HUMAN RESOURCES MANAGEMENT

Chapter 1
Personnel Management and HRM
Rishad Hossain
M.Sc HRM(ACU, USA), MBA (DU)
Program Director
BiMS

rishad.hossain@bimsedu.com
 Basic Concepts…

Personnel management: personnel Management is that part of management concerned with

people at work and with their relationships within an enterprise.

Four ‘traditions’ of personnel management

 The welfare tradition

 The industrial relations tradition
 The control of labor tradition
 Professional tradition
Basic Concepts…

HRM: The strategic integration

Direct _____________
Business strategy
And organizational Advisory - - - - - - - - - -
culture

Functional and
product market Line management
strategies
Personnel
Management
Function

Employees
 Basic Concepts…

Definition of HRM

HRM is the process of acquiring, training, appraising, and compensating employees , and
attending to their labor relations, health and safety, and fairness concerns.- Gary Dessler.

A strategic approach to managing employment relations which emphasizes leveraging

people’s capabilities is critical to achieving sustainable competitive advantage, this being
achieved through a distinctive set of integrated employment policies, programs and
practices. (Bratton & Gold)
Basic Concepts…

HRM: The strategic integration

Business strategy
and culture Direct ____________
Advisory - - - - - - - - -

Functional and
product market Line management
Strategies including
HRM
Personnel
Employees
 Basic Concepts…

Key policy goals of HRM (Guest model)

Strategic Integration- Integrate HRM issues into their strategic plans to incorporate an HRM
perspective into their decision-making

High commitment- People must be managed in a way that ensures both their genuine
‘behavioral’ commitment to pursuing the goals of the organization and their ‘attitudinal’
commitment.

Flexibility- HRM policies must be structured to allow maximum flexibility for the organization,
so it can respond to every-changing business needs.

High quality- the notion of quality must run through everything the organization does.
Basic Concepts…

Functions of HRM

 Human resource planning.

 Job and work design.
 Staffing- recruitment, selection and placement.
 Training and development.
 Performance appraisal and review.
 Compensation and reward.
 Employee/Industrial relations and benefits.
 Health, safety and welfare
 Organizational development
 Basic Concepts…

Role of HR/ personnel management

 Guidance Role : Offering specialist recommendation and policy frame work to guide line
mangers decisions.

 Advisory role: Offering specialist information and perspective to line managers (and individual
employees) on employment matters.

 Service role: providing service to a range of internal customers

 Control/ auditing role: Analyzing personnel indices (such as wage costs or labor turnover),
monitoring performance carrying out benchmarking or a local government review.

 Planning/organizing role: Human resource forecasting and planning, developing flexible

working method
Basic Concepts…

Out sourcing HR tasks

 Training
 Recruitment
 Health and safety monitoring and advice
 Employee welfare and counseling
 Payroll management
 Legal advice
Basic Concepts…

Quantitative Measures of HR function

• Staff turnover/ labor wastage (or labor stability ) ratios

• Absenteeism rates
• Unit labor cost
• Incidence of grievance procedures, disciplinary procedures, appeals to industrial tribunal
• Number of days production (and associated costs) lost through accidents
• Number of selected recruits remaining in the job, achieving performance targets, achieving
promotion.
• Number of staff achieving professional or other qualifications, or undertaking training
programs
• Success of training programmers in achieving their objectives
• The cost of any or all of the above
Basic Concepts…

Qualitative Measures of HR function

 Employee motivation, team spirit, job satisfaction

 The extent to which HR proposals, policies, documentation and so on are accepted by
line managers
 The perception of the HR function’s value, service, expertise, quality of service accepted
by its internal customer
Basic Concepts…
Old assumptions (PM) New assumptions (HRM)
Reactive piecemeal interventions in response Proactive, system-wide interventions, with emphasis on
to specific problems. fit, linking HRM with strategic planning and cultural
change

People are a variable cost People are social capital, capable of development
Self interest dominates, conflict between Co-incidence of interest between stakeholders can be
stakeholders developed

Seeks power advantages for bargaining and Seeks power equalization for trust and collaboration
confrontation

Control of information flow to enhance Open channels of communication to build trust,

efficiency, power commitment

Relationship orientation Goal orientation

Control from the top Participation and informed choice

HUMAN RESOURCES MANAGEMENT

Chapter 5
Reward Management
Basic Concepts…

Motivation

The heart of motivation is to give people what they really want most from work. The
more you are able to provide what they want, the more you should expect what you
really want, namely: productivity, quality, and service. (Twyla Dell)

 Reward
 Extrinsic rewards: For work, eg. Pay, benefits
 Intrinsic reward: In work, eg. Responsibility, challenge interest
 Incentive
 Delegation of Authority
 Empowerment
 Recognition
 Feedback on performance
Basic Concepts…

 Job performance (ability)

Performance = Motivation (desire to do job) + Ability (capacity
to do the job) + Work environment (tools, materials,
information)
Or
Performance= Ability X Motivation
 Productivity (skills)
 Job satisfaction
 Employee extension

People who are motivated perform extra effort then those who are not
motivated
Basic Concepts…

Maslow’s Hierarchy of need

Basic Concepts…

Two factor Theory ( Frederick Herzberg)

The need to avoid unpleasantness is satisfied through hygiene factors which control
dissatisfaction but cannot offer lasting satisfaction.
Eg. Company policy and administration, salary, The quality of supervision, Interpersonal
relations etc.

The need for personal growth, fulfillment is satisfied through motivator factors. The only
way to offer job satisfaction
Eg: Status, responsibility, recognition, advancement, challenging work, growth
Basic Concepts…

Expectancy theory (Victor Vroom)

People will act only when they have a reasonable expectation that their actions will lead to
desired goals. They will perform better if they believe that reward will follow effective
performance.

The strength or ‘force’ of motivation is a product of

EXV=F
Expectancy
Valence
Force of motivation
Basic Concepts…

Job Evaluation

Job Evaluation is the process of analyzing and assessing the content, worth or size
of jobs within an organization, in order to rank and group them as a basis for an
equitable remuneration system.

Step 1: Select compensable factors

Step 2: Gather data on jobs
Step 3: Evaluate jobs
Step 4: Assign specific pay values to the job
Basic Concepts…

Factors determining Pay

 Market rates of pay

 Affordability
 Culture and value system of the organization
 Collective bargaining negotiations
 Government intervention
 Individual performance
Basic Concepts…

Factors determining Pay

 Market rates of pay

 Affordability
 Culture and value system of the organization
 Collective bargaining negotiations
 Government intervention
 Individual performance
Basic Concepts…

Component of the reward system

Salary systems

A grade structure consisting of a hierarchy of bands or levels (‘Grades’) to which are

allocated to groups of job that are broadly comparable in value

A pay structure, defining pay ranges or scales of each grade, allowing scope for pay
progression or increases according to length of service and performance
Basic Concepts…

Performance pay

 Payment by result
 Performance related pay
 Suggestion scheme (non-cash prize)
 Team-based pay
 Gain sharing
 Profit sharing
 Employee share ownership
Basic Concepts…

Indirect Pay (Benefits)

 Extended holiday entitlement

 Company cars
 Insurance
 Catering services
 Recreational facilities
 Allowances
 Discounts or preferential terms
 Educational programs
HUMAN RESOURCES MANAGEMENT

Chapter 6
Monitoring and managing performance
Basic Concepts…

Performance appraisal: Performance appraisal means evaluating an employee’s current and/or

past performance relevant to his or her performance standard.

Process of performance appraisal

Step 1 Identification of criteria

Step 2 Appraisal report
Step 3 Appraisal interview
Step 4 Review of the assessment
Step 5 Action plan
Step 6 Follow-up
Basic Concepts…

Why performance appraisal:

 Emphasize on goal setting, training, performance appraising, rewarding

 Managers and supervisors may obtain random impression of subordinates’ performance,
but rarely form a coherent, complete and actual picture.
 Managers or subordinates have a fair idea of their subordinates
 Judgment are easy to make, but less easy to justify in written

Sources of performance feedback

 Self appraisal
 Downwards appraisal
 Upward appraisal
 Peer appraisal
 Customer Appraisal
 360 degree appraisal
Appraisal tools…

Graphic Rating Scale Method

 The graphical rating scale is the simplest and still most popular technique for appraising
performance.

 A graphic rating scale lists traits and range of performance values for each trait.

 The supervisor rates each subordinate by circling or checking the score that best describes
his or her performance for each trait. The assigned values for the trait are then totaled.
Appraisal tools…

Forced Distribution Method

The forced distribution is similar to grading on a curve. With this method, rater place
predetermined percentage of ratees into performance categories.

For example:

 15% high performance

 20% high average performance
 30% average performance
 20% Low average performance
 15% low performance
Appraisal tools…

Critical incident Method

The supervisor keeps a log of positive and negative examples (critical incident) of a
subordinate’s work-related behavior.

Every six month or so, supervisor and subordinate meet to discuss the ratter’s performance
using the incidents.
Appraisal tools…

Narrative Forms

 The persons supervisor is responsible for providing his or her performance and required areas of
improvement.

 This aids the employee in understanding where his or her performance was good or bad, and how
to improve that performance.
 Appraising performance: Problems and solutions

Rating Errors:

• Recency error
The recency effect occurs when a rater gives greater weight to recent events when appraising an
individual’s performance.
Using some method of documenting both positive and negative performance can minimize this
problem.

• Central tendency error

Appraisers, who rate all employees within a narrow range, usually the middle or average, commit a
central tendency error.

• Leniency error
Every evaluator has his own value system, which acts as standard against which appraisals are
made. Some evaluators mark high and others low.
The former is referred to as positive leniency error and the ratter as negative leniency error or
strictness.
 Appraising performance: Problems and solutions

• Halo effect
The halo effect occurs when a manager rates an employee high or low on all items because of
one characteristic.

• Contrast error
This error is the tendency to rate people relative to other people rather than to performance
standards. This can be avoided if you compare a person with standards, not with another
person.

• Bias

• Unclear Standard
 Appraising performance: Problems and solutions

Steps to avoid appraisal performance problems

 Learn and understand the potential problems, and the solutions

 Use the right appraisal tools. Each tool has its own pros and corns
 Train supervisor to reduce rating errors

 Record keeping
Basic Concepts…

Performance Management: Performance management is a process that consolidate goal

setting, training, performance appraising, rewarding.

Performance management activities

 Preparation of performance agreements

 Preparation of performance and development plan

 Management of performance through the year

 Provision of performance review

Basic Concepts…

Types of disciplinary situation

 Excessive absenteeism

 Excessive lateness in arriving at work

 Defective and/or inadequate work performance

 Poor attitudes which influence the work of others or which reflect on the public image of the
firm
Basic Concepts…

Model disciplinary procedure

 The informal talk

 Oral warning

 Written or official warning

 Suspension without pay

 Dismissal
Basic Concepts…

Grievance Occurs when an individual feels that (s)he is being wrongly

treated by a colleague or supervisor: picked on, unfair appraised or blocked for
promotion, or discriminated against on ground of race or sex
HUMAN RESOURCES MANAGEMENT

Chapter 7
Exit Rights and Procedures
Basic Concepts…

Termination of the employment contract

Contracts of the employment contract

 By performance:
 By mutual agreement
 By notice
 Breach of contract
 Frustration
Basic Concepts…

Resignation
Resignation is the process by which an employee gives notice of his or her intention to
terminate the employment contract

Procedure to resignation
1. Exit interview
2. Negotiate period
3. Notify key people
4. Complete performance assessment
Basic Concepts…

Retirement
There are two basic approaches to retirement policy
1. Flexible retirement
2. Fixed retirement
Basic Concepts…

Resignation
Resignation is the process by which an employee gives notice of his or her intention to
terminate the employment contract

Procedure to resignation
1. Exit interview
2. Negotiate period
3. Notify key people
4. Complete performance assessment
Basic Concepts…

Redundancy

Causes of redundancy

 Adverse trading condition

 Increased global competition
 Introduction of ICT

Types of redundancy

 Voluntary Redundancy
 Involuntary Redundancy
Basic Concepts…

Dismissal
An individual can be legally dismissed in three ways
 His or her employment is terminated with notice, or without notice
 He or she is employed under a fixed-term contract which comes to an end and is not
rewarded on the same terms
 Because of conduct which is a significant breach of the contract of employment

Wrongful dismissal: Wrongful dismissal is where there are insufficient reasons to justify

Unfair dismissal: Unfair dismissal is where law and internal policies have been breached
Basic Concepts…

Dismissal is justified where related to

 Redundancy
 Legal impediment: eg. Loss of driving license or lack of work permit
 Incapability: eg. Ill health or lack of qualification
 Misconduct: eg. Fail to follow minimum disciplinary procedure
 Substantial reason: The employee marries a competitor

Dismissal is unjustified where related to

 Redundancy where the selection is deemed unfair

 Trade union member ship: join or refusal to join trade union
 Pregnancy, maternity, dependent care or parental care
 Refuse to work on holiday
 Whistle blowing
 Transfer of the undertaking (unless economic, technical or organizational reasons)
 Discrimination
Basic Concepts…

Employment tribunal

Employment tribunal are independent judicial bodies which arbitrate in employment matters
including unfair dismissal, employment protection and claims in relation to sexual/ racial
discrimination and equal pay.

Members of employment tribunal

1. A legally-qualified chairperson
2. Employer representative
3. Employee representative
 Marking Scheme

 Answers nearly Agrees with fundamental concepts (covered in a typical reference

and/or text):  40-50%

 Answers fully agrees with fundamental concepts (covered in a typical reference

and/or text):     50-60%

 Answer includes few attempts of explanation and/or analysis: 60-70%

 Answer includes relevant examples with analysis provide: 70-80%

 Answer includes Relevant examples with analysis and recommendation and /or
conclusion provided: 80+ %