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LECTURE-31&32

BASE COMPENSASTION: WAGE AND SALARY

It involves monetary benefits to employees in the form of wages or salaries. Theterm wage is used to denote remuneration to workers doing manualor physical work. Thus , wages are given to compensate theunskilled workers for their services rendered to the organization .Wages may be based on hourly, daily, weekly or even monthlybasis. But the term salary is usually defined to mean compensationto office employees, foreman, managers and professional andtechnical staff. It is paid on weekly, monthly or yearly basis.

SUPPLEMENTARY COMPENSATION

It involves fringe benefits offered through several employeeservices and benefits such as housing, subsidized food, medical aid,crche etc. It has been given different titles in industry such asservices programmes, employee benefits and non-wage payments.Because of the increasing costs of fringe benefits some people alsolabel them hidden pay roll.

TYPES OF SUPPLEMENTARY COMPENSATION

1) PAYMENT FOR THE TIME NOT WORKED.2) PROTECTION AGAINST HAZARDS3) EMPLOYEE SERVICES4) LEGAL PAYMENTS

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LECTURE-33

PERFORMANCE APPRAISAL

Performance refers to an employees accomplishment of assignedtasks.Appraisal means estimating the worth of something .

Performance appraisal is the process of recording assessment ofemployee performance, potential and development needs.It is the systematic description of the job related strengths andweaknesses of an individual or a group.

OBJECTIVES OF PERFORMANCE APPRAISAL

It aims at improving organizational effectiveness. Role of performanceappraisal in these areas is discussed below.:

Human Resource Planning: It generates significant and revelantinformation about the promotability and potential of employees.Information used to assess the organisations internal supply ofhuman resources and availability of managerial person forsuccession planning.

Recruitment and Selection: Evaluation made in performanceappraisal can be used to find out the particular areas of knowledge,skills and experience which successful performers possess and canbe used to select right type of candidates.

Career planning and development: - Feed back guidance enableemployer to bring changes in their behavior, attitude, skills andknowledge also employees can be counseled to develop theirparticular type of work. Keeping in view of their strength andweakness.

Training and development:- Helps in identifying developments needs ofemployees to employer their performance to individual; and organization.

Compensation:- information gathered through performance appraisal providedimports fro making decision concerning salary, incentives appreciation etc.

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Achiever can be rewarded and poor performance can be give appropriatesignals.

Employee valuation:- data gathered through performance appraisal can bemoved for making decision Concerning transfer , demotion or dismissed. It

provides legal to organization and justification for such decision.

Basis issue in performance appraisal: - The issue taken intoconsideration are:

Should employees alone be the focus for P.A.

What should be the basic for appraising employees performance?

Should the effect of external environment on employees performancenot be taken into account while evaluation their performance

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LECTURE-34

Features affecting the performance of employees

a. Job it self: employees not put on clearly depend jobs and hencevaluation can not be accurate.

b. Organization and structure: take structure may and mightdepailmantation may prevent flow of information and low downdecision making which may have advance effect on performance

c. Rule procedure and method of work: when work is could out whererules and method used are not depend properly, un appropriates and

outdated this affect the performance.d. Type of machinery and environment: Employees are unable to attain

high standard f performance of machinery is outdated, defective ormoving

e. The work environment: Not conducive or efficient performance.

Basis for appraising performance: Every job requires it holds tocarry out various activities or display behaviors . some of which may be

crucial for proper perfrmance of the job and some other may not be crucial.These are the performance decision. They need to specified for each job andhow well they have to perform , performance dimension and performancestandards need to be determined before employees are put on the job.

Effect of external: External environment refer to all direct action andindirect action elements efficiency Ex: union suppliers customers etc.

Rapid charges taking place in the external environment of organizationrequire that interest of all these elements are balances so that disrupting inthe functioning of the organization could be avoided and employees

performance is not adversely affected.

Performance appraisal process:

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It involves a series of stops that are aimed to provide objective, balancedand unbalanced opinion about performance of employees. Steps are

Establishing performance standard

i. Nature of performance standardii. Type of performance standard a common specificiii. How to developed performance standard

2. Communications the standards to employees3. Evaluating actual performance4. Comparing actual performance with standards5. Discussion appraisal with employees

a. Comparing No one is perfectb. We do not see ourselves as other do

c. Need to understand and appreciate employees viewpoint

d. Making employees accept the benefit of counseling6. Taking corrective action

Do nothing

Remove the real cause for narration

Revise the standards

Traditional methods(i) Ranking method

(ii) Paired comparison method(iii) Grading(iv) Forced distribution method(v) Checklist method

(vi) Critical incident method(vii) Graphic scale method

(viii) Essay method(ix) Field review method

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LECTURE-35&36

Modern MethodsApproval be result or objectivesBehaviorally achieved rating scaleAssessment scale360 degree appraisal

1. Appraisal by result or objectives

Basic idea behind this appraisal is that the organization is concerned withachievement of objectives through the contributions of individual managerrather than on their traits

Various steps involved -:

i) Joint process between superior & his subordinatesii) Subordinate prepares plan for specific period in light of overall

plan provided by his superior and final plan through mutualconsultation.

iii) Both of them decide the evaluation criteria.iv) End of the period the superior evaluates on the basis of mutually

agreed criteria.v) Superior discusses the results of his evaluation; corrective actions

suggested if necessary and mutual target agreed for next period.

Limitations

i) Emphasis on work achievements aloneii) Operational problem of those managers whose contributions

cannot be measured precisely.iii) Puts emphasis on present performance only.

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BARS (behaviorally anchored rating scale )

It measures observable, critical behaviors that are related to specific jobdimensions

i) Identification of performance measures.ii) Identification of critical behavioriii) Rationalization of critical behavioriv) Scaling of critical behaviorv) Development of the BARS instruments

AdvantagesI) Employee behavior & not their unobservable traits are

measured which gives better description of employees.II) This makes the technique much more compatible with the

requirement of unbiased appraisal.

III) People participate in determining job dimensions and thedevelopment of the scales & hence are widely enhanced.

IV) Rater can give objectives feedback on how ratee performed& on what specific behavior, the ratee must makeimprovements.

3. Assessment centers: Purpose of this method is to test candidates in asocial situation, using a number of assessors and a variety of

procedures. It is a central location where managers come together andparticipates in a number of simulated exercises on the basis of whichthey are evaluated by a panel of raters.

Requirements

i) Multiples assessment techniques need to be used and one of thesemust be a simulation technique

ii) Multiple trained assessors must be used.iii) Judgment based on pooled information.iv) Evaluation must be made at a time separate form the observation

of behavior.v) Simulation exercise used in this method should be first tested for

their reliability, validity and objective.vi) Dimensions, attribute, characteristic or quality evaluated by the

programme must be determined by an analysis of relevant jobbehavior.

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Objectives of assessment centers

i) To measure potential for first level supervision, upper managementposition.

ii) To determine T & D need of employees.iii) To select recent college students for entry level position.iv) To provide more accurate HR information.v) To make an early determination of potential.vi) To assist in implementing affirmative action goals.

PROCESS

Establishing goal for program Designing physical facilities

Detailed JA Selecting exercises and participants

Defining dimension to be assessed Training of assessors

Conducting of programs

Evaluating participates feedback andfollow up activities

Positive features

i) based on direct observation, providing accurate information.

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ii) Assessment based on composite, pooled judgment of several ratees

360 Degree Approval : Process of systematically gathering data on a

persons skills, abilities and behavior from a variety of sources - managers ,peers, subordinates and even customers and clients. In this besidesappraising the performance of the assessee his other attributes such as talents, behaviors , values and technical consideration are also appraised.

Information collected from

Appraised by superior Appraised by peersAppraised by subordinates

Appraised by clients

Positive aspects Negative aspectsGreater self awareness of managers;reveals strength and weakness

The system may be utilized tohumilitate personnel

Reduced gap between self assessment and colleaguesassessment

Response from colleagues may beblased.

Teamwork thrives through peer

group assessment

Linking reward to appraisal may turn

to be unfairFacts about organization culture andambiences are brought to light

It ignores performance in terms ofreaching goals.

Empowerment is facilitated The ratee may deny the truth of negative feedback.

Inflexible employees are forced toinitiate self change

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LECTURE-37

Potential appraisal

Performance appraisals objectiveEvaluation of employee in present role.His development for higher order job

To determine an employees likelihood to succeed in the new job, potential,appraisal is carried. Potential appraisal dicovers the hidden part in anindividual.

Steps

1. Determination of role dimension for which an employeespotentional is to be appraised.

2. Various attributes required for the effective job performancemechanisess for appraising should be determined.

3. Potential of the employee can be appraised in the light of variousattributes identified as above

4. Potential appraisal should be linked with other human resourcemanagement elements such as providing feed back and counselingT&D promotion job rotation etc.

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Potential

High Problem children Stars

Low

Solid citizens

LowHigh

Performance

Barriers to Appraisals

1. Faulty assumptions2. Psychological blocks3. Technical pit falls

(i) Criterior problems(ii) Distortions

a. Halo effectsb. Central tendency

c. Constant errorsd. Raters liking and disliking

Overcoming barriers to appraisal

(i) System can be designed to help in minimizing undesirable(ii) Rating must be made by immediate superior.(iii) Rating must be reviewed with the ratee(iv) Effective feedback system developed(v) Supportive management philosophy

Effective Feedback

1. Intended to help the employees2. Specific3. Descriptive4. Useful

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5. Timely6. Employee readiness for feedback7. Clear 8. Valid

Performance criteria for operatives

1 Quantity and quality of output in a given period2 Work sample test3 Length of service4 Amount of training necessary5 Rating by supervisor6 Number of accidents in a given period7 Number of absents in a given period

Performance criteria for frontline supervisors.1 Quantity and quality of output in a given period2 Labor cost per unit of output in a given period3 Material cost per unit output in a given period.4 Total cost per unit of output in a given period5 Absenteeism rate for a given period.6 Turnover rate for a given period7 Man shifts lost due to stoppage of work in a given period8 Number of accidents in a given period.

Performance criteria for middle level managers1 Quantity and quality of output in a given period2 Labor cost per unit of output in a given period3 Material cost per unit output in a given period.4 Total cost per unit of output in a given period5 Rational use of overhead facilities6 Co ordination among supervisors7 Degree of knowledge among supervisors about corporate goals

and policies8 Extent to which9 Extent of upward communication of ideas , information and

quarries from frontline supervisors

Performance criteria for top management

1 Return on capital employee

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2 Labor productivity indices3 Capacity utilization4 Gain or loss in market share5 Degree of knowledge among middle level managers about

corporate goals and policies6 Extent to which middle level managers regard themselves as

managers and behave likewise7 Extent of upward communication of ideas , information and

quarries from middle level; managers8 Contribution of the social culture value of the environment

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LECTURE-38&39

JOB EVALUATION

Job evaluation may be defined simply as an attempt to determine and compare the

demands which the normal performance of particular jobs make on normal workerwithout taken in to account of the individual abilities or performance of the workersconcerned.

Job evaluation is the process of analysis and assessment of jobs to ascertain reliably theirrelative worth using the assessment as a basis for a balanced wage structure.

OBJECTIVES

1. Establishment of sound wage foundation for incentive and bonus programs.2. Maintenance of consistent wage policy.

3. Enables management to gauge and control its payroll costs and more accurately.4. Provides a framework for periodic review of wages and salaries.5. Classify functions, authority and responsibility which in turn ends in work

simplification and eliminating of duplicate operations.6. Reduce grievances and labour turnover.7. Serves as a basis for negotiation with the union.

ADVANTAGES

1. Rational, internal and external consistent wages and salary structure can beevolved.

2. Helps in maintaining harmonious relations.3. Standardizes process of determining wage differentials for various jobs.4. Job evaluations takes all relevant factors into account to determine wages.5. Provides rate for job not for man.6. Helps to control works.

LIMITATIONS

1. No standard list of factors to be considered for job evaluation.2. Trade union regard job evaluation with suspicious.3. It cannot be presumed that jobs of equal worth will be equally attractive to the

employees.

JOB EVALUATION PROGRAMME

1. Through examination of jobs.2. Preparation of job description and job analysis.3. Comparison of one job with others.4. Arrangement of jobs in their current sequence in terms of value to the firm.

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5. Relation of the sequence to a money scale.

JOB ANALYSIS

JOB DESCRIPTION JOB SPECIFICATION

JOB RATING

MONEY ALLOCATION

JOB CLASSIFICATION

PRINCIPLES OF JOB EVALUATION

1. consideration of job2. clarify of job information

3. pooling of knowledge4. grouping of jobs5. selection of job factors

i) skillii) experienceiii) effort & initiativesiv) responsibilityv) working environmentvi) supervision needed

METHODS OF JOB EVALUATION

Non quantitative methods1. ranking or job comparison method2. grading or job classification

Quantitative methods3. point rating

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4. factor comparison

1. RANKING METHOD

The purpose of ranking is to determine what a job involves the same level ofduties, responsibilities and requirements as others in the series or a higher or lowerlevel than they do. Comparisons are made on the basis of whole jobs. Three techniquesused for ranking purposes, namely

1. Utilizing job descriptions2. making group comparisons3. ranking along a number line

2. JOB GRADING

Improvement over ranking method. It involves

1. establishment of job classes or grades2. definition of each grade3. classification of individual jobs according to how well their characterstics

match those of the different grade definitions.

For each grade or class there is a different rate of wage.

3. POINT METHOD

Under this method a qualitative evaluation of different jobs in terms of variousfactors is made. Max. pts values are assigned to each job factors required to beconsidered. Each job is awarded pts. for each of the job factors. Wage levelappropriate is fixed on the basis of total pts. Scored by it.

MAJOR JOB FACTORS ARE:

a) Skillb) Effortc) Responsibilityd) Working conditions

STEPS

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1) List of the type of jobs to be accompanied2) Determine the factors to be used in this method & define them properly3) Determine number of degrees allocated to each factor & prepare suitable

definition of each4) Assign pts to each degree of each factor

5) Select certain number of key jobs & evaluate each in terms of scale soconstruct6) Design the wage structure

4. FACTOR COMPARISON METHOD

Proposed by Eugene.J.Benge used to evaluate the wehite collar jobs, Combinationof ranking & pt. System. Like rank method it votes jobs by comparing one jobwith another & like pt. System it is analytical in the sense of subdividing jobs intocompensate factor.

Factors are 5 in no.s

1) Mental requirement2) Skills3) Physical requirements4) Responsibilities5) Working conditions

STEPS

1) Select factors & define clearly2) Select key jobs which serve as standard against which all jobs are

compared.3) Allocate wage for each key job to differentiate factors4) Develop job comparisons scale & insert key jobs in them5) Evaluate the job in question factor by factor in relation to key jobs on job

comparison scale6) Design, adjust & operate wage structure.

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LECTURE-40

EMPLOYEES HEALTH & SAFETY

TYPES OF WORKING ENVIRONMENT

1. Physical Environment2. Mental Environment3. Social Environment

PHYSICAL ENVIROMENT OR HEALTHY WORKING CONDITIONS

i. Cleanlinessii. Lightning

iii. Temperature & ventilationiv. Freedom from noisev. Working space

SAFETY IN INDUSTRY

Safety measures result in reduced industrial accidents but also raise industrial efficiency.

IMPACT ON INDUSTRIAL SAFETY ON PRODUCTIVITY

Safety measures boost morale of workers helps in developing team spirit in sense ofbelongingness.

INDUSTRIAL ACCIDENT

It is an unexpected occurrence in an industrial establishment causing injury to one ormore persons.Under factories act 1948 an industrial accident has been defined as an occurrence in anindustrial establishment causing injury which makes him unfit to resume duties in thenext 48 hours.

ANALYSIS OF ACCIDENT

(a) Total number of employees in unit exposed to different types of accidents.(b) -Number Of accident.(c) Kind of work in which employee was engaged.(d) Date, time of day &the shift during which the accident occurred.(e) Total number of hours during which employee was engaged in the particular job

when accident occurred.(f) Personal data.

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(g) Inadequate cause of data.

Accident frequency date = (no. of injuries / no. of human hoursworked)*10,00,000

Accident __frequency_rate = (no. of human days lost/no. of human hoursworked)*10,00,000

CAUSES OF INDUSTRIAL ACCIDENT

1. Inherent hazards.2. Collision.3. Slip or fall on floor & stairs case.4. Miscellaneous causes.

EFFECTS OF ACCIDENTS

Measures for ensuring Industrial Safety

i. Safety Committee.ii. Safety Training.

iii. Material Handeling Equipment.iv. Guarding of Machines.v. Maintenance of plant.

vi. Regular Inspection.vii. Equipment Redesidning.

viii. Proper Clothing.ix. Clean Floors.x. Safety Campaign.

Safety EducationRole of GovernmentNational Safety CouncilNational Safety AwardsSafety Day- 4th March

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LECTURE-41

HEALTH OF WORKERS IN FACTORIES

Sections 11 to 20 of the Factories Act 1948 contains provisions regarding creation ofhealthy working conditions for workers. These are examined below:

1) CLEANLINESSS(SEC-11)2)DISPOSAL OF WASTES AND EFFLUENTS (SEC-12)3)VENTILATION AND TEMPERATURE(SEC-13)4)DUST AND FUMES(SEC-14)5)ARTIFICIAL HUMIDIFICATION(SEC-15)6)OVERCROWDING(SEC-16)7)LIGHTING(SEC-17)8)DRINKING WATER(SEC-18)9)LATRINES AND URINALS(SEC-19)10)SPITTOONS(SEC-20)

SAFETY OF FACTORY WORKERS

The safety provisions are contained in section 21 to 41 of the Factories Act, 1948.

1) FENCING OF MACHINERY(SEC-21)2) WORK ON OR NEAR MACHINERY IN MOTION(sec-22)3) Employment of young persons on dangerous machines (SEC-23)4) STRIKING GEAR AND DEVICES FOR CUTTING OFF POWER(SEC-24)5) SELF-ACTING MACHINES(SEC-25)6) CASSING OF NEW MACHINERY(SEC-26)

7) PROHIBITION OF EMPLOYMENT OF WOMEN AND CHILDREN NEARCOTTON-OPENERS(SEC-27)

8) HOISTS AND LIFTS(SEC-28)9) LIFTING MACHINES, CHAINS, ROPES AND LIFTING TACKLES(SEC-29)10) REVOLVING MACHINERY(SEC-30)11) PRESSURE PLANT(SEC-31)12) FLOORS, STAIRS AND MEANS OF ACCESS(SEC32)13) PITS, SUMPS, OPENING IN FLOORS ETC.(SEC-33)

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14) EXCESSIVE WEIGHTS(SEC-34)15) PROTECTION OF EYES(SEC-35)16) PRECAUTIONS AGAINST DANGEROUS FUMES(SEC-36)17) PRECAUTIONS REGARDING THE USE OF PORTABLE LIGHT(SEC-36A)18) EXPLOSIVE OR INFLAMMABLE DUST, GAS, ETC(SEC-37)

19) PRECAUTIONS IN CASE OF FIRE(SEC-38)20) POWER TO REQUIRE SPECIFICAATION OF DEFECTIVE PART OR TESTSOF STABILITY(SEC-39)

21) SAFETY OF BUILDINGS AND MACHINERY(SEC-40)22) MAINTENANCE OF BUILDINGS(SEC-40A)23) SAFETY OFFICERS(SEC-40B)24) POWER TO MAKE RULESS(SEC-41)

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LECTURE-42&43

EMPLOYEES WELFARE

Labour welfarfe entails all those activities of the employers which are directed towardsproviding the employees with certain facilities and services in addition to wages orsalaries.

AGENCIES OF LABOUR WELFARECENTRAL GOVERNMENTSTATE GOVERNMENTEMPLOYERS

TRADE UNIONSCHARITABLE ORGANISATION

TYPES OF WELFAARE SERVICES

1) ECONOMIC SERVICES2) RECREATIONAL SERVICES3) FACILITATIVE SERVICES

i) Canteen, rest rooms and lunch roomsii) Housing facilitiesiii) Medical facilities

iv) Washing facilitiesv) Educational facilitiesvi) Leave travel concession

PROVISIONS OF FACTORIES ACT REGARDING LABOUR WELFARE

1) WASHING FACILITY(SEC-42)2) FACILITIES FOR STORING AND DRYING CLOTHING(SEC-43)3) FACILITIES FOR SITTING(SEC-44)4) FIRST AID APPLIANCES(SEC-45)

5) CANTEENS(SEC-46)\6) SHELTERS, REST ROOMS AND LUNCH ROOMS(SEC-47)7) CRECHES(SEC-48)8) WELFARE OFFICERS(SEC-49)

PROVISIONS REGARDING LABOUR WELFARE UNDER OTHER ACTS

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PLANTATIONS LABOUR ACT, 1951

1)CANTEENS2)CRECHES3)RECREATIONAL FACILITIES

4)EDUCATIONAL FACILITIES\5)HOUSING FACILITIES6)PROVIDE AMENITIES FOR PROTECTION AGAINST RAIN OR COLD7)APPOINTMENT OF WELFARE OFFICER IN PLANTATION EMPLOYING 300OR MORE WORKERS

MINES ACT, 1952

1)MAINTENANCE OF CRECHES2)PROVISION OF SHELTERS

3)PROVISION OF CANTEENS4)MAINTENANCE OF FIRST AID BOXES AND ROOMS5)PROVISIONIN COAL MINES

i) PIT HEAD BATHS EQUIPPED WITH SHOWERSii) SANITARY LATRINES

iii) LOCKERS1) APPOINTMENT OF WELFARE OFFICERS

MERCHANT SHIPPING ACT, 1958

1) CREW ACCOMDATION2) SUPPLY OF SUFFICIENT DRINKING WATER3) SUPPLY OF NECESSITIES LIKE BEDDING, TOWELS ETC.4) SUPPLY OF MEDICINES5) \GRANT OF RELIEF TO DISTRESSED SEAMEN6) EVERY FOREIGN GOING SHIP SHOULD HAVE QUALIFIED DOCTOR7) APPOINTMENT OF SEAMENS, WELFARE OFFICERS8) ESTABLISHMENT OF HOSTELS, CLUBS, CANTEENS ETC9) PROVISION OF EDUCATIONAL FACILITIES

THE MOTOR TRANSPORT WORKERS ACT, 1961

1) CANTEENS2) CLEAN, WELL-LIGHTED REST ROOMS3) UNIFORM, RAINCOATS, WASHING ALLOWANCE4) MEDICAL FACILITIES\5) FIRST AID FACILITIES

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DOCK WORKERS ACT ,1948

AMENITIES PROVIDED IN THE PORT PREMISES

1) TOILETRS

2) DRINKING WATER3) WASHING FACILITIES4) BATHING FACILITIES5) CANTEENS6) REST SHELTERS7) FIRST-AID ARRANGEMENTS8) WELFARE MEASURES

LABOUR WELFARE OFFICER

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LECTURE-44

SOCIAL SECURITY

It is the endeavour of community as a whole to afford itself to the utmost extentpossible to any individual uring periods of physical distress consequent on illness orinjury and from the economic distress consequent on reduction or loss of earnings dueto illness , disablement, maternity, unemployment, old age or death of the workingmember.

Social Insurance

It is a mechanism through which benefits are provided to the contributories necessaryfor satisfying wants during old age, sickness, unemployment and other contingenciesof life.

Social Assistance

It is a program through which the Government attempts to ameliorate the distresscaused by contingencies of life. No contribution are made, for getting the benefit bythe workers. In other words, social assistance includesnon-contributory benefitstowards the maintence of children, mothers, invalids, the aged, the disabled and other

like the unemployed. Benefits are provided to persons of small means in sufficientquantity so that their minimum standards of needs could be satisfied.

MEASURES FOR SOCIAL SECURITY OF WORKERS

1) THE WORKERSCOMPENSATION ACT, 19232) THE EMPLOYEESSTATE INSURANCE ACT, 19483) THE EMPLOYEES PROVIDENT FUND ACT ,19524) THE MATERNITY BENEFIT ACT, 1961.

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LECTURE-45

ROLE OF HRM IN STRATEGIC MANAGEMENT

Strategic management of human resources facilitates creation ofcompetitive advantage for the organization over its rivals by buildingunique human resource based competence. An organisationssrecruitment, selection, training, performance appraisal, andcompensation practices can have a strong influence on employeecompetence as illustrated below:

a. RECRUITMENT AND SELECTION

b. TRAININGc. PERFORMANCE APPRAISALd. COMPENSATION

Strategic human resource management may be defined as the linkingof human resource management with strategic goals and objectives inorder to improve business performance and develop organizationalculture that fosters innovation and flexibility.There is no denying thefact that human resources are at the core of achieving competitiveadvantage by a firm. This has led to strategic management humanresource in dynamic organisaation.

The HRM practices of an organization can be an important source ofcompetitive advantage. For this strategic focus should be given on thefollowing:

1) HRM pre-selection practices including human resource planningand job analysis.

2) HRM selection practices meant to staff various positions in theorganization. Both recruitment and selection policies andprocedures should be designed keeping in view the mission andpurpose of the organization.

3) HRM post-selection practices to maintain and improve theworkers job performance levels. HR decisions related to trainingand development, performance appraisal, compensation andmotivation should be based on corporate strategy of theorganization.

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EMOTIONAL QUOTIENT

The term EI is the ability to command respect by building relationshipsor the ability to get along with the people and situations.

The term EI was used for the first time to involve a set fo personal andsocial abilities of an individual. It was realized that there is definitelymuch more success in life than possessing a high IQ and thisrealization eventually brought to light the concept EQ.Self-awareness,self regulation, motivation, empathy and social skills are maindimensions of EQ.

Goleman has identified three elements of emotional quotient:

1) SELF AWARENESS

2) SOCIAL AWARENESS3) SOCIAL SKILLS

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LECTURE-46

MENTORING

The popular meaning of the term mentoring is to provide wiseadvice or counseling. In the context of human resource development,mentoring is considered as a process whereby a senior executive actsas a friend, philosopher and guide to a new recruit and provides himthe support that the latter needs. The support may take the forms ofemotional support I, coaching, counseling and guiding. The seniormanager who provides such support is known as the mentor andperson who is provided with such support is called the mentee or the

protg.

A MENTOR PERFORMS ALL TYPES OF FUNCTIONS FROM ELABORATINGJOB CONTENTS TO PERSONAL COUNSELLING, FROM DRAWING UP ADRESS CODE TO TEACHING TABLE MANNERS, ETC.

MENTORING PROCEDURE

It cannot be rigid. It will depend upon the nature and requirement ofthe organisaation. However mentoring at Smithkline BeechamConsumer Healthcare consists of the following seven steps:

1) One-day workshop for profiling menntees and allotment ofmentors.

2) Five-day induction at the head office and first mentor-menteemeeting for familiarizing mentees with corporate functions andsmoother initiation.

3) Role-clarity workshop for mentors and weekly meeting withmentees within the first month for avoidance of mentor-managerrole conflict and forging closer ties with mentees.

4) Fortnightly mentor-mentee meeting and assigning of budgets forextending the concept to the peer level.

5) Need based meetings supplemented by phone calls and e-mailsfor reinforcing formal and informal learning by the mentees.

6) Review of the process by mentors and mentees for revising theprocess to generate feedback.

7) Final presentation by the mentees on mentoring for crystallingthe feedback for corrective measures.

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DIFFICULTIES IN MENTORINGtMentoring may face the following hurdles in an organization:

1) Overload2) Lack of Role Clarity3) Lack of Information4) Unhelpful Attitude5) Lack of Mentoring Skills

In order to increase the effectiveness of mentoring the followingsuggestions should be kept in view:

1) Mentoring program should have the support of top management

which should clarify the roles of both mentors and mentees.2) Mentors should have adequate information about the potentials

and career paths of the mentees.3) Mentors should have helpful attitude towards the mentees.4) Mentees should be encouraged to develop new ideas and

sharpen their skills.

EMPLOYEE STOCK OPTION

These plans are basically designed for the executives. Under stockoption plan the eligible executives arealloted companys shares belowthe market price.

The executives who are offered shares under ESOP feel committed tothe company and work for the growth of the company. Because ofpossibility of gains in future their motivational level is also increased.But if the market value of the shares foes down due to politicaluncertainity, general economic depression or some other reason, theemployees holding shares under ESOP will be the losers. It is becauseof this reason that many executives dont prefer the Employee StockOption Plan as an Incentive Plan.

According to Flippo The typical employee ownership or stock optionplan provides a mechanism through which certain eligible employeesmay purchase the stock of company at a reduced rate.

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FEATURES OF EMPLOYEE STOCK OPTION PLAN

1) Employee stock option plan is voluntary in nature.2) It offers an option to purchase a certain amount of stock or

shares in the future at a stated price or in the present at a price

lower than the market price.3) It is intended to procure and hold talented professional

employees.4) It makes the employee a part-owner of the company where he is

working.5) Mutuality of interest is created between the individual and the

company.6) Stocks are held in trust until employee chooses to withdraw from

the plan or leave the company.

MERITS OF EMPLOYEE STOCK OPTION

The advantages of employee stock option are as under:

1) It promotes mutuality of interest between the employees andemployer.

2) The employees get an opportunity to attend the meetings of theshareholders and have detailed information about the progressand future plans of the company.

3) It promotes thrift, efficiency and security on the part ofemployees.

4) Workers income is supplemented by dividends.5) The management also gains because of better cooperation,

lesser supervision, reduced labour turnover, improved industrialrelations, better understanding on the part of workers,elimination of waste and enhancement of efficiency.

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LECTURE-47&48

FLEXITIME

As the name implies, it gives employees some discretion as to whenthey will come to work in the morning and when they will leave in theafternoon. In the other words, flexitime is a system wherebyemployees are required to work a specific number of hours a week but

are free to vary the hours of work within certain limits. Each dayconsists of a common core, usually, four hours with a flexibility bandsurrounding the core.

Flexitime is short for flexible work-hours or work-schedule. It is basedon the assumption that employees are paid for doing their quota ofwork and not for being at the place of work for a fixed number of hourson each working day. The system of flexitime offers strongmotivational potential by increasing workers freedom and allowingworkers to assume greater responsibility through creatingopportunities for them to make decisions about their work schedule.

Flexitime has a variety of advantages to both management andworkers. There is evidence that employees have higher morale, lowerabsenteeism and tardiness rates and longer lengths of service.Productivity gains are also made as employees arrange to work duringthe times when they are most energetic.From the employees point ofview the use of time can be better tailored to personal needs andpreserences and private lives can consequently be made morecomfortable.

Flexitime has some limitations also. It cannot be implemented at all

when the work requires all employees to be present at the same time.It may produce problems for managers in directing subordinatesoutside the core time period, cause confusion where there is shift workor interdependencies between functions.

TOTAL QUALITY MANAGEMENT

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Total Quality Management may be defined as creating an organisational culturecommitted to the continuous improvement of skills, teamwork, process, product andservice quality, and customer satisfaction. For achieving total quality, three things areEssential:

1)Meeting customers requirements

2)Continuous improvement through management process3)Involvement of all employees.

Objectives of TQM Philosophy

Meeting the customers requirements is the primary objective and the key toorganizational survival and growthThe second objective is continuous improvement of qualityThe third objective aims at developing the relationship of openness and trust among the

employees at all levels in the organization.

COMPONENTS OF TOTAL QUALLITY MANAAGEMENT

1) CUSTOMER ORIENTIATION2) CONTINUOUS IMPROVEMENT3) EMPLOYEES INVOLVEMENT

BENEFITS OF TQM

The following benefits can be derived from a sound TQM program

1) TQM brings quality consciousness in the enterprise which encourages productionof quality products.

2) TQM helps in providing greater satisfaction to the customers by meeting theirrequirements.

3) It creates a good public image.4) There is better use of materials, machines, capital, human resources etc.5) Wastages are reduced to a minimum.6) Employees are committed to higher quality and feel highly motivated.

IMPLEMENTATION OF TQM

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W.E.Deming suggested Plan-Do-Check_Act Cycle for the implementation of TQM inany organization. The steps in PDCA cycle are as follows:

1) Lay down policies and objectives of TQM.2) Chalk out the methods to achieve TQM objectives.

3) Educate and train workers and managers to understand and meet the requirementsof TQM.4) Start the operation of TQM by introducing new product, machines, procedures,

etc.5) Observe results of operation and find out the causes of non-conformance to

quality standards.6) Analyse results and determine the consequences of non-conformance and place

the report before the top management.7) Prevent undesired effects in Quality improvement. Establish personal

relationships with employees so that they can voice their concerns and ideas.8) Suggest measures for improvement of methods and design in future.

KAIZEN

The Japanese word for continuous improvement is KAIZEN, which means improving theoverall system by constantly improving the little details. TQM managers dedicated toKaizen are never totally happy with things. Its practitioners view quality as an endlessjourney, not a final destination. They are always experimenting, measuring, adjustingand improving.

There are four general avenues for continuous improvement for any organization. Theseinclude:

1) Improved and more consistent product and service quality.2) Faster cycle times3) Greater flexibility4) Lower costs and less waste.

International attention is being focused on the outstanding performance of the Japaneseeconomy and the success of management practices being adopted of the Japanese firms.Interest in Japanese management system has rapidly increased in the western countries ofthe world. Quality improvement is central to the Japanese system along with life timeemployment , seniority based promotion, group participation, etc. In Japanese system,quality is expressed in relation to continuous improvement known as kaizen.

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QUALITY CIRCLES

CONCEPT AND FEATURES OF A QUALITY CIRCLE.

The concept of Q.C emerged from quality control. Q.C are quite popular in Japan.Looking at their success, many organizations in U>.S.A. and India have also attempted toimplement Q.C. It should be noted that Q.C provide a future-oriented approach. Theyseek high quality products in the current production run and in the future.

A Q.C is a small group of employees doing similar or related work who meet regularly toidentify, analyse and solve product-quality problems and to improve general operations.

The Q.C are relatively autonomous units usually led by a supervisor or a senior workerand organized as work units. The workers, who have a shared area of responsibility,

meet periodically to discuss , analyse, and propose solutions to ongoing problems.

The key features of Q.C are as under:

1) A Q.C is a voluntary group.2) It represents a collective effort.3) It intends to improve the quality of output.4) It coordinates the activities of members towards improving the quality of work in

the workshop.5) It facilitates frequent meetings and discussions of members for improving quality.6) It has no discrimination against age, sex and position.

PURPOSE OF Q.C.

The technique of Q.C has been refined over the years. It is now followed to achieve thefollowing objectives:

1) Overall improvement of quality of products manufactured by the enterprise.2) Improvement of production methods and productivity of the enterprise.3) Self-development of the employees who take part in Q.C.4) Encouragement of innovative ideas among the employees.5) Building high morale of employees by developing team-work in the organization.

BENEFITS OF Q.C

1) Formulation of Q.C in Japan and other countries has helped in bringing outseveral innovations and changes in work methods and products.

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2) Q.C have proved to be a valuable tool for increasing productivity, improvingquality and increasing workers job satisfaction.

3) Membership in a Q.C means a participative environment that providesidentification with the work-group.

4) Quality circles help in the development of the participants as they are encouraged

to produce innovate ideas and find new ways to improve product quality.5) Q.C provide opportunities for better understanding among the members.6) Q.Cs create awareness of the potential of the workers.

INTRODUCING Q.C IN AN ORGANISATION

1. SELLING THE IDEA OF QUALITY CIRCLE2. CONSTITUTION OF Q.C3. ANALYSIS OF QUALITY PROBLEMS

4. PROBLEM SOLVING5. PRESENTATION OF SUGGESTIONS TO THE MANAGEMENT6. IMPLEMENTATION

PROBLEMS IN IMPLEMENTATION OF QUALITY CIRCLES

1. NEGATIVE ATTITUDE2. LACK OF ABILITY3. LACK OF MANAGEMENT COMMITMENT4. NON-IMPLEMENTATION OF SUGGESTIONS

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LECTURE-49-51

HUMAN RESOURCE ACCOUNTING

Human Resource Measurement in India(A Study of Indian Corporate Sector)IntroductionIn any organisation the most important input is the human element The success or failureof a company very much depends on the persons who man the organisation. It is a matterof common knowing that capital issues of even new undertakings are oversubscribed, if

they floated by competent persons. This is because the investor in the capital marketplaces high value in the human ability rather than any other factors like net worth,yield, price earnings ratio which are not available in the case of a new company. Evenamong nations, countries like Japan, West Germany and Korea are able to make rapidstrides, thanks to the human resources, not in terms of numbers but terms of quality,devotion to work and loyalty to the rate. In the Asiad at Delhi also, we saw how the twoKoreas secured a large number of medals quite out of proportion to their size, strengthandresources. This was possible because of the emphasis on the development of humanresources. Japan, a country which is not endowed with much of natural resources, is nothandicapped at all, thanks to its human resources with the help of which that nations cansurmount any difficulty. History is replete with examples of several great personalitieslike Christ, Buddha, Prophet Mohammed, Sankara and Vivekananda to realise whatsingle individual can achieve without any material resources. In business also the greatestasset is the humanresource of the enterprise and not the plant, equipment or the magnificent buildings itowns. It is worth recalling what Alfred Marshal said long ago the most valuable of allcapital is that invested in human beings. However, it is unfortunate that the balancesheets do not exhibit this most vital asset, while capitalinvested in other assets is shown. This is one~ of the severe limitations of present dayfinancial statements which hinder the uses of these statements from making full use ofthem. Generally, the productivity of investment in industries is known from the rate ofreturn it gives. $0 far, these rates of productivity are considered in respect of physicalassets investment only. To find out the productivity of investment inrespect of human beings in any enterprise, Human, Resource Accounting (HRA) will behelpful. The Human Resource Accounting is also scaling tool that generates thequantitative control information about the contribution of human resources for promotingindustrial productivity. R can help the management in taking many vital decisionsrelating to selection, lay-off, transfers, training, promotion, etc. The American

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Accounting Associations Committee on Human Resource Accounting has definedhuman resource accounting as under:Human resource accounting is the process of identifying and measuring data abouthuman resources and. Communicating this information to the interested parties. Thus,the basic premises underlying the theory of Human Resource Accounting are :

(1) People are valuable resources of an enterprise;(2) The usefulness of manpower as an organizational resources is determined by the wayin which it is managed; and(3) Information on investment and value of human resources is useful for decision-making in the enterprise.It helps in developing financial assessments for the people within the organisation andmonitoring of these assessments in the light of net accounting policy of the concern fromtime to time. The purpose of HRA is to improve the quality of human resources decisionsmade both internally and externally concerning and organisation. However, the specificobjectives of Human Resource Measurement may be outlined as under:(1) to assist the management in taking suitable decisions regarding investment on human

resources;(2) to provide information to all people concerned regarding the earning potential ofhuman resources of theorganisation;(3) to assess the efficiency of human resources in obtaining productivity and profitability;and(4) to provide comparative information regarding costs and benefits associated withinvestment in human assets.Rationale of Human Resource MeasurementThe accountants in the past have not given due consideration to this important assetworking in the enterprise. In our traditional accounting practices, the heavy amountincurred on the recruitment, placement, selection, training and development of thepersonnel is generally treated as revenue expenditure and hence it is debited to profit andloss account of the period during which such amount is incurred. But today, it is arguedthat these expenditures incurred by an enterprise to get the benefit of the services of itsmanpower force in future is against the accounting principle to treat them completely ofa revenue nature. In fact, such expenditure should be capitalised and be shown in thebalance sheet. The failure of professional accountants to treat human resources as assetjust like physical and financial assets attracted the attention of academics and inseventies, the concept of Human Resource Accounting was evolved which emphasise thathuman resources should betreated like physical assets and should be shown in the balancesheet of the enterprise.ObjectivesThe primary purpose of human resource accounting is to facilitate the management ofpeople as organisational resources. It. can also called as human resource managementaccounting, Le., the application of accounting to the management of human resources.Rensis Likert, one of the earliest proponents of the subject, haslisted the following objectives of Human Resource Accounting:(1) To furnish cost value information for making

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(2) Management decision and maintaining human resources in order to attain costeffective organisational objectives.(3) To allow management personnel to monitor effectively the use of human resources.(4) To provide a sound and effective basis on asset control, Le., whether assets areconserved, depleted or appropriated.

(5) To aid in the development of management principles by classifying the financialconsequences of various practices.Present Value of Future Earning ModelUnder this approach, the value of human resources of an organisation is determinedaccording to their present value to the organisation. A number of valuation models havebeen developed to determine the present value.This model has been developed by Brauch Lev and Aba Schwarts in 1971. They are ofthe opinion, that determination of the total of a firms labour force is a straightforwardextension of the measurement procedure of an individual value to the organisation. Theyhave divided the whole labour force into certain homogeneous groups such as skilled,unskilled, set11i-skilled, technical staff, managerial staff etc. and in accordance with

different classes and age groups. Average earnings stream for different classes and agegroups are preparedfor each group separately and the present v5lue for the human capital is calculated. Theaggregate present value of different groups represents the capitalised future earnings ofthe firm as a whole. They have advocated the use of cost of capital rate for the purpose ofcapitalising the present. value of the future earnings of the employees. According tothem, the value of human capital represented by a person of age is the presentvalue of his remaining future earnings from his employment. They have given thefollowing formula for calculating the value of an individual:Vr = T E(t) / t : r (1 + r) t - rWhere Vr = the human Capital value of a person r years old,E(t) = the persons annual earnings up to retirement, represented by the earning profile,r = discount rate (Cost of Capital),T = Retirement age.Rewards Evaluation ModelThis model has been suggested by FlanhoItz. It identifies the major variables thatdetermine an individuals value to an organisation, i.e. his expected reliable value. Theexpected realisable value of an individual is the present worth of future services expectedto be provided during the period he is expected to remain in the organisation. The modelis based on the presumption that a persons value to an organisation depends upon thepositions to be occupied by him in the organisation. The movement, of people from oneorganisation role to another is a stochasic process with rewards. As people move andoccupy different organisational roles, theyrender services (i.e., rewards) to the organisation. However, the roles they will occupy infuture will have to be determined probabilistically for each individual. The modelsuggests a five steps approach for assessing the value of an individual to theorganisation :1. Forecasting the period will remain in the organisation, i.e., his expected service life;2. Identifying the services states, i.e., the roles that the might occupy including, of course,the time at which he will leave organisation;

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3. Estimating the value derived by the organisation when a person occupies a particularposition for a specified time period;4. Estimation of the probability of occupying each possible mutually exclusive state atspecified future times; and5. Discounting the value at a predetermined rate to get the present value of human

resources.This model is certainly an improvement over the Lev and Schwartz. But this model whenexamined on operational capacity falls short of a practical value inasmuch as thatprobabilities will have to be determined for each individual occupying various servicestates, and. these probabilities will have to be determined for all employees for periods onan individual basis. Further, it will be tremendously expensive way to predict careermovements of exit probabilities on an individual basis. Moreover, data developed on thebasis will involve large variance which will reduce usefulness of the model.Morse (1973) suggested this approach. Under it the value of human resources isequivalent to the present value of the net benefits derived by the enterprise from theservice of its employees. The following steps are involved under this approach:

1. The gross value of the services to be rendered in future by the employees in theirindividual and collective capacity.2. The value of direct and indirect future payments to the employees is determined.3. The excess of the value of future human resources (as per (1) above) over the value offuture payments (as per (2) above) is ascertained. This represents the net benefit to theenterprise because of human resources.184 11.672.14. By applying a predetermined discount rate (usually the cost of capital) to the netbenefit, the present value isdetermined. This amount represents the value of human resources to the enterprises.Certainty Equivalent Net Benefit ModelThis approach has been suggested by Pekin Ogan (1976) is, in fact, an extension of netbenefit approach of morose. Under it, the value of human resources is determined bytaking into consideration the certainty with which the net benefits in future will accrue tothe enterprise. The method involves the followingsteps :(a) Net Benefit from each employee. (as determined under the previous approach)(b) Certainty factor at which the benefits will be available in future.(c) The certainty equivalent benefits will be calculated by multiplying the certainty factorwith the net benefits from all employees. This will be the value of human resources of theenterprise.

Applications of Human Resource AccountingIf we look at the annual reports of public enterprises and private enterprises in India, wefind that chairmans report invariable contains the statements highlighting thesignificance of human resources. The chairman of these enterprises make their remarks atthe annual general meeting of the shareholders that our employees are most importantassets and without their significant contribution, the present growth in the operationwould not have been attained. I wish to place it as record of my sincere gratitude for thehard work done by the employees of our company. I thankfully acknowledge the

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contribution made by our employees. These qualitative pronouncements reflect theimportance of human resources in an enterprise but the quantitative information relatingto their contribution or their value is nowhere recorded or shown in the financialaccounts. However, in practice, a few enterprises, stated below, value their humanresources and report this information in their annual reports.

(A) Public Sector Enterprises(1) Bharat Heavy Electrical Ltd.,(2) Cement Corporation of India,(3) Project and Equipment Corporation of India,(4) Engineers India Ltd.,(5) Minerals and Metals Trading Corporation of India,(6) Electrical India Ltd.,(7) Oil and Natural Gas Commission,(8) Hindustan Shipyard Ltd.,(9) Steel Authority of India Ltd., and(10)Oil India Ltd ..

(B) Private Sector Enterprises(1) Tata Engineering and Locomotive Works(TELCO)(2) Associated Cement Company (ACC), and(3) Southern Petro Chemical Industries Corporation (SPIC).The methodology of human asset accounting encompasses the elements such as :(a) The composition of employees in different grades for five years;(b) Productivity of human resources for five years;(c) Programmes for employee development;(d) Personnel payments to the employees and expanses on social welfare per employee;(e) Human asset valuation;(f) Human assets vis--vis total assets, and(g) Value of human assets in an organisation etc.Emerging IssuesIn India, human resource accounting has not been introduced so far as a system. TheCompanies Act, 1956 does not require furnishing of any significant information abouthuman resource in financial statements of companies. The Institute of CharteredAccountants of India has issued accounting standards of different technical subjects ofaccounting but it has not been able to bring any definitive accounting standard formeasurement and reporting of cost and value of human resources of an organisation.The existing accounting standards, however, fully support the adoption of humanresource accounting for the purpose of meeting their own requirements in true sense. Theresult of non-disclosure of human resources cost and value information in financialstatements of business enterprises, has been that financial statements do not reveal anyquantitative information on human resources side and the statement of affairs isimproperly reported to different authorities.The dichotomy in accounting between human and non-human capital is ratherfundamental in that while fatter is recognized as an asset and recorded as such in thefinancial statements, the former is totally ignored. With the accelerated growth in scienceand technology the value of human capital is gradually increasing and hence it is essentialfor a company to reflect the investment in human resources. Recently, the idea of human

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resources accounting attracted the minds of many scholars viz., Hermanson, HekimanJones, Likert, Flam holtz, Brument & others. The modern thinking of these scholars isthat all the assets of. the Company including the human asset must be properly treated,analysed and reported by an accounting system in view of the long-terminterest of the organisation. So the Human Resource Accounting is needed in this context.

Human Resource Accounting is necessary: (a) disclose what is happening to the energyof human beings and what is its valuefor management, and (b) to find out the productivity of investment on human beings inorganisation. It is the scaling tool that generates and reports quantitative controlinformation about the contribution of human resource for promoting industrialproductivity. The application and usefulness of Human Resource Measurement dependson the future efforts and experiments to be made by practicing managers, accountants andacademicians. The application of HRA also needs support from the professional bodiesand Government.In the absence of Human Resource Accounting, the management may not realise thenegative effects of certain programmes aimed at improving profits in the short-run. Such

programmes may result in decreased value of human assets due to fall in the productivitylevels, high labour turnover, low morale, etc. The success of an organisation very muchdepends on the build-up of quality workforce at all levels. The success stories ofBHEL, lTC, Hindustan Lever, Larsen & Toubro and several other enterprises are largelydue to the emphasis on human resource development. If this vital asset is not shown inthe balance-sheet, to that extent the public and live stores are handicapped. HumanResource Accounting helps investors and public by providing the necessary information.

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LECTURE-52-54

Human Resources Information SystemsThe human resource information system is a systematic procedures for collecting,storing, maintaining retrieving and validation data needed by an organization about itshuman resources. The HRIS is usually a part of the organizations larger managementinformation system. The HRIS need not be complex or even computerized. Butcomputerization has its own advantage of providing more accurate and timely data fordecision making. The areas of application of HRIS are many .Some of them includetraining management, risk management and legal requirements, attendance reporting andanalysis, HRP, accident reporting and prevention, strategy planning, financial planningand other related areas.Steps in implementing an HRIS

As with any major change, proper planning is an absolute necessity for successfulimplementation of an HRIS.The steps outlined below describes the specific proceduresinvolved in successfully developing and implementing an HRIS.Step1: Inception of idea: The idea having an HRIS must originate somewhere theoriginator of idea should prepare a preliminary report showing the need for an HRIS andwhat it can do for the organizations.Step2: Feasibility study: This evaluates the present system and details the benefits of anHRIS.It evaluates the cost and benefits of an HRIS.Step3: Selecting a project team: Once the feasibility study has been accept ed and theresources allocated project team should be selected. The project team should consist of anHR representatives from both management information systems and payroll.

Step4: Defining the requirements: A statement of requirements specifices in detailexactly what the HRIS will do. A large part of the statements normally deals with thedetails of the reports that will be produced. Naturally, the statement also describes otherspecific requirements. This typically includes written descriptions of how users collectand prepare data, obtain approvals, complete forms, retrieve data, and perform other non-technical tasks associated with HRIS use. The key is here is to make sure that the missionthe HRIS truly matches managements needs for an HRIS.Step5: Vendor analysis: This step determines what hardware and software are availablethat will best meet the organizations need for the lowest price.This is a difficult task. Thebest approach is usually not to ask vendors if a particular package can meet theorganizations requirements but how it will meet those requirements.

Steps6: Package contract negotiation: after a vendor has been selected , the contractmust be negotiated, the contract stipulated+ the vendors responsibilities with regards tosoftware,installation,service,maintenance,training and documentation.Step7: Training: Training usually begins as soon as possible after the contract has beensigned. First the HR members of the project team are trained to use the HRIS.Towardsthe end of the implementation, the HR representative will train manager from otherdepartments in ho w to submit information to the HRIS and how to request informationfrom it.

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Step8: Tailoring the system: This step involves making changes to system to best fit theneeds of the organization. A general rule of thumb is not to modify the vendors package,because modifications frequently cause problems. An alternative approach is to developprograms that augment the vendors program rather altering it.Step9: Collecting the system: Prior to start-up of the system, data must be collected and

entered into the system.Step10: Testing the system: Once the system has been tailored to the organizations needand the data entered, a period of testing follows. The purpose of the testing phase isverify the output of the HRIS and to make sure it is doing what it is supposed to do.Step11: Starting up: Start up begins when all the current actions are put into the systemand reports are produced. It is wise to attempt start-ups during the lull period so thatmaximum possible time can be devoted to HRIS. Even though the system has been test,some additional errors often surface during start-up.Step12: Running in parallel: Even after the new HRIS has been tested, it is desirable torun the new system in parallel with the old system for a period of time. This allows forthe comparison of outputs of both the system and examination of any inaccuracies.

Step13: Maintenance: It normally takes several weeks or even months for HR people tofeel comfortable with the new system. During this stabilization period, any remainingerrors and adjustments should be handled.Step14: Evaluation: After the HRIS has been in place for reasonable length of time, thesystem should be evaluated. Is the HRIS right for the organization and is it being properlyused?Following steps when implemented will not give HRIS success, but it will increase theprobability.A well-designed human resources information system (HRIS) is a powerful,computer-based tool that enables you to enter and update all types of employee-relatedinformation quickly and easily. It lets you access and generate a wealth of HRmanagement information, and produce internal reports and external compliance reports asneeded. HRIS significantly contributes to the efficiency and effectiveness of your HRfunction. We offer a number of packaged systems to fit your needs and budget.Benefits:

An HRIS system:Computerizes record-keeping.Increases key personnel data available to management.Enables you to produce timely reports, both standard and customized.Automates the preparation of many government-required reports.Enables you to track up-to-date time-off balances (vacations, sick days, holidays, andmore).Saves time, increases efficiency.

Human Resource Audit

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Nature of Human Resource AuditAn HR audit is a tool for evaluating the personnel activities of an organisation. The auditmay include one division or an entire company. It gives feedback about the HR functionsto operating managers and HR specialists. It also provides feedback about how wellmanagers are meeting their HR duties. In short, the audit is an overall quality control

check on HR activities in a division or company and an evaluation of how these activitiessupport the organisations strategy

Benefits of Human Resource

Several benefits that result from an HR audit are: Identification of the contributions of the HR department to the organisation, Improvement of the professional image of the HR department, Encouragement of greater responsibility and professionalism among members of theHR department Clarification of the HR departments duties and responsibilities,

Stimulation of uniformity of HR policies and practices, Finding critical personnel problems, Ensuring timely compliance with legal requirements, Reduction of HR costs through more effective personnel procedures, Creation of increased acceptance of the necessary changes in the HR department and A thorough review of the departments information system.The HR manager himself or herself is interested in knowing his or her department seffectiveness. It is not that the department is infallible. Errors do happen. Policies andpractices become outdated. By auditing itself, the department finds problems before theybecome serious. Done correctly, the evaluation process can build a strong rapportbetween the department and operating managers, and it can reveal outdated

assumptions that can be changed to meet the departments objectives and futurechallenges. Systematic assessment instills discipline in the personnel staff and encouragesthem to move away from intuitive techniques to more rigorous assessment of the likelybenefits to be achieved. Further, a personnel function must establish credibility with themanagement by justifying its programmes and clearly demonstrating how it contributedto the attainment of organisational goals.

Scope of AuditAn HR audit must cover the activities of the department and extend beyond, because thepeoples problems are not confined to the HR department alone. Thus, the audit should bebroad in its scope. It must evaluate the personnel function, the use of its procedures bythe managers and the impact of these activities on the employees.Specifically, an HR audit covers the following areas:1. Audit of human resource function,2. Audit of managerial compliance,3. Audit of the human resource climate, and4. Audit of corporate strategy.

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Audit of Human Resource FunctionThis involves audit of all HR activities discussed till now in this book. For each activity,the auditors must

(i) determine the objective of each activity,(ii) identify who is responsible for its performance,

(iii) review the performance,(iv) develop an action plan to correct deviations, if any, between results and goals,

and(v) follow up the action plan.

The following 20 criteria would help measure effectiveness of the HR function of anorganisation.Each statement has a four-point rating scale varying from very true to nottrue.1. In your company, all issues are closely linked to every other business process.2. The HR department is represented in strategy-building sessions of the topmanagement.3. HR issues are discussed explicitly when strategic plans are formulated.

4. The performance of the HR department and of the organisation are linked.5. The HR function is given as much, or more significance, as other functions.6. HR managers have sufficient power to suggest strategic initiative to the topmanagement.7. The HR department can easily compete for funds and management involvement.8. The structure of the HR department is effective in delivering competent services.9. Line managers are recruited along with trained specialists in the HR department.10.The services of the HR department are equally available to everyone.11.The head of the HR department is always accessible to all employees.12.The HR department plans the companys manpower needs proactively.13.The HR department conveys organisational goal to everyone.

14.The HR department links appraisal and compensation to corporate objectives.15.The HR department meets the companys and individuals training needs.16.The HR department disseminates information down the ranks.17.The HR department does not handle staff-welfare, canteens, or payrolls management.18. The HR department has knowledge qfbehavioura1 sciences and industrial psychology19.The HR department gets feedback on its performance from other employees.20.HR practices are audited, their costs computed, and then effectiveness evaluated.

This HR management audit allows you to rate the extent to which an organisation hasbasic HR activities in place a-c how well they are being performed. In deciding uponyour rating, consider also how other managers and employees would rate

the activitiesI. Legal Compliance

1. Equal employment opportunity requirements2. Immigration reform3. Health and safety4. Wage and hour laws5. Employment-at-will statements6. Privacy protection

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7. ERISA reporting/compliance8. Family/medical leaveII. Obtaining Human Resources

9. Current job descriptions and specifications10.HR supply-and-demand estimates (for 3 years)

11.Recruiting process and procedures12.Job-related selection interviews13.Physical exam proceduresIII. Maintaining Human Resources

14.Formal wage/salary system15.Current benefits programs/options16.Employee recognition programs17.Employee handbook/personnel policy manual18.Absenteeism and turnover control19.Grievance resolution process20.HR record-keeping/information systems 166 11.271

IV. Developing Human Resources21.New employee orientation program22.Job skills training programs23.Employee development programs24.Job-related performance appraisal25.Appraisarfeedback training of managers