 HRM is a part of the broader field of

management, thus one must understand

what management is in order to understand
human resources management.
 Management is the process of planning,
organizing, staffing, directing and
controlling the efforts of organization’s
members and using all other resources to
achieve objectives.
Human resources management
 HRM deals with acquisition, retention,
development and effective utilization
of human resources. HRM is a strategic
and coherent approach to management
of an organization’s most valued assets
i.e. the people who individually and
collectively contribute to achievement
of its objectives.
 Human resources management -
definition
The management function of identifying
the need for acquiring, optimally utilising
and finally discharging the human factor
back to society in a responsible and
ethically acceptable way.

Refers to the philosophy, policies,

procedures and practices related to the
management of people in an organisation.
02/11/2022 4
 HRM - definition
 All those activities associated with the
management of employment
relationships in the firm. Managing
employment relationships aims at
enhancing commitment, quality and
flexibility of employees – ‘SOFT HRM’
OR HIGH COMMITMENT
MANAGEMENT (HCM).
02/11/2022 5
 Definition cont..
 HRM is a distinctive approach to employment
management which seeks to achieve improved
performance of the firm (competitive advantage)
through the strategic deployment of highly committed
and capable workforce using considered techniques.
 HRM seeks to adopt policies and procedures which
support organizational strategy (business objectives).
‘HARD HRM’ (STRATEGIC HRM- SHRM)- which
support corporate strategy goals such as cost
minimization, lean operation structures.

02/11/2022 6
 Definition cont..
 It is the function of management that
focuses on staffing. It goes beyond the
traditional personnel management role.
 It is the process of acquiring, training,
appraising and compensating employees
and attending to their labour relations,
health and safety, and fairness concerns
 Includes All decisions that affect the
workforce
 HRM functions
Human Resource Planning
Job analysis and design
Recruitment and selection
Placement and induction
Training and development
 HRM functions
Compensation management
Performance Management
Industrial Relations
Employee Health and Safety
Managing employee separation
Features of HRM
 It emphasizes on strategic management of
people which achieves integration between
business strategy and the HR strategy
 A comprehensive approach is adopted in
development of HRM policies and practices
 It places importance in gaining commitment to
organizational goals, mission and values its
commitment – oriented
 It treats people as assets rather than costs i.e.
people are regarded as a source of competitive a
development and as human capital to be invested
in through the provision of leaning and
development opportunities
 Its approach to employee relations is unitarist
rather than pluralist i.e. it is believed that
employees share the same interest as employers
 HRM is a line management responsibility
Evolution of the field of HRM
 HR departments were once called health & happiness
departments. Individuals in the HR department were
those past their prime. The department was seen as
unimportant but necessary in an organization. HR
officers were responsible for organizing picnics,
birthdays, weddings, company anniversaries, parties
etc.
 However, some changes took place that
necessitated a shift in personnel approaches
e.g.
 The rise of modern labour unions
 The increasing educational level of societal
members
 Increased competition among firms
F.W. Taylor demonstrating that we
have first class workers and other
workers
Increasing demand of the less
privileged members of society
Increased technological changes
Changing role of HR Practitioner
 1930s (welfare officer)
 1950s (recruitment specialist)
 1970s (industrial relations negotiator)
 1980s (HR specialist)
 1990’s/2000’s (visionary/corporate
philosopher)
 Prior to 1930s many organizations held
workers as machines in the production
process. In the 1930s and 1940s some large
employers, out of humanitarian grounds
decided to include some welfare services
into the contract of employment. Thus they
employed welfare officers and welfare
services include allowances and time offs etc
 These welfare services gave the
employers a good image in the eyes of
potential and current employees vis a
vis competition.
 The 1950s & 1960s were characterized
by economic boom in many parts of the
world. Skilled workers were few and in
high demand. The work of the HRM
was to recruit for the organization
The 1950s & 1960s were
characterized by economic boom
in many parts of the world. Skilled
workers were few and in high
demand. The work of the HR
practitioner was to recruit for the
organization
 The 1970s were characterized by economic
recession and employers needs to shed off
excess workers. Many employees joined
trade unions to negotiate for better terms
and conditions of employment.
 The HRM played the role of industrial
relations negotiator to negotiate against
what employers considered to be excessive
demands by trade unions.
 The 1980s and 1990s were years of
economic hardships. Governments
amended laws to allow employers to
minimize costs through reduction of
workforce. Trade unions lost their
powers. The role of the HRM turned to
be supplying labour at the lowest cost
possible.
From the mid 1990s the role of the
HRM turned to be not only
supplying personnel to the
organization but also being a
corporate philosopher for the
organization.
Objectives of the HRM Function
 Helping the organization reach its
goals
 Employing the skills and abilities of the
workforce efficiently
 Providing the organization with well-
trained and well-motivated employees
 Increasing to the fullest the employee’s job
satisfaction and self-actualization.
 Developing and maintaining a quality of
work life that makes employment in the
organization desirable
 Communicating HRM policies to all
employees
 Helping to maintain ethical policies and
socially responsible behavior
 Managing change to the mutual
advantage of individuals, groups, the
enterprise and the public
 Managing increased urgency and faster
cycle time
 Why HR is important to all
managers
 To ensure the right personnel is hired and
placed in the right jobs
 To reduce turnover
 To ensure that people are doing their best
and improving their job performance
 To ensure that managers do not waste time
on useless interviews that do not yield the
right candidates
 Why HR is important to all
managers (cont..)
 To ensure that your company is not taken to
court because of breaking any of the labour
laws ( unfair labour practices)
 Ensure equity in salaries, wages and other
benefits
 To ensure that lack of training does not
undermine the organizational effectiveness
 TASK
Discuss the challenges that both
employees and employers faced as
a result of virtual working during
the covid-19 pandemic.
Challenges of HRM
 Globalization
 Profitability through growth
 Technology
 Intellectual capital
 Change
 Changing mix of the work force
 Changing values of the workforce
 Changing expectations of employees
 Changing levels of productivity
 Changing demands by the Government
 Epidemics e.g. HIV/AIDS, Ebola, covid-19
 Changing labour laws
 Regional conflicts
 Natural disasters
 Leaner workforce
 Formulating HR policies and strategies
Similarities between Personnel Management
and HR Management
 Personnel management strategies like
HRM strategies flow from the business
strategy
 Personnel management like HRM
recognizes that line managers are
responsible for managing people. The
personnel function provides necessary
advice and support services to enable
managers to carry out their
responsibilities
 The values of personnel management and
HRM are identical with regard to respect to
individuals, which is achieved by balancing
organization and individual needs and
developing people to achieve the maximum
level of competence both for their own
satisfaction and to facilitate the
achievement of organizational objectives
Both personnel management and
HRM recognize that of most
essential functions as that of
matching people to even changing
organizational requirements i.e.
placing and developing the right
people in for the right jobs
 The same range of techniques in selection,
competency analysis, performance management,
training, management development and reward
management is used in both HRM and personnel
management
 Personnel management like HRM attaches
importance to process of communication and
participation within an employee relations systems
Differences
 Personnel management is an activity aim
primarily at non managers where as HRM
is more concerned with managerial staff
 HRM is much more of an integrated line
management activity whereas personnel
management seeks to influence line
management.
HRM emphasizes the importance
of senior management being
involved in management of people
whereas personnel management
does not
Human Resource Planning
 This is the process of determining an
organization’s human resource needs. It is also the
process of systematically reviewing human
resource requirements to ensure that the required
number of employees, with required skills are
available when and where they are needed. It
involves matching internal and external supply of
people with job openings, anticipated in the
organization over specified period of time.
Dealing with surplus
Restricted hiring
Reduced hours
Early retirement
Lay offs/Retrenchment
Positive consequences of
retrenchment
 People may discover their full potential when they
leave employment
 Creativity and entrepreneurial spirit is enhanced
 The organization is able to eliminate employees
who do not add value to the organization
 Through retrenchment the organization can get
rid of employees who are untrainable and
incapable of learning
 Employees who feel underutilized in the organization
can look for other work to do where they can utilize
their skills
 The employer is able to get an optimal number hence
efficiency is achieved
 A performance culture is created because
retrenchment serves as a wake up call for non-
performers
Negative consequences of
retrenchment
 Traumatizing experience to the victim
 Regular income ceases, hence employees are not able
to meet their bills
 It affects employees’ standard of living
 Heavy workload to the remaining employees which
may be a cause of fatigue
The morale of the remaining
employees goes down
The image of the organization is
affected since the employees who
leave may bad mouth the
organization
Dealing with shortage
 Creative recruiting
 Compensation incentives
 Training programmes
 Different selection standards
 Overtime
 Outsourcing
 Employee leasing
 Job enlargement/multiskilling
HR Forecasting Techniques
(Methods)
 Zero-Base Forecasting
 Bottom-up Approach
 Predictor Variables/Trend Projection
Technique
 Expert Estimate Technique
 Simulation
 Use of Mathematical Models
JOB ANALYSIS
This is the systematic process of
determining the skills, duties and
knowledge required for performing
jobs in an organization. It involves
collecting data about jobs
 Job Analysis is a process to identify and
determine in detail the particular job
duties and requirements and the
relative importance of these duties for a
given job.
 Job Analysis is a process where
judgments are made about data
collected on a job.
 The purpose of job analysis is to obtain
answers to six important questions:
 What physical and mental tasks does
the worker accomplish?
 When is the job to be completed?
 Where is the job to be accomplished?
How does the worker do the job?
Why is the job done?
What qualifications are needed to
perform the job?
The data collected about jobs is
used to prepare two documents:
Job description
Job specification
 Job description –the principal product of a
job analysis. It represents a written summary
of the job as an identifiable organisation
unit
 Job specification – a written explanation of
the knowledge, skills, abilities, traits and
other characteristics (KSAOs) necessary for
effective performance on a given job
Parts of a Job Description
 Job identification
 Job summary
 Duties performed
 Date of the job analysis
 Performance standards - in terms of
quantity and quality levels of each job
duty
Relation to other jobs
Supervision
Machines, tools and equipment
Working conditions
Hazards
Job Specification
 It is a written record of the
requirements sought in an individual
worker for a given job. It refers to a
summary of the personal
characteristics required for a job. It is a
statement of the minimum acceptable
human qualities necessary for the
proper performance of a job.
Reasons for Conducting Job
Analysis
 Human resource planning
 Recruitment and selection
 Training and development
 Performance appraisal
 Compensation and benefits
Employee Health and Safety
Employee and labour relations
Legal considerations
Maintenance and separation
Job Analysis Methods
Observation
Questionnaires
Interviews
Employee recording
Technical conference method
Steps in Job Analysis
 Collection of background information
 Selection of representative positions to
be analyzed
 Collection of job analysis data
 Preparation of job descriptions
 Developing job specifications
RECRUITMENT AND SELECTION
 Recruitment is the process of attracting
individuals on a timely basis, in sufficient number
and with appropriate qualifications and
encouraging them to apply for jobs within an
organization. Finding the appropriate way of
encouraging qualified candidates to apply for
employment is extremely important when a firm
needs to hire employees.
Recruitment sources
 Internal
 External
Internal Sources
 Many large organizations attempt to develop their own
low level employees for higher positions. These
promotions can occur through an internal search of
current employees who have bid for the job. Been
identified through the organizations HRM system or
even been referred by a fellow employee.
Advantages of current employees
 It is good public relations
 It builds morale
 It encourages good individuals who are ambitious
 It improves the probability of a good selection
because information on the individual’s
performance is readily available
 It is less costly than going outside to recruit
 Those chosen internally already know the organization
 When carefully planned promoting from within can
also act as training device for developing middle and
top level managers e.g. through on the job training
techniques
Disadvantages
 They could be dysfunctional of the organization
uses less qualified internal sources only because
they are there when excellent candidates are
available on the outside
 Internal searches may generate in fighting
among rival candidates for promotion
 It decreases morale levels of those not selected
 It causes excessive in breeding i.e. it hinders new
blood with current ideas, knowledge and
enthusiasm
Employee referrals and
recommendations
Advantages
 Employees rarely recommend someone unless they
believe the individual can perform adequately.
 Employee referrals may receive more accurate
information about their potential jobs. The
recommender often gives the applicant more
realistic information about the job than could be
conveyed through external sources. This
information therefore reduces unrealistic
expectations and increases job survival
 Employee referrals are an excellent means of
locating potential employees in those hard to fill
positions
Disadvantages
 Recommenders may confuse friendship with job
performance competence. This is because
individuals often like to have their friends from
them at their place of employment for social and
economic reasons
 Employee referrals may lead to nepotism i.e.
hiring individuals related to persons already
employed by the organization’s racisms,
tribalism etc
 Employee referrals may minimize an
organization’s desire to add diversity to the
workplace
External Sources & methods of
recruitment
 Advertisements
 Employment Agencies
 There are three forms of employment
agencies
 a) Public or state agencies
 b) Private employment agencies
 c) Management consulting firms
Schools, Colleges and Universities
Professional Organizations
Unsolicited Applicants
Cyber Space/Internet Recruiting
Advantages of internet recruiting
 Internet recruiting provides a low cost
means for most businesses to gain
unprecedented access to potential
employees worldwide
 It is a way to increase diversity i.e. getting
potential employees from across the globe
 Due to a wide search, internet recruiting
provides people with unique talents
 As computer prices fall, access costs to the
internet decrease and therefore many potential
employees access internet hence organization
can advertise higher level jobs as well as low
level jobs
 Disadvantages
 There is not any personal touch on contact between
the potential employee and the organization
 Not all potential candidates can access the internet
therefore the selection choice may not be very wide
 Competitors in the Labour Market
 Former Employees of the Organization
 Persons with Disabilities
 Older Individuals
 Self Employed Workers
 Job Fairs
 Internships
 Benefits of Internship
 During the internship the student gets to
view business practices first hand
 The intern contributes to the firm by
performing needed tasks
 Through this relationship a student can
determine whether a company could be a
desirable employer
 Having a relatively lengthy of time to
observe the students job performance, the
firm can make a better judgment regarding a
persons qualifications.
 Internships also provide opportunities for
students to bridge the gap from business
theory to practice
 Internships serve as an effective public
relations tool that provides feasibility for the
company and assists in recruitment.
 Open Houses
 Walk in Applicants
 Event Recruiting
Advantages of External
Recruitment
 Free flow of new ideas into the organization
 Increased productivity as a result of new
employees trying to prove their performance
and potential
 Less training costs because these employees
are already experienced
Disadvantages
 Expensive – because of recruitment costs
 The organization is not sure of their full
potential and performance
 Reality shock as a result of unrealistic
expectations
 Take time to settle down
Alternatives to Recruitment
 Outsourcing
 Overtime
 Multi-skilling (job enlargement)
 Contingent workers (temporary and part
time)
 Employee leasing
Outsourcing
 This is the process of transferring
responsibility for an area of service and its
objectives to an external provider.
Subcontracting of various functions to other
firms has been a common practice for
decades. This decisions may make sense
when the subcontractor can perform a given
function e.g. maintenance, cleaning etc with
perhaps even greater efficiency and
effectiveness.
Contingent Workers
 These are part-time temporary or
independent contractors. Due to global
competition and changing technology
organizations are not able to do accurate
forecasting of their employment needs in
advance. To avoid hiring people one day and
resulting to lay offs the next, firms look to
the benefits of flexible employment
strategies.
Employee Leasing
 The leasing firms have got employees who
are specialists in providing various services
and these employees are usually sent to the
various client firms. The employees are
accountable to the leasing firm for
everything including salaries and benefits as
well as other issues that concern or affect
employee/employer relationship.
Overtime
 This is the most commonly used method of
meeting short term fluctuations in work
volume. Overtime may help both the
employer and employee. The employer
benefits by avoiding recruitment, selection
and training costs. The employees gain from
increased income during the overtime
period.
Multi-skilling/ job enlargement
This is whereby employees’
duties are increased such that
they can handle extra duties
that they were not initially
performing.
External Environment of
Recruitment
 Labour market conditions
 Legal considerations
 Political interference
 Trade unions
 Corporate image
 Economic factors
Internal Environment of
Recruitment

Organizational policies
Nepotism
SELECTION
 It is the process of choosing the best employees out of the
many recruits.
 It is required of recruits to fill a job application from which
seeks four types of information:
 Personal information – names, addresses, telephone
numbers, marital status, age, gender, nationality, height,
weight,
 Education background – schools, higher education,
institutions attended qualifications obtained, special
training, membership or professional bodies
 Employment history – companies worked for,
dates of employment, duties and responsibilities,
military service
 Other interests - sports, hobbies, membership
and clubs, societies
 The job application form gives;
 A basis for drawing up a shortlist
 Provides a foundation of knowledge to be used
before the interview
 Post interview decision making process
SELECTION PROCESS
 The preliminary interview
 Review of application and resumes
 Selection tests
 Employment interviews
 Reference and background checks
 Selection decision
 Medical examination
 Job offer
1) Preliminary Interview
 The basic purpose of this initial screening of applicants is
to eliminate those who do not meet the position
requirements. At this stage the interviewer asks a few
straight forward questions. In addition to eliminating
unqualified job applicants quickly a preliminary interview
may produce other positive benefits for the firm. It is
possible the position for which the applicant applied is not
the only one available. A skilled interviewer will know
about other vacancies in the firm and may be able to steer
the prospective employee to another position. These
interviews can also be effected via telephone or video tapes.
2) Review of Applications and
Resumes
 Biographical Data
 This may include name, father’s name, date and place of
birth, age, sex nationality, height, weight, physical
disability if any, marital status, number of dependants
etc.
 Educational Attainment
 Includes education (subjects offered and grades secured,
training acquired in special fields and knowledge gained
from professional or technical Institutions.
 Work Experience
 Includes previous experience, the number of jobs held
with same or other employers, including the nature of
duties and responsibilities and the duration of various
assignments, salary received, grades and reasons for
leaving the present employer.
 Salary and Benefits ie present and expected .
 Personal Items
 Association memberships, extracurricular
activities, sports, hobbies and any other pertinent
information supporting a candidate’s suitability for
a post.
 Other Items
 May include names and addresses of previous
employers, references etc
3) Selection Tests
Advantages of Selection Tests
 Research indicates that tests are reliable and
accurate means to predict on the job performance.
 The cost of employment testing is small in
comparison to ultimate hiring cost. Hiring costs
include advertising, recruiting, interviewing and
training expenses
 Organizations use tests to identify aptitudes and
job related skills that interviews cannot recognize.
Problems using selection tests
 Job performance depends on an individual’s ability
and motivation to do the work. Selection tests may
accurately predict an applicant’s ability to perform
the job but they are less successful in indicating
the extent to which the individual will be
motivated to perform it.
 Legal liabilities – pre-employment testing carry
legal liabilities eg a law suit from rejected
applicants who claim a test was not job related or
that it unfairly discriminated against a protected
group violating employment laws.
 Test anxiety – applicants often become
quite anxious when confronting a
hurdle that might eliminate them from
consideration. The test administrators
reassuring manner and a well
organized testing operation should
serve to reduce this threat
4) Interviews
 This is the most widely used selection tool. Interviews
are used for a variety of purposes including selection,
appraisal, disciplinary action, counseling and general
problem solving Employment interview is a goal
oriented conversation in which the interviewer and
applicant exchange information. Interview is a
selection technique which enables the employer to
view the total individual and directly appraise him and
his behavior. It is a method by which an idea about an
applicant’s personality including his intelligence,
interests and general attitudes towards life can be
obtained by a face to face contact.
Types of interviews
 Patterned or Structured Interview
 This is the most common method of interview. It is
based on the assumption that to be most effective every
pertinent detail bearing on what is to be accomplished
what kind of information is to be sought, how much
time is to be allotted to it must be worked out in
advance. Questions are asked in a particular order with
very little deviation.
 Non-directive or Free Interview
 It is unstructured and is relatively non-planned as to
format. In such an interview, the applicant is asked some
very general questions and he may reply to these in any
way he likes for a considerable length of time. The
interview is not directed by questions or comments as to
what the candidates should be asked.
 Depth or Action Interview
 It is semi-structured in nature and utilizes questions in key
areas which have been studied in advance by the
interviewer. The typical subject discussed at such
interviews include a candidates home life, education,
previous experience, hobbies, recreational interests etc.
The interviewer provides instructional information about
his organization, the nature of work, pay, opportunities for
advancement, job demands etc. The idea of such an
interview is to get a true picture of the interviewer by
intensively examining his background and thinking so that
a correct evaluation and decision may be made.
 Group Discussion Interview
 In this type of interview groups rather than individuals are
interviewed. The interviewees are given certain problems
and are asked to reach a specific decision within a
particular time limit. The applicants enter into group
discussions knowing that the interviewee is a test but do
not know which qualities are being measured or tested.
 Panel or Board Interview
 In this type of interview, a candidate is interviewed by a
number of interviewers. Questions may be asked in turn or
asked in random order as they arise on any topic.
 Stress Interview
 In the stress interview, the interviewer assumes a hostile
role towards the applicant. He deliberately puts him on the
defensive by trying to annoy, embarrass or frustrate him.
Usually the interviewer in such circumstances asks
questions rapidly, criticizes the interviewees answers
interrupts him frequently, keeps the candidate waiting
indefinitely and then subjects him to interrogation,
questioning whatever he might state or too many questions
are asked at a time by many interviewers etc. The purpose
is to find out how a candidate behaves in a stress situation,
whether he bases his temper, gets confused frightens.
Procedure for an interview
 Review background information
 Before proceeding to interview, a candidate is advisable to collect and
correlate all relevant information about her/him
 Preparation of question plan
 This is especially important for inexperienced interviewers. As
question is put to candidate and answered by her it should be cross
marked and then next question asked
 Putting the candidate at ease
 For most candidates undergoing an interview, means considerable
mental and emotional strain but display of people understanding and
sympathy on part of interviewer may considerably relieve such tension.
The candidate should also be provided with all necessary facilities and
comfort so as to put her at ease. The interviewer should not interrupt
candidate in any way and should patiently listen to her answers
 Drawing out the best in a candidate
 Different candidates react differently to questions put to
them during an interview. It is therefore for interviewer to
decide how best to handle each candidate so as to get the
best out of her or him
 Concluding the interview
 After interview is over and candidate has left the room,
interviewer/s should quickly glance through their notes
and bring to mid their impression about the candidate so
as to make a provisional assessment of her/his
performance. It is only after this that the next candidate
should be called in
5) Reference and background
checks
 Reference checks are validations that provide additional
insight into the information furnished by the applicant and
allow verification of its accuracy. In fact applicants are
often required to submit the names of several references
that can provide additional information about them. Most
organizations place more emphasis on professional
references included in background investigations.
Background investigations involve obtaining data from
various sources, including previous employers and
business associates. These professional references and
academic institutions are a valuable source of information
about applicants
 Negligent hiring- the liability an employer incurs
when it fails to conduct a reasonable investigation
of an applicant’s background and then assigns a
potentially dangerous person to a position where
he or she can inflict harm.
 Negligent retention- when a company keeps
persons on the payroll whose records indicate
strong potential for wrongdoing and fails to take
steps to defuse a possible violent situation.
 Negligent referral- when a former
employer fails to offer a warning about
a particularly severe problem with a
past employee.
6) Selection decision

 Management should notify both successful and
unsuccessful candidates of selection decisions as soon
as possible. This action is simply a matter of courtesy
and good public relations. Any delay may also result in
the firm losing a prime candidate, as top prospects
often have other employment options. If currently
employed by another firm, the successful candidate
customarily gives between two and four weeks’ notice.
Even after this notice, the individual may need some
personal time to prepare for the new job.
7) Medical examination

 All medical exams must be directly relevant to the job
requirements and that a firm cannot order a medical
exam until the applicant is offered employment.
Typically a job offer is contingent on the applicant’s
passing of this examination. The basic purpose of the
medical examination is to determine whether an
applicant is physically capable of performing the work.
8) Job offer
PLACEMENT AND INDUCTION
Placement
 This is determination of the job to which the
accepted candidate is to be assigned and his
actual assignment to that job. A proper
placement of a worker reduces employee
turnover, absenteeism and accidental rates
as well as improving morale.
Principles for consideration during
placement
 Right people should be placed on right jobs
 A candidate should be placed on the job according
to the job requirement
 A job should be offered to candidates who have
required qualifications and experience
 At the time of placement, candidate should be
educated about the job, working conditions, target
output, expectations of job etc
INDUCTION
 Induction is the process of receiving
and welcoming employees when they
first join a company and giving them
the basic information they need to
settle down quickly and happily and
start work.
AIMS OF INDUCTION
 To smooth the preliminary stages when everything
is likely to be strange and unfamiliar to the starter;
 To establish quickly a favourable attitude to the
company in the mind of the new employee so that
he or she is more likely to stay;
 To obtain effective output from the new employee
in the shortest possible time;
 To reduce the likelihood of the employee leaving
quickly
Importance of Induction
Reducing the cost and inconvenience of early leavers
 The costs can include:
 Recruitment costs of replacement;
 Induction costs (training etc);
 Costs of temporary agency replacement;
 Cost of extra supervision and error correction;
 Gap between the employee’s value to the company and
the cost of the employee’s pay and benefits
Increasing Commitment
 A committed employee is one who identifies
with the organization, wants to stay with it and
is prepared to work hard on behalf of the
organization. The first step in achieving
commitment is to present the organization as
one that is worth working for and to ensure that
this first impression is reinforced during the first
weeks of employment
Clarifying the Psychological
Contract
 Consists of implicit, unwritten beliefs and assumptions
about how employees are expected to behave and what
responses they can expect from their employer. It is
concerned with norms, values and attitudes. The
psychological contract provides the basis for the
employment relationship, and the more this can be
clarified from the outset, the better. Induction
arrangements can indicate what the organization
expects in terms of behavioural norms and the values
that employees should uphold. Induction provides an
opportunity to inform people of the way things are done
so that misapprehensions are reduced even if they
cannot be eliminated.
Accelerating Progress up the
Learning Curve
 New employees will be on a learning curve –
they will take time to reach the required level of
performance. Clearly, the length of the learning
curve and rates of learning vary, but it is
important to provide for it to take place in a
planned and systematic manner from the first
day to maximize individual contributions as
quickly as possible.
Socialization
 New employees are likely to settle in
more quickly and enjoy working for
the organization if the process of
socialization takes place smoothly.
The social aspects of work
(relationships with colleagues) are
very important for many people.
Formal induction programs
 INDUCTION ACTIVITIES
 1. Reception

 The following checklist for reception is

recommended;
 Ensure that the person whom the new employee
first meets (ie. the receptionist, personnel
assistant or supervisor) knows of their pending
arrival and what to do next.
 Set a reporting time, which will avoid the risk of the starter
turning up before the reception or office staff arrive.
 Train reception staff in the need for friendly and efficient
helpfulness towards the new employee.
 If the new employee has to go to another location
immediately after reporting, provide a guide, unless the
route to the other location is very straightforward.
 Avoid keeping the new employee waiting without knowing
what to do next.
Documentation

 A variety of documents may be issued to new employees,

including safety rules and safety literature, a company rule
book containing details of disciplinary and grievance
procedures and an employee handbook.
 The Employee Handbook
 An employee handbook is useful for this purpose. It
should convey clearly and simply what new staff needs to
know;
 A brief description of the company – its history, products,
organization and management;
 Basic conditions of employment – hours of work,
holidays, pension scheme, insurance;
 Pay – pay schemes, when paid and how,
deductions, queries;
 Sickness – notification of absence, certificates,
pay;
 Leave of absence;
 Company rules;
 Disciplinary procedure;
 Capability procedure;
 Grievance procedure;
 Promotion procedure;
 Union and joint consultation arrangements;
 Education and training facilities;
 Health and safety arrangements;
 Medical and first-aid facilities;
 Restaurant and canteen facilities;
 Social and welfare arrangements;
 Telephone calls and correspondence;
 Rules for using email;
 Traveling and subsistence expenses
Company induction – initial
briefing
 The member of the personnel department or other
individual who is looking after new employees should run
through the main points with each individual or, when
larger numbers are being taken on, with groups of people.
In this way, a more personal touch is provided and queries
can be answered.
 When the initial briefing has completed, new employees
should be taken to their place of work and introduced to
their manager or team leader for the departmental
induction programme. Alternatively, they may go straight
to a training school and join the department later.
Introduction to the workplace
 New employees will be concerned about who they are
going to work for (their immediate manager or team
leader), who they are going to work with, what work they
are going to do on their first day, and the geographical
layout of their place of work (location of entrances,
exists, lavatories, restrooms and the canteen).
 Some of this information may be provided by a member
of the HR department, or an assistant in the new
employee’s place of work. But the most important source
of information is the immediate manager, supervisor or
team leader.
 The departmental induction programme should,
wherever possible, start with the departmental
manager, not the immediate team leader. The
manager may give only a general welcome and a
brief description of the work of the department
before handing new employees over to their team
leaders for the more detailed induction. But it is
important for the manager to be involved at this
stage.
Formal induction courses
 Formal induction courses enable new employees to be
assembled in groups so that a number of people can be
given consistent and comprehensive information at the
same time, which may not be forthcoming if reliance is
placed solely on supervisors. A formal course is an
opportunity to deliver messages about the organization,
its products and services, its mission and values, using a
range of media such as videos and other visual aids that
would not be available within departments.
Content of formal induction
courses
 Information about the organization – its
products/services, structure, mission and core
values;
 Learning arrangements and opportunities – formal
training, self-managed learning, personal
development plans;
 Performance management processes – how they
work and the parts people play;
 Health and safety – occupational health,
prevention of injuries and accidents, protective
clothing, basic safety rules;
 Conditions of service – hours, holidays, leave, sick
pay arrangements, maternity/paternity leave;
 Pay and benefits – arrangements for paying
salaries or wages, the pay structure, allowances,
details of performance, competence or skill based
pay schemes, details of profit sharing, gain sharing
or share ownership arrangements, pension and life
or medical insurance schemes;
 Policies, procedures and working arrangements –
equal opportunities policies, rules regarding
sexual and racial harassment and bullying,
disciplinary and grievance procedures, no-
smoking arrangements;
 Trade unions and employee involvement – trade
union membership and recognition, consultative
systems, agreements, suggestion schemes.
On-the-job induction training
 Most new employees other than those on formal
training schemes will learn on the job, although
this may be supplemented with special off-the-job
courses to develop particular skills or knowledge.
On-the-job training can be haphazard, inefficient
and wasteful. A planned, systematic approach is
very desirable. This can incorporate:
 Job skills analysis to prepare a learning
specification;
 An initial assessment of what the new employee
needs to learn;
 The use of designated colleagues to act as guides and
mentors – these individuals should be trained in how to
carry out this role;
 Coaching by team leaders or specially appointed and
trained departmental trainers;
 Special arrangements
 These on-the-job training arrangements can be
supplemented by self-managed learning arrangements, by
offering access to flexible learning packages and by
providing advice on learning opportunities.
TRAINING AND DEVELOPMENT
 Training is the process of raising
knowledge and skills of an employee
for doing particular jobs. It is organized
activity designed to create a change in
the thinking and behaviour of people
and to enable them to do their jobs in a
more efficient manner.
Difference between Training and
Development
 Training implies the act of raising knowledge and skills
required for efficient performance of a particular job.
Development means growth of an individual in all
respects.
 Training is largely job centered while development is
career bound. Training is meant for employees
Reasons for Training
Non availability of trained personnel
 It is difficult to find properly trained workers for various
categories of jobs in an organization. This sometimes
makes it necessary to select workers with little or no
training for kind of work to be handled by them.
Suitability for organizational needs
 Even where a worker is well trained for job to be assigned
to him, he needs to be given some special training
consistent with specialized job requirements of
organization.
Proficiency on latest methods
 Rapid scientific and technological developments have made it
necessary to provide continuous training facilities in organization
itself. This is because even when a worker has been trained in one set of
work methods, he finds that where he has learnt at considerable
expense of time and effort has already become outdated due to
invention of never methods.

Job satisfaction
 Training gives employee confidence in handling the job assigned to
him. It enables him to achieve level of performance required by job to
be handled by him. It instills self confidence and boosts morale of
employee which makes him more productive and committed to
organizational goals.
Higher output of quality goods
 Training helps employee to raise quantity and
quality of his output through improvement in
work methods and skills
Fewer accidents
 Training helps in reducing number of accidents
and breakdowns. A person who has learnt how
to do a job even before he is put on it will handle
machines move competently than untrained
person.
Low spoilage rate
 It reduces spoilage rate and wastage of material. This is
because it makes a substantial raise in skills such that
even in the midst of vast changing technology, workers
do not go out of touch with modern machines
Reduction in number of complaints
 A trained worker never complains about his work or
their machines and tools given to him to perform it.
Only untrained worker may do so.
Better use of resources
 With trained workers, the organization can apply its
physical, financial and HR in a better and more
economical way
Management by exception
 Trained workers develop sharper reflexes and a greater
capacity for diagnosis and analysis of day to day problems.
They need not rush to supervisor every now and then for
advice to solve routine problems. This considerably reduces
the work load of supervisors who can practice management
by exception and devote the time and energy to tackling
larger and move important issues.
Healthy interpersonal relations
 Raising complexity of organization has led to interpersonal
and inter group problems due to loss of contact between
management and employees. Proper human relations
training of which many new techniques have been
developed can help in overcoming such problems
Identification of Training Needs
 Organizational Analysis
 This consists of identifying the areas where training of
employees is called for. Employee training needs will
depend on objectives organization structure, existing
personnel and future plans of organization. This will
highlight what activities will be undertaken by
organization and whether employees with their existing
skills would be able to perform them efficiently.
 Task Analysis
 This calls for detailed examination of each job, activities to
be performed to accomplish required standards and
working conditions under which it is to be performed. This
will indicate what kind of jobs are performed and what
types of employees will be able to perform them.
 Worker analysis
 This analyses skills, abilities and what kind of
training and development facilities that each
employee requires to enable him to perform better.
The ideal way to identify such needs is to observe
employees at work, interview with individual
employees, their supervisors and colleagues and
past records techniques.
ON THE JOB TRAINING METHODS
 This is where employees are trained as they
perform their jobs.
 1. Orientation/induction training
 This is meant for new employees and its objective
its to adopt them to specialized job requirements
and work methods of the organization. In this
training, new employee is given a job description
and also provides with a set of policies, rules and
procedures which have bearing on his performance
as an employee.
 2. Apprenticeship training
 Here, a worker is appointed as an apprentice. He is
placed under the charge of qualified senior worker.
He learns methods of work by observing and
assisting his senior. In-skilled trades
apprenticeship training in the most common.
Electricians, plumbers, machine operators etc
usually learn their jobs through such training. The
period of apprenticeship differs from job to job.
During this kind of training, worker is paid less
than a qualified worker.
 3. Delegation
 It is a process whereby the superior assigns certain
responsibilities to his subordinates and also delegate to
here authority in equal measure. It forces subordinate to
make his own decisions without looking up to his superior
every now and then and also display leadership qualities.
Delegation enables superiors to train their subordinates in
a specific job by making them take their own decisions and
also feel a sense of accomplishment when a given task is
successfully performed
 4. Promotion and transfers
 Promotion or transfer in the case of an employee may cause a
significant change in the nature of his duties and responsibilities. An
employee must be properly trained before he is promoted or
transferred to a new job.
 5. Refresher training/retraining
 Rapid technological and scientific can make employees obsolete in
course of time. This is because, with change in technologies and work
methods, job requirements also change. Therefore even those
employees are adequately qualified have to undergo training in the use
of new methods and techniques. Refresher training enables employees
to refresh their memory of things they learnt a long time ago.
 6. Vestibule training
 The word vestibule means a passage or room
between outer door and interior of a building. It
means training organized in a school or in an
industrial plant to train new workers in specific
skills so as to prepare them to handle their jobs. It
is introduced when number of workers to be
trained is large, when volume of training is
enormous and line supervisor because of heavy
responsibilities is not in a position to spare time to
attend to training.
 7. Job rotation
 The objective of job rotation is employee development
through provision of diversified training. It may take
different forms e.g. employee selected for training, may be
assigned jobs after the other in different departments. Each
such shifting assignments is to train employee in work
procedures of different departments. Another form of job
rotation requires selected employee to observe work of
different departmental heads. Here employee himself does
not do anything in department to which he is sent. He just
observe how various departmental heads perform their
functions.
 8. Creation of “assistant to” positions
 To broaden outlook of trainee and to prepare him
for wider managerial responsibilities he may be
posted as an assistant to different department
heads. Objective of this is to enable trainee to
acquire actual managerial experience in each
department of organizational. In this task he is
helped by superior who assigns trainee duties
according to his abilities and skills and he is always
available to offer advice and guidance
 9. Committee or board membership
 Committee is a specific type of meeting in which members
as a group are delegated to each member irrespective of his
placement in organizational hierarchy. Thus if a supervisor
and his subordinate are both made member of committee,
they will have equal authority in deliberations of
committee. The size of committee should not be too large.
It should neither be too small to avoid conflict of power.
Committee meetings are a useful training device and if
conducted properly they enable members to interact with
another, pull their ideas and experience with a view to
solving various organizational problems.
Advantages of on the job training
 It facilitates the transfer of learning because the trainee
has the opportunity to practice the skills immediately.
 Employee’s are able to see the relevance and relationship
of the skills learnt and the practical aspects of the job.
 It is cost effective because no training costs are incurred,
venue cost, training materials etc.
 There is continuity of work because there is no
disruption or break from work.
 The supervisor can control what the employees is being
exposed to.
Disadvantages
 May be limiting due to lack of training
expertise, i.e managers may lack training skills.
 It can disrupt the smooth flow of work which in
turn would inconvenience the customers.
 Damage and wastage that can be caused
especially where machines are involved.
 Normal working condition or environment may
inhibit learning because of noise, poor
comments from other employees etc.
OFF THE JOB TRAINING METHODS
 This is where employees leave their work
stations and go for training else where.
1. Training by management institutions
 After independence there has been considerable
growth in number of institutions imparting
technical and other training that equips
managerial and technical personnel with the
skills they require for their respective jobs.eg.
Kenya School of Government etc.
2. Lectures, seminars, conference etc
 Lecture courses may be used to impart knowledge and also develop
analytical abilities among workers. Large organization may employ
qualified and trained persons to conduct specific lecture courses
suited to needs of different categories of workers. However, small
organization which can’t afford such expenditure can avail the
services of experts employed by educational and other professional
bodies for such lecture courses. Conferences provided occasion for
formal interchange of views among employees of different
organizations. Proposals or ideas developed by various speakers are
thrown open for discussion among participants and consensus is
reached taking into account the various view points expressed.
Seminars and workshops provided by educational institutions and
professional bodies may also be of great help in training personnel.
3. Case study
 A case is written account of an actual organizational
situation in its historical, environmental, operational,
financial and human aspects. Case study enables
trainees to
 a) Pinpoint the problems
 b) Identify and analyze causes there of
 c) Suggest alternative solutions
 d) Indicate which of alternatives would be the best
under prevailing conditions
 4. Role playing
 It is a training method under which participants assume
certain roles and enact them spontaneously in classroom
condition. It tends to emphasize feelings and relationships
between people. In a role playing sessions, participants are
assigned the votes by turns, while two or more trainees
enact roles assigned to them, others act as observers and
critics. As a training technique it enables participants to
broaden their experience by trying alternative approaches
to a problematic situation.
 5. Management games
 It is a training method that involves a group
exercise in decision making as regards an
administrative problem situation it is similar to
role playing the only difference is that role playing
seeks to emphasize feelings and relationships
between people while management games are
more concerned with administrative problems.
6. Brain storming
 This is a problem solving technique which consists
of evaluation of ideas put forward by group of
people who are convened especially for this
purpose. It facilitates a pooling of knowledge and
experience of different people who are experts in
their respectful fields with a view to solving
complex problems. It therefore enables a problem
situation to be looked at from different points of
view making it easier to find an optimum solution.
Advantages of off the job training
 Training is handled by experts therefore,
employees will benefit more.
 There is motivation and the employees
appreciate being provided with skills away from
the organization. It is exciting and viewed as a
treat.
 Employees can get exposure especially where the
training is involving employees from other
organizations because of sharing of experiences.
 There will be no work interruptions.
 It is free from pressures of work environment.
 No risk of damaging valuable equipment.
Disadvantages
 It can be too costly
 Lack of continuity of work
 No control over participants when attending
training
 It can expose the employees to things that are
not favourable to the organization. Can
enlighten the employees against the
organization.
 Some times the transfer of learning is difficult.
PERFORMANCE MANAGEMENT
 Performance management is a strategic
and integrated approach to delivering
sustained success to organizations by
improving the performance of the
people who work in them and by
developing the capabilities of teams
and individual contributors.
 Performance is a record of outcomes
achieved. Performance management is a
means of getting better results from the
organization, teams and individuals by
understanding and managing performance
within an agreed framework of planned
goals, standards and competence
requirements.
 It is a process of establishing shared understanding
about what is to be achieved, and an approach to
managing and developing people in a way that
increases the probability that it will be achieved in the
short and longer term.
Principles of performance
management
 It translates corporate goals into individual,
team, department and divisional goals
 It helps to clarify corporate goals
 It is a continuous and evolutionary process in
which performances improves over time
 It relies on consensus and cooperation rather
than control or coercion
 It encourages self-management of individual
performance
 It requires management style that is open and honest
and encourages two-way communication between
superiors and subordinates
 It requires continuous feedback
 Feed back loops enable the experience and
knowledge gained on the job and individuals to
modify corporate objectives
 It measures and assess all performance against
jointly agreed goals
 It should apply to all staff; and it is not
primarily concerned with linking performance
to financial rewards.
PERFORMANCE APPRAISAL
 Performance appraisal involves measuring
the performance of employees. It is
concerned with determining how well
employees are doing their jobs,
communicating that information to the
employees and establishing a plan for
performance improvement.
Reasons for Performance
Appraisal
 For making administrative decisions relating to
promotions, firings, layoffs and merit pay
increases. It helps a manager decide what
increases of pay shall be given on grounds of
merit.
 For determining the future use of an employee.
 Appraisal can provide needed input for
determining both individual and organizational
training and development needs, through
identifying strengths and weaknesses.
 Appraisal encourages performance improvement. They
may motivate the employee to do better in his current
job due to knowledge of results, recognition of merit and
the opportunity to discuss work with his manager.
 Appraisals help to identify an individual’s current level
of performance.
 Information generated by appraisal can be used as an
input to the validation of selection procedures.
 Appraisal information is an important input to human
resource planning and succession planning, career
planning and so on.
PERFORMANCE APPRAISAL
METHODS
 GOAL - SETTING OR MANAGEMENT BY
OBJECTIVES
 This is more commonly used with professional and
managerial employees.
 The MBO process consists of the following steps:-
 Establishing clear and precisely defined
statements of objectives for the work to be done by
an employee.
 Developing an action plan indicating how these
objectives are to be achieved.
 Allowing the employee to implementing the action
plan
 Measuring objective achievement
 Taking corrective action when necessary
 Establishing objectives for the future.
MULTI-RATER ASSESSMENT
 This is currently a very popular method
of performance appraisal. It is also
known as 360-degree feedback. 360-
degree feedback is the systematic
collection and feedback of performance
data on an individual or group derived
from a number of the stakeholders on
their performance.
 With this method, managers, peers, customers,
suppliers or colleagues are asked to complete
questionnaires on the employee being assessed. The
person being assessed also completes a questionnaire.
Data on ones performance is analysed and the result
shared with the employee appraised, who in turn
compares the results with his assessment.
RANKING METHODS
 The core element of the use of rankings is that
employees are compared to each other, and given
some number that supposedly indicates whether
they are better than, about the same or less
effective than their colleagues. In ranking
methods, especially the simplest form, the
supervisor lists all subordinates in order, from the
highest to the lowest in performance.
Types of ranking methods
Straight ranking method
Paired comparison method
Alternation ranking method
RATING SCALES
 GRAPHIC RATING-SCALE
 With this method, the rater assesses an employee on
factors such as quantity of work, dependability, job
knowledge, attendance, accuracy of work and
cooperativeness. Graphic rating scales include both
numerical ranges and written descriptions.
WORK STANDARDS APPRAISAL
APPROACH
 This approach is used most frequently for
production workers, and is basically a form of goal
setting for these employees. It involves setting a
standard or an expected level of output and then
comparing each employee’s performance to the
standard. Work standards should reflect the
average output of a typical employee. Work
standards attempt to define a fair days work.
ESSAY APPROACH
 This requires that the evaluator describe an
employee’s performance in written narrative form.
A typical essay appraisal question might be
“Describe, in your own words, this employee’s
performance, including quantity and quality of
work, job knowledge and ability to get along with
other employees. What are the employees
strengths and weaknesses?’
CRITICAL – INCIDENT APPRAISAL
 This requires the evaluator to keep a written record of
incidents as they occur. The incidents recorded should
involve job behaviours that illustrate both satisfactory
and unsatisfactory performance of the employee being
rated. The recorded incidents provide a basis for
evaluating performance and providing feedback to the
employee.
THE CHECKLIST
 In the checklist method, the rater makes
yes-or-no responses to a series of
questions concerning the employee’s
behaviour. The checklist can also have
varying weights assigned to each
question.
ASSESSMENT CENTRES
 This is a special form of appraisal intended to
identify potential for promotion. It consists of a
series of exercises such as leaderless group
discussions, role-playing, business games and ten-
minute speeches. A group of candidates is
brought together at a fairly isolated spot where
they go through the exercises over a period of one
to three days. They are judged by assessors who
are usually managers of the company who have
received appropriate training.
THE OPEN-ENDED METHOD
 This is a recent innovation, introduced
because of dissatisfaction with rating
scales. The method emphasizes the
way the job is performed and expects
the manager to write a few sentences
about the subordinate rather than pick
ticks in columns.
ERRORS IN PERFORMANCE APPRAISAL
 The Halo error
 The halo effect occurs when a manager rates an
employee high on all items because of one
characteristic. For example, if a worker has few
absences, her supervisor might give her a high
rating in all other areas of work, including quantity
and quality of output, because of her
dependability. The manager may not really think
about the employee's other characteristics
separately.
The opposite of a halo error is a
horn error, where negative
performance in one dimension
influences any positive aspects of
the employee's performance.
The Leniency Error
 The process of being 'too easy'.
Leniency bias may exist because
supervisors are concerned about
damaging a good working relationship
by giving an unfavourable rating. Or
they may wish to avoid giving negative
feedback, which is often unpleasant, so
they inflate the ratings.
The Error of Strictness
 At the opposite extreme of leniency is the error of
strictness in which ratees are give unfavourable
ratings regardless of performance level. Raters
with low self-esteem or raters who have personally
received a low rating are most likely to rate strictly.
Rater training, which includes reversal of
supervisor subordinate roles and confidence
building, will reduce this error.
The Central Tendency Error
 Rather than using extremes in ratings, there is a tendency
on the part of some raters to evaluate all ratees as average
even when performance actually varies. This bias is referred
to as the error of central tendency. Raters with large spans
of control and little opportunity to observe behaviour are
likely to rate the majority of employees in the middle of the
scale, rather than too high or too low. This is a 'play-it-safe'
strategy. Central tendency can also be a by-product of the
rating method. The forced-distribution format requires the
most employees be rated 'average'.
The Recency error
 As the typical appraisal period [six months to a
year] is far too long for any rater to adequately
remember all performance-relevant information.
As the appraisal interview draws near, the rater
searches for information cues as to the value of
performance. Unfortunately, recent behaviours or
outputs are more salient. As a result, recent events
are weighted more heavily than they should be.
 Called the recency of events error, this bias can have
serious consequences for a ratee who performs well for six
months or a year but then makes a serious or costly error in
the last week or two before evaluations are made.
 Employees and managers can minimise this error by
keeping ongoing behavioural or critical incident files in
which good and poor behaviours and outputs are recorded.
Although time consuming, they ensure that information
for the entire period is incorporated into the appraisal.
The Contrast Error
 Rating should be done on the basis of standards
that are established before the rating. The contrast
error is the tendency to rate people relative to
other people rather than to performance
standards. For example, if everyone else in a group
is doing a mediocre job, a person performing
somewhat better may be rated as excellent because
of the contrast effect.
COMPENSATION
 Compensation or remuneration refers to all the
extrinsic rewards employees receive in exchange
for their work. Compensation and pay are not
synonymous terms. Pay refers only to the actual
shilling, dollar, pound that employees receive in
exchange for their work. Usually compensation is
seen as consisting of the base wage or salary, any
incentives or bonuses and any benefits.
 A reward system consists of financial rewards (fixed
and variable pay) and employee benefits, which
together comprise total remuneration. Total
remuneration is the value of all cash payments (total
earnings) and benefits received by employees.
COMPONENTS OF A
REMUNERATION PACKAGE
 Base pay/basic salary
 Allowances
 Bonuses
 Incentives
 Commissions
 Employee benefits
 Perquisites /Perks
Basic Salary
 This is the major component of employment
compensation package. Basic salary is worked out on
the basis of job evaluation, and is adjusted either
because of reclassification or changes in the cost of
living index. Basic salary is a range with top and base
clearly defined.
 Basic salary is the fixed salary or wage, which
constitutes the rate for the job.
Allowances
 Some of the well-known allowances include; house rent,
travel allowance, daily allowance, hardship allowance, shift
allowance, and so on. The concept of allowance is based on
the cost of living index and are meant to compensate for
the extra efforts needed for one to perform normal duties.
Allowances can be added to the basic pay depending upon
the contingencies of the job. The exact quantum of most
allowances is usually linked to the basic salary as they
present a percentage of the basic.
Bonuses
 This is a reward for good performance,
which is paid in lump sum related to
the results obtained by individuals,
teams or the organization. Bonus is
seen as profit sharing and focuses on
improving productivity for both
employer and employee.
Perquisites
 Perks are those benefits that do not usually come
in the form of cash but are provided to maintain
certain needs and status of the employee, and
image of the organization. These may include
perks such as stock options, club membership, car
or housing loans, reimbursement of the cost of
children’s education, paid holidays, generous
medical benefits, furnishing of residence and
many others.
Incentives
 These are payments linked to the
achievement of previously set targets,
which are designed to motivate people
to achieve higher levels of
performance. Targets are usually
quantified as output, sales and so on.
Commissions

A special form of incentive in

which payments to sales
representatives are made on the
basis of a percentage of the sales
value they generate
Aims and purpose of Compensation
management
 The main aim of compensation management is develop and implement
reward policies and practices required to support the achievement of
the organizational business goals. More specifically, compensation
management aims to:
 Create total reward processes that are based on beliefs about what the
organisation values and wants to achieve
 reward people for the value they create
 Align reward practices with both business goals and employee values
 Reward the right things to convey the right message about what is
important in terms of expected behaviour and outcomes
 Facilitate the attraction and retention of the skilled and competent
people the organisation needs thus “ winning the war for talent”
 Help in the process of motivating people and gaining their
commitment and engagement
 Support the development of performance culture
 Develop a positive employment relationship and psychological contract
 To support, communicate and reinforce an organizational culture,
values and competitive strategy
 To comply with government regulation
Importance of Compensation
 Importance of compensation to the
organization
 Research suggests that reward system can
influence the company’s success in several ways.
Through compensation, organisation can be able
to:
 Motivates, energizes and directs behaviour
 Reward to attract and retain qualified, high
performing workers
 Control the Cost of compensation
 a) Motivate, energize and direct behavior
 The amount of pay and the way it is packaged and delivered
to employees can motivate, energize and direct behavior. It
can change the way employees think about work, can help
them refocus their energies and direct their performance
 b) To attract and retain qualified, high performing workers
 Unless applicants find the job offers to be appropriate in terms of the
amount of compensation, they may not consider employment with a
particular firm. Compensation strategies and practices can shape the
composition of a workforce and the competences and capabilities they
will bring to the organization and ultimately influence the firm’s
performance levels and effectiveness
 c) Cost of compensation
 The cost of compensation can influence a firm’s success.
On average, the overall cost of labour is estimated to be
70% of the firm’s total costs, but these will differ with the
industry. Firms that wish to pursue a strategy based on cost
leadership must find a way to reduce these costs without
sacrificing quality. In summary, then, the strategy and
structure of compensation programmes have an important
implication for businesses and their ability to create a
competitive advantage
Importance of compensation to the
employees
 Compensation can provide houses, better education for children,
better vacations, clothes, cars etc.
 Employees are motivated when reward is related to performance or
contribution, and when it is perceived as fair and equitable.
 Employees tend to prefer pay based on their own performance and not
team or group or company performance. It shows that employees who
prefer individualized reward were also the highest performing
employees
 Employee’s satisfaction with pay is correlated with
organizational commitment and trust in
management
 Reduced absenteeism and lateness,
 No intention of seeking alternative employment
opportunities
 No intentions of terminating employment with the
organization,
 Reduced incidents of theft
 No corruption
 Particular components of pay have different
values to different people. For example
research indicates that young people tend to
focus predominantly on cash compensation.
As people age, however, their preference
tends to shift to benefits and workplace
flexibility.
 Pay satisfaction
Importance of compensation to the
government and society
 Societies that have a good compensation system produce
more and enjoy higher standards of living. This means that
citizens enjoy higher qualities of life, higher levels of
education, more luxuries, better health care, and more
time off.
 In addition, governments tend to use such standards as
platform for social change. Legislations such as labour
laws, work injuries and benefits, minimum wages, social
benefits, pensions and employee retirements are aimed at
ensuring that people are treated justly and that the poor
and less powerful members of the society are protected
from injustices.
 There are also laws about taxes on
compensation to protect the low paid
workers.
 Taxes from higher compensated employees
are used to develop infrastructure and
provide social benefits which are used by all
citizens equally.
Elements of Good compensation
policy

 Levels of adequacy of wage payment

 Equity in wage payment
 Recognition of efficiency of performance
 Incentive payment
Objectives of compensation policy
 From the view point of employers
 Employers can systematically estimate labour costs
and exercise perfect control over labour costs
 Employers can influence and explain trade union
members as well as employees the basis of wage
programme because its based on systematic
analysis of job components and wage facts
 A sound wage administration can go a long way in
reducing friction and grievance of employees over
wage differentials and inequalities
 Good salary administration attracts a
highly qualified people into
organization
 A sound salary administration is
necessary for building up morale and
raise motivation of employees. Quite
obviously result is raised output and
profits
 From employees view point
 Under a good salary administration employees are
paid equitably i.e. they are paid according to their
skills and abilities
 Favourism is considerably reduced when wage and
salary administration is good
 Employees motivation is enhanced and morale is
stepped up when administration of salary is
effective
FACTORS INFLUENCING WAGE AND SALARY
STRUCTURE
 Firms’ capacity to pay
 Demand for and supply of labour
 Existing market rate
 Cost of living
 Living wage
 Job requirements
 Productivity of labour
 Government regulations and policies-legal
considerations. Various laws on things like
minimum wages, maximum working hours,
overtime rates, and benefits, safety and health
provisions, compensation for injuries, social
securities etc. affect the rates of pay.
 Managerial attitudes
 Psychological and social factors
 Trade union bargaining power
INDUSTRIAL RELATIONS
 Industrial relations is the study of bargaining
relationship between employees and employers.
 The continuous relationship between a defined
group of employees and management.
 The field of industrial relations looks at the
relationship between management and workers,
particularly groups of workers represented by a
union
WHAT IT INVOLVES
 Employment and employment
regulations
 Trade unionism
 Grievance and grievance handling
procedures
 Discipline and disciplinary action
 The laws governing all above
The industrial relations can be seen
as a system which contains three
actors:
 The trade Unions
 The employers associations
 The government
Trade unions
This is a voluntary association of
employees formed to protect and
promote on their interests through
collective action
Principles of trade unions
Unity is strength
Equal pay for equal work
Security of service
 Participation of the trade unions in
industrial relations can take different
forms, from collective bargaining to
strikes. Trade Unions find their
legitimate and strength to take part in
these negotiations from their
members.
Reasons for joining trade unions
 To get economic security ensure steady flow of income
 To restrain management from taking any action which is
irrational, illogical, discriminatory or detrimental to
interests of employee
 To restrain management in showing favoritism in the
assignment of duties and responsibilities, transfers,
promotions, and maintenance of discipline in some corners
at cost of other units. Also in issues of layoffs, retirements,
rewards and punishment so that there is no bias in all these
aspects
 To fall inline with other workers in a better way and to gain
respect in the eyes of their peers
 Secure protection from economic hazard beyond their
control e.g. accidents, death, unemployment, old age etc
 To communicate their aims, ideas, feelings, views,
dissolutions, frustrations and dissatisfaction with
management and organizations
 To get a job through good offices of trade unions
Objectives of trade unions
 To secure and if possible improve living standard
and economic status of its members
 To enhance and if possible guarantee individual
security against threats and contingencies that
might result from market fluctuations,
technological change or management decisions
 To influence power relations in social system in
ways that favour and do not threaten union gains
or goals
 To advance the welfare of all employees who work
for a living whether union members or not
 Create mechanisms to guard against the use of
arbitrary and inhuman policies and practices in
work place
Methods used by trade unions in achieving
objectives
 a) Negotiated agreements with management
 These negotiations deal with salaries, wages, hours
of work, terms and conditions of employment,
personal and job security, employee benefits and
services, medical care, retirement benefits etc
 b) Collective bargaining
 A trade union achieves its objectives through
collective bargaining
 c) Grievance processing and handling
procedures
 A trade union should see that a proper
grievance processing and reddressal
procedures is existing within the
organization and as soon as grievance
reaches C.E.O it’s dealt with satisfactorily.
 d) Arbitration
 It is a process by which unsettled or unresolved
dispute can be solved or settled by an outside
agency.
 e) Insurance
 Mutual insurance through common contribution
is another way to achieve the union objectives
especially regarding financial needs of workers
when there is stoppage of work e.g. due to strikes
 f) Political pressure
 This is another source with help of which pressure
is exercised through legislators who are capable of
bringing about changes in labour laws

g) Recruitment
 Through a special arrangement, a trade union may
exercise some control over hiring, supervision and
discharge of workers
Collective Bargaining
 This is a process by which employers
and representative of employees
attempt to arrive at an agreement
covering the conditions under which
employees will contribute and be
compensated for their services.
 It is called collective because both
employer and the employee act as a
group rather than individuals. It is
described as bargaining because the
methods of reaching an agreement
involves proposals and counter
proposals, offers and counter offers.
Bargaining means the process of
cajoling, debating, discussing, and
threatening in order to bring about
a favourable agreement for those
concerned.
Types of bargaining
 Distributive bargaining
 This is a straight out haggling, over the
disturbance of a pie. Here, economic
issues like wages and salaries and
remuneration are, discussed. Under
distributive bargaining one party’s gain
is another party’s loss.
Integrative bargaining
 This is a negotiation of an issue on
which both parties may gain or at least
neither one looses. Discussion over a
better job evaluation system or better
training employees are e.g. of
integrative bargaining win-win/loss-
loss situation.
Attitudinal structuring
 Here, some attitudes like trust or
distrust, friendliness or hostility
between labour and management are
shaped and reshaped. When there is a
back log of bitterness between both
parties, industrial relations could not
be smooth and harmonious. Collective
bargaining in terms of attitudinal
structuring is called for in this case.
Intra – organizational bargaining

This type of bargaining is necessary

when there are conflicts between
various groups in the organization.
UNFAIR LABOUR PRACTICES -
EMPLOYER
• To interfere with, restrain, or coercing
employees in exercising their legally
sanctions rights of self organisation.
• For company representatives to dominate
or interfere with either the formation or
the administration of labour unions.
 Discriminating employees for their legal
union activities
 Discharging or discriminating against
employees simply because the latter filed
unfair practices against the company

 Employers refusing to bargain collectively

with their employees’ duly chosen
representatives
UNFAIR LABOUR PRACTICES -
UNIONS
• Refuse to bargain in good faith with the employer
about wages, hours and other employment
conditions.
• Certain strikes and boycotts are also unfair
practices

• Engage in “featherbedding” (requiring an

employer to pay an employee for services not
performed

• Charging excessive or discriminatory membership

fees
 Inducing, encouraging, threatening or coercing any
individual to engage in strikes, refusal to work, or boycott
where the objective is to:
 Force or require an employer or self employed persons to
recognize or join any labour organisations
 Force or require an employer to cease using products or
doing business with another person
 Force an employer to apply pressure to another employer
to recognize a union which is not in your industry
The rights of an employee
 To belong or not to belong to a union ( except for
union shops)

 Employees can present grievances directly to an

employer

 Employees authority to make any subtraction of union

dues form his/her pay cheque
The rights of an employee (cont..)
 Nominate candidates for union office

 Vote in union elections

 Attend union meetings

 Examine the union accounts and records

Good faith guidelines
 Meetings for purposes of negotiating the contract are
scheduled and conducted with the union at reasonable
times and places
 Realistic proposal are submitted
 Reasonable counterproposals are offered
 Each party signs the agreement once it has been
completed
 Does not mean that either party is required to agree to a final proposal or make
concessions
When is bargaining not done in good faith?
 Surface bargaining: Going through the motions of
bargaining without any real intention of
completing a formal agreement

 Inadequate concessions: Unwillingness to

compromise, even though no one is required to
make a concession
 Inadequate proposal and demands: The
advancement of the proposal should be a positive
factor in determining the overall good faith
When is bargaining not done in good faith?
(cont..)
 Dilatory tactics: the law requires that the parties
meet and “confer at reasonable times and
intervals’ obviously, refusal to meet with the union
does not satisfy the positive duty imposed on the
employer
 Imposing conditions: Attempts to impose
conditions that are so burdensome or
unreasonable as to indicate bad faith
When is bargaining not done in good faith?
(cont..)
 Making unilateral changes in conditions: A strong
indication that the employer is not bargaining with the
required intent of reaching an agreement

 Bypassing the representative: The duty of the

management to bargain in good faith involves , at
minimum, recognition that the union representative is
the one with whom the employer must deal with in
conducting negotiations
When is bargaining not done in good faith?
(cont..)
 Committing unfair labour practices during
negotiations: Such practices reflect poorly upon the
good faith of the guilty party

 Withholding information: An employer must supply

the union with information, upon request, to enable it
to understand and intelligently discuss the issues
raised during bargaining
When is bargaining not done in good faith?
(cont..)
 Ignoring bargaining items: Refusal to
bargain on a mandatory item (one must
bargain over these) or insistence on a
permissive item (one may bargain over
these)
 NB Negotiating in good faith does not
mean that negotiations cannot grind to a
halt
EMPLOYEE HEALTH AND SAFETY
 Industrial accidents
 It is defined by Occupational Health and Safety
Act as an occurrence in an industrial
establishment causing bodily injury to a person
which makes him unfit to resume his duties in the
next 48 hours. It is an occurrence which interrupts
or interferes with orderly progress of work in an
industrial establishment
Causes of industrial accidents
 Work-related causes
 These include also referred to as unsafe conditions of
work
 Unsafe and defective equipment
 Hazardous arrangements or procedure in or around
the machines and equipment
 Inadequate safety devices
 Improper lighting
 Poor house keeping
 Improper/inadequate ventilation/air pollution
 Improperly guarded equipment
 Unsafe storage, congestion, overloading etc
Unsafe acts
 Accidents may be also result of unsafe acts on the
part of employees. Lack of knowledge or skill in
handling the equipment, physical incapacities,
and wrong acts of employees result on industrial
accidents. These unsafe acts include:
 Failure to use safety/protective equipment
provided by the organization
 Making safety devices inoperative by adjusting,
removing or disconnecting them
 Using unsafe equipment
 Throwing materials on floor carelessly
 Failure to consider safety warning in works spot
 Using unsafe procedures in handling, unloading,
combining and mixing etc
 Improper cleaning, oiling, repairing etc of the
dangerous equipment
 Distractions, teasing, abusing, quarreling and day
dreaming on part of employee
Psychological causes
 Fatigue
 Anxiety
 Tiredness
 Overwork
 Monotony
 Boredom
 Lack of self confidence
 Frustrations
Environmental causes
 Slippery floors
 Rough floors
 Fumes etc
 Excessive lights
 Humidity
 Dust
Safety programme
 Safety program should have top management
approach and support
 Supervisory personnel should be entrusted with
responsibility of a safety program
 Safety should be given due consideration like
other areas such as wages and salary
administration, recruitment, selection, training
etc
 A definite safety program should be developed to
educate all employees in safety, and to secure their
active cooperation in order to eliminate industrial
accidents
 In all phases of management like planning,
organizing, procurement of raw materials,
supervision and operation safety should be
included
Occupational Safety and Health
Act, 2007
 Cleanliness (Section 47) – Every factory should
be kept in a clean state, and free from stench
arising from any drain, sanitary convenience or
other nuisance. Accumulation of dirt and refuse
shall be removed daily by some effective method.
The floor of every work room shall be cleaned at
least once in every week by washing or by any
other method. All inside walls, partitions, ceilings,
stair cases to be washed at least once in every
period of one year or 5 years if they are kept
painted with oil paint or varnished.
 Overcrowding (Section 48) – There shall
be no overcrowding in any room of the
factory so as to be injurious to the health of
the workers employed therein. Every work
room shall not be less than nine feet in
height.
Ventilation (Section 49) – Effective and suitable
provision shall be made for securing and maintaining
the adequate ventilation of the room for the
circulation of fresh air in each room.
 Lighting (Section 50) – Effective provision shall be
made for securing and maintaining sufficient and
suitable lighting, whether natural or artificial, in every
part of a factory in which persons are working or
passing.
 Drainage of floors (Section 51) – Where a floor is
liable to become wet in the course of any
manufacturing process to such an extent as is capable
of being drained, effective means of drain shall be
provided.
 Sanitary conveniences (Section 52) – Sufficient and
suitable sanitary conveniences for the factory workers
shall be provided, maintained and kept clean. Separate
sanitary conveniences should be provided for male and
female workers and adequately lighted and ventilated.
Responsibilities of the employer in
health and safety
 Provide a working environment that is free from
recognized hazards that are causing or likely to cause
death or serious physical harm to employees and
comply with standards, rules, and regulations
 Familiarize yourself and your employees with
mandatory health and safety standards
 Examine work place conditions to ensure they conform
with applicable standards
 Minimize or reduce safety and health hazards
 Ensure that employees have and use safety tools and
equipment ( including appropriate personal protective
equipment) and that such equipment is properly
maintained
 Employ color codes, posters, labels , or signs in several
languages to warn employees of potential hazards
 Establish or update operating procedures and
communicate them so that employees follow safety
and health requirements
 Provide medical examinations for trades required by
law
 Refrain from discriminating employees who properly
exercise their rights in health and safety
 Safety training - should be part of the orientation
programme and at different points during the
employees career – voluntary training or compulsory
training which is required by government regulations
 Inspection and research – inspect workplace with the
goal of reducing accidents and illness, carry out
accident research
Rights of the employee
 Employees have a right to seek safe workplace without fear
of punishment.
 Complaining to an employer, union or labour ministry, or
any other relevant government agency about job safety and
health hazards
 Filing safety or health grievances
 Participating on workplace safety and health committees or
in union activities concerning job safety and health
 Review copies of appropriate workplace standards, rules
and regulations, and requirements that the employer
should have available in the workplace