n Evaluation of Human Resource Policies and Practices – A case study of Jamuna Bank Limited”
Objective of the Study There have two types of objective The main objectives of the study are: •
To acquire the practical knowledge regarding the HRM practices of Jamuna Bank Limited.
The Secondary objectives of this report are:
To develop the practical knowledge by the practical orientation of work.
To build up the pillar of the career for near future.
To know about Jamuna Bank Limited
To know about Human Resource Departments Practices of Jamuna Bank Limited.
Methodology of the Study Different data and information are required to meet the goal of this report. Those data and information were collected from various sources, such as, primary and secondary which is showed below: Primary Sources of Data: •
I have collected primary data through questionnaire.
Secondary Sources of Data: •
Annual report of Jamuna Bank Limited.
Statement of affairs.
Bank Rate sheet.
Progress report of the Bank.
Bangladesh Bureau of statistics report.
Different publications regarding banking function.
Scope of the study Jamuna Bank Limited is now well growing and it’s containing sixty-six branches in Bangladesh. The scope of the study will be limited to the organizational setup, function and operation of the Jamuna Bank Limited in the Bangladesh. This report mainly encompasses the Human Resource Practices of Jamuna Bank Limited.
Limitations of the Study During the study, I have faced the following limitations: •
It is very difficult to collect all the required information in such a short period.
Due to some legal obligation and business secrecy banks are reluctant to provide data. For this reason, the study limits only on the available published data and certain degree of formal and informal interview.
The bankers are very busy with their jobs, which lead a little time to consult with.
Large-scale research was not possible due to time constraints.
Relevant data and document collection were difficult due to the organization confidentiality.
The Organization History Jamuna Bank Limited (JBL) is a Banking Company registered under the Companies Act, 1994 with its Head Office at Chini Shilpa Bhaban, 3, Dilkusha C/A, Dhaka-1000. The Bank started its operation from 3rd June 2001. The Bank undertakes all types of banking transactions to support the development of trade and commerce of the country. JBL's services are also available for the entrepreneurs to set up new ventures and BMRE of industrial units. Jamuna Bank Ltd., the only Bengali named new generation private commercial bank was established by a group of winning local entrepreneurs conceiving an idea of creating a model banking institution with different outlook to offer the valued customers, a comprehensive range of financial services and innovative products for sustainable mutual growth and prosperity. The sponsors are reputed personalities in the field of trade, commerce and industries. The Bank is being managed and operated by a group of highly educated and professional team with diversified experience in finance and banking. The Management of the bank constantly focuses on understanding and anticipating customersâ€™ needs. The scenario of banking business is changing day by day, so the bank's responsibility is to device strategy and new products to cope with the changing environment. Jamuna Bank Ltd. has already achieved tremendous progress within only eight years. The bank has already ranked as one of top quality service providers & is known for its reputation. At present the Bank has real-time centralized Online banking branches (Urban & Rural) throughout the Country having smart IT-Backbone. Besides this traditional delivery point, the bank has ATM of its own, sharing with other partner banks & Consortium throughout the Country. The operation hour of the Bank is 10:00 A.M. To 6:00 P.M. from Sunday to Thursday with transaction hour from 10:00 A.M. to 4:00 P.M. The Bank remains closed on Friday including government holidays
Vision, Mission, Objectives 4
Vision To become a leading banking institution and to play a pivotal role in the development of the country Mission The Bank is committed to satisfying diverse needs of its customers through an array of products at a competitive price by using appropriate technology and providing timely service so that a sustainable growth, reasonable return and contribution to the development of the country can be ensured with a motivated and professional work-force
Objectives • To earn and maintain CAMEL Rating 'Strong' • To establish relationship banking and improve service quality through development of Strategic Marketing Plans. • To remain one of the best banks in Bangladesh in terms of profitability and assets quality. • To introduce fully automated systems through integration of information technology. • To ensure an adequate rate of return on investment. • To keep risk position at an acceptable range (including any off balance sheet risk). • To maintain adequate liquidity to meet maturing obligations and commitments. • To maintain a healthy growth of business with desired image. • To maintain adequate control systems and transparency in procedures. • To develop and retain a quality work-force through an effective human Resources Management System. • To ensure optimum utilization of all available resources. • To pursue an effective system of management by ensuring compliance to ethical norms, transparency and accountability at all levels
Functional Areas A bank plays a vital role for developing economic growth in any country and controlling money circulation. It has a lot of functions in different ways. First we have to know about a bank, that isA bank means an institution, which borrows money from the surplus unit of the society and lends money to the deficit units for earning profit. The deposits are mainly accepted by the banker through current account and saving account withdraw able by cheques. Deposits are
also accepted by several head of accounts. A bank includes a body of persons, weather incorporated or not, who carry on business on banking. Thus bank is a profit making institution, which deals in money and credit. The functions of commercial banks are now wide and varied. However the function of commercial banks many broadly be classified under the following two categories:A. Primary Function and B. Secondary Function A. Primary Functions The primary functions of commercial bank/ Jamuna Bank Limited are as follows. Accepts Deposits: The first primary function of bank is to accept deposits of money from the public or serves group. The total deposits held by the banker are broadly classified asa) Demand Deposit: Demand deposits are withdrawn able on demand and thus on prior notice is needed. Deposit in Current Accounts fall in this category. b) Time Deposit: Time deposits are repayable on the expiry of a fixed period on time only. Fixed Deposit Accounts, recurring Deposit Accounts and deposit payable at specified notice fall in this category. The bank usually pays interest on all types of deposit accounts except the current accounts. Lends Money: Banking business essentially involves lending. In fact the deposits are accepted for Lending and investment. Depending on the requirements of the borrowers, the bank lends money in the forms following: a) Loans: In case of loan, the entire amount is paid to the borrower in lump sump, either in case or by way of transfer to his account. The borrower can withdraw the amount at any time. The loan can be repaid either in installments or in lump sump. Interest is calculated and charged on the debit balance usually with quarterly rests. A loan was repaid in full or in part cannot be withdrawn further. Thus, no cheque book is issued against the loan account. b) Overdraft: Overdraft is usually a temporary agreement where the 6
customer is allowed to allow withdraw money exceeding the credit balance of the current account up to an agreed limit. Unlike loan, withdrawals or deposits can be made any number of time, provided the total amount overdraws does not exceeds the agreed limit. Interest incharged only for the amount drawn. c) Cash Credit: A cash credit is an arrangement where the customer is allowed to withdraw money up to the sanctioned limit. Unlike overdraft this is a permanent arrangement and usually used to meet the working capital needs of business house, industries etc. In cash credit account withdrawals and deposits may be affected frequently. Interest is charged on daily balanced and thus the borrower can save interest by reducing the debit balance with his surplus amount. Cash credit arrangement is usually made against pledged or hypothecation of goods but this could also be extended against personal security. d) Bill Discounted and Purchased: Another mode of advancing money is discounting of the issuance bill of exchange. The banks buy the bill before its maturity at a price less than the face value. The amount, which the bank deducts from the face value of instrument, is actually the interest calculated up to the date of maturity of the bill. On maturity the bank realizes the amount from the drawer of the bill. Banks sometimes purchase the bills instead of discounting them. This Bills must be is accompanied by documents of title of goods is purchased by the bank. In such cases the bank extends credit in the form of overdraft or cash credit against the security of the bill purchase. Creates Credit: The creation of credit is one of the important functions of commercial bank. In the Ordinary course of business, bank accepts deposit from the public and lends money to its customers. When a bank extends loan, it does not pay the amount in the bank Account of the borrower and allow withdrawing the required amount by cheques. Creates Medium of Exchange: Commercial banks usually issue cheque, which circulates like money in the society And thus creates the medium of exchange.
B. Secondary function: Modern commercial banks like Jamuna Bank Limited, besides performing the primary functions, cover a wide range of financial and non-financial service to meet the growing needs of the time. Some of these services are available only to the customers while others are available to the public in general. The subsidiary services provided by a modern banker may be classified in the following two groups: B.1: Agency Services: In many case the commercial banks act as the agents of the customers. As an agent the bank provides the following services: o Execution of standing instructions or orders of the customer via, payment of subscription, insurance premium, utility bill, rent etc. o Collection of cheque, draft, bill of exchange, promissory note, dividends, salaries, pensions, rent etc. on behalf of the customer. o Acting as a correspondents and representative of its customers, other banks and financial institution. B.2: General Utility Services: Commercial Banks provide a variety of general utility services to the customers. They are following: ☼ Issue Letter of Credit (L/C) bank guarantee etc. ☼ Accepts valuables comment for safe custody. ☼ Conducts in foreign exchange business. ☼ Lease financing ☼ Provides inter-net banking service. ☼ Provides telex-banking service. ☼ provides home banking service. ☼ Provides specialize advisory service. ☼ Issued debit and credit cards. ☼ Underwrites shares and securities. ☼ Factoring. 8
☼ Merchants banking. Basic Activities Jamuna Bank Limited accepts deposits on the basis of Mudaraba in the following types of accounts, and pays profit, like that of dividend in these accounts, except Alwadia Current Account. Customers' deposit their fund in the following types of Accounts: 1. Mudaraba Short Notice Deposit Account 2. Mudaraba Savings Account 3. Mudaraba Term Deposit Account 4. Other Deposit Scheme Accounts are following: ► Monthly Saving Scheme. ► Monthly Income Scheme. ► Double Benefit Scheme. ► Triple Benefit Scheme. ► Millionaire Scheme. ► Hajj Scheme. ► Cash waqf Scheme. ► Household Durable Purchase Scheme. ► Housing Investment Scheme. ► Women Entrepreneur Investment Scheme. ► Small Entrepreneur Investment Program. ► Medium Entrepreneur Investment Program. 5. Investments modes: To provide interest-free Banking Jamuna Bank has adopted the following modes of investment: Musharaka (equity participation on the basis of sharing profit and loss) Mudaraba (sharing of profit and loss in business where one of the partners provides expertise and management and other partner provides capital remaining inactive) Murabaha (buying and selling of commodities goods etc. with profit) Bai-Muajjal (credit sale with profit) Ijara (leasing for rent) Hire purchase or Shirkatul Melk
Bi-Salam (purchasing of agricultural products while in production and providing advance oney to the producers) Istisna (purchasing of industrial products while in production and providing advance money to the producers). Quard. 6. Computer services: Jamuna Bank Limited is computerized and provides the following services some of these services will be introduced soon. Jamuna Bank Limited introduced a few schemes, which are very popular: •
Any Branch Banking
SMS Push Pull Services
Other Delivery Channel Services (to be implemented)
Organizational Structure Board of Directors It appears like this
Chairman Vice-Chairman Directors’ president ice-president Sponsors Managing Director
There is a board of Directors of 18 members in the bank. The board of Directors is the apex body of the bank. 1. Al-haj Md. Rezaul Karim Ansari, Chairman 2. Gazi Golam Murtoza, Vice Chairman 3. Al-haj M. A. Khayer 4. Engr. A. K. M. Mosharraf Hussain 5. Engr. Md. Atiqur Rahman 6. Golam DastagirGazi (Bir Protik) 7. Fazlur Rahman 8. Al-Haj Nur Mohammed 9. Md. Tajul Islam 10. Sakhawat, Abu Khair Mohammad 11. Md. Belal Hossain 12. Md. Mahmudul Hoque 13. Md. Sirajul Islam Varosha 14. Farhad Ahmed Akand 15. Kanutosh Majumder
16. Shaheen Mahmud 17. Md. Ismail Hossain Siraji 18. A. S. M. Abdul Halim Independent Director 19. Md.Motior Rahman Managing Director
Various Committees Board of Audit Committees The board of directors also decided the composition of each committee and determines the responsibilities of the committee. Policy Committee Al matters relating to the principles, rules and regulation, ethics etc. for operation and management of the bank are recommended by the committee to the board of directors. Executive Committees All routine matters beyond delegated powers of management are decided upon by or routed through Executive Committee, subject to ratification by the board of directors. The Board of Directors has an extension as follows-
Chairmen Vice-Chairmen Directors Managing Directors Secretary
All routine matters beyond delegated powers of Management are decided upon by or routed through the Executive Committee, subject to ratification by the Board of Directors. The Executive Committee consist of 7 (seven) members of the Board of Directors and the Managing Director. The Chairman of this Committee is being selected by rotation. Chairman Al-Haj Nur Mohammed Board Audit Committee This Committee consists of 4 members: 1. Md. Tajul Islam, Chairman 2. Engr. Md. Atiqur Rahman, Co-Chairman 3. A.S.M. AbdulHalim,Independent Director 4. Malik Muntasir Reza,Company Secretary An- Overview:
Introduction Human resource management (HRM) is a relatively modern label for the range of themes and practices involved in managing people. It is defined and described in a variety of (sometimes contradictory) ways. Human Resource Management (HRM) is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. Human Resource Management can also be performed by line managers. Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training. Human resource (or personnel) management, in the sense of getting things has done through people. It's an essential part of every manager's responsibilities, but many organizations find it advantageous to establish a specialist division to provide an expert service dedicated to ensuring that the human resource function is performed efficiently. "People are our most valuable asset" is a cliché which no member of any senior management team would disagree with. Yet, the reality for many organizations is that their people remain • • • • •
under valued under trained under utilized poorly motivated, and consequently perform well below their true capability
The rate of change facing organizations has never been greater and organizations must absorb and manage change at a much faster rate than in the past. In order to implement a successful business strategy to face this challenge, organizations, large or small, must ensure that they have the right people capable of delivering the strategy. The market place for talented, skilled people is competitive and expensive. Taking on new staff can be disruptive to existing employees. Also, it takes time to develop 'cultural awarenessâ€™, product/process/organization knowledge and experience for new staff members. As organizations vary in size, aims, functions, complexity, construction, the physical nature of their product, and appeal as employers, so do the contributions of human resource management. But, in most the ultimate aim of the function is to: "ensure that at all times the business is correctly staffed by the right number of people with the skills relevant to the business needs", that is, neither overstaffed nor understaffed in total or in respect of any one discipline or work grade.
Functional Areas of HRM Human Resource Management functions may be briefly described as: 1. Manpower Planning: The HR considers the actual requirement of the staff for the organization. Because the overstaffing is wasteful and expensive, and understaffing leads to loses of the organization economics and profits. 2. Employee selection: Selection of employees for the suitable job. 3. Employees motivating: Motivating employees and encourage them to give their best in work productivity. 4. Employees relation: Keeping a healthy relationship with the employees and their problems are redressed. 5. Payroll module: Payment of salaries and wages to the workers at the proper time. Some functional areas of HRM are given below:
Employee Motivation: To retain good staff and to encourage them to give of their best while at work requires attention to the financial and psychological and even physiological rewards offered by the organization as a continuous exercise. Basic financial rewards and conditions of service (e.g. working hours per week) are determined externally (by national bargaining or government minimum wage legislation) in many occupations but as much as 50 per cent of the gross pay of manual workers is often 14
the result of local negotiations and details (e.g. which particular hours shall be worked) of conditions of service are often more important than the basics. Hence there is scope for financial and other motivations to be used at local levels. As staffing needs will be vary with the productivity of the workforce (and the industrial peace achieved) so good personnel policies are desirable. The latter can depend upon other factors (like environment, welfare, employee benefits, etc.) but unless the wage packet is accepted as 'fair and just' there will be no motivation.
Employee evaluation: An organization needs constantly to take stock of its workforce and to assess its performance in existing jobs for three reasons: •
To improve organizational performance via improving the performance of individual contributors (should be an automatic process in the case of good managers, but (about annually) two key questions should be posed.
What has been done to improve the performance of a person last year? and what can be done to improve his or her performance in the year to come?).
To identify potential, i.e. to recognize existing talent and to use that to fill vacancies higher in the organization or to transfer individuals into jobs where better use can be made of their abilities or developing skills.
To provide an equitable method of linking payment to performance where there are no numerical criteria (often this salary performance review takes place about three months later and is kept quite separate from 1. and 2. but is based on the same assessment).
Training and Development: In general, education is 'mind preparation' and is carried out remote from the actual work area, training is the systematic development of the attitude, knowledge, skill pattern required by a person to perform a given task or job adequately and development is 'the growth of the individual in terms of ability, understanding and awareness'. Within an organization all three are necessary in order to: o Develop workers to undertake higher-grade tasks; o Provide the conventional training of new and young workers (e.g. as apprentices, clerks, etc.); o Raise efficiency and standards of performance;
o Meet legislative requirements (e.g. health and safety); o Inform people (induction training, pre-retirement courses, etc.); From time to time meet special needs arising from technical, legislative, and knowledge need changes. Meeting these needs is achieved via the 'training loop'.
Recruitment and Selection of Employees: Recruitment of staff should be preceded by: An analysis of the job to be done (i.e. an analytical study of the tasks to be performed to determine their essential factors) written into a job description so that the selectors know what physical and mental characteristics applicants must possess, what qualities and attitudes are desirable and what characteristics are a decided disadvantage; ď‚§
In the case of replacement staff a critical questioning of the need to recruit at all (replacement should rarely be an automatic process).
Effectively, selection is 'buying' an employee (the price being the wage or salary multiplied by probable years of service) hence bad buys can be very expensive. For that reason some firms (and some firms for particular jobs) use external expert consultants for recruitment and selection.
Equally some small organizations exist to 'head hunt', i.e. to attract staff with high reputations from existing employers to the recruiting employer. However, the 'cost' of poor selection is such that, even for the mundane day-to-day jobs, those who recruit and select should be well trained to judge the suitability of applicants.
Compensation and Benefit: Compensation (payment in the form of hourly wages or annual salaries) and benefits (insurance, pensions, vacation, modified sick days, stock options, etc.) can be a catch-22 because an employee's performance can be influenced by compensation and benefits, and vice versa. In the ideal situation, employees feel they are paid what they are worth, are rewarded with sufficient benefits, and receive some satisfaction (good work environment, interesting work, etc.). Compensation should be legal and ethical, adequate, motivating, fair and cost-effective, and able to provide employment security.
Performance appraisal: One way to assess performance is through a formal review on a periodic basis, generally annually, known as a performance appraisal or performance evaluation. Because line managers are in daily contact with the employees and can best measure performance, they are usually the ones who conduct the appraisals. Other evaluators of the employee's
performance can include subordinates, peers, group, and self, or a combination of one or more. Just as there can be different performance evaluators, depending on the job, several appraisal systems can be used. Some of the popular appraisal methods include (1) ranking of all employees in a group; (2) using rating scales to define above-average, average, and below-average performance; (3) recording favorable and performance, known as critical incidents; and (4) managing by objectives.
Industrial Relation: Good industrial relations, while a recognizable and legitimate objective for an organization, are difficult to define since a good system of industrial relations involves complex relationships between: (a) Workers (and their informal and formal groups, i.e. trade union, organizations and their representatives); (b) Employers (and their managers and formal organizations like trade and professional associations); (c) The government and legislation and government agencies l and 'independent' agencies like the Advisory Conciliation and Arbitration Service.
Importance of HRM Organizational Psychology holds that successful organizations do not owe their success solely to market realities and sustainable competitive advantages. Actually, there is a lot more. Successful companies are those that consider their human capital as their most important asset. Facts and figures are the quantitative elements of successful management, yet the qualitative, i.e. the cognitive aspects, are those that actually make or break an organization. Human Resources Management (HRM) is the strategic management of the employees, who individually and collectively contribute to the achievement of the strategic objectives of the organization. Assuming that the employees of an organization are individuals with own mental maps and perceptions, own goals and own personalities and as such they cannot be perceived as a whole, HRM holds that the organization should be able to employ both individual and group psychology in order to commit employees to the achievement of organizational goals. Aiming to enable the organization to achieve its strategic goals by attracting, retaining and developing employees, HRM functions as the link between the organization and the employees. A company should first become aware of the needs of its employees, and at a later stage, understand and evaluate these needs in order to make its employees perceive their job as a part of their personal life, and not as a routine obligation. To that end, HRM is
very crucial for the whole function of an organization because it assists the organization to create loyal employees, who are ready to offer their best. The HRM activities in modern organizations are typically performed in communication with the General Management in an effort to provide a variety of views when a decision must be taken. In that way, decision making is not subject to the individual perceptions of the HR or the General Manager, but it becomes the outcome of strategic consensus. The main goals / responsibilities of HRM are: â€˘ To retain low employee turnover rate by inspiring people to work for the company â€˘ To attract new employees â€˘ To contribute to employee development To achieve these goals, Human Resources Management trains and motivates the employees by communicating ethical policies and socially responsible behavior to them. In doing so, it plays a significant role in clarifying the organization's problems and providing solutions, while making employees working more efficiently. On the other hand, challenges do not cease for the HRM. Modern organizations can survive in the dynamic, competitive environment of today only if they capitalize on the full potential of each employee. Unfortunately, many companies have not understood the importance of the human capital in successful operations. The recruitment and selection of the best employees is a very difficult obligation. Even companies that are voted in the top-ten places to work at, often endure long periods of hard work to realize that human element is all an organization should care about. New challenges arise even now for the organization, and it is certain that new challenges will never cease to emerge. Therefore, the use of proper Human Resources techniques is a really powerful way for organizations to overcome these challenges, and to improve not only their quantitative goals but also their organizational culture, and their qualitative, cognitive aspects. HRM is the legal liaison between the organization and the employees, they are to uphold the employment and safety laws (civil rights act) as well as follow the practices, which may differ within federal guidelines that the employer authorizes. A large part of this growth is the Human Resources department of these companies, who are responsible for hiring the people with the knowledge to bring new technology into a company. To be successful in the automotive market, these companies needs a highly skilled, flexible and committed work force, a flexible and innovative management, the ability to retain developed talent, and a strong partnership between management and labor unions. The backbone of any successful company is the HR department, and without a talented group of people to hire, culture, and inform employees, the company is doomed for failure.
Challenges of HRM The role of the Human Resource Manager is evolving with the change in competitive market environment and the realization that Human Resource Management must play a more strategic role in the success of an organization. Organizations that do not put their emphasis on attracting and retaining talents may find themselves in dire consequences, as their competitors may be outplaying them in the strategic employment of their human resources. With the increase in competition, locally or globally, organizations must become more adaptable, resilient, agile, and customer-focused to succeed. And within this change in environment, the HR professional has to evolve to become a strategic partner, an employee sponsor or advocate, and a change mentor within the organization. In order to succeed, HR must be a business driven function with a thorough understanding of the organization's big picture and be able to influence key decisions and policies. In general, the focus of today's HR Manager is on strategic personnel retention and talents development. HR professionals will be coaches, counselors, mentors, and succession planners to help motivate organization's members and their loyalty. The HR manager will also promote and fight for values, ethics, beliefs, and spirituality within their organizations, especially in the management of workplace diversity. This topic will highlight on how a HR manager can meet the challenges of workplace diversity, how to motivate employees through gain-sharing and executive information system through proper planning, organizing, leading and controlling their human resources.
The Challenges of Workplace Diversity: The future success of any organizations relies on the ability to manage a diverse body of talent that can bring innovative ideas, perspectives and views to their work. The challenge and problems faced of workplace diversity can be turned into a strategic organizational asset if an organization is able to capitalize on this melting pot of diverse talents. With the mixture of talents of diverse cultural backgrounds, genders, ages and lifestyles, an organization can respond to business opportunities more rapidly and creatively, especially in the global arena (Cox, 1993), which must be one of the important organizational goals to be attained. More importantly, if the organizational environment does not support diversity broadly, one risks losing talent to competitors. This is especially true for multinational companies (MNCs) who have operations on a global scale and employ people of different countries, ethical and cultural backgrounds. Thus, a HR manager needs to be mindful and may employ a Think Global, Act Local' approach in most circumstances. With a population of only four million people and the nation's strive towards high technology and knowledge-based economy; foreign talents are lured to share their expertise in these areas. Thus, many local HR managers have to undergo cultural-based Human Resource Management training to further their abilities to motivate a group of professional that are highly qualified but culturally diverse. Furthermore, the HR professional must assure the local professionals that these foreign talents are not a threat
to their career advancement. In many ways, the effectiveness of workplace diversity management is dependent on the skilful balancing act of the HR manager.
Control and Measure Results: A HR Manager must conduct regular organizational assessments on issues like pay, benefits, work environment, management and promotional opportunities to assess the progress over the long term. There is also a need to develop appropriate measuring tools to measure the impact of diversity initiatives at the organization through organization-wide feedback surveys and other methods. Without proper control and evaluation, some of these diversity initiatives may just fizzle out, without resolving any real problems that may surface due to workplace diversity.
Motivational Approaches: Workplace motivation can be defined as the influence that makes us do things to achieve organizational goals: this is a result of our individual needs being satisfied (or met) so that we are motivated to complete organizational tasks effectively. As these needs vary from person to person, an organization must be able to utilize different motivational tools to encourage their employees to put in the required effort and increase productivity for the company.
Executive Information Systems: Executive Information System (EIS) is the most common term used for the unified collections of computer hardware and software that track the essential data of a business' daily performance and present it to managers as an aid to their planning and decisionmaking. With an EIS in place, a company can track inventory, sales, and receivables, compare today's data with historical patterns. In addition, an EIS will aid in spotting significant variations from "normal" trends almost as soon as it develops, giving the company the maximum amount of time to make decisions and implement required changes to put your business back on the right track. This would enable EIS to be a useful tool in an organization's strategic planning, as well as day-to-day management.
HRM Theory & Model Developing HRM Plan A broad spectrum of theories from different disciplines is portrayed in contemporary A broad spectrum of theories from different disciplines is portrayed in contemporary HRM (as a discipline of business administration). Theories from psychology, sociology and economics correspond to the variety of problems addressed in HRM which are again situated at different levels of analysis, namely on the individual, group and organizational level. This article introduces basic elements of the modern "rational choice" approach: the macro20
micro-macro model of explanation, homo socio-economic as a model of man and exchange theory as a baseline model of aggregation. A final summary discusses research questions and applications of "rational choice" in HRM. The HRM Plan is built upon an understanding of the department's vision, mission, values, and strategic programs and challenges. Developing the HRM Plan this way links the HRM programs to business plans and helps priorities HRM programs according to business priorities. Model for Developing the HRM Plan
HRM- Two Model The concept of Human Resource Management developed with a more strategic level of thinking about the nature and role of people (as total 24hr per day human beings) working in organizations which are â€˜culturesâ€™ in their own right. Recent thinking has moved from the control-based model to the compliance model. The soft edge of the latter involves eliciting employee commitment and expecting effectiveness and efficiency to follow. The hard edge of the latter involves ridding the organization of unnecessary layers of middle management which, when stripped of control functions, have very little by way of value added. The management task is to cause the people to be as creative and productive as possible.
Sub-division of work; specific job Broader jobs; combined Job Design responsibility - with accountability ; planning and implementation; Principles planning separate from teams implementation Management Organization
Labor Management Relations Management Philosophy
Top-down control and coordination; Flat structure; shared goals for hierarchy; status symbols. coordination and control; status minimized Fair dayâ€™s pay for a fair dayâ€™s work; job Reinforcing group achievement; evaluation and appraisal; individual pays geared to skill and other incentives. contribution criteria; profit sharing Unionized (damage control, Mutual mechanism for bargaining); Non unionized (attitude communications and surveys) participation; mechanisms for giving employee voice on issues Adversarial
The boss dictates; management Fulfillments of employeeâ€™s obligated to stakeholders needs is a goal rather than an end
Traditional HRM model
Mutuality; joint problem-solving and planning
Customer Satisfaction Model The customer satisfaction model from N. Kano is a quality management and marketing technique that can be used for measuring client happiness. Kano's model of customer satisfaction distinguishes six categories of quality attributes, from which the first three actually influence customer satisfaction: 1. Basic Factors: (Dissatisfies. Must have.) - The minimum requirements which will cause dissatisfaction if they are not fulfilled but do not cause customer satisfaction if they are fulfilled (or are exceeded). The customer regards these as prerequisites and takes these for granted. Basic factors establish a market entry 'threshold'. 2. Excitement Factors: (Satisfiers. Attractive.) - The factors that increase customer satisfaction if delivered but do not cause dissatisfaction if they are not delivered. These factors surprise the customer and generate 'delight'. Using these factors, a company can really distinguish itself from its competitors in a positive way. 3. Performance Factors: The factors that cause satisfaction if the performance is high, and they cause dissatisfaction if the performance is low. Here, the attribute performance-overall satisfaction is linear and symmetric. Typically these factors are directly connected to customers' explicit needs and desires and a company should try to be competitive here. The additional three attributes which Kano mentions are: 4. Indifferent Attributes: The customer does not care about this feature.
5. Questionable Attributes: It is unclear whether this attribute is expected by the customer. 6. Reverse Attributes: The reverse of this product feature was expected by the customer. Employment & Employees
Human Resource Planning Meaning Human resource planning is the process of determining an organizationâ€™s human resource need. Human Resource Planning is one of the most important elements in a successful human resource management program, because it is a process by which an organization ensures that it has the right number and kinds of people, at the right place, at the right time, capable of effectively and efficiently completing those tasks that will help the organization achieve its overall strategic objectives. Rigorous HR planning links people management to the organization's mission, vision, goals and objectives, as well as its strategic plan and budgetary resources. A key goal of HR planning is to get the right number of people with the right skills, experience and competencies in the right jobs at the right time at the right cost. Human Resource planning is the processes by which management ensures that it has the right personnel, who are capable of completing those tasks that help the organization, reach its objectives.
Basic Human Resource Planning Model Open new product line Open new factory and distribution system
Develop staffing for new installation •Production workers
Recruit skilled workers
Develop technical training programs
•Supervisors •Technical staff •Other managers
Transfers infeasible because of lack of managers with right skills
Transfer managers from other facilities
4 Develop new objectives and plans
Recru it managers fro m outside
Recruiting and training programs feasible
3 Too costly to hire from outside
Job Analysis A job analysis is a systematic exploration of the activities within a job. It is a technical procedure used to define a jobs duties, responsibilities, and accountabilities. Job analysis provides information about jobs currently being done and the knowledge, skills, and abilities that individuals need to perform the jobs adequately. The job analysis may include these activities: • Reviewing the job responsibilities of current employees, •
Doing Internet research and viewing sample job descriptions online or offline highlighting similar jobs,
Analyzing the work duties, tasks, and responsibilities that need to be accomplished by the employee filling the position,
Researching and sharing with other companies that have similar jobs, and
Articulation of the most important outcomes or contributions needed from the position.
Job Analysis Method The basic method by which HRM can determine job elements and the essential knowledge, skills and abilities for successful performance include the following:
1. Observation Method: Observation method is a job analysis technique in which data are gathered by watching employee works. 2. Individual Interview Method: The individual interview method assembles a team of job incumbents for extensive individual interviews. 3. Group Interview Method: Group interview method is meeting with a number of employees to collectively determine what their jobs entail. 4. Structured Questionnaire Method: Structured questionnaire method is a specially designed questionnaire on which employees’ rate tasks they perform in their jobs. 5. Diary Method: Diary method is a job analysis method requiring job incumbents to record their daily activities. 6. Technical Conference Method: Technical conference method is a job analysis technique that involves extensive input from the employee’s supervisor.
HR Demand The demand step is done both for the short and longer -term strategic horizons. Thus this step in the HRP framework potentially requires one to do a bit of forecasting, as demand is a future orientated concept (even if it’s for the immediate future). We therefore look at several methods of forecasting demand. One of the interesting things about demand for labor is that it is a derived demand. In other words, the demand for labor is dependent on more primary demands. We have already seen how strategy creates demand for a certain level of labor. More specifically, business strategy leads to consumers demanding the organization’s products, and a greater internal demand for capacity. It is from this and other ‘primary’ demands that the demand for labor is derived. Thus the demand for labor is a secondary, dependant (derived) demand.
HR Supply There are three steps in assessing supply capability, 1. Assess what HR capabilities currently exist in the organization to fulfill needs 2. In light of this, assess how adequately the current workforce supplies needs (is there a shortage or surplus of the right kind of staff based on forecasted demand?) 3. Therefore, assess what changes need to be made to perfect the HR supply (strategic staffing goals and plans - do we hire / downsize / relocate / etc.)
The step looks at current people & skills. There are several (hopefully) readily available information sources within the organization that make it possible to do this. These include:
Organizational Supply Capabilities o Skills inventory: (a register of current HR capabilities, incorporating information on each employees’ skills, demographics, and test scores etc.) o Management inventory: (similar to skills inventory, but tailored to management, often including subjective assessments of ability etc.)
Assessing Adequacy of Current Staff Once one has be assessed the current or future workforce capabilities, one need to assess those capabilities against demand. There are three possibilities in each case: Too few people / skills (shortage - we need to add) Too many people / skills (surplus - need to remove employees from this sector) Need to reduce some staff & hire others (it is even possible that the number of people will remain the same in this case, but the type / quality will have changed). The third option normally involves skills (not numerical) deficiencies, where current staff lack necessary skills and cannot be trained, necessitating replacing them with adequately skilled staff for the situation. There are however potential legal problems in this regard, which should be understood and managed (see second block work).
Strategic Staffing Goals & Plans The comparison of demand and internal supply data will lead to quantifiable objectives for strategic staffing (i.e. ‘we need to add XYZ number of so-and-so quality to our TYU division / job level’ or ‘we need to remove ABC number of staff from FGH department’). Whoever is fulfilling the HRP process will need to fulfill these objectives through choice of methods.
Forecasting as a Part of Human Resource Planning Choose human resource programs
DEMAND FO RECASTING
Determine organizational objectives
SUPPLY FO REC ASTING
Demand forecast for each objective
Aggregate demand forecast
Internal supply forecast
•T urnover control
Does aggregate supply meet aggregate No demand?
External supply forecast
Aggregate supply forecast
Yes Go to feasibility analysis steps
Recruitment Meaning According to Edwin B. Flippo, “Recruitment is the process of searching the candidates for employment and stimulating them to apply for jobs in the organization”. Recruitment is the activity that links the employers and the job seekers. A few definitions of recruitment are: o A process of finding and attracting capable applicants for employment. The process begins when new recruits are sought and ends when their applications are submitted. The result is a pool of applications from which new employees are selected. o It is the process to discover sources of manpower to meet the requirement of staffing schedule and to employ effective measures for attracting that manpower in adequate numbers to facilitate effective selection of an efficient working force.
Recruitment Method A manager can recruit in two different ways: Internal recruitment is when the business looks to fill the vacancy from within its existing workforce.
External recruitment is when the business looks to fill the vacancy from any suitable applicant outside the business.
Sources of Recruitment
i The four most popular ways of recruiting externally are: 1. Job centers: These are paid for by the government and are responsible for helping the unemployed find jobs or get training. They also provide a service for businesses needing to advertise a vacancy and are generally free to use. 2. Job advertisements: Advertisements are the most common form of external recruitment. They can be found in many places (local and national newspapers, notice boards, recruitment fairs) and should include some important information relating to the job (job title, pay package, location, job description, how to applyeither by CV or application form). Where a business chooses to advertise will depend on the cost of advertising and the coverage needed (i.e. how far away people will consider applying for the job 3. Recruitment agency: Provides employers with details of suitable candidates for a vacancy and can sometimes be referred to as ‘head-hunters’. They work for a fee and often specialize in particular employment areas e.g. nursing, financial services, teacher recruitment 4. Personal recommendation: Often referred to as ‘word of mouth’ and can be a recommendation from a colleague at work. A full assessment of the candidate is still needed however but potentially it saves on advertising cost. Internal sources: 1. Transfers: The employees are transferred from one department to another according to their efficiency and experience.
2. Promotions: The employees are promoted from one department to another with more benefits and greater responsibility based on efficiency and experience. 3. Others are Upgrading and Demotion of present employees according to their performance. 4. Retired and Retrenched employees may also be recruited once again in case of shortage of qualified personnel or increase in load of work. Recruitment such people save time and costs of the organizations as the people are already aware of the organizational culture and the policies and procedures. 5. The dependents and relatives of Deceased employees and Disabled employees are also done by many companies so that the members of the family do not become dependent on the mercy of others.
Advantages and Disadvantages Advantages and Disadvantages are given below: Advantages
Cheaper and quicker to recruit.
Limits the number potential applicants.
People already familiar with the business and how it operates.
No new ideas can be introduced from outside the business.
Provides opportunities • May cause resentment for promotion with in the amongst candidates not business – can be appointed. motivating. Business already knows • Creates another vacancy the strengths and which needs to be filled weaknesses of candidates Outside people bring in O Longer process new ideas O More expensive process due to Larger pool of workers advertisements and interviews from which to find the required best candidate People have a wider O Selection process may not be range of experience effective enough to reveal the best candidate
o External Recruitment o
Selection Meaning and Definition Selection is increasingly important as more attention is paid to the costs of poor selection, and as reduced job mobility means that selection errors are likely to stay with the organization for longer. Selection and evaluation techniques are explored that help you pick among qualified candidates. Successful selection activities entail a lot of careful planning and careful thought. Employee selection processes are critical to hiring a superior staff. According to R.M. Hodgetts â€œSelection the process in which an enterprise chooses the applicants who best meets the criteria for the available position.â€?
Selection Process Selection processes are given below:
Application Blank Preliminary Interview Testing (If applicable) In-Depth Interview Reference Check
Physical Examination Offer Employment
1. Application Blank: Prospective employees are requested to complete an application blank, which provides the manager with information on the education and the experience of an applicant.
2. Preliminary Interview: This steps attempt to screen out the obviously unqualified from the pool of applicants. This interview may be conducted by the manager or a personnel specialist. 3. Testing: The purpose of employment testing is to determine the candidate’s ability to perform the job. 4. In-Depth Interview: The in-depth interview provides the applicant’s prospective manager or managers the opportunity to verify information on hand and to find out more about the applicant’s interests, aspirations, and expectations. 5. Reference Check: Applicants normally are asked to supply personal or work reference on the application blank. Work references have value, provided the reference feels free to communicate. 6. Physical Examination: Prior to tendering a job offer, some organizations require potential employees to take a physical examination. The purposes of the examination are to: a) Prevent insurance claims for illness or injuries that occurred prior to employment by the company. b) Detect any communicable diseases c) Certify that the person can physically perform the work. 7. Offer of Employment: At this point, the top-ranking applicant is offered a job by management. This may involve a series of negotiations on initial salary depending on the organization’s compensation philosophy.
Method of Employee Selection A) Steps Prior to Selection 1. Collecting Departmental Requisition 2. Determination of Source 3. Serving Notice B) Steps Involve in Employee Selection 1. Obtaining Letter of Applicants and Sorting Out 2. Conducting Test a) Efficiency Test b) Intelligence Test c) Aptitude Test d) Personality Test 3. Taking Interview 4. Primary Selection 5. Enquiry of Personal History 32
6. Medical Test 7. Final selection C) Steps after Selection 1. Sending Letter of Appointment 2. Receiving Report of Joining
Application of Employment of Personnel For employment of personnel Human Resource Division perform job analysis and prepare job description and job specification in the area of managers & executives and Non- ACS. The organization have corporate strategic plan and prepare human resource plan every year. That is prepared by Human resource Division. They used computerized forecasting, trend analysis, management judgment method for forecasting human resource method. The principles of recruiting and selection are the incumbent should be creative, trustworthy, responsive, and courageous and should have experience, skills and good qualification. They used online and newspaper advertisement for recruiting. For selection they take initial screening, employees test, interview, background investigation and check references. By testing all kinds of requirements head of Human Resource Division makes the final decision. Finally, they make a orientation program for the new employees. Training & Development:
Training 5.1.1 Meaning Training is extremely important for organizational members to develop competencies for the new assignments precipitated by major organizational change. Training is the process of altering employee behavior and attitudes in a way that increases the probability of goal attainment. Training is the systematic process of providing an opportunity to learn KSAs for current or future job. According to Michael Jucious “Training is used to indicate any process by which the aptitudes, skills and abilities of employees to perform specific jobs are increased.” According to R.M. Hodgetts “Training is the process of altering employees’ behavior and attitudes in a way that increases the probability of goal attainment.”
Training Method Off-the-job Training 1. Lectures and Demonstration: The lecture is one of the oldest forms of training, second only to demonstrations. The lecture is merely telling someone about something. A demonstration is a visual display of how to do something or how something work. 2. Computer-Based Training: Many companies are implementing computer-based training (CBT) as an alternative to classroom-based training to accomplish goals. Some of the reasons for this shift are demonstrated in the following beliefs many companies hold about CBT. • Reduces trainee learning time • Reduces the cost of training • Provides instructional consistency • Allows the trainee to master learning • Increases access to training 3. Basic Lecture/Discussion: Lecture/Discussion Component 1.Orientation Presenting information so that trainees understand the direction the lecture is headed and the organization for getting there. 2. Enthusiasm Presenting information in a manner that conveys the topics importance and inherent value. 3. Variety Using voice, gestures ,various components listed in this table, and audio visual aid, 4. Logical Organization Presenting information in a logical order and providing logical transitions between topic areas. 5. Providing Explanation Describing facts, concepts, and principles in a clear and easily understood manner. 6. Giving Directions Providing instructions in a manner that allows trainees to understand what they are to do and how to do it. 7. Illustrating 34
Learning Affected Attention
Attention Attention Retention: Symbolic coding Retention: Cognitive organization Retention: coding
Providing clear, interesting, and relevant example of how information can or has been applied. 8. Comparing and Contrasting Articulating the similarities and differences, advantages and disadvantages, and so on of relevant topic areas. 9. Questioning and Discussing Seeking information from the trainees regarding their comprehension, their content-related ideas, and stimulating the trainees thought processes. 10. Summarizing Highlighting important concepts covered in a manner that links the topics/ideas together.
Retention: All areas Attention Retention: Attention Retention: All areas Retention: Cognitive organization
4. Games and Simulation: Training games and simulations are designed to reproduce or stimulate processes, events and circumstances that occur in the traineeâ€™s job a) Equipment Simulator: Equipment simulators are mechanical devices that require trainees to use the same procedures, movements or decision processes they would use with equipment back on the job b) Business Games: Business games are simulations that attempt to represent the way an industry, company, or subunit of a company functions. c) In-Basket Technique: The in-basket technique provides trainees with a packet of written information and requests, such as memos, messages and reports. d) Case Studies: Case studies attempt to simulate decision-making situations that trainees might find on the job.
On-the-Job Training The most frequently used training method, especially in smaller businesses is on-the-job training (OJT). OJT uses more experienced and skilled employees whether coworkers or supervisors to train less skilled and experienced employees. 1. Job Rotation: Job rotation involves moving employees to various positions in the organization in an effort to expand their skills, knowledge and abilities.
2. Apprenticeship Training: Apprenticeship training, another form of OJT, is one of the oldest forms of training. Apprenticeship programs are partnership between labor unions, employers, schools and the government. 3. Coaching: Coaching is the process of providing one-on-one guidance and instruction to improve knowledge, skills and work performance. Usually, coaching is directed at employees with performance deficiencies.
Development Meaning Development is used by many to refer to the acquisition of KSAs needed to perform in some future jobs. Development refers to the learning of KSAs. In other words, training provides the opportunity for learning, and development is the result of the learning. The act of developing or disclosing that which is unknown; a gradual unfolding process by which anything is developed, as a plan or method, or an image upon a photographic plate; gradual advancement or growth through a series of progressive changes; also, the result of developing, or a developed state.
Development Method Some development of an individualâ€™s abilities can take place on the job. We will review several methods that are given below: 1. Job Rotation: Job rotation involves moving employees to various positions in the organization in an effort to expand their skills, knowledge and abilities. 2. Assistant-To Positions: Employees with demonstrated potential sometimes work under a seasoned and successful manager, often in different areas of the organization. 3. Committee Assignment: Committee assignment can allow the employee to share in decision making, to learn by watching others, and to investigate specific organizational problems. 4. Lecture Courses and Seminars: Traditional forms of instruction revolve around formal lecture courses and seminars. These help individuals acquire knowledge and develop their conceptual and analytical abilities. 5. Outdoor Training: The primary focus of such training is to teach trainees the importance of working together, of jelling as a team.
Development Phase Input
Instructional Material Determine Factors That Facilitate Learning and Transfer
Alternative Instructional Method
Facilities Trainee and Trainer Manuals
Characteristics of Training & Development Characteristics of training & development are given below: 1. Leads, directs and participates in developing bureau-wide strategies and initiatives to improve employee and organizational performance and effectiveness consistent with bureauâ€™s training and development goals and mission. 2. Assesses training, development and other organization improvement needs through consultation with executives, managers and employees; determines appropriate training methods; develops training content using subject matter experts and designs training materials; develops and implements training plans; hires and directs the work of consultants involved in assessing training and development needs; establishes and implements training evaluation and feedback criteria and processes; designs evaluation and survey instruments; conducts and coordinates focus groups and interviews designed to develop and refine organization and work unit effectiveness improvement processes and interprets results; prepares evaluation reports; facilitates staff debriefings and problem-solving sessions; 3. Presents results to bureau managers and advisors.
4. Manages organizational development projects; determines issues that need to be addressed and works with bureau management to determine appropriate interventions; hires, coordinates, monitors and evaluates the work of outside consultants involved in facilitating interventions; determines 5. Appropriate steps of the intervention process. 6. Develops proposals for the re-design of training curriculum; analyzes course lesson plans to identify connections between courses; interviews current and potential instructors; facilitates focus groups; 7. Researches curriculum design of other similar organizations; develops, prepares and submits proposals for the improvement of scope, sequence and priorities of training curriculum; facilitates the review and resolution of proposal recommendations. 8. Manages bureau apprentice programs; oversees on-the-job and classroom training; develops materials for performance evaluation; provides for the training and development of staff responsible for training apprentices; tracks apprentice progress and updates the Trades Apprentice Committee on their 9. progress; ensures appropriate documentation and records are kept for each apprentice; develops and implements recruitment strategies to ensure diversity of applicants; monitors performance, leave time and other issues and ensures issues are dealt with appropriately. 10. Proposes and develops interactive approaches to training subjects; assesses need for using interactive training methods and prioritizes courses; conducts research and solicits advice from subject matter experts; designs methods and tools and prepares instructions for their use; collaborates with staff to pilot interactive methods and tools; facilitates debriefing of pilot training programs; revises and prepares documentation of new methods. 11. Recruits instructors for training programs; assesses need for instructors in specific subject areas; identifies resources; drafts instructor contracts; designs and prepares guidelines for instructor use in developing courses; prepares proposals for diversification of teaching methods; provides instruction and technical assistance to instructors. 12. Supervises and directs the delivery of training by instructors and through bureau training programs; trains instructors on effective training delivery techniques; conducts and leads training and development activities including organizing and facilitating panels, researching and selecting reading 13. And writing assignments, organizing and leading training sessions and coordinating team-building activities. 14. Adult learning principles, methods and techniques; 15. Survey development and implementation methods and techniques to determine organizational development and training needs; 16. Group dynamics characteristics; 17. Leadership and management practices and principles; 18. Curricula design, development and implementation methods and practices; 19. Customer service and public relations methods, practices and procedures. 20. Effective oral and written communications;
21. Establishing rapport with small and large groups to facilitate organizational development, creative thinking and problem solving; 22. Providing training opportunities to individuals and groups at all levels of abilities and management; 23. Creating networking opportunities for City staff; 24. Influencing individuals and groups at all levels within the organizational structure; 25. Establishing and maintaining effective working relationships with others.
Advantages of Training & Development 1. Communication: Provides the foundation for effectively interacting and influencing in the workplace. 2. Team Building: Enables workgroups and teams to be more productive and servicefocused. 3. Facilitation: Profiles the effective facilitator, and provides foundational and advanced techniques for managing group dynamics and building deliverables effectively to meet business objectives. 4. Business Analysis: Provides foundational and advanced training in scoping, process analysis and modeling, data analysis and modeling, requirements definition, and design techniques to support business process improvement, innovation, and information system development efforts. 5. Change Leadership: Assesses leadership preferences, motivational styles, and organizational characteristics to enable development of effective change leadership behaviors. Some of Training and Development programs include: • Business Process Analysis and Modeling Techniques • Business Data Analysis and Modeling Techniques • Psychological Type and its Impact in the Workplace • The Motivational Manager: Language and Behavior Interaction in the Workplace • Essential Facilitation Skills o Foundations of Facilitation o Human Dynamics of Facilitation o Documenting and Modeling Skills for Facilitators • Kick Start your Project: Setting Scope, Determining Deliverables, Establishing the Team • Influencing with Integrity: Effective Communication in the Workplace.
Disadvantages of Training & Development 1. Cost: Most outsourced training is pricy, especially programs that are built by outsourced vendors for individual companies. Travel, software purchases, room rentals, equipment purchases must be factored into the budget. It is important to do a cost analysis to ensure that the outsourced provision of training is the best cost alternative. If the program is something that is needed by a select group of staff, it can be much more cost effective to outsource the training rather than building a training program in house.
2. Not Customized to the Individual Corporate Culture, Vision or Goals: If the training provider is offering this training to a wide range of participants, the generalities in the training may make the training irrelevant and not as useful as a more targeted approach. 3. Workload on Return to the Office: Being away from the office can cause work to pile up. This alone can deter staff from participating in training programs that require being away from the office for long periods of time. 4. More Time Consuming: If taking outsourced training requires travel to an institution in another city, travel time and time away from home can cause stress. Short term programs or programs that are offered in modules offered frequently can be a better alternative.
Importance of Training & Development In Organization development, the related field of training and development (T & D) deals with the design and delivery of learning to within organizations. After hiring the employees by an organization, next step is determining the need of training and development for them. It is obvious that some new employees are not experienced to their work so they need special training to perform effectively and efficiently. Different organizations held different training and development programs according to their available resources and requirements. The significance and value of training has long been recognized. Consider the popular and often repeated quotation, “Give a person a fish and you feed him for a day. Teach a person to fish and you feed him for a lifetime.” This simple but profound saying is attributed to the wisdom of Confucius who lived in the 5 th century BC. Given today’s business climate and the exponential growth in technology with its effect on the economy and society at large, the need for training is more pronounced than ever. Training, in the most simplistic definition, is an activity that changes people’s behavior. Increased productivity is often said to be the most important reason for training. But it is only one of the benefits. Training is essential not only to increase productivity but also to motivate and inspire workers by letting them know how important their jobs are and giving them all the information they need to perform those jobs (Anonymous, 1998). McNamara (n.d.) lists the following as general benefits from employee training: • Increased job satisfaction and morale • Increased motivation • Increased efficiencies in processes, resulting in financial gain • Increased capacity to adopt new technologies and methods • Increased innovation in strategies and products • Reduced employee turnover This is only a partial listing of the many benefits that result from training. Training that is appropriate to the needs of an organization can add great value.
Application of Training & Development
The organizations policy regarding training & development is for developing employee’s current skill and future prospect. They believe that employee will produce more if position is right. By internal research the organization determine training needs for its employees. By using performance appraisal method they evaluate training effectiveness. They use on-thejob training, conference, classroom lecture techniques for training. Human Resource Division plays planning, scheduling and implementing role in case of employee training. Compensation:
Compensation Meaning Compensation is the financial remuneration given by the organization to its employees in exchange for their work. Compensation system must be lined to organizational objectives and strategies. Compensation requires the balancing the interest and cost of the employer with the expectation of the employees. Pay is a statement of an employee’s worth by an employer. Pay is a perception of worth by an employee. All reward systems are based on the assumptions of attracting, retaining and motivating people. Financial rewards are an important component of the reward system, but there are other factors that motivate employees and influence the level of performance called non-financial reward.
Compensation System • •
Extrinsic Compensation -Tangible or Monetary Intrinsic reward System-Intangible or non monetary
Extrinsic Rewards: Extrinsic rewards are benefits provided by the employer, usually money, promotion or benefits. They are external to the job and come from an outside source, mainly management. Components of extrinsic rewards are given below: i.
Direct: Base pay: Wages Salary
Indirect: Benefits: Medical/Life insurance
Variable Pay Bonuses Incentives
Retirement pensions Worker’ compensation Others.
Intrinsic rewards are satisfactions one derives from doing the job. These are self-initiated rewards: pride in ones work, a sense of accomplishment, or enjoying being part of a work team.
Praise/recognition from supervisors. Challenging work assignments. Professional growth and development opportunities. Merit increases Promotions and lateral moves Informal rewards
Developing Base Pay System Job Analysis (JD & JS)
Job evaluation Pay survey
Pay structure Pay policies
Performance Appraisal Individual Pay
Implementation Communication Monitoring
Classification & Compensation
1. Hiring Rates for Internal or External Candidates and Returning Employees: To offer an external candidate a staff position with a salary between the minimum and first quartile of the pay band (where approval of Human Resource Services classification & compensation staff is not required), contact your next supervisory level. 2. Annual salary increases: Salary increases for classified staff are granted at the beginning of each staff member's work year. For employees who work the full calendar year, annual increases take effect July 1. For employees who work a 9month, 10-month, or 11-month academic year, annual increases take effect at the beginning of that employee's work year. 3. Off-cycle increases: Non-represented staffs are also eligible to receive an Off-Cycle Salary Increase, which provides additional flexibility for staff pay increases beyond the fiscal year salary increase. Off-Cycle Increases are intended to address market and equity issues relative to recruitment, retention, and organizational change
during the fiscal year. Off-Cycle Increases are not meant to address merit or movement between job standards, or to take the place of the regular fiscal year salary increase. 4. Position review increases: When positions change from one job standard/title to another, an analyst reviews the incumbent's salary in collaboration with the Human Resources representative, taking market data and internal equity into account. Normally, upon movement of a position to a job standard/title with a higher pay band, an employee will receive a salary increase of no less than 5%.
Establishing the Pay Structure Once the job evaluation is complete, the data generated become the nucleus of the organizationâ€™s pay structure. This means establishing pay rates or ranges compatible with the ranks, classification, or points arrived at through job evaluation. 1. Compensation Survey: Compensation surveys are used to gather factual data on pay practices among firms and companies within specific communities. 2. Wage Curve: After the compensation committee arrives at pointâ€™s totals from job evaluation and obtains survey data on what comparable organizations are paying for similar jobs, a wage curve can be fitted to the data. A completed wage curve tells the compensation committee the average relationship to between points of established pay grades and wage base rate. 3. Wage Structure: The wage structure is a pay scale showing ranges of pay within each grade. Typically, organizations design their wage structures with ranges in each grade to reflect different tenure in positions, as well as level of performance.
Special cases of Compensation As organizations rapidly change in this dynamic world, so, too, do compensation programs. Special cases of compensation are given below: Incentive Compensation Plans: In addition to the basic wage structure, organizations sincerely committed to developing a compensation system designed around performance should consider incentive pay. Individual Incentives Plans: Individual incentives plans is a motivation systems based on individual work performance. Individual incentives plans pay off for individual performance.
Merit pay: One popular and almost universally used incentive system is merit pay. Merit pay is an increase in pay, usually determined annually. Group Incentives: Group incentives are motivational plan provided to a group of employees based on the collective work. Each individual incentive option we describe also can work for group. Plant Wide Incentives: Plant wide incentives are a motivation system that rewards all facility members based on how well the entire group performed. Its aim to direct the effort of all employees toward achieving overall organizational effectiveness. Scanlon Plan: Scanlon plan is an organization wide incentive program focusing on cooperation between management and employees through sharing problems, goals and ideas. IMPROSHARE: IMPROSHARE is an incentive plan that uses a specific mathematical formula for determining employee bonuses. 1. Team-Based Compensation: Team-based compensation is a pay based system on how well the team performed. Under a team-based compensation plan, team members who work on achieving and in many cases, exceeding established goals often share equally in the rewards. 2. Paying for Performance: Pay-for-performance programs are rewarding employees based on their job performance. Pay-for-performance programs compensate employees based on a performance measure. â€˘
Competency-Based Compensation: Competency-Based Compensation organizational pay system that rewards skills, knowledge and behaviors.
Broad-Banding: Broad-banding is paying employees at present levels based on their level of competency.
International Compensation Increasingly, today, globalization is a reality for organizations of almost any size. Only the smallest companies seem unaffected by the disappearance of global boundaries among organizations, markets, and people. Globalization has increased awareness of and concern for creating internationally equitable compensation systems in many companies. The complex nature of international compensation dictates that it receives special attention from organization operating in a multi-national environment. It is crucial that organizations understand the kind of employees employed by international firms, the elements that
comprise an international compensation system, and the special problems associated with returning citizens on overseas assignments to their home corporation. Components of International Compensation 1. Base Salary: Two alternatives exist for determining base salary for an expatriate: (1) adhering to the established policies and procedures of the parent company's country, including formal job evaluation; or (2) following the policies and practices of the country in which the expatriate works. 2. Indirect Monetary Compensation (Benefits): The benefits package for expatriates is generally the same as the one provided in the home country. However, an organization must be aware that specific countries require benefits that may not be offered in the home country. 3. Equalization Benefits: These benefits are intended to keep expatriates in the same financial condition they were in before accepting an overseas assignment and to reduce any negative aspects of living in a foreign country. A limited selection of the benefits available includes the following: •
Educational allowance for children
Foreign Service Premium
Assignment completion bonus
Cultural training for family
This list only scratches the surface of the equalization benefits that can be offered in terms of financial allowances, social adjustment assistance, and transitional support for the expatriate's family. 4. Incentives: Expatriates may receive a variety of incentives ranging from cash bonuses of various kinds, to stock options, and performance-related payments. 46
Crafting an effective international compensation plan requires a careful consideration of the various types of compensation as well as the specifics of the assignment and employee involved.
Application of Compensation All types of personnel in this organization work five days per week and eight hours per day. Pay, job rotation, promotion, financial incentives, work sharing, autonomy and freedom are methods or techniques to motivate employees. Principles of compensation of this organization are monthly payment, increment, reward, and bonus. To determine wages/salary rates the organization performs performance evaluation by using the ranking and job classification method. The organization have pay scale for its employees and that is strictly followed by the organization. Financial factors and work environment are favorable for all type of employees in this organization. Impressive job title, own visiting card, option for casual dress up, safe warm and clean workstation, sufficient control over the job, decorated office and location are the non-financial incentives for employees. The organization handles grievances according to the company rule. Performance Appraisal:
Performance Appraisal Meaning Performance appraisal is a formal assessment of how well employees are doing their job. Performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skills development. Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does. According to Flippo, a prominent personality in the field of Human resources, â€œperformance appraisal is the systematic, periodic and an impartial rating of an employeeâ€™s excellence in the matters pertaining to his present job and his potential for a better job." Performance appraisal is a systematic way of reviewing and assessing the performance of an employee during a given period of time and planning for his future. It is a powerful tool to calibrate, refine and reward the performance of the employee. It helps to analyze his achievements and evaluate his contribution towards the achievements of the overall organizational goals.
By focusing the attention on performance, performance appraisal goes to the heart of personnel management and reflects the management’s interest in the progress of the employees.
Objectives of Performance appraisal To review the performance of the employees over given period of time. To judge the gap between the actual and the desired performance. To help the management in exercising organizational control. Helps to strengthen the relationship and communication between superior – subordinates and management – employees. To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future. To provide feedback to the employees regarding their past performance. Provide information to assist in the other personal decisions in the organization. Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development. To reduce the grievances of the employees.
Legal Guidelines for Appraisals Performance ratings must be job-related. Employees must be given a written copy of their job standards in advance of appraisals. Managers who conduct the appraisal must be able to observe the behavior they are rating. Supervisors must be trained to use the appraisal form correctly. Appraisals should be discussed openly with employees and counseling or corrective guidance offered. An appeals procedure should be established to enable employees to express disagreement with the appraisal.
Sources of Performance Appraisal 48
Manager and/or Supervisor Appraisal done by an employee’s manager and reviewed by a manager one level higher. Self-Appraisal Performance By the employee being evaluated, generally on an appraisal form completed by the employee prior to the performance interview. Subordinate Appraisal Appraisal of a superior by an employee, which is more appropriate for developmental than for administrative purposes. Peer Appraisal Appraisal by fellow employees, compiled into a single profile for use in an interview conducted by the employee’s manager. Team Appraisal Appraisal, based on TQM concepts, recognizing team accomplishment rather than individual performance. Customer Appraisal Appraisal that seeks evaluation from both external and internal customers.
Pros and Cons of 360-Degree Appraisal •
PROS The system is more comprehensive in that responses are gathered from multiple perspectives. Quality of information is better. (Quality of respondents is more important than quantity.) It complements TQM initiatives by emphasizing internal/external customers and teams. It may lessen bias/prejudice since feedback comes from more people, not one individual. Feedback from peers and others may increase employee self-development.
CONS The system is complex in combining all the responses. Feedback can be intimidating and cause resentment if employee feels the respondents have “ganged up.” There may be conflicting opinions, though they may all be accurate from the respective standpoints. The system requires training to work effectively. Employees may collude or “game” the system by giving invalid evaluations to one another. Appraisers may not be accountable if their evaluations are anonymous.
Process of Performance Appraisal
1. Establishing Performance Standards: The first step in the process of performance appraisal is the setting up of the standards which will be used to as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standards set should be clear, easily understandable and in measurable terms. In case the performance of the employee cannot be measured, great care should be taken to describe the standards. 2. Communicating the Standards: Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization. The employees should be informed and the standards should be clearly explained to the. This will help them to understand their roles and to know what exactly is expected from them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators. 3. Measuring the Actual Performance: The most difficult part of the Performance appraisal process is measuring the actual performance of the employees that is the work done by the employees during the specified period of time. It is a continuous process which involves monitoring the performance throughout the year. This stage requires the careful selection of the appropriate techniques of measurement, taking care that personal bias does not affect the outcome of the process and providing assistance rather than interfering in an employees work. 50
4. Comparing the Actual with the Desired Performance: The actual performance is compared with the desired or the standard performance. The comparison tells the deviations in the performance of the employees from the standards set. The result can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance depicting a negative deviation in the organizational performance. It includes recalling, evaluating and analysis of data related to the employees’ performance. 5. Discussing Results: The result of the appraisal is communicated and discussed with the employees on one-to-one basis. The focus of this discussion is on communication and listening. The results, the problems and the possible solutions are discussed with the aim of problem solving and reaching consensus. The feedback should be given with a positive attitude as this can have an effect on the employees’ future performance. The purpose of the meeting should be to solve the problems faced and motivate the employees to perform better. 6. Decision Making: The last step of the process is to take decisions which can be taken either to improve the performance of the employees, take the required corrective actions, or the related HR decisions like rewards, promotions, demotions, transfers etc. Rater Errors • •
Error of Central Tendency A rating error in which all employees are rated about average. Leniency or Strictness Error A rating error in which the appraiser tends to give all employees either unusually high or unusually low ratings. Regency Error A rating error in which appraisal is based largely on an employee’s most recent behavior rather than on behavior throughout the appraisal period. Contrast Error A rating error in which an employee’s evaluation is biased either upward or downward because of comparison with another employee just previously evaluated.
Purpose of Performance Appraisal Performance Appraisal is being practiced in 90% of the organizations worldwide. Selfappraisal and potential appraisal also form a part of the performance appraisal processes. According to a recent survey, the percentage of organizations (out of the total organizations surveyed i.e. 50) using performance appraisal for the various purposes are as shown in the diagram below:
The most significant reasons of using Performance appraisal are: ♦ Making payroll and compensation decisions – 80% ♦ Training and development needs – 71% ♦ Identifying the gaps in desired and actual performance and its cause – 76% ♦ Deciding future goals and course of action – 42% ♦ Promotions, demotions and transfers – 49% ♦ Other purposes – 6% (including job analysis and providing superior support, assistance and counseling)
Challenges of Performance Appraisal In order to make a performance appraisal system effective and successful, an organization comes across various challenges and problems. The main challenges involved in the performance appraisal process are: 1. Determining the evaluation criteria: Identification of the appraisal criteria is one of the biggest problems faced by the top management. The performance data to be considered for evaluation should be carefully selected. For the purpose of evaluation, the criteria selected should be in quantifiable or measurable terms
2. Create a rating instrument: The purpose of the Performance appraisal process is to judge the performance of the employees rather than the employee. The focus of the system should be on the development of the employees of the organization. 3. Lack of competence: Top management should choose the raters or the evaluators carefully. They should have the required expertise and the knowledge to decide the criteria accurately. They should have the experience and the necessary training to carry out the appraisal process objectively. 4. Errors in rating and evaluation: Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait influencing the evaluatorâ€™s rating for all other traits) etc. may creep in the appraisal process. Therefore the rater should exercise objectivity and fairness in evaluating and rating the performance of the employees 5. Resistance: The appraisal process may face resistance from the employees and the trade unions for the fear of negative ratings. Therefore, the employees should be communicated and clearly explained the purpose as well the process of appraisal. The standards should be clearly communicated and every employee should be made aware that what exactly is expected from him/her. Performance appraisal is also closely linked to other HR processes like helps to identify the training and development needs, promotions, demotions, changes in the compensation etc. A feedback communicated in a positive manner goes a long way to motivate the employees and helps to identify individual career developmental plans. Based on the evaluation, employees can develop their career goals, achieve new levels of competencies and chart their career progression. Performance appraisal encourages employees to reinforce their strengths and overcome their weaknesses.
Methods of Performance Appraisal Performance appraisal - Traditional approach Traditionally, performance appraisal has been used as just a method for determining and justifying the salaries of the employees. Than it began to be used a tool for determining rewards (a rise in the pay) and punishments (a cut in the pay) for the past performance of the employees. This approach was a past oriented approach which focused only on the past performance of the employees i.e. during a past specified period of time. This approach did not consider the developmental aspects of the employee performance i.e. his training and development needs or career developmental possibilities. The primary concern of the traditional approach is to judge the performance of the organization as a whole by the past performances of its employees
Therefore, this approach is also called as the overall approach. In 1950s the performance appraisal was recognized as a complete system in itself and the Modern Approach to performance appraisal was developed. Traditional Methods are given below: 1. Essay Appraisal Method: This traditional form of appraisal, also known as “Free Form method” involves a description of the performance of an employee by his superior. The description is an evaluation of the performance of any individual based on the facts and often includes examples and evidences to support the information. A major drawback of the method is the inseparability of the bias of the evaluator. 2. Straight Ranking Method: This is one of the oldest and simplest techniques of performance appraisal. In this method, the appraiser ranks the employees from the best to the poorest on the basis of their overall performance. It is quite useful for a comparative evaluation. 3. Paired Comparison: A better technique of comparison than the straight ranking method, this method compares each employee with all others in the group, one at a time. After all the comparisons on the basis of the overall comparisons, the employees are given the final rankings. 4. Critical Incidents Methods: In this method of Performance appraisal, the evaluator rates the employee on the basis of critical events and how the employee behaved during those incidents. It includes both negative and positive points. The drawback of this method is that the supervisor has to note down the critical incidents and the employee behavior as and when they occur. 5. Field Review: In this method, a senior member of the HR department or a training officer discusses and interviews the supervisors to evaluate and rate their respective subordinates. A major drawback of this method is that it is a very time consuming method. But this method helps to reduce the superiors’ personal bias. 6. Checklist Method: The rate is given a checklist of the descriptions of the behavior of the employees on job. The checklist contains a list of statements on the basis of which the rater describes the on the job performance of the employees. 7. Graphic Rating Scale: In this method, an employee’s quality and quantity of work is assessed in a graphic scale indicating different degrees of a particular trait. The factors taken into consideration include both the personal characteristics and characteristics related to the on-the-job performance of the employees. For example a trait like Job Knowledge may be judged on the range of average, above average, outstanding or unsatisfactory. 8. Forced Distribution: To eliminate the element of bias from the rater’s ratings, the evaluator is asked to distribute the employees in some fixed categories of ratings like
on a normal distribution curve. The rater chooses the appropriate fit for the categories on his own discretion.
7.8.2 Performance appraisal - Modern approach The modern approach to performance development has made the performance appraisal process more formal and structured. Now, the performance appraisal is taken as a tool to identify better performing employees from others, employeesâ€™ training needs, career development paths, rewards and bonuses and their promotions to the next levels. Appraisals have become a continuous and periodic activity in the organizations. The results of performance appraisals are used to take various other HR decisions like promotions, demotions, transfers, training and development, reward outcomes. The modern approach to performance appraisals includes a feedback process that helps to strengthen the relationships between superiors and subordinates and improve communication throughout the organization. The modern approach to Performance appraisal is a future oriented approach and is developmental in nature. This recognizes employees as individuals and focuses on their development. Modern Method are Given below: 1. Assessment Centers: An assessment centre typically involves the use of methods like social/informal events, tests and exercises, assignments being given to a group of employees to assess their competencies to take higher responsibilities in the future. Generally, employees are given an assignment similar to the job they would be expected to perform if promoted. The trained evaluators observe and evaluate employees as they perform the assigned jobs and are evaluated on job related characteristics. The major competencies that are judged in assessment centers are interpersonal skills, intellectual capability, planning and organizing capabilities, motivation, career orientation etc. assessment centers are also an effective way to determine the training and development needs of the targeted employees. 2. Behaviorally Anchored Rating Scales: Behaviorally Anchored Rating Scales (BARS) is a relatively new technique which combines the graphic rating scale and critical incidents method. It consists of predetermined critical areas of job performance or sets of behavioral statements describing important job performance qualities as good or bad (for e.g. the qualities like inter-personal relationships, adaptability and reliability, job knowledge etc). These statements are developed from critical incidents. In this method, an employeeâ€™s actual job behavior is judged against the desired behavior by recording and comparing the behavior with BARS. Developing and practicing BARS requires expert knowledge. 3. Human Resource Accounting Model: Human resources are valuable assets for every organization. Human resource accounting method tries to find the relative worth of these assets in the terms of money. In this method the Performance appraisal of the employees is judged in terms of cost and contribution of the employees. The cost of employees include all the expenses incurred on them like their compensation, recruitment and selection costs, induction and training costs etc whereas their contribution includes the total value added (in monetary terms).
4. 360 Degree Performance Appraisals 360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive appraisal where the feedback about the employees’ performance comes from all the sources that come in contact with the employee on his job. 360 degree respondents for an employee can be his/her peers, managers (i.e. superior), subordinates, team members, customers, suppliers/ vendors - anyone who comes into contact with the employee and can provide valuable insights and information or feedback regarding the “on-the-job” performance of the employee. 360 degree appraisal has four integral components: i. ii. iii. iv.
Self appraisal Superior’s appraisal Subordinate’s appraisal Peer appraisal.
Self appraisal gives a chance to the employee to look at his/her strengths and weaknesses, his achievements, and judge his own performance. Superior’s appraisal forms the traditional part of the 360 degree appraisal where the employees’ responsibilities and actual performance is rated by the superior. Subordinates appraisal gives a chance to judge the employee on the parameters like communication and motivating abilities, superior’s ability to delegate the work, leadership qualities etc. Also known as internal customers, the correct feedback given by peers can help to find employees’ abilities to work in a team, co-operation and sensitivity towards others.
Management by Objectives (MBO) The concept of ‘Management by Objectives’ (MBO) was first given by Peter Drucker in 1954. It can be defined as a process whereby the employees and the superiors come together to identify common goals, the employees set their goals to be achieved, the standards to be taken as the criteria for measurement of their performance and contribution and deciding the course of action to be followed. The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employee’s actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and the choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities.
Performance Appraisal under an MBO Program
Criteria for Measuring Performance at Different Levels The criteria for measuring performance changes as the levels of the employees and their roles and responsibilities change. A few examples for each level are described below: 1. For top level management o Degree of organizational growth and expansion o Extent of achievement of organizational goals o Contribution towards the society o Profitability and return on capital employed 2. For middle level managers
Performance of the departments or teams
Co-ordination with other departments
Optimal use of resources
Costs Vs. revenues for a given period of time
The communication with superiors and subordinates
3. For front line supervisors •
Quantity of actual output against the targets
Quality of output against the targets
Number of accidents in a given period
Rate of employee absenteeism
Arguments against Performance Appraisal A large number of managers, human resource professionals, human resource consultants and researchers are recommending companies to get rid of the performance appraisal systems. The main argument given by the researchers is that the system of performance appraisals itself is based on a few wrong assumptions and it fails to fulfill its basic purpose. 58
The major arguments given in favors of abolishing the performance appraisals are: ♦ The first and the foremost argument is the fact that discrepancies between the theory and its application. There is often disconnecting between the theory and the practical implementation. ♦ PA is a bitter process for most of the employees which can create emotional pressures and stress for the employees. ♦ The focus of the PA process is too narrow i.e. just to determine the rewards and punishments for the employees by measuring their past performance. ♦ PA is often looked upon as a tool to control the employees by the superiors which dampen the intrinsic motivation of the employees. ♦ Most of the managers and superiors are not trained enough to carry the processes in the appropriate and the structured manner. ♦ PA process increases the dependency of the employees on their superiors. ♦ PA process encourages accountability, approvals and discourages the spirit of creativity and initiative by employees and also de-motivates them. ♦ Performance appraisals are conducted by managers who are often not trained to be appraisers. This obstructs the genuine feedback, as it includes subjectivity and bias of the raters leading to incorrect and unreliable data regarding the performance of the employees. ♦ PA can adversely affect the morale of the employees and create dissatisfaction among them, thereby affecting the organizational performance. ♦ Performance appraisals and reviews are often time consuming, with faulty methods to measure performances and generating false results and the decisions taken can be politically influenced.
The Balanced Scorecard To evaluate the organizational and employee performance in Performance appraisal management processes, the conventional approach measures the performance only on a few parameters like the action processes, results achieved or the financial measures etc. The balanced scorecard provides a list of measures that balance the organizations internal and process measures with results, achievements and financial measures. The two basic features of the balanced scorecard are:
A balanced set of measures based on the four perspectives of balanced scorecard
Linking the measures to Employee Performance
The four Perspectives recommended by Kaplan and Norton for the managers to collect information are: ♦ The financial measures: The financial measures include the results like profits, increase in the market share, return on investments and other economic measures as a result of the actions taken. ♦ The customers’ measures: These measures help to get on customer satisfaction, the customer’s perspective about the organization, customer loyalty, acquiring new customers. The data can be collected from the frequency and number of customer complaints, the time taken to deliver the products and services, improvement in quality etc. ♦ The internal business measures: These are the measures related to the organization’s internal processes which help to achieve the customer satisfaction. It includes the infrastructure, the long term and short term goals and objectives, organizational processes and procedures, systems and the human resources. ♦ The innovation and learning perspective: The innovation and learning measures cover the organization’s ability to learn, innovate and improve. They can be judged by employee skills matrix, key competencies, value added and the revenue per employee.
Benefits of balanced Scorecard
The benefits of the balanced scorecard approach in measuring performance are:
Gives the complete picture of the employee as well as the organizational performance.
It guides users in determining the critical success factors and performance indicators.
Strategic review or analysis of the organizational capabilities and performance.
Focusing the whole organization on the few key things needed to create breakthrough performance.
Integrating and directing the performance and efforts from the lowest levels in the organization to achieve excellent overall performance.
The Balanced Scorecard
Application of Performance Appraisal The organization makes formal performance appraisal program every year. Employee performance is evaluated by the employeesâ€™ immediate boss. The organization used field review and management by objective (MBO) method for performance evaluation. This performance appraisal served as betterment for both the employees and the organization. Seniority, efficiency, loyalty, seniority and efficiency, seniority and performance are the bases of promotion used in this organization. Career counseling program are held in this organization. Senior members of this organization play mentoring role to guide juniors in building their career. Staff briefing is a communication method used in this organization. They think communication is a bridge to have success. Conclusion & Recommendation:
The performance of a Banks today competitive business is important. Just few years ago the number of bank was very small. So the competition was not a strong as it is today. Things have changed with the emergence of many new banks. Now the customers have option to
take the one that the best so the current banking business scenario is simply highly competitive. It was great pleasure for me to do my Internship Program in a respected organization like Jamuna Bank Limited. Though my practical exposure in Jamuna Bank Limited. For just twelve weeks it provides me a wide range of scope to observe the different functions of bank through the cordial assistance of its members. I had the scope to observe the functions of focused on Foreign Exchange banking system especially in export division. What I have observed the bank has the vision to be the best Private Commercial Bank in Bangladesh in terms of efficiency, capital adequacy, asset quality, sound management etc. The bank is maintaining a well-structured communication from top to bottom level. Each official should be valued and treated as a part of the bank and they must have the privilege to devote themselves for the betterment of service of the bank.
Recommendation The 5 years success story though helped the bank to attain a leading role but to remain unrivalled among new generation banks; the bank must face new challenges. Overall, the bank must make a positive attempt to be more outward looking in their goals and aware of what is happening. They must also emphasize on the domestic scenario more closely and analyze any certain trends and strategies of their competitors. The bank must accept any failures and think of them as an objective to pursue future goals instead of blaming such failures on other factors. I hope in spite of my all limitations, this experience of sharing works with such working environment will help me a lot in my professional life. The organization should use statistical analysis to determine how employees’ regular performance in the organization is. They should use computer base training, job rotation, role playing technique for developing employees’ skills. Another issue is that they should send their employee for outside training BIBLIOGRAPHY 1. Annual Report, “Jamuna Bank Ltd” 2. Website: www.jamunabank.com.bd 3. Fundamental of Human Resource Management. By DeCenzo & Robbins 4. Principal of Management. By Griffin 5. Effective Training. By P. Nick Blanchard 6. http://wiki.answers.com/Q/What_is_human_resource_manager_5_functions 62
7. http://wiki.answers.com/Q/What_is_the_importance_of_human_resources_manag ement_in_an_organization 8. http://www.webpronews.com/topnews/2004/12/28/the-challenges-of-humanresource-management 9. http://recruitment.naukrihub.com/meaning-of-recruitment.html 10. http://tutor2u.net/business/gcse/people_recruitment_methods.htm 11. http://appraisals.naukrihub.com/definition-concept.html
Jamuna Bank Limited (JBL) is a Banking Company registered under the Companies Act, 1994 with its Head Office at Chini Shilpa Bhaban, 3, Dilk...