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Human Resource Management. Dr. Hadia Hamdy Magda Hassan Yomna Samir Dina Mehrez. Fundamentals of Human Resource Management. By: Dina Mehrez. Management Essentials. Management involves setting goals and allocating scarce resources to achieve them.

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human resource management

Human Resource Management

Dr. Hadia Hamdy

Magda Hassan

Yomna Samir

Dina Mehrez

management essentials
Management Essentials
  • Management involves setting goals and allocating scarce resources to achieve them.
  • Management is the process of efficiently achieving the objectives of the organization with and through people.
management essentials1
Management Essentials
  • Primary Functions of Management
    • Planning – establishing goals
    • Organizing – determining what activities need to be done
    • Leading – assuring the right people are on the job and motivated
    • Controlling – monitoring activities to be sure goals are met
why is hrm important to an organization
Why is HRM Important to an Organization?
  • The role of human resource managers has changed. HRM jobs today require a new level of sophistication.
    • Employment legislation has placed new requirements on employers.
    • Jobs have become more technical and skilled.
    • Traditional job boundaries have become blurred with the advent of such things as project teams and telecommuting.
    • Global competition has increased demands for productivity.
why is hrm important to an organization1
Why is HRM Important to an Organization?
  • The Strategic Nature – HRM must be
    • a strategic business partner and represent employees.
    • forward-thinking, support the business strategy, and assist the organization in maintaining competitive advantage.
    • concerned with the total cost of its function and for determining value added to the organization.
why is hrm important to an organization2
Why is HRM Important to an Organization?
  • HRM is the part of the organization concerned with the “people” dimension.
  • HRM is both a staff, or support function that assists line employees, and a function of every manager’s job.
  • HRM Certification
    • Colleges and universities offer HR programs.
why is hrm important to an organization3
Why is HRM Important to an Organization?

Four basic functions:

  • Staffing
  • Training and Development
  • Motivation
  • Maintenance
how external influences affect hrm
How External Influences Affect HRM
  • Strategic Environment
  • Governmental Legislation
  • Labor Unions
  • Management Thought
how external influences affect hrm1
How External Influences Affect HRM
  • HRM Strategic Environment includes:
    • Globalization
    • Technology
    • Work force diversity
    • Changing skill requirements
    • Continuous improvement
    • Work process engineering
    • Decentralized work sites
    • Teams
    • Employee involvement
    • Ethics
how external influences affect hrm2
How External Influences Affect HRM
  • Governmental Legislation
    • Laws supporting employer and employee actions
  • Labor Unions
    • Act on behalf of their members by negotiating contracts with management
    • Exist to assist workers
    • Constrain managers
    • Affect non unionized workforce
how external influences affect hrm3
How External Influences Affect HRM
  • Management Thought
    • Management principles, such as those from scientific management or based on the Hawthorne studies influence the practice of HRM.
    • More recently, continuous improvement programs have had a significant influence on HRM activities.
staffing function activities
Staffing Function Activities
  • Employment planning
    • ensures that staffing will contribute to the organization’s mission and strategy
  • Job analysis
    • determining the specific skills, knowledge and abilities needed to be successful in a particular job
    • defining the essential functions of the job
staffing function activities1
Staffing Function Activities
  • Recruitment
    • the process of attracting a pool of qualified applicants that is representative of all groups in the labor market
  • Selection
    • the process of assessing who will be successful on the job, and
    • the communication of information to assist job candidates in their decision to accept an offer
goals of the training and development function
Goals of the Training and Development Function
  • Activities in HRM concerned with assisting employees to develop up-to-date skills, knowledge, and abilities
  • Orientation and socialization help employees to adapt
  • Four phases of training and development
    • Employee training
    • Employee development
    • Organization development
    • Career development
the motivation function
The Motivation Function
  • Activities in HRM concerned with helping employees exert at high energy levels.
  • Implications are:
    • Individual
    • Managerial
    • Organizational
  • Function of two factors:
    • Ability
    • Willingness
  • Respect
the motivation function1
The Motivation Function
  • Managing motivation includes:
    • Job design
    • Setting performance standards
    • Establishing effective compensation and benefits programs
    • Understanding motivational theories
the motivation function2
The Motivation Function
  • Classic Motivation Theories
    • Hierarchy of Needs –Maslow
    • Theory X – Theory Y –McGregor
    • Motivation – Hygiene – Herzberg
    • Achievement, Affiliation, and Power Motives – McClelland
    • Equity Theory – Adams
    • Expectancy Theory - Vroom
how important is the maintenance function
How Important is the Maintenance Function?
  • Activities in HRM concerned with maintaining employees’ commitment and loyalty to the organization.
    • Health
    • Safety
    • Communications
    • Employee assistance programs
  • Effective communications programs provide for 2-way communication to ensure that employees are well informed and that their voices are heard.
translating hrm functions into practice
Translating HRM Functions into Practice
  • Four Functions:
    • Employment
    • Training and development
    • Compensation/benefits
    • Employee relations
hrm in an entrepreneurial enterprise
HRM in an Entrepreneurial Enterprise
  • General managers may perform HRM functions, HRM activities may be outsourced, or a single generalist may handle all the HRM functions.
  • Benefits include
    • freedom from many government regulations
    • an absence of bureaucracy
    • an opportunity to share in the success of the business
hrm in a global village
HRM in a Global Village
  • HRM functions are more complex when employees are located around the world.
  • Consideration must be given to such things as foreign language training, relocation and orientation processes, etc.
  • HRM also involves considering the needs of employees’ families when they are sent overseas.
hr and corporate ethics
HR and Corporate Ethics
  • HRM must:
    • Make sure employees know about corporate ethics policies
    • Train employees and supervisors on how to act ethically
  • Human resource planning is a process by which an organization ensures that
    • it has the right number and kinds of people
    • at the right place
    • at the right time
    • capable of effectively and efficiently completing those tasks that will help the organization achieve its overall strategic objectives.
  • Linked to the organization’s overall strategy and planning to compete domestically and globally.
  • Overall plans and objectives must be translated into the number and types of workers needed.
  • Senior HRM staff need to lead top management in planning for HRM issues.
linking organizational strategy to human resource planning
Linking Organizational Strategy to Human Resource Planning
  • Ensures that people are available to meet the requirements set during strategic planning.
  • Assessing current human resources
    • A human resources inventory report summarizes information on current workers and their skills.
  • Human Resource InformationSystems
    • HRIS are increasingly popular computerized databases that contain important information about employees.
linking organizational strategy to human resource planning1
Linking Organizational Strategy to Human Resource Planning
  • Assessing current human resources
    • Succession planning
      • includes the development of replacement charts
      • portray middle-to-upper level management positions that may become vacant in the near future
      • lists information about individuals who might qualify to fill the positions
linking organizational strategy to human resource planning2
Linking Organizational Strategy to Human Resource Planning
  • Determining the Demand for Labor
    • A human resource inventory can be developed to project year-by-year estimates of future HRM needs for every significant job level and type.
    • Forecasts must be made of the need for specific knowledge, skills and abilities.
linking organizational strategy to human resource planning3
Linking Organizational Strategy to Human Resource Planning
  • Predicting the Future Labor Supply
    • A unit’s supply of human resources comes from:
      • new hires
      • contingent workers
      • transfers-in
      • individuals returning from leaves
    • Predicting these can range from simple to complex.
linking organizational strategy to human resource planning4
Linking Organizational Strategy to Human Resource Planning
  • Predicting the Future Labor Supply
    • Decreases in internal supply come about through:
      • Retirements
      • Dismissals
      • Transfers-out
      • Lay-offs
      • Voluntary quits
      • Sabbaticals
      • Prolonged illnesses
      • Deaths
linking organizational strategy to human resource planning5
Linking Organizational Strategy to Human Resource Planning
  • Where Will We Find Workers
    • migration into a community
    • recent graduates
    • individuals returning from military service
    • increases in the number of unemployed and employed individuals seeking other opportunities, either part-time or full-time
  • The potential labor supply can be expanded by formal or on-the-job training.
linking organizational strategy to human resource planning6
Linking Organizational Strategy to Human Resource Planning
  • Matching Labor Demand and Supply
    • Employment planning compares forecasts for demand and supply of workers.
    • Special attention should be paid to current and future shortages and overstaffing.
    • Recruitment or downsizing may be used to reduce supply and balance demand.
    • Rightsizing involves linking staffing levels to organizational goals.
linking organizational strategy to human resource planning7
Linking Organizational Strategy to Human Resource Planning

Employment Planning and

the Strategic Planning Process

job analysis
Job Analysis
  • Job Analysis is a systematic exploration of the activities within a job.
  • It defines and documents the duties, responsibilities and accountabilities of a job and the conditions under which a job is performed.
job analysis1
Job Analysis
  • Job Analysis Methods
    • Observation method – job analyst watches employees directly or reviews film of workers on the job.
    • Individual interview method – a team of job incumbents is selected and extensively interviewed.
    • Group interview method – a number of job incumbents are interviewed simultaneously.
job analysis2
Job Analysis
  • Job Analysis Methods
    • Structured questionnaire method – workers complete a specifically designed questionnaire.
    • Technical conference method – uses supervisors with an extensive knowledge of the job.
    • Diary method – job incumbents record their daily activities.
  • The best results are usually achieved with some combination of methods.
job analysis3
Job Analysis
  • Structured Job Analysis Techniques
    • Department of Labor’s Job Analysis Process:
      • Information from observations and interviews is used to classify jobs by their involvement with data, people and things.
      • Information on thousands of titles available on O*Net OnLine which is the Department of Labor’s replacement for the Dictionary of Occupational Titles.
job analysis4
Job Analysis
  • Position Analysis Questionnaire (PAQ)(developed at Purdue University)
    • Jobs are rated on 194 elements, grouped in six major divisions and 28 sections.
    • The elements represent requirements that are applicable to all types of jobs.
    • This type of quantitative questionnaire allows many different jobs to be compared with each other, however, it appears to be more applicable to higher-level professional jobs.
job analysis5
Job Analysis
  • Job Descriptions
    • Written statement of what jobholder does, how it is done, under what conditions and why.
    • Common format: title; duties; distinguishing characteristics; environmental conditions; authority and responsibilities.
    • Used to describe the job to applicants, to guide new employees, and to evaluate employees.
job analysis6
Job Analysis
  • Job Specifications
    • States minimum acceptable qualifications.
    • Used to select employees who have the essential qualifications.
job analysis7
Job Analysis
  • Job Evaluations
    • Specify relative value of each job in the organization.
    • Used to design equitable compensation program.
job analysis8
Job Analysis
  • The Multi-faceted Nature of Job Analysis
    • Almost all HRM activities are tied to job analysis.
    • Job analysis is the starting point for sound HRM.
job analysis9
Job Analysis
  • Job Analysis and the Changing World of Work
    • Globalization, quality initiatives, telecommuting, and teams require adjustments to the components of a job.
    • Today’s jobs often require not only technical skills but interpersonal skills and communication skills as well.
Recruitment and Selection

By: Dr. Hadia Hamdy

  • Recruiting
    • Once an organization identifies its human resource needs through employment planning, it can begin the process of recruiting potential candidates for actual or anticipated organizational vacancies.
  • Recruiting brings together those with jobs to fill and those seeking jobs.
recruiting goals
Recruiting Goals
  • To provide information that will attract a significant pool of qualified candidates and discourage unqualified ones from applying.
recruiting goals1
Recruiting Goals
  • Factors that affect recruiting efforts
    • Organizational size
    • Employment conditions in the area
    • Working conditions, salary and benefits offered
    • Organizational growth or decline
recruiting goals2
Recruiting Goals
  • Constraints on recruiting effortsinclude:
    • Organization image
    • Job attractiveness
    • Internal organizational policies
    • Recruiting costs
recruiting a global perspective
Recruiting: A Global Perspective
  • For some positions, the whole world is a relevant labor market.
  • Parent (Home) country nationals are recruited when an organization is searching for someone with extensive company experience to launch a very technical product in a country where it has never sold before.
recruiting a global perspective1
Recruiting: A Global Perspective
  • Host-country nationals (HCNs) are targeted as recruits when companies want each foreign subsidiary to have its own distinct national identity.
  • HCN’s minimize potential problems with language, family adjustment and hostile political environments.
recruiting sources
Recruiting Sources
  • Sources should match the position to be filled.
  • Sources:
    • Internal Searches
    • Employee Referrals/


    • External Searches
    • Alternatives
recruiting sources1
Recruiting Sources

The internal search

  • Organizations that promote from within identify current employees for job openings:
    • by having individuals bid for jobs
    • by using their HR management system
    • by utilizing employee referrals
recruiting sources2
Recruiting Sources

The internal search

  • Advantages of promoting from within include
    • morale building
    • encouragement of ambitious employees
    • availability of information on existing employee performance
    • cost-savings
    • internal candidates’ knowledge of the organization
recruiting sources3
Recruiting Sources

The internal search

  • Disadvantages include:
    • possible inferiority of internal candidates
    • infighting and morale problems
recruiting sources4
Recruiting Sources

Employee referrals/recommendations

  • Current employees can be asked to recommend recruits.
  • Advantagesinclude:
    • the employee’s motivation to make a good recommendation
    • the availability of accurate job information for the recruit
    • Employee referrals tend to be more acceptable applicants, to be more likely to accept an offer and to have a higher survival rate.
recruiting sources5
Recruiting Sources

Employee referrals/recommendations

  • Disadvantagesinclude:
    • the possibility of friendship being confused with job performance
recruiting sources6
Recruiting Sources

External searches

  • Advertisements:Must decide type and location of ad, depending on job; decide whether to focus on job (job description) or on applicant (job specification).
  • Two factors influence the response rate:
    • identification of the organization
    • labor market conditions
recruiting sources7
Recruiting Sources

External searches

  • Employment agencies:
    • Public or state employment services focus on helping unemployed individuals with lower skill levels to find jobs.
    • Private employment agencies provide more comprehensive services and are perceived to offer positions and applicants of a higher caliber.
recruiting sources8
Recruiting Sources

External searches

  • Schools, colleges, and universities:
    • May provide entry-level or experienced workers through their placement services.
    • May also help companies establish cooperative education assignments and internships.
recruiting sources9
Recruiting Sources

Recruitment alternatives

  • Temporary help services.
    • Temporary employeeshelp organizations meet short-term fluctuations in HRM needs.
    • Older workers can also provide high quality temporary help.
  • Employee leasing.
    • Trained workers are employed by a leasing company, which provides them to employers when needed for a flat fee.
    • Typically remain with an organization for longer periods of time.
Selection – the process by which an organization chooses from a list of applicants the person or persons who best meet the selection criteria for the position available, considering current environmental conditions
internal environmental factors influencing selection
Internal Environmental Factors Influencing Selection
  • Organization characteristics that can influence the selection process:
    • Size
    • Complexity
    • Technological ability
external environmental factors influencing selection
External Environmental Factors Influencing Selection
  • Government employment laws and regulations
  • Size, composition, and availability of local labor markets
selection criteria
Experience and

Past Performance

Formal Education


Characteristics and

Personality Type



Selection Criteria
reliability of selection criteria
Reliability of Selection Criteria
  • Reliability – how stable or repeatable a measurement is over a variety of testing conditions.
validity of selection criteria
Validity of Selection Criteria
  • Validity – addresses the questions of:
    • What a selection tool measures
    • How well it has measured it
  • It is not sufficient for a selection tool to be reliable
  • The selection tool must also be valid
steps in the selection process
1. Preliminary


3. Employment


2. Employment


6. Physical


5. Selection


4. Background

and Reference


Steps in the Selection Process
the selection process
The Selection Process

Initial Screening

  • Involves screening of inquiries and screening interviews.
  • Job description information is shared along with a salary range.
the selection process1
The Selection Process

Employment Interview

Interviews involve a face-to-face meeting with the candidate to probe areas not addressed by the application form or tests

  • Two strategies for effective use of interviews:

1. Structuring the interview to be reliable and valid

2. Training managers on best interview techniques

the selection process2
The Selection Process

Types of Interviews:

  • Unstructured interview
  • Structured interview
  • Behavioral Interviews
    • Candidates are observed not only for what they say, but how they behave.
    • Role playing is often used.
  • Stress Interviews.
the selection process3
The Selection Process

Realistic Job Preview

  • RJP’s present unfavorable as well as favorable information about the job to applicants.
  • May include brochures, films, tours, work sampling, or verbal statements that realistically portray the job.
  • RJP’s reduce turnover without lowering acceptance rates.
the selection process4
The Selection Process

Employment Tests

  • Mechanism that attempts to measure certain characteristics of individuals, e.g.,
    • aptitudes
    • intelligence
    • personality
  • Should be validated before being used to make hiring decisions
the selection process5
The Selection Process

Employment Tests

  • Estimates say 60% of all organizations use some type of employment tests.
    • Performance simulation tests: requires the applicant to engage in specific job behaviors necessary for doing the job successfully.
    • Work sampling: Job analysis is used to develop a miniature replica of the job on which an applicant demonstrates his/her skills.
the selection process6
The Selection Process

Employment Tests

  • Assessment centers: A series of tests and exercises, including individual and group simulation tests, is used to assess managerial potential or other complex sets of skills.
  • Testing in a global arena: Selection practices must be adapted to cultures and regulations of host country.
the selection process7
The Selection Process

Background Investigation:

  • Verify information from the application form
  • Typical information verified includes:
    • former employers
    • previous job performance
    • education
    • legal status to work
    • credit references
    • criminal records
the selection process8
The Selection Process

Background Investigation

  • Do not always provide an organization with meaningful information about applicants
  • Concerns over the legality of asking for and providing confidential information about applicants
the selection process9
The Selection Process

Physical Examinations

  • Should be required only after a conditional offer of employment has been made
  • Putting more money into selection can significantly reduce the amount of money it must spend on training
  • A selection system will make some mistakes
    • No guarantee of successful job performance
Training and Development

By: Magda Hassan

  • The Socialization Process.
  • Employee Orientation.
  • Employee Training
  • Employee Development.
  • Organization Development.
  • Evaluation of Training Program.
  • Socialization, training and development are all used to help new employees adapt to their new organizations and become fully productive.
  • Ideally, employees will understand and accept the behaviors desired by the organization, and will be able to attain their own goals by exhibiting these behaviors.
1 the socialization process
1. The socialization Process
  • Socialization
    • A process of adaptation to a new work role.
    • Adjustments must be made whenever individuals change jobs
    • The most profound adjustment occurs when an individual first enters an organization.
1 the socialization process1
1. The socialization Process

The assumptions of employee socialization:

  • Socialization strongly influences employee performance and organizational stability
  • Provides information on how to do the job and ensuring organizational fit.
  • New members suffer from anxiety, which motivates them to learn the values and norms of the organization.
1 the socialization process2
1. The socialization Process

The assumptions of employee socialization:

  • Socialization is influenced by subtle and less subtle statements and behaviors exhibited by colleagues, management, employees, clients and others.
  • Individuals adjust to new situations in remarkably similar ways.
  • All new employees go through a settling-in period.
1 the socialization process3
1. The socialization Process

A Socialization Process

1 the socialization process4
1. The socialization Process

The Socialization Process

  • Prearrival stage: Individuals arrive with a set of values, attitudes and expectations which they have developed from previous experience and the selection process.
1 the socialization process5
1. The socialization Process
  • The Socialization Process
    • Encounter stage: Individuals discover how well their expectations match realities within the organization.
    • Where differences exist, socialization occurs to imbue the employee with the organization’s standards.
1 the socialization process6
1. The socialization Process

The Socialization Process

  • Metamorphosis stage: Individuals have adapted to the organization, feel accepted and know what is expected of them.
2 new employee orientation purpose
2. New-Employee OrientationPurpose
  • Orientation may be done by the supervisor, the HRM staff or some combination.
  • Formal or informal, depending on the size of the organization.
  • Covers such things as:
    • The organization’s objectives
    • History
    • Philosophy
    • Procedures
    • Rules
    • HRM policies and benefits
    • Fellow employees
2 new employee orientation
2. New-Employee Orientation
  • Learning the Organization’s Culture
    • Culture includes long-standing, often unwritten rules about what is appropriate behavior.
    • Socialized employees know how things are done, what matters, and which behaviors and perspectives are acceptable.
2 new employee orientation roles
2. New-Employee OrientationRoles

The CEO’s Role in Orientation

  • Senior management are often visible during the new employee orientation process.
  • CEOs can:
    • Welcome employees.
    • Provide a vision for the company.
    • Introduce company culture -- what matters.
    • Convey that the company cares about employees.
    • Allay some new employee anxieties and help them to feel good about their job choice.
2 new employee orientation1
2. New-Employee Orientation

HRM’s Role in Orientation

  • Coordinating Role: HRM instructs new employees when and where to report; provides information about benefits choices.
  • Participant Role: HRM offers its assistance for future employee needs (career guidance, training, etc.).
3 employee training
3. Employee Training


  • Employee training

a learning experience designed to achieve a relatively permanent change in an individual that will improve the ability to perform on the job.

  • Employee development

future-oriented training, focusing on the personal growth of the employee.

3 employee training1
3. Employee Training

Determining Training Needs

4 methods of employee training
4. Methods of Employee Training
  • On-the-job training methods
    • Job Rotation
    • Understudy Assignments
  • Off-the-job training methods
    • Classroom lectures
    • Films and videos
    • Simulation exercises
    • Vestibule training
5 employee development
5.Employee Development
  • This future-oriented set of activities is predominantly an educational process.
  • All employees, regardless of level, can benefit from the methods previously used to develop managerial personnel.
5 employee development1
5.Employee Development

Employee development methods

  • Job rotation involves moving employees to various positions in the organization to expand their skills, knowledge and abilities.
  • Assistant-to positions allow employees with potential to work under and be coached by successful managers.
6 employee development methods
6. Employee Development Methods

Employee development methods

  • Committee assignments provide opportunities for:
    • decision-making
    • learning by watching others
    • becoming more familiar with organizational members and problems
  • Lecture courses and seminars benefit from today’s technology and are often offered in a distance learning format.
6 employee development methods1
6. Employee Development Methods

Employee development methods

  • Simulations include case studies, decision games and role plays and are intended to improve decision-making.
  • Outdoor trainingtypically involves challenges which teach trainees the importance of teamwork.
7 organization development
7. Organization Development
  • What is change?
  • OD efforts support changes that are usually made in four areas:
    • The organization’s systems
    • Technology
    • Processes
    • People
7 organization development1
7. Organization Development
  • Two metaphors clarify the change process.
    • The calm waters metaphor describes unfreezing the status quo, change to a new state, and refreezing to ensure that the change is permanent.
    • The white-water rapids metaphor recognizes today’s business environment which is less stable and not as predictable.
8 evaluating training and development effectiveness
8. Evaluating Training and Development Effectiveness

Evaluating Training Programs:

  • Typically, employee and manager opinions are used,
    • These opinions or reactions are not necessarily valid measures
    • Influenced by things like difficulty, entertainment value or personality of the instructor.
  • Performance-based measures (benefits gained) are better indicators of training’s cost-effectiveness.
evaluating employee performance agenda
Evaluating Employee Performance - Agenda
  • Purpose of performance management system
  • Difficulties in performance management system
  • Steps of the Appraisal process
  • Appraisal methods
performance evaluation
Performance Evaluation
  • The performance management systems need to include:
    • decisions about who should evaluate performance
    • what format should be used
    • how the results should be utilized
purposes of a performance management system
Purposes of a Performance Management System
  • Feedback - let employees know how well they have done and allow for employee input.
  • Development – identify areas in which employees have deficiencies or weaknesses.
difficulties in performance management systems
Difficulties in Performance Management Systems
  • Focus on the individual: Discussions of performance may elicit strong emotions and may generate conflicts when subordinates and supervisors do not agree.
difficulties in performance management systems1
Difficulties in Performance Management Systems
  • Focus on the process: Company policies and procedures may present barriers to a properly functioning appraisal process.
  • Additionally, appraisers may be poorly trained.
step 1 and 2
Step 1 and 2
  • Establishment of performance standards
    • Derived from company’s strategic goals.
    • Based on job analysis and job description.
  • Communication of performance standards to employee.
step 3 and 4
Step 3 and 4
  • Measurement of performance using information from:
    • personal observation
    • statistical reports
    • oral reports
    • written reports
  • Comparison of actual performance with standards.
step 5 and 6
Step 5 and 6
  • Discussion of appraisal with employee.
  • Identification of corrective action where necessary.
    • Basic corrective action deals with causes.
appraisal methods
Appraisal Methods

Three approaches:

  • Absolute standards
  • Relative standards
  • Objectives
1 absolute standards
1. Absolute Standards

Evaluating absolute standards:

  • An employee’s performance is measured against established standards.
  • Evaluation is independent of any other employee.
1 absolute standards1
1. Absolute Standards
  • Essay Appraisal: Appraiser writes narrative describing employee performance & suggestions.
  • Critical Incident Appraisal: Based on key behavior incident illustrating effective or ineffective job performance.
1 absolute standards2
1. Absolute Standards
  • Checklist Appraisal: Appraiser checks off behaviors that apply to the employee.
  • Adjective Rating Scale Appraisal: Appraiser rates employee on a number of job-related factors.
1 absolute standards3
1. Absolute Standards
  • Forced-Choice Appraisal:Appraisers choose from sets of statements which appear to be equally favorable, the statement which best describes the employee.
1 absolute standards4
1. Absolute Standards
  • Behaviorally Anchored Rating Scales (BARS):Appraiser rates employee on factors which are defined by behavioral descriptions illustrating various dimensions along each rating scale.
2 relative method
2. Relative Method
  • Employees are evaluated by comparing their performance to the performance of other employees.
2 relative method1
2. Relative Method
  • Group Order Ranking: Employees are placed in a classification reflecting their relative performance, such as “top one-fifth.”
2 relative method2
2. Relative Method
  • Individual Ranking: Employees are ranked from highest to lowest.
  • Paired Comparison:
    • Each individual is compared to every other.
    • Final ranking is based on number of times the individual is preferred member in a pair.
3 achieved outcome method
3. Achieved Outcome Method

Management by Objectives (MBO)

  • includes mutual objective setting and evaluation based on the attainment of the specific objectives
3 achieved outcome method1
3. Achieved Outcome Method
  • Common elements in an MBO program are:
    • goal specificity
    • participative decision making
    • an explicit time period
    • performance feedback
  • Effectively increases employee performance and organizational productivity.
development of compensation and pay systems agenda
Development of Compensation and Pay systems - Agenda
  • Objectives of compensation
  • Types of rewards
  • Development of a base pay system
objectives of compensation
Objectives of compensation
  • Efficiency
    • Quality
    • Performance
    • Cost
  • Fairness
  • Compliance
types of reward plans
Types of Reward Plans

Intrinsic versus Extrinsic Rewards

  • Intrinsic rewards (personal satisfactions) come from the job itself, such as:
    • pride in one’s work
    • feelings of accomplishment
    • being part of a work team
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Types of Reward Plans

Intrinsic versus Extrinsic Rewards

  • Extrinsic rewards come from a source outside the job
    • include rewards offered mainly by management
    • Money
    • Promotions
    • Benefits
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Types of Reward Plans

Financial versus Non-financial Rewards

  • Financial rewards include:
    • wages
    • bonuses
    • profit sharing
    • pension plans
    • paid leaves
    • purchase discounts
  • Non-financial rewards emphasize making life on the job more attractive; employees vary greatly on what types they find desirable.
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Development of a Base Pay System

Job Analysis

Job Evaluation

Pay Survey

Job Structure

Pay Structure & Grades

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Development of a Base Pay System

Job Evaluation

  • Use of job analysis information to determine the relative value of each job in relation to all jobs within the organization.
    • The ranking of jobs
    • Labor market conditions
    • Collective bargaining
    • Individual skill differences
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Development of a Base Pay System

Job Evaluation Methods

  • Ordering method: A committee places jobs in a simple rank order from highest (worth highest pay) to lowest.
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Development of a Base Pay System

Job Evaluation Methods

  • Classification method:
    • Jobs are placed in classification grades
    • Compare their descriptions to the classification description and benchmarked jobs
    • Look for a common denominator such as skills, knowledge, or responsibility
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Development of a Base Pay System

Job Evaluation Methods

  • Point method:
    • Jobs are rated and allocated points on several identifiable criteria, using clearly defined rating scales.
    • Jobs with similar point totals are placed in similar pay grades.
    • Offers the greatest stability.
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Development of a Base Pay System

Establishing the Pay Structure

  • Compensation surveys
    • Used to gather factual data on pay rates for other organizations
    • Information is often collected on associated employee benefits as well