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Human Resources Management & Development

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1 Human Resources Management & Development
May 04, 2005 (Wednesday) Presented By: Tariq Saeed To Pakistan Steel Mills

2 Overview Introduction to Human Resource Management.
Evolution & Development of HRM Foundations of HRM Theory & Practice Strategic HRM Motivation of Employees & Leadership Performance Management

3 Has evolved through the
The Concept Of HRM Has evolved through the Development of Management Thought process

4 Definition Of Management
Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims.

5 Types Of Management Management is classified into four branches in accordance with the type of resources it deals with, i.e., Money (Finance) Finance Management Material Materials Management Machine (Technology) Operational Management Men (Human Resource) Human Resources Management.

6 Human Resource Management
The branch of Management of The Human Resources

7 Evolution Of Human Resources Management
The Industrial Revolution (1776) The Emergence of Free Collective Bargaining Scientific Management US Civil Services Commission Private Industry’s Approach to Personnel Management Human Relations Movement The Behavioral Sciences

8 Development Of HRM Pioneer Work Behavioral Science Movement
Organizational Development Movement The Corporate Culture Cult The Art Of Japanese Management Peter Drucker 1950 Douglas Mcgreger Maslows Hierarchy Of Needs 1960

9 Growth Of Human Resources Management
File Maintenance Stage Government Accountability Stage Organizational Accountability Stage Strategic Partner-ship Stage

10 Government Accountability Organizational Accountability
Stage 1 Stage 2 Stage 3 Stage 4 File Maintenance Government Accountability Organizational Accountability Strategic Partner

11 Change From Personnel To HRM
From personnel department to HRM department. A change in approach and a change in name. Treating seriously the issues of attracting developing motivating people and to utilize them effectively. The organizations now rate high on development of following: personnel and HRM policies systems, practices Agreements consistent with the corporate strategy

12

13 What Is HRM Concerned About?
“Human Resource Management is concerned with the problems, organizations face at all levels of the organization”. “These activities undertaken by the organizations are the means by which they assure themselves of A long term supply of people with needed competencies and required levels of loyalty and commitment ”. ( “Professor Michael Bear”)

14 Definition Of The Functions Of HRM
Human Resource Management is the process of acquiring, training, appraising, and compensating, retaining employees and attending to their labor relations, health and safety, and fairness concerns.

15 Present Concept Of HRM Human resource management in its present form is an approach to the management of people based on four fundamental principles. Human resources are the most important assets of an organization. Their Management is the key to its success. Success is most likely if the personnel policies and procedures are closely linked with, objectives and strategic plans. The corporate culture and values, organizational climate and managerial behavior culture influences the achievement of excellence. This culture be managed. HRM is concerned with integration. Getting all the members of the organization involved in working together with a common sense.

16 HRM Concept HRM involves all the management decisions and actions that affect the nature of the relationship between the organization and employees i.e., Its Human Resources. It communicates the instrumental values about people and the notion that people no less than, physical plans and financial resources may be viewed and managed as assets. The most important implication of this approach is the development of trust between employees, managers and unions

17 HRM Concept Human Resource Management is the responsibility of all those who manage people. It is the management concerned with people at work and with their relationship within an enterprise. It applies to all fields of employment. It aims at achieving both efficiency and justice. It seeks to brings together and develop into an effective organization, all the people of an enterprise, to make there best contribution to its success both as an individual and as member of working group. It seeks to provide fair terms and conditions of employment and satisfying work for the employed.

18 Emerging Trends In HRM Three basic traditions.
Personnel Administration. Labor Relations. Organizational Development. Changes in basic values of society. Fundamental shift in ideology to the concern for the whole and not a part of community. Concern with the rights of the managed not just the managers. A shift towards greater concern for the systems of the organization. Contd..

19 Employee involvement and union-management collaboration.
To identify problems and develop processes. Competence and commitment issues given attention. Traditional control on information flow giving way to more openness to employees and increase communications Shift from short term perspective to long term perspective to problems and their solutions Increased emphasis on training and development activities, performance appraisal and improvement processes. Contd..

20 A concern for the outcomes not just the role and policies
Flexibility in application of HR policies to individuals and the business Flexibility in control at the top to a more participative and collaborative management Willingness to talk about the problems in organization Change in attitudes towards conflicts HRM concerned with the groups of shareholders, employees, the union and the government

21 HRM People Functions Include:
Performance Management Employees Communications Train and develop Employee commitment Equal opportunity Health and safety Grievances/labor relations Job analyses Labor needs Recruit Select candidates Orient and train Wages and salaries Incentives and benefits

22 HRM Is Important to All Managers. Don’t Let These Happen In Your Areas!
The wrong person High turnover Poor results Useless interviews Court actions Safety citations Salaries appear unfair Poor training Unfair labor practices

23 Line And Staff Aspects Of HRM
Authority Making decisions Directing work Giving orders Line Managers Accomplishing goals Staff Managers Assisting and advising line managers Definition

24 Line Manager’s HRM Jobs
Policies and procedures Labor costs Development Morale Protecting The right person Orientation Training Performance Creativity Working relationships

25 Staff Manager’s HRM Jobs
Line authority Implied authority Functional control Employee advocacy

26 Activities Which Constitutes HRM
Staffing. Retention. Development. Adjustment. Managing Change. Together these activities constitutes the HRM System.

27 HRM Activities All these activities are the special responsibilities of HR Department but these are also at the core of every managers job throughout an organization. The line managers have authority and have considerable impact on the way workers actually behave.

28 These Activities Can Be Carried Out At:
Individual levels. Work teams. Departmental levels. Organizational levels

29 Staffing Identifying work requirements within an organization.
Determining the numbers of people and the skills mix necessary for the the work. Recruiting, selecting and promoting qualified candidates.

30 Retention Rewarding employees’ for performing their jobs effectively.
Ensuring harmonious working relations between employees and managers. Maintaining a safe and healthy work environment.

31 Development A function whose objectives is to preserve and enhance employees’ competence in their jobs through improving their knowledge, skills, abilities and other characteristics; (“COMPETENCIES”)

32 Adjustment Comprises activities intended to maintain compliance with the organization's HR policies (e.g. through discipline) and business strategies (e.g. cost leadership)

33 Managing Change An ongoing process whose objective is to enhance the ability of an organization to anticipate and respond to development in its external and internal environments and to enable employees at all levels to cope with the changes.

34 Change In Recruiting Strategy
A change in recruiting strategy in accordance with the expected job requirements means: Develop selection procedure that will identify the kind of competencies required for future employees. Change in compensation policies. New incentive systems be developed. Offer new training & development programs. Assessment procedures will be changed. New rewards procedures. Discharge, promote or transfer some employees. Provide mechanism to remaining employees to cope with change.

35 Objectives Of HRM Department
Broad objective to optimize the usefulness of all workers in an organization Special objective To help line managers manage those workers more effectively. The HR department accomplishes this special objective through policy initiation and formulation, advice, service and control in resonance with line managers. Thus the HR responsibilities are shared by the hr department and line managers.

36 Special Objectives The special objective is accomplished through:
Policy incitation and formulation. Advise. Service. Control in close coordination with line managers.

37 How Do Line Managers’ Share These Activities
Activity Line Managers Responsibility HR Department Responsibility STAFFING Providing data for job analysis and minimum qualifications; integrating strategic plans with HR Plans at the unite level, interviewing candidates, integrating information collected y the HR dept., making final decisions on entry level hires and promotions. Job analysis, HR planning, recruitment, compliance with civil rights laws and regulations; application blanks, written tests, performance tests, interview, background investigations, reference checks and physical examinations. RETENTION Fair treatment of employees, open communication, face to face resolution of conflict, promotion of teamwork, respect for the dignity of each individual, pay increase base on merit. Compensation and benefits, employees’ relations, health and safety and employee services. DEVELOPMENT On-the-job training, job enrichment, coaching, applied motivational strategies, performance feedback to subordinates. Development of legally sound performance management system, morale surveys, technical training, management and organization development, career planning, counseling and HR research. ADJUSTMENT Discipline, discharge, layoffs and transfers. Investigation of employee complaints, outplacement services and retirement counseling. MANAGING CHANGE Provide a vision of where the company or unit is going & the resources to make the vision a reality. Provide expertise to facilitate the overall process of managing change. HR Provides Expertise : Line Managers Use it to Manage People Effectively

38 Basic Functions ACTIVITY How Done FUNCTIONS Staffing Getting people.
Employees. Employment. Training & Development Preparing them. Maximizing potential. HRD Motivation Stimulating them. Compensation & Benefits. Maintenance Keeping them. Employee Relations.

39 The HRM Process Strategic Organization Culture Environment Objectives
HR Strategy Organizational structure Outputs Performance management Training and development Reward management Employee relations Job analysis recruitment

40 Strategic Human Resources Management
Strategic HRM mean getting everybody from top of the organization to the bottom doing things to implement the strategy of business effectively. To use people most wisely with respect to the strategic needs of the organization. This needs an integrative frame work that systematically links HR activities with business needs. (Systems Approach) Development of a map and time line to ensure alignment between HR strategy and business strategy.

41 Strategic HRM Activities
HR Philosophy HR Policies HR Programs HR Practices HR Processes

42 Human Resources Philosophy Or HR Contribution in Company Growth & Success
A firm’s HR philosophy is generally a broad statement about how it regards its people, the role they play in the overall success of a business, and how they are to be treated and managed. Empowering people to drive to business from the closest point to the market. Developing the skills to be the best in the business. Building career opportunities. Building teamwork. Helping people succeed by the building an environment with high integrity, strong and consistent values, and continuous improvement. Changing environment towards effective time management, cost consciousness and improving interaction for increasing productivity by proactive support to line managers.

43 ORGANIZATIONAL STRATEGY
Initiates the process of identifying strategic business needs and provides specific opportunities to them INTERNAL CHARACTERISTICS EXTERNAL CHARACTERISTICS STRATEGIC BUSINESS NEEDS Expressed in mission or vision statements and translated into strategic business objectives STRATEGIC HUMAN RESOURCES MANAGEMENT ACTIVITIES Human Resources Philosophy expressed in statements defining business values and culture. Human Resources Policies expressed as shared values (guidelines). Human Resources Programs articulated as Human Resources strategic. Human Resources Practices for leadership, managerial and operational roles. Human Resources processes for the formulation and implementation of other activities. Express how to treat and value people. Establishes guidelines for action on people related business issues and HR program. Coordinates efforts to facilitate change to address major people related business issues. Motivates needed role behaviors. Defines how these activities are carried out

44 Roles Of HR Manager Business person Shaper of change
Consultant to the organization and partner to line managers Strategy formulator and implementer TALENT MANAGER (I.E network with professional colleagues, including recruiters,line managers, and other HR professionals) ASSET MANAGER AND COST CONTROLLER (Based on understanding financial and accounting procedures.)

45 Strategic Planning and Trends
Definition Strategy is the company’s long-term plan for how it will balance its internal strengths and weaknesses with its external opportunities and threats to maintain a competitive advantage. Page 1-11

46 Strategic Planning 101 There are three levels of strategic planning as shown below Corporate Strategy Business Strategy Business Strategy Business Strategy Business Strategy Functional Strategies

47 The Strategic Planning Process
SWOT analysis - Strengths, Weaknesses, Opportunities, and Threats Best strategic plans balance a company’s Strengths and Weaknesses with the Opportunities and Threats the firm faces Basic strategic trends Globalization Technological advances The nature of work The workforce Page 1-12

48 HR’s Evolving Role Protector and Screener Change Agent
Strategic Partner

49 Strategic HRM Definition
Strategic Human Resource Management: linking HRM with strategic goals and objectives to improve business performance and develop organizational cultures fostering innovation and flexibility. Clarify the business strategy Realign the HR functions and key people practices Create needed competencies and behaviors Realization of business strategies and results Evaluate and refine

50 How HR Helps Strategy Execution
Functional strategies should support competitive strategies Value chain analysis Outsourcing Strategy Formulation

51 How HR Helps Form Strategy
Formation of a company’s strategy = identifying, analyzing and balancing external opportunities and threats with internal strengths and weaknesses Environmental scanning

52 The Value Chain Approach

53 HR And Technology Basic HR systems demand paperwork
70% of HR’s employees time = paperwork Off the shelf forms from Office Depot/Officemax Online forms Human Resource Information Systems (HRIS) HR on the Internet

54 HR Means Performance Can HR have a measurable impact on a company’s bottom line? Better HRM translates into improved employee attitudes and motivation (e.g., working at home) Well run HR programs drive employee commitment TOYOTA

55 Is There a “One Best HR Way”?
Follow a company’s operating and strategic initiatives All companies can benefit from Profit sharing programs Results oriented appraisals Employment security Foster informal relationships- promote worldwide communications Develop global executives

56 Current Pressures On HRM
Increase international competition Increasing complexity of business and size of organizations Slower growth with receiving advancement opportunity to employees Increased education & awareness of the workforce Changing personal / work force values More concern with career and life satisfaction Changing workforce / mix demography Expectations / satisfaction of employers Productivity improvement needs Greater involvement of government in HR development and practices

57 Challenges Faced By HR Managers
Changing Mix Of Work Force Changing Personal Values Expectations Of Employees Levels Of Productivity Demands And Government Regulation

58 Strategic Objectives For HRM
Design strategy ensuring fuller utilization of human resources Establish and maintain a self-respecting relationship among all employees Enable each person to make his/her maximum personal contribution to the effective working of the organization by creating an appropriate and conducive work climate Bring about maximum individual development of personnel through renewed thrust on employees education and training Make effort to recognize and satisfy individual and group need for providing higher job satisfaction Maintain a high morale and better human relations to win employee’s commitment

59 How To Achieve Objectives?
Answer to this question by creating a culture in the organization which is employee-oriented. The factors responsible for fostering good human relations and higher productivity are as follows: Management’s genuine belief that employees love work (create proper environment) Utilizing employee’s higher skills through their involvement Recognition to employee’s informal groups Humanize jobs in which employees are called not by labels but by names Employee- orientated supervision, recognizing human dignity Two-way communication Feedback and counseling Ability based leadership Employee welfare and good quality of work life Equitable monetary benefits.

60 Critical HR Processes Training And Development Policies Implementation
TQM Training And Development Policies Implementation Systems Update And Procedures Improvement Practices And Processes Development Competencies (KSAs) Development Talent Management Identification Of Future HR Requirement Leadership Development

61 HRM In Pakistan HRM in Pakistani Environment Current Trends
of HRM in Pakistan

62 The Changing Role of HR Yesterday Today Tomorrow Success factors
Business judgment intuition Information strategic plan mission Flexibility agility speed Organizational style Paternalistic Professional Empowered learning vibrant Employees considered as.. Hungry, naked & defenseless creatures Thinking and rational beings Fully evolved completely satisfied, mature human beings Motivational methods Driving people through basic needs Driving people through social and intellectual needs People drive themselves Role of HR Providing people with food, clothing and shelter Motivate by providing effective & fair appraisals systems As a change agent As innovator As a strategic partner

63 Business Trends & HR Competencies For Our Times
Globalization. Technology. Change. Knowledge Capital. Speed in Market. Cost Control. Credibility. People Skills. Understanding the Business of Business. A Consultative Approach. Comfort with Change. Visioning.

64 HRM & Philosophy Of Islam
Authority and responsibility. Participative management. Rewards and performance Equal opportunities concept. Leadership Evaluation & improvement. Commitment & motivation Balanced approval

65 Motivation of Employees & Leadership

66 The term motive implies the action to satisfy a need.
What Is Motive? Motive is an inner force that moves a person to behave in a certain way. Motives are the mainsprings of action in people. The term motive implies the action to satisfy a need.

67 Motives Motives are the “WHYS” of behavior. They arouse and maintain activity and determine the general direction of the behavior of an individual. Motives are sometime defined as needs, wants, drives and impulses within the individual. Motives are directed towards goals which may be conscious or subconscious

68 Motivation Motivation is a general term applying to the entire class of drives, desires needs, wishes and similar forces. To say that managers motivate their subordinates is to say that they do those things which they hope will satisfy those drives and desires and induce the subordinates to act in a desired manner. Motivation is a complex subject. It involves the unique feelings and thoughts and past experiences of each of us as we share a variety of relationships within and outside the organizations.

69 Why Motivation? To initiate our followers to reach our objectives, we must hold some reward once the objective is attained. What rewards do people seek? The answer is that they seek to fulfill their wants and needs.

70 Human Needs PRIMARY NEEDS: Physiological requirements for water, air, food, sleep & shelter SECONDARY NEEDS Self Esteem Status Affiliation With Others Affection (Giving) Accomplishment Self Assertion

71 NEEDS (Physiological/Physical) DRIVES/BEHAVIOR GOALS/INCENTIVES DRIVES GOALS

72 Motive Needs & Wants The term motive, need, wants and drives are used interchange ably. Motivation can also be termed as the willingness to expand energy, achieve a goal or a reward. NEED Respect from others. BEHAVIOR outstanding work on the job. REWARD praise, pay increase, status symbols.

73 Motivator Motivator is something that influences an individual behavior. It makes a difference in what a person will do. Motivators are things that induce a person to perform. Motivators are the identified rewards or incentives that sharpen the drive to satisfy the wants.

74 Motivation And Satisfaction
Motivation refers to the drive and effort to satisfy a want or goal. When a want is satisfied we experienced the contentment which is called Satisfaction. Motivation implies a drive towards an outcome, and satisfaction is the outcome experienced.

75 Significant Motivation Theories

76 1. The Carrot And The Stick Theory

77 2. Hierarchy of Needs Theory
BASIC PHYSIOLOGICAL NEEDS SAFETY/SECURITY NEEDS LOVE/BELONGING NEEDS ESTEEM NEEDS SELF-ACTUALIZATION

78 HIERARCHY OF NEEDS Esteem Needs Affiliation or acceptance needs
for self-actualization Security or Safety needs Physiological needs

79 A Hierarchy Of Work Motivation
BASIC PHYSICAL NEEDS Food, clothing, shelter SAFETY & SECURITY Seniority plans, union health insurance, employee assistance plans, severance pay, pension etc LOVE & BELONGING Formal and informal work groups ESTEEM Titles, status symbols, promotions, banquets SELF-ACTUALIZATION Personal growth, realization of potential

80 3 .McGregor’s Theory of Motivation
THEORY “X”

81 THEORY “Y”

82 4.Herzberg's Theory of Motivation (Two Factor Theory)
According to this theory, motivation is largely affected by two factors, namely: The Hygiene Factors Or The Dissatisfies. The Motivators Or The Satisfiers.

83 The Hygiene Factors Or The Dissatisfiers
Leadership Relationship With Peers, Superiors and Subordinates Working Conditions Salary Company Policy and Administration, etc

84 The Motivator Or The Satisfiers
These are factors, which give a sense of satisfaction to the employees and result in motivating them. Achievement. Recognition. Advancement. Responsibility. Challenging work.

85 Herzberg’s Two Factor Theory
MOTIVATOR HYGIENE FACTOR The Job Itself Environment Achievement. Recognition. Challenging work. Responsibility. Advancement. Challenging job. Company Policies. Supervision. Working conditions. Interpersonal relations. Salary /status, Security.

86 Vroom’s Expectancy Theory
People will be motivated to do things to reach a goal if they believe in the worth of their goal and if they can see that what they do will help them in achieving it. In a sense a particular action will lead to a desire Force = Valance X Expectancy Force = Strength of a persons motivation. Valence = Strength of individuals performance for an outcome. Expectancy = The probability that a particular action will lead to a desired outcome.

87 Vroom’s Expectancy Theory
Recognizes the importance of: Needs and motivation The harmony of objectives. Expectation of the rewards for the work done. Perception of value varies. Managers job to design environment.

88 McCelland's Theory of Needs
Three kinds of basic motivation needs: Need for Power (N Pwrs) Need for Achievement (N Ach) Need for Affiliation (N Aff)

89 Portar & Lowler Motivation Model
Value of Rewards Ability to do specified task Perception of task required Effort Performance accomplishment Perceived effort – review probability Perceived equitable rewards Intrinsic rewards Satisfaction Exitricis rewards

90 Equity Theory OUTCOMES BY A PERSON = OUTCOMES BY ANOTHER PERSON
INPUTS BY A PERSON INPUTS BY ANOTHER PERSON

91 Reinforcement Theory Individuals can be motivated by proper design of their work environment and praise for their performance and that punishment for poor performance produces negative results.

92 Application Of Motivation Theories
Approaches to motivation: Hierarchy of Needs. Motivation Hygiene Approach. Intrinsic and Extrinsic Motivation Approach. Achievement Motivation. Behavior Modification. Expectancy Model.

93 Special Motivational Techniques
Power & Achievement. Money as a Motivator. Competition. Job design & workflow. Integration of goals. Participation. Quality of work life (QWL)

94 Ground Rules For Motivating Employees

95 1. Understand Individual Needs And Desires

96 2. Acknowledge And Respect Their Personal Worth

97 “Treat a man as he is, and he will remain as he is; treat a man as he can and should be, and he will become as he can and should be” ….. Goethe

98 3. Recognize And Appreciate Their Efforts
"Forget their mistakes and zero in on all smart things that they do right. Praise them and they’ll do more things right and discover talents and abilities they never realized they had” …….. Mary Kay Ash

99 4. Involve Them And Encourage Participation

100 5.Seek Their Advice

101 6.Make Them Teachers

102 7.Delegating Star Projects

103 Self Motivation Set a goal for yourself
Supplement your long-term objectives with short-term goals and specific actions. Learn a challenging new task each year. Make your job a different one. Set improvement objectives for your position. Develop an area of expertise. Build on your strengths, or develop one of your weaknesses into a strength. Give yourself feedback and reward yourself.

104 Leadership Skills

105 Importance Of Leadership
You can take away my factories, burn up my buildings, but give me my people, and I’ll build the business right back again. (Henry Ford)

106 Definition of Leadership
Leadership is defined as the art or process of influencing people so that they will strive willingly and enthusiastically towards the achievement of group goals.

107 Leadership & Managership

108 Differences Between a Manager and a Leader
Administers Innovates Assigns goals and objectives Develops a vision Maintain power Empowers people Focuses on systems and structure Focuses on developing people Relies on control Inspire trust and motivate Short range view Long range view Asks “how” and “when” Asks “what and why” Eye on the bottom line. Eye on horizon Imitates Creates Accepts status quo. Challenges status quo Demand compliance Develops commitment Does things right Does the right things

109 Leadership Is… A relationship… not a formal position.
A behavior … not a function.

110 Ingredients of Leadership
Power. Fundamental understanding of people and their motivation. Ability to inspire followers to apply their full capabilities to a project. The style of the leader and the climate he/she develops.

111 Traits Approach To Leadership
Physical Traits. Intelligence and Ability Traits. Task Related Characteristics. Social Characteristics.

112 Key Leadership Traits Drive Motivation Honesty Integrity
Cognitive ability Understanding of Business Impact of creativity Flexibility Charisma on Leadership effectiveness.

113 Leadership Behavior & Styles

114 Democratic or participative leader
Leadership Styles Autocratic leader Follower Democratic or participative leader Free-rein leader

115 Styles Based On Use Of Authority
AUTOCRATIC LEADER FOLLOWER

116 Styles Based On Use Of Authority
DEMOCRATIC / PATICIPATIVE LEADER FOLLOWER

117 Styles Based On Use Of Authority
FREE – REIN LEADER FOLLOWER

118 Theories of Leadership
Leadership As A Continuum. Situation Or Contingency Approach. Path Goal Approach. Likert’s Four Systems of Management

119 Leadership As A Continuum
Forces operating in a manager’s personality Forces in sub-ordinates that will affect manager’s behavior Forces in a situation

120 Contingency Theory Of Leadership
People become leaders not only because of the attributes of their personalities but also because of various situational factors and the interactions between leaders and group members

121 Critical Dimensions Of The Leadership Situation
Position Power Task Structure Leader – Member Relations

122 Path Goal Theory The main function of the leader is to clarify and set goals with sub-ordinates, help them find the best path for achieving the goals and remove obstacles

123 Likert’s Four Systems Of Management
System 1: exploitive – authoritative System 2 : benevolent – authoritative System 3 : consultative System 4 : participative - group

124 Goal Approach To Leadership Effectiveness
Organization Leader Behavior Motivated Subordinates Functions Of A Leader Characteristics Of Subordinate Work Environment

125 The Managerial Grid The grid has two dimension:
Concern for production. Concern for people.

126 WORK AND MORALE AT BALANCE
The Managerial Grid Concern for production Concern for people 1.1 MIN WORK MIN MORALE 9.1 MAX WORK 5.5 WORK AND MORALE AT BALANCE 1.9 MAX MORALE 9.9 LOW 1 2 3 4 5 6 7 8 9 HIGH

127 Can Leadership Be Taught?
80 percent of leadership growth derives from experience on the job. 20 percent can be acquired through training and study. On-the-job training and classroom training must go hand in hand.

128 Performance Management

129 Performance Performance refers to an employee’s accomplishment of assigned tasks.

130 Appraisal Appraisal is the judgement of an employee’s
performance in his job, based on considerations other than productivity alone. All managers are constantly forming judgments of their subordinates and are in that sense continuously making appraisals. The term is,however, applied in Human Resource Management to “Formal and systematic assessment made in a prescribed and uniform manner at a certain time”.

131 Appraisal Period It is length of time during which an employees job performance is observed in order to make a formal report.

132 Performance Appraisal
It is the systematic description of the job-relevant strengths and weaknesses of an individual or a group

133 Performance Appraisal A Complex and often Misunderstood Process
Performance appraisal is an exercise in observation and judgement, it is a feedback process, and it is an organizational intervention. It is a measurement process as well as an intensely emotional and human process also.

134 Performance Management
Performance Management is the total process of observing an employee’s performance in relation to job requirements over a period of time and then making an appraisal of it. This is done by: Clarifying expectations. Setting goals. Providing on-the-job coaching. Storing and recalling information about performance. Counseling & Feedback. Monitoring.

135 Performance Management Process
Planning Performance. Managing Performance. Reviewing Performance. Rewarding Performance.

136 Performance Management
Managing performance needs appraisal. It means something very specific, and much too narrow. A process of improvement, which demands continued attention. Performance appraisal is only a part in the overall PM process. PM requires a willingness and commitment to focus on improving performance at all levels . Timely feedback and constant focus of everyone’s attention on the ultimate objective. We need to break performance appraisal orientation to performance management.

137 The Organizational And Human Contexts Of Performance Appraisal
Performance appraisal is almost universal. In our contest not so well organized. Managers have limited contact with employees outside but we have no distance. Accuracy in appraisal is less important than motivating and rewarding the subordinates to most managers. Standards and ratings tend to vary widely and often unfairly Personal values and biases can replace organizational standards. Sometimes the validity of performance appraisals is reduced by the supervisor’s resistance to making them. Some supervisors complain that performance appraisal is pointless paperwork Performance appraisal interfere with more constructive supervisor -subordinate coaching relationships.

138 The Process of Performance Management Needs Three Things To Be Done Well
DEFINE PERFORMANCE: Set Goals. Decide How to Measure Accomplishment. Assessment of Process. FACILITATE PERFORMANCE: Obstacles. Provide Adequate Resources. Careful Selection of Employees. ENCOURAGE PERFORMANCE: Provide sufficient number of rewards that employees really value and do so in a timely and fair manner

139 Purposes of Performance Management System
Provide justification for employment decisions. Provide feedback for personal and career development. Help establish objectives for training programs after identifying the development needs. Serve as-input for a formal reward and punishment system. To motivate employees to do better in present job. Used as criteria in test validation. Help diagnose organizational problems.

140 Purpose of Performance Management System
Employment Decisions PURPOSES OF PERFORMANCE APPRAISAL SYSTEM Diagnosis of Organizational Problems Employee Feedback Objective for Training Programs Criteria in Test Validation

141 Diagnosing Organizational Problems How Done
This is done by identifying training needs in terms of knowledge, skills abilities, and other characteristics to consider as a basis for distinguishing between effective and ineffective performers and using them in other decisions like hiring etc.

142 Performance Management
NEW JOB REQUIREMENTS JOB DESCRIPTION OBJECTIVE SETTING PERFORMANCE ASSESSMENT REVIEW / PLAN UPDATE PERIODIC REVIEWS COACHING / FEEDBACK EMPLOYEE DEVELOPMENT / CAREER PLANNING PLAN REWARDS & RECONGNITION

143 How does Performance Management fit into the overall company management process?
Company Strategic Plans Sales Projections Line Expansions New Products Facility Plans Human Resources Organization Planning Succession Planning Organizational and People Development Performance Planning Periodic Reviews - Coaching & Feedback Evaluation Rewards & Recognition Employee Dev /Career Plan Environment Styles Culture Values

144 Performance Management System
The goal of performance management is to improve organizational performance by translating the organization’s strategic plan into individual employee performance plan This Needs a Proper and Integrated PMS

145 Requirements Of Effective Appraisal Systems
The Fundamental requirements of any appraisal-system are: Relevance Sensitivity Reliability. Acceptability Practicality.

146 weaknesses of each individual
Relationship Of Performance Standards To Job Analysis And Performance Appraisal Job Analysis Performance Standards Appraisal Describes work and personal requirements of a particular job Translate job requirements into levels of acceptable/ unacceptable performance Describes the job-relevant strengths and weaknesses of each individual

147 Legal Issues In Performance Appraisal
To avoid legal difficulties, consider taking the following steps: Conduct a JA and determine job characteristics Incorporate these characteristics into a rating system Train supervisors to use the rating system properly. Provide performance counseling or corrective guidance Formal appeal mechanism , and higher level review. Document appraisal and reasons for termination decision

148 The Strategic Dimension Of Performance Appraisal
Greatest Management Principle: The things that get rewarded get done well. Short term if rewarded will generate short term performance. When long term results required then the performance on longer periods need to be rewarded. Managers may emphasize short or long term objectives or a combination. Short term objectives - outcome as bottom line results for current quarter. Long term objectives - increase market share and securing repeat business. To be most effective, strategic management of Performance must be linked to the strategies an organization uses to gain competitive advantage eg innovation, speed, quality or cost control.

149 Types Of Review Methods Of Review Performance Review.
Potential Review. Reward Recommendations. Methods Of Review Ranking Grading Behavior Expectations Open Ended 360 Degree Feedback Multi-Rater.

150 Alternative Methods Of Appraising Employee Performance
Behavior oriented Rating Method. Relative Rating System. Absolute Rating System Result orientated Method. MBO Work and Planning Review

151 Behavior-oriented Rating Methods
Narrative Essay. Ranking. Paired Comparisons. Forced Distribution. Behavioral Checklist. Critical Incidents. Graphic Rating Scale. Behaviorally Anchored Rating Scales (BARS).

152 When Should Each Technique Be Used
If objective is to compare employees across raters for important employment decisions (e.g. promotion, merit pay) ,MBO and work planning review should not be used. They are not based on a standardized rating scheme for all employees. If a BARS is used, diary keeping should be made a part of the process. This will improve the accuracy of the ratings, and it also will help supervisors distinguish between effective and ineffective employees. If objective performance data are available , MBO is the best strategy to use. Work planning and review are not as effective as MBO.

153 When Should Each Technique Be Used
Appraisal methods that are best in a broad organizational sense- BARS and MBO - are the most difficult to use and maintain . Methods that focus on describing, rather than evaluating , behavior(e.g. BARS, rating scales)produce results that are the most interpretable across raters. No rating method has been an unqualified success when used as a basis for merit pay or promotional decisions. When certain statistical corrections are made , the correlation's between scores on alternative rating formats are very high. Hence all the formats measure essentially the same thing.

154 Popularity of Appraisal Methods & Their Use
Rating Scales - 51% Essays % MBOs % Other Forms - 9%

155 Who Should Evaluate Performance
The Immediate Supervisor. Peers. Subordinates. Self-appraisal. Customers Served. Computers. Multi-Raters or 360 Degree Feedback.

156 Appraisal Errors COMMON ERRORS: OTHER ERRORS: Leniency. Severity.
Central Tendency. OTHER ERRORS: Halo Error Contrast Errors Recency Error

157 Secrets Of Effective Appraisal Interviews
Frequent Communication Training in Performance feedback and Appraisal Interviewing Encourage Subordinate to Prepare Encourage Participation Judge Performance , Not Personality Be Specific, and Be an Active Listener Avoid Destructive Criticism Set Mutually Agreeable Goals Continue to Communicate, and Asses Progress Toward Goals Regularly Make Organizational Rewards Contingent on Performance

158 Impact Of Performance Appraisal On Productivity, Quality Of Work Life, And The Bottom Line
Performance appraisal is a feedback process. Feedback increases performance by 10 to 30 percent.” Feedback is a fairly inexpensive way to improve productivity; but, to work effectively, it requires sustained commitment. The cost of failure to provide such feedback may result in the loss of key professional employees, the continued poor performance of employees who are not meeting performance standards, and a loss of commitment by all employees. The myth that employees know how they are doing without adequate feedback from management can be an “expensive fantasy”.

159 Implications For Management Practice
The difficulty of implementing and management of performance appraisal systems. To improve policy issues for improvement in PMS make “quality of performance appraisal feedback to subordinates” and “development of subordinates” integral parts of every manager’s job description. Tie rewards to effective performance. Recognize that performance appraisal is a dialogue involving people and data; both political and interpersonal issues are involved. No appraisal method is perfect, but with management commitment and employee “buy-in” performance management can be a very useful and powerful tool.

160 Impact Of National Culture On Organizational Performance Appraisals
Less support for performance appraisal as practiced in Western cultures More focus on group rather than individual performance Greater willingness to consider nonperformance factors(e.g. off-the-job behaviors, age) as criteria in appraisal Less willingness to attribute performance levels to the skills and efforts of particular individuals More open and direct relations between supervisor and subordinate An expectation of closer supervisory styles. To forgive, forget and be generous on employee expectations.

161 Conclusion

162 Complexity Of Performance Management
Performance Management includes issues as: Developmental (feedback) Technical aspects (Design of an appraisal system) Interpersonal Aspects (Appraisal interviews) Administrative (Pay, Promotions) This makes it extremely complex.

163 Linking Performance Management with other key areas
Performance Planning Performance Feedback & Coaching Performance Evaluation Implementation Skills Gap Analysis Training Needs Assessment Employee Development Plan

164 Performance Management System
“Is a means to create and maintain a climate of success in the organization.” … Martin Fisher, “Performance Appraisals” This means a Win-Win relationship with employees & Sharing the business success all the way

165 The Executive Appraisal Paradox
Executive Paradox Structured performance reviews not liked Formal review below dignity Too busy to conduct appraisal. Autonomy and creativity in executives Results the only basis for assessing Comprehensive evaluation impossible via formal performance appraisal

166 Answer To The Executive Appraisal Paradox
A formal, systematic executive appraisal process is a must. Incorporate formal performance planning. Make performance review and appraisal an ongoing process. Focus on process as well as outcomes during the executive review. Be as specific and thorough as possible.

167 Questions / Answers

168 Thank You


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