assignment unit 4

8/8/2019 Assignment Unit 4

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Date 15/09/2010 Hariom

INSTITUTE OF CO-OPERATIVE MANAGEMENT

ASSIGNMENT OF UNIT -IV HUMAN RESOURCE MANAGEMENT

SUBMITTED TO SUBMITTED BY

Mr. Shaizal Batra Akshay Kirtane




CONTENTS

Topic:-

y Performance appraisal 3

y Potential evaluation 6

y Job evaluation 8

y W age determination 12




Performance Appraisal

A performance appraisal, employee appraisal, performance review, or

(career) development discussion is a method by which the job performance of an employee is evaluated (generally in terms of quality, quantity, cost, and time)

typically by the corresponding manager or supervisor . A performance appraisal

is a part of guiding and managing career development. It is the process of

obtaining, analyzing, and recording informa tion about the relative worth of an

employee to the organization. Performance appraisal is an analysis of an

employee's recent successes and failures, personal strengths and weaknesses,

and suitability for promotion or further training. It is also the judgement of an

employee's performance in a job based on considerations other than productivity

alone.

Definition Performance appraisal is a method of evaluating the behaviour of

employees in the workspot, normally including both and quantitative and

qualitative aspects of job performance.it is a systematic and objective way of

evaluating both work-related behaviour and potential of employees.it is a

process that involves determining and communicating to an employee how the

job and ideally, establishing a plant of improvement.2

Contents1 Aims

2 Methods

3 Criticism

4 See also

5 References

6 Sources

7 External links




Aims

Generally, the aims of a performance appraisal are to:

Give employees feedback on performance

Identify employee training needs

Document criteria used to allocate organizational rewards

Form a basis for personnel decisions: salary increases, promotions, disciplinary

actions, bonuses, etc.

Provide the opportunity for organizational diagnosis and development

Facilitate communication between employee and administration

Validate selection techniques and human resource policies to meet federal Equal

Employment Opportunity requirements.

To improve performance through counselling, coaching and development.

Methods

A common approach to assessing performance is to use a numerical or scalar

rating system whereby managers are asked to score an individual against a

number of objectivesattributes. In some companies, employees receive

assessments from their manager , peers, subordinates, and customers, while also

performing a self assessment. This is known as a 360-degree appraisal and

forms good communication patterns.

The most popular methods used in the performance appraisal process include

the following:

Management by objectives

360-degree appraisal

Behavioural observation scale

Behaviourally anchored rating scales

Trait-based systems, which rely on factors such as integrity and

conscientiousness, are also commonly used by businesses. The scientific




Employee Evaluation

An organization needs constantly to take stock of its workforce and to assess its performance in existing jobs for three reasons:

y To improve organizational performance via improving the performanceof individual contributors (should be an automatic process in the case of good managers, but (about annually) two key questions should be posed:

o what has been done to improve the performance of a person last

year?

o and what can be done to improve his or her performance in the year

to come?).y 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.

y To provide an equitable method of linking payment to performance wherethere are no numerical criteria (often this salary performance rev iew takes place about three months later and is kept quite separate from 1. and 2.

but is based on the same assessment).

On-the-spot managers and supervisors, not HR staffs, carry out evaluations. The

personnel role is usually that of:

y Advising top management of the principles and objectives of an

evaluation system and designing it for particular organizations andenvironments.

y Developing systems appropriately in consultation with managers, supervisors and staff representatives. Securing the involvement a ndcooperation of appraisers and those to be appraised.

y Assistance in the setting of objective standards of evaluation /assessment, for example:

o Defining targets for achievement;o Explaining how to quantify and agree objectives;

o Introducing self-assessment;

o Eliminating complexity and duplication.

y Publicizing the purposes of the exercise and explaining to staff how thesystem will be used.

y Organizing and establishing the necessary training of managers and

supervisors who will carry out the actual evaluations/ appraisals. Not onlytraining in principles and procedures but also in the human relations skills

necessary. (Lack of confidence in their own ability to handle situations of

poor performance is the main weakness of assessors.)




y Monitoring the scheme - ensuring it does not fall into disuse , following

up on training/job exchange etc. recommendations, reminding managersof their responsibilities.

Full-scale periodic reviews should be a standard feature of schemes since

resistance to evaluation / appraisal schemes is common and the temptation towater down or render schemes ineffectual is ever present (managers resent the

time taken if nothing else).

Basically an evaluation / appraisal scheme is a formalization of what is done ina more casual manner anyway (e.g. if there is a vacancy, discussion about

internal moves and internal attempts to put square pegs into 'squarer holes' are both the results of casual evaluation). Most managers approve merit payment

and that too calls for evaluation. Made a standard routine task , it aids the

development of talent, warns the inefficient or uncaring and can be an effective

form of motivation.




Job Evaluation

What is job evaluation? what are the different ways in which a job

evaluation can be carried out?

Job evaluation is a systematic assessment of job content. It establishes the worth

of a job in terms of salary or wage compared to other jobs. Ma ny elaborate

schemes have been developed and applied with varying degrees of success.

While some structure is necessary on a project, pay is more likely to begoverned by market conditions, scarcity, individual knowledge, performance or trade agreements. Job evaluation is the method of ordering jobs or positions

with respect to their value or worth to the organization, and placing them into

job families and zones. Job evaluation is the A formal process by whichmanagement creates a job worth hierarchy withi n an organization. The two basic approaches are the market data approach and the job content approach.

The different ways in which a job evaluation can be carried out is

i)Ranking:

This method is one of the simplest to administer. Jobs are compared to each

other based on the overall worth of the job to the organization. The 'worth' of a job is usually based on judgements of skill, effort (physical and mental),

responsibility (supervisory and fiscal), and working conditions.

Advantages :

y Simple.

y Very effective when there are relatively few jobs to be evaluated (less

than 30). Disadvantages

y Difficult to administer as the number of jobs increases.

y Rank judgements are subjective.

y Since there is no standard used for comparison, new jobs would have to be compared with the existing jobs to determine its appropriate rank. In

essence, the ranking process would have to be repeated each time a new job is added to the organization.




Ranking Methods :

Ordering Simply place job titles on 3x5 inch index cards then order the titles byrelative importance to the organization Weighting.

Paired Comparison

ii)Classification Jobs are classified into an existing grade/category structure or

hierarchy. Each level in the grade/category structure has a description andassociated job titles. Each job is assigned to the grade/category providing theclosest match to the job. The classification of a position is decided by

comparing the whole job with the appropriate job grading standard. To ensureequity in job grading and wage rates, a common set of job grading standards

and instructions are used. Because of differences in duties, skills andknowledge, and other aspects of trades and labor jobs, job grading standards ar e

developed mainly along occupational lines. The standards do not attempt todescribe every work assignment of each position in the occupation covered. The

standards identify and describe those key characteristics of occupations which

are significant for distinguishing different levels of work. They define these keycharacteristics in such a way as to provide a basis for assigning the appropriategrade level to all positions in the occupation to which the standards apply.

Advantages

y Simple.

y The grade/category structure exists independent of the jobs. Therefore, new jobs can be classified more easily than the Ranking Method.

Disadvantagesy Classification judgments are subjective.

y The standard used for comparison (the grade/category structure) may

have built in biases that would affect certain groups of employees(females or minorities).

y Some jobs may appear to fit within more than one grade/category.

iii)Factor Comparison A set of compensable factors are identified as

determining the worth of jobs. Typically t he number of compensable factors issmall




5. Examples of compensable factors are:

SkillResponsibilities

Effort

Working Conditions Next, benchmark jobs are identified. Benchmark jobsshould be selected as having certain characteristics. equitable pay (no t overpaid

or underpaid)range of the factors (for each factor , some jobs would be at the low end of the

factor while others would be at the high end of the factor). This processestablishes the rate of pay for each factor for each benchmark job. Slightadjustments may need o be made to the matrix to ensure equitable dollar

weighting of the factors. The other jobs in the organization are then comparedwith the benchmark jobs and rates of pay for each factor are summed to

determine the rates of pay for each of the other jobs.

Advantages :

The value of the job is expressed in monetary terms.

Can be applied to a wide range of jobs.

Can be applied to newly created jobs. DisadvantagesThe pay for each factor is based on judgements that are subjective.The standard used for determining the pay for each factor may have build in

biases that would affect certain groups of employees (females or minorities).

iv) Point Method A set of compensable factors are identified as determining theworth of jobs. Typically the compensable factors include the major categories

of:

Skill

ResponsibilitiesEffortWorking Conditions




These factors can then be further defined.

1. Skill

y Experience

y Education

y Ability

2. Responsibilities

y Fiscal

y Supervisory

3. Effort

y Mental

y Physical

4. Working Conditions

y Location

y Hazards

y Extremes in Environment

The point method is an extension of the factor comparison method. Each factor

is then divided into levels or degrees which are then assigned points. Each job israted using the job evaluation instrument. The points for each factor aresummed to form a total point score for the job. Jobs are then grouped by total point scores and assigned to wage/salary grades so that similarly rated jobswould be placed in the same wage/salary grade.

Advantages :

The value of the job is expressed in monetary terms.

Can be applied to a wide range of jobs.Can be applied to newly created jobs. Disadvantages

The pay for each factor is based on judgements that are subjective.The standard used for determining the pay for each factor may have build in biases that would affect certain groups of employees.




Wage & Salary Determination:-

Definition :-

³A wage payment is essentially the price for a particular commodity .´

By: - Rothschild.

³Wages is the payment to the labour for its assistance to production.´

By: - Harrison.

Principles of wage & salary determination:-

(1). It should be developed keeping in view the interest of the employee,employer , consumer , community .

(2). It should be stated clearly in writing.

(3). It should be consistent.

(4). It must be sufficiently flexible.

(5). Management should be in use that employees know & understood the wage

policy of the company.

(6). It should be formed in such a manner that it should simply administrateactivity.

(7). It should be reviewed & revised periodically.

Objectives:-

(1). To establish focus & equitable remuneration.

(2). To attract competent personnel.

(3). To retain the present employee.

(4). To improve union management relations.




(5). To improve public image with company.

Factors affecting wages:-

(2). Ability to pay.

(3). Labour unions.

(4). Productivity.

(5). Cost of living.

(6). Prevailing the wages rates.

(7). Job requirements.

(8). Individual difference in wage rules .(i.e., work experience ,workers age &

potential ,education qualification, hazards involve in the jobs etc,.)

(9). State regulations (Norms & Regulations) .

Method of Wage payment:-

There are two types of method for calculation of wage payment, t hey are as

follows :-

(1). Time Rate system : formula- Wages = Time taken * Rate prescribed

Advantages :-

(i). Simplicity.

(ii). Certainty of wages.

(iii). Useful in non-standard works.

(iv). Top quality of production.




Disadvantages :-

(i). Lack of incentive for efficiency.

(ii). Need for more supervision .

(iii). Loss of efficiency.

(iv). Difficult assessment of individual¶s work .

(2) Piece Rate system :- formula : Wages = No. of units produced * Rate per

unit .

Advantages :-

(i). Increased production .

(ii). Better employer-employee relationship .

(iii). Maximum utilization of tools & equipment .

(iv). Rise in the standard of living .

Disadvantages :-

(i). Misuse of machine & tools .

(ii). Uncertainty of remuneration .

(iii). Loss of health .

(iv). Loss of the quality of goods .

Process of Wage determination :-

(1). Job analysis.

(2). Job evaluation.

(3). Wage survey .

(4). Developing Wage structure

(5). Wage administration rule

(6). Employee appraisal




State regulation for wages:-

Minimum wages act 1948

The payment of wage act 1936

Equal remuneration act 1976

Industrial dispute act 1976

Section 529(A) of companies act 1956

Executive compensation:-

(1)straight salary

(2) bonus

(3)employee stock option plan(ESOP)

(4)fringe benefits

Factors for e

xecutive compensation:-

(1)complexity of the job

(2)capacity to pay

(3)education and experience

(4)performance

(5)economic environment

(6)legislation




Essentials for sound wage and salary system:-

(1)internal equity

(2)external competitiveness

(3)built in incentive

(4)link with productivity

(5)maintaining real wages

(6)increment

assignment unit 4

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