one person could be both reflector and
pragmatist].
However, none of these four learning styles is exclusive. It is quite possible that
one
person could be both a reflector and a theorist, and someone else could be an
activist/pragmatist, a reflector/pragmatist or even a theorist/pragmatist.
The learning The time required to reach an Recognize that progress may
curve. acceptable standard of skills or vary and may not be
competence which varies continuous. . Enable learners to
between people. Learning may consolidate their learning and
proceed in steps with plateaux, introduce reinforcement
rather than being a continuous periods in training programmes
process to recognise the existence of
learning steps and plateaux.
The motivation to People need to be motivated to Learners should be helped to
learn learn effectively develop
learning goals and to
understand the
benefits to them of achieving
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them.
Performance management
processes
leading to personal
development plans can provide
a means of doing this
Learning and Motivation. People will learn if they are motivated. Motivation is
“the disposition and commitment of the learner – the motive to learn – is one of
the most critical factors affecting training effectiveness. Under the right
conditions, a strong disposition to learn, enhanced by solid experience and a
positive attitude, can lead to exceptional performance”.
Individuals have responsibility for their own learning but also need support from
managers and the organization.
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RM must ensure that the organization has skilled, competent well motivated
people. People should be rewarded for the value they create. It must reward the
right things to convey the right message. An effective reward strategy has three
components:
Clearly defined goals which are linked to business objectives
Tailored to satisfy needs of the organization and its people – consistent and
integrated with one another.
Effective and supportive HR and reward processes in place.
Criteria:
Link reward plans to corporate goals.
Enact organization’s values.
Clarity on goals and flexibility in achieving them
Recognize resource availability
Plan for implementation.
It may seek to develop high performance culture, attracting and retaining
good quality people; achieving equity, managing costs etc.
Total Reward [TR]: [Worldatwork, 2000]: “all the employer’s available tools
that may be used to attract, retain motivate and satisfy employees. This
encompasses every single investment that an organization makes in its people
and everything its employees value in the employment relationship”
Thus all aspects of reward form an integrated and coherent whole – including
base pay, performance pay, competence/contribution, employee benefits. All
must be mutually supportive. It is all the tools an employer uses. This is a
holistic approach. The reward elements should be interrelated, complimentary
and mutually reinforcing. TR includes:
Compensation which is “foundational”; primarily financial and to satisfy
income needs.
Benefits – satisfy protection needs; often not performance based.
The work experience – this is relational binding workers to the organization
e.g. for personal development and fulfilment.
Transactional [Tangible]
PAY BENEFITS
Individual
Communal
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The transactional quadrants are financial in nature and are essential for
recruitment and retention. But they can be copied. The relational quadrants
enhance the value of the transactional ones.
Reward policies provide guidelines for implementing reward strategies. They are
influenced by organizational philosophy:
Levels – high payer, average or even below average. It is influenced by
market competition for quality people; posture of the firm; its culture etc.
Market rates & Equity. These two are often in tension.
Differential rewards for performance, contribution; how much, under what
circumstances e.g. performance bonus may be set between 10% and
30%. Also how to relate to individual, team or organizational performance.
Flexibility in respect to fast changing conditions.
The basic economic determinant of pay is supply and demand. However pay
levels are also explained by efficiency wage and HC theory.
Supply and demand. Classical economic competitive theory on pay focuses
on external pressure than internal equity. “A job is worth what the market
says it is worth.” Thus market pricing prevails against job evaluation
which measures the relative worth of jobs within the organization with no
regard to external relativities.
Efficiency Wage Theory. Pay may exceed market rate if the firm believes
this increase productivity by motivating superior performance, attracting
better candidates, reducing turnover. Thus firms seek to be market
leaders.
Human Capital Theory. Workers possess skills which can be “rented out” to
employers. Knowledge and skills acquired through education/training
constitute a stock of productive capacity. Employees expect returns on HC
investments through higher earnings. Employer gets improved
performance, capacity to innovate.
HC theory implies that investing in people adds value to the firm. HCT
encourages skills/competence based pay as a reward method. Individuals have
their own value in the marketplace. This value may be higher than market rate.
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Job Evaluation [JE] was criticized in the 1980s and 90s but is now
acknowledged for achieving internal equity. Definition: “a systematic process for
defining the relative worth/size of jobs within the organization. Approaches to JE
may be analytical or non-analytical. JE gives a framework for grading and for
pay decisions. It achieves equality pay for work of equality value. It enhances
transparency e.g. sex, age, race or disability.
JE: Aims:
Internal relativities
Information for designing/maintaining equitable/defensible grade/pay
structure [transparency]
An objective basis for grading jobs allowing consistent decisions to be
made about grading.
Organization meets it ethical and legal obligation to grant equality pay for
work of equality value.
Types:
Analytical JE Schemes analyze the extent to which defined factors/elements
are present in all jobs to be evaluated e.g. effort, skill, decision. There
must be a ‘factor plan’ which defines factors and their levels and attaches
score. These scores are totalled. The totals create rank order of jobs. This
is the most common analytical approach. One scheme is used throughout
the organization.
A graduated factor comparison scheme jobs factor by factor on a
graduated scale e.g. with 3 levels [higher, equality, lower]
Analytical JE is systematic and judgemental; it is concerned about the job
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not the person. However any assessment of one job relative to another is
always subjective. It however must focus on the content of the job, and
the demands it makes on the job holders.
Design Criteria:
Thorough analysis of what factors are appropriate.
Scheme should facilitate impartial judgement of relative job size.
Factors should cover the whole range of jobs at all levels; without favouring
any particular type/occupation; or discriminating by gender, race etc. it
should measure feature of male/female dominated jobs fairly.
Factors must be defined clearly and differentiated to avoid double counting.
Levels should be defined and graduated clearly.
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Avoid gender bias in the choice of factors, their wording, weighting etc
Process Criteria:
Transparency-everyone knowing how it works and basis of the evaluations
Involve women, minorities, the disabled etc
Build consistence checks
Check that the outcome of JE does not merely replicate existing hierarchy. A
JE is generally expected to challenge present relativities.
Participants should be thoroughly trained.
Resulting grade structure and grade boundaries should not be
discriminatory
Provide a review of evaluations and for appeals
Regular review to check if scheme is still fit for its purpose.
Examples.
Knowledge and skills
Communication and contacts
Judgement and decision making
Impact
People management
Freedom to act
Working environment
Responsibility for financial resources
Differing problems, level of clarity of thought in assessing conflicting
information, balancing risks
are not obvious. May fairly often be involved in devising new solutions.
4 Frequently exercises independent judgement when faced with unusual problems
and situations where no policy guidelines/precedents are available. May also
frequently be responsible for devising new strategies and approaches which require
the use of imagination/ingenuity.
5 Deals with widely differing problems calling for extreme clarity of thought in
assessing conflicting information and balancing the risks associated with possible
solutions. Additionally, one of the main requirements of the role may be to develop
fundamentally new strategies and approaches.
After a point factor then jobs must be analysed e.g. using a questionnaire to
establish purpose of the job, activities carried out; demands of the job. Factors
can be tested on a sample of jobs to check on level of definition, clarity of
wording etc. factor weighting must also be done
A grade and pay structure communicates career and pay opportunities available
to employees. Grade and pay structures should:
Be appropriate to the culture, needs and characteristics of the organization
and its employees.
Facilitate management of relativities and achieve equity, fairness,
consistency and transparency
Adapt to pressures from market rate changes, skills shortages.
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With broad banding, the number of grades is compressed to allow for flexibility.
However they are harder to manage. They build employee expectations. They
are difficult to explain and decisions are harder to justify due to lack of structure
and precision. There are also equal pay problems. Reliance on external market
relativities reproduces inequalities in the labour market.
Financial incentives provide direct motivation –“do this and you will get that”
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Advantages of PRP
Motivation
Delivering message
Fair to reward performance
Tangible means to reward/recognize achievement
Disadvantages of PRP
Motivation nit guaranteed
Performance assessment is difficult and measure of performance may not
be realistic. So ratings may be unfair/subjective. Emphasis on individual
performance destroys team working.
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Pay may rise faster than performance [pay drift] and hence is not cost
effective in the long run. PRP schemes are difficult to manage well. They
rely on effective PM processes.
People focus on meeting quantitative targets. So PRP may produce poor
quality performance.
Short- termism – pursuit of quick results not longer term strategic goals.
Competence can also be assessed through pay thresholds which define criteria
needed to progress to a higher zone in a grade e.g. developing practitioner,
fully qualified or advanced/expert practitioner. [What individual has to know or
be able to do].
Skill Based Pay. SBP is linked to the number, kind and depth of skills
individuals develop and use. It pays for horizontal acquisition of skills on a wide
range of tasks and for vertical development of skill to operate at a higher level;
or development of depth in existing skill. SBP is people not job oriented. They
are paid for necessary skills. It does not dwell on how well the skill is used [This
would then be PRP].
Skill blocks or modules/clusters must be defined
Success in a block/module leads to increase in base pay
Training module/programmes are defined.
SBP is often part of multi-skilling. It avoids problem of PRP but can be expensive
to introduce or operate.
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+ Pay for future Success
Pay for past performance
Paying for Contribution
=
+
Results Competence
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Disadvantages:
Require cohesive mature teams
Resentment as individual efforts are not specifically rewarded.
Peer pressure compels conformity to group norms
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HR Policy Areas.
Overall:- values and beliefs on treatment of people
Equity – fair, even handed and just treatment. Protection from unfair
decisions made by managers. Equal employment opportunity and
promotion, pay.
Consideration for individual circumstances.
OL- promoting learning and development
Performance through people – culture of continuous improvement with
provision for feedback.
Quality of Work Life – working to improve QWL: increasing sense of
satisfaction with work, reducing monotony, increasing variety, autonomy
and responsibility, avoiding stress. Acceptable balance between work and
life outside work.
Working Conditions –healthy and safe and pleasant
Equal Opportunity irrespective of sex, creed, disability, age, marital status
etc. where warranted affirmative action to redress past imbalances.
Discrimination may be direct/indirect [a condition is applied which
adversely affects one group]. [nationality, sexual orientation]
Managing diversity i.e. individual differences including eliminating cultural
bias.
Age & Employment. Age is a poor predictor of performance. It is not to be
equated with physical and mental ability. Criteria for selection/promotion
should emphasise ability to do the job.
Promotion – balance between internal/external recruitment.
Work Life Balance –with interests and responsibilities outside work through
flexible practices e.g. child care, special leave for parents/carers.
Reward – equitable pay system; equal pay for work of equal value, paying
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The Traditional Activities of Personnel Management
manpower Analysis of manpower needs according to current manpower
planning & resources & nature of labour market. Laying foundation for
Control policies on recruitment, selection, training, pay etc.
recruitment Starting with detailed job analysis, then selection of the most
appropriate method of recruitment eg use of job centres,
consultants, adverts in the media. The aim is attract suitable
candidates
selection Using a variety of techniques eg application forms, interviews,
tests. Decision is made based on general/specific criteria.
Training & Type of training; people to be trained; appropriate training
Development. methods eg on the job instruction, specific courses
appraisal A contentious issue generally. Sometimes resisted by trade
unions. Formal systems are needed to assess contribution of
individuals. System is often designed by personnel specialists
but administered by all managers.
pay a complex area involving rate of pay [negotiated with unions]
administration eg flat rate, payment by results etc. number/range of fringe
benefits eg pensions, company cars, mortgages etc.
job & how jobs are to be carried out or the organisation structured;
Organisational design & administration of programmes such as job
Design enrichment or quality of working life etc.
Collective Preparing employer’s case & negotiating with employee
Bargaining representatives; then applying such agreements and dealing
with outcomes.
grievance & Personnel Manager is at the fore front dealing with
dispute individual/collective grievances. Usually specific procedures
handling are laid down.
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legal advice Personnel Managers are the resident experts on legal matters
pertaining to employment & must guide others.
employee Personnel specialists communicate general information to the
communication workforce & administer programmes on employee
s & counselling participation e.g. suggestion schemes. Also sometimes include
employee advice & counselling
personnel Especially as firms get larger. Records are useful for making
Information & personnel decisions.
Records
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HRP has ‘hard’ dimension – quantitative analysis to ensure the right number of
the right sort of people. Soft –availability of people with the right attitudes and
motivation. Manpower planning tends to be quantitative and therefore hard.
HRP;
forecasts future people need [demand forecast]
forecasts future availability of people [supply forecasts]
Drawing up plans to match demand and supply.
HRP considers internal labour markets – people who can be promote, trained
and be re-deployed and then external labour markets at local, regional,
national, international levels. A make/buy approach can be adopted.
Make –recruit at junior levels as trainees and the rely on promotion
Buy – bring in fresh blood.
Often there is a mix between the two depending on the circumstances of each
firm.
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Aims of HRP.
Attract and retain appropriate skills, competences and expertise.
Anticipate potential surpluses/deficits
Develop well trained flexible workforce
Reduce external dependence when skills are in short supply through
retention and employee development strategies.
Improve utilization of people through flexible systems of work.
HRP Process. The process may be circular not merely linear. A well articulated
business plan forms the basis for HR plans. Business plans may be evolutionary
rather than deliberate- fragmented, intuitive and incremental. Where future is
not predictable, HRP may involve broad scenarios rather that precise forecasts.
It may be summarized as:
Business strategic plans setting out future activity levels and skills
required.
Resourcing strategy –by developing intellectual capital.
Scenario planning – broad assessment of where the organization is going in
its environment and implications for HR requirements
Demand/Supply forecasting – numbers and skills available/required from
within or outside the organization.
Labour turnover analysis –actual turnover used as input to supply forecasts
Work environment analysis scope to develop skills and achieve job
satisfaction.
Operational effectiveness analysis e.g. productivity and scope for flexibility
to cope with new/changing demands.
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Reasons for Turnover. Exit interviews will assist in drawing up retention plans.
Interviewer should probe skilfully and sensitively for reasons for dissatisfaction
or unhappiness. Attitude surveys of existing employees should also be done.
Costs of LTO.
Leaving costs – payroll costs and personal administration of leaver.
Recruitment and replacement [advert, interview etc]
Opportunity cost –recruitment, induction.
Direct costs of introducing replacement [induction]
Cost while vacancy lasts
Reduced input of starters.
Talent Management is not just about high flyers. Everyone in the organization
has talent. So TM is not for a favoured few though there is a bias for people with
scarce skills and high potential. [See Other Notes on this topic]
TM Process.
Develop organization as employer of choice –a great place to work.
Recruitment and selection that picks good quality people and are retained.
People have opportunity to grow their skills and have autonomy interest
and challenge.
Career development and growth.
Rewarding jobs.
Positive psychological contract.
Leadership qualities of line management to be developed.
Rewarding excellence, enterprise and achievement
Succession planning
Recruitment and Selection [obtaining the number and type of people the
organization needs]. The aim is to obtain employees at minimum cost. Stages:
Defining requirements –prepare job description and specification, decide
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Requirements:
1) JD sets out details of the job, reporting relationships, activities/tasks
carried out; terms and conditions pay, benefit.
2) Person/Job specification. Competences are what person must know and be
able to do; any special aptitudes or skills required. Qualification and
training, experience. Any specific demands e.g. to introduce new systems,
develop new markets. Organisational fit –corporate culture. Special
requirements – travelling, unsocial hours, mobility. Meeting candidate’s
expectations in terms of career opportunities, training, security etc.
Selection Methods.
Interviews – usually individual, face to face discussion. One interviewer
may be used [decision may be biased or superficial] or a second
interviewer or panel [e.g. personnel manager and line manager at the
same time]. Selection boards are large and more formal.
Assessment Centres use a range of techniques. Features include:
o Focus on behaviour.
o Exercises to simulate key dimension of the job e.g. role playing,
group exercises etc.
o Interviews and tests.
o Candidates are assessed together to allow interaction
o Several assessors/observers are used.
Graphology draws conclusions about personality from handwriting which is
used as a basis for predicting future performance
Application forms use a standardized format and include bio data.
After a provisional offer decision has been made, references may be obtained
on the candidate’s character and suitability. This covers factual information.
Opinions on are less reliable. They avoid adverse/detrimental remarks.
Advantages:
Probing questions asked on experience/competence.
Interviewer can describe the job and organization
Candidate can ask about the job, career prospects, organization,
terms/conditions.
Disadvantages
Lacks validity in making sound predictions of performance and reliability
between candidates.
Relies on the skill of the interviewer. Many are poor interviewers though
they think they are good.
Does not assess competence for the particular job.
Bias and subjective judgements.
Selection Tests.
Psychological tests [psychometric-mental measurement]. They measure
individual abilities/characteristics to predict success in a job. A good test
should be:
o A sensitive measuring instrument that discriminates well.
o Standardized on a representative sample.
o Reliable – measures the same thing.
o Valid- measures what it is intended to measure. Thus an intelligence
test should measure intelligence not for example verbal facility.
Validity has these forms:
Predictive – the test correctly predicts future behaviour.
Concurrent - the test score differentiates individuals e.g.
high/low performers.
Content-test relates to the characteristics of the job
Face – test looks right and measures what it is supposed to
measure.
Construct – measures a particular construct or characteristic.
Construct validity looks at the test itself.
Types of tests.
Intelligence tests depend on a theory of what constitutes intelligence.
Intelligence itself is however complex.
Personality is assessed in order to predict behaviour in a role. Personality is
itself also an all-embracing imprecise term and there are many
personality theories and hence tests.
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Many employees leave within the first few months after joining. This entails a
cost:
Recruiting replacement
Induction
Supervision and error correction.
Induction serves to clarify the psychological contract [norms, beliefs,
expectations]. Impact on learning curve its length and the rate of learning.
Socialization is provided. Documentation is provided at induction e.g. employee
handbook. General company induction is followed by departmental induction
under the immediate supervisor for detailed induction. Formal induction can be
arranged in groups to give consistent comprehensive information. These may
mix people from different departments but usually at the same level.
Content:
The organization its products/services, structures, mission, values.
Learning arrangement/opportunities –formal training, self-managed
learning, personal development plans.
Health and safety
Conditions of service.
Pay and benefits – performance, skills/competence based schemes, profit
sharing, gain sharing, medical schemes etc.
Policies and procedures –sexual harassment, disciplinary/grievance
procedures.
Trade unions and employee involvement.
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Principles of PM:
Translating corporate goals into individual, team, departmental goals etc
Clarifying corporate goals
A continuous and evolutionary process in which performance improves over
time.
Relying on consensus and cooperation not control/coercion
Encourages self-management of individual performance.
Require management style that is open, honest; with two way
communication between supervisors and subordinates
Require continuous feedback allowing experience and knowledge gained on
the job to modify corporate objectives.
Measures all performance against agreed goals
Applies to all staff.
Is not primarily about linking performance to rewards.
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Ethical considerations:-
Respect for the individual
Mutual respect for each others’ needs and pre-occupation
Procedural fairness- limiting adverse effects
Transparency – people affected should be able to examine the basis of
decisions made.
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Objectives are designed to bring about change; they should cover all important
aspects of the job [KRAs] and not focus on one dimension. They should be
SMART:
Specific/stretching, clear, unambiguous, challenging.
Measurable e.g. quantity/quality, time, money.
Achievable –challenging but within reach of a competent committed
person.
Result oriented and Relevant to the objectives of the organization hence
achieving alignment.
Time framed –achievable within an agreed time scale.
Performance standards are useful when time –based target cannot be set. They
may endure from one period to another. They should be quantifiable as far as
possible e.g. speed of response, level of service. Performance measures are
necessary to establish that the intended result has been achieved to the level to
which the job holder is responsible for the result. Such measures should:
Relate to result not effort
Results must be within the job holder’s control
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demands in new situations, addressing shortfalls in light of what has been done,
examining changes in the circumstances in which the job is done, and noting
new pressure/demands, changes in duties or responsibilities. PM should
enhance “deliberate learning from experience” [Mumford. 1994]. Every task
represents a learning opportunity and we should reflect on the experience: how
it was done and draw conclusions on future behaviour.
Individual and manager prepare for the review [reviewer and reviewee].
Individual should engage in self-assessment/appraisal. This helps build positive
discussion and less inhibition/defensive behaviour. It is more constructive and
builds open dialogue. It is less unilateral. Individual works on the basis of
standards/targets agreed upon. There must be mutual trust between the two.
Reviewers must not capitalize on honest self-assessment. The risk is that
reviewees will over-estimate their achievements especially if money is at stake.
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does most of the talking while reviewer listens attentively. Analyse performance
not personality, what was done not the sort of person; the whole period not
isolated or recent events only. Adopting a no surprises approach e.g. if
performance problems were identified and dealt with at the time of their
occurrence. Recognizing achievements/strengths, ending the meeting positively.
The tendency is also to avoid negative descriptions in the levels and to leave
out “unsatisfactory” and “unacceptable”. Thus a popular method provides
positive reinforcement at each level. This aligns with continuous improvement –
all performance is improvable.
Example:
1) Highly Effective –frequently exceeds agreed targets/standards and
performs consistently in a thoroughly proficient manner beyond
expectations
2) Effective-achieves agreed targets/standards and meets normal
expectations.
3) Developing- contribution stronger in some aspects, most
objectives/standards met but some areas need further development.
4) Improvable-contribution generally meets/almost meets standards and
there is clear room for improvement in a number of definable areas
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Against.
A single rating summing up total performance is an over-simplification of
complex factors influencing performance some beyond the individual’s
control.
Consistency between raters is difficult/impossible to achieve.
Largely subjective – thus may be unfair/discriminatory
Ratings encourage manager to be dishonest especially if related to pay
Turns an open, positive, constructive discussion into a top-down
judgemental exercise.
Positive developmental aspects of review may be overshadowed when a
rating leads to a pay decision. Pay implications then dominate the whole
process.
Labelling people with a letter/number is demotivating/demeaning
Rating conveys opinion about past performance not the future.
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Documentation
PM is about managing and improving performance not completing forms.
However some format always assists orderly presentation of plans and
comments. The forms constitute working documents to be completed jointly by
managers and individuals. They record agreement about performance actions
and achievements. Some protection against unfair assessment is provided
where the manager’s manager views and comments on the completed form. [So
called “grandfather”]
Introducing PM
Care is needed to minimize risk of failure considering:
Where and how PM is to be introduced
Who is covered
When reviews? What sort?
Pilot testing
Briefing arrangements.
Rationale: assumptions:
Enhanced Awareness of self vs.
how others see us
Enhanced Awareness is key to maximum performance as leader.
. Manager
Internal Customers
Peers Individual
Direct Reports
Example
Or on performance:
1: Weak 6: Outstanding.
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Advantages:
Broad perspective on how one is perceived by others.
Increased awareness of and relevance of competence
More reliable feedback to senior management about their performance
Encourage more open feedback
Clearer picture of individual’s real worth
More rounded view of performance
Identifying key development areas for individual, department, organization
Identify strengths in the organization
Awareness of personal impact of managers
Supporting continuous development
Feedback perceived as more valid/objective leading to acceptance of
results
Problems.
Feedback not frank/honest
Feedback giving stress
Lack of follow-up action
Over-reliance on IT
Too much bureaucracy.
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However business and HR issues influence each other. HRM strategic Models:
1) High Performance Management- developing processes that make an
impact on the firm’s performance through its people e.g. in productivity,
quality, levels of customer service, growth, profit etc leading to increased
shareholder value. It starts with leadership, vision and benchmarking
which create momentum, and direction. Its main driver are:
a. Decentralized, devolved decision making by those closest to the
customer.
b. Development of people capabilities through learning at all levels
with emphasis on self-management and team capabilities.
c. Building trust, enthusiasm and commitment for direction of the
organization.
d. Fair treatment for those who leave, engaging needs of the
community outside the organization.
e. Necessary practices are rigorous recruitment and selection, training,
incentive pay and PM processes.
2) High Commitment Management. Aims to elicit a commitment so that
behaviour is self regulated not controlled through sanctions/pressures.
High levels of trust features:
a. Career ladders and emphasis on trainability
b. High levels of functional flexibility and abandoning rigid job
descriptions.
c. Reducing hierarchies and status differentials.
d. Reliance on team structures for disseminating information, team
building and working, structuring work and problem solving [quality
circles]
e. Job design that incorporate intrinsic satisfaction
f. No compulsory lay-offs or redundancies, permanent employment
guarantee
g. Assessment/payment systems such as merit pay, profit sharing
3) High Involvement Management. Employees are treated as partners. They
are respected and they have a voice. There is continuing dialogue
between managers and team members.
a. “On-line” work teams
b. “Off-line” employee involvement activities and problem solving
groups
c. Job rotation.
d. Suggestion programmes
e. Decentralization
f. Concerned with communication and involvement
g. Climate of continuing dialogue between managers and members to
define expectations and share information on values, mission,
vision, objectives etc
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earn money. But work also creates satisfaction by doing something worthwhile,
creating a sense of achievement, prestige, recognition, opportunity to use and
develop skills, scope to exercise power and for companionship.
“Are lean organizations usually mean?” The impact of leaner methods has
implications for employees e.g. longer hours, stress, morale/motivation,
reduction in career opportunities.
The Flexible firm. The concept was originated by Atkinson [1984]. Increasingly
the trend is for firms to seek various forms of structural and operational
flexibility. This takes three main forms:
The labour force is broken into peripheral [numerical flexibility] groups around a
numerically stable core group which handles the organisation’s key, firm
specific activities. At the core the focus is on functional flexibility. At the
periphery, numerical flexibility is more important. As market grows, periphery
expands to take up slack; it contracts when growth slows. At the core only
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tasks/responsibilities change. Here they are insulated from medium term market
fluctuations and so enjoy job security. Periphery is not so lucky.
Role. How a person behaves is often prescribed by socially acquired rules. The
person adopts a suitable role in order to perform effectively within the situation.
Role is the part played by individuals at work in fulfilling their job requirements.
Roles give the specific forms of behaviour required for a particular task. It sets
the way tasks are carried out not the tasks themselves i.e. broad aspects of
behaviour. Thus a job description lists tasks to be carried out. People at work are
always acting a part; not reciting lines but interpreting them in terms of their
own perception especially in interactions with other people. Thus roles exist in
relation to other people i.e. a role set.
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Competence [Boyatzis, 1982 –US] “a capacity that exists in a person that leads
to behaviour that meets the job demands within the parameters of the
organizational environment and that, in turn, brings about desired results”.
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