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HUMAN RESOURCE MANAGEMENT

Name RATI BHAN

Roll No. 511022630

Program MBA

Subject HUMAN RESOURCESMANAGEMENT [Set 1]

Code MB0043LearningCentre

IICM KINGSWAY CAMP

RATI BHAN, MBA (1ST SEM), SUBJECT CODE-MB043, SET-1 Page 18/27/2010

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Q.1 Training refers to the process of imparting specific skills.Training need analysis is required for effective trainingprogram. Explain in detail, all the three factors of Thayer and

McGhee model of identify training needs.

Ans:- Given the investment that organizations make in training it is criticalfor organizations to ensure that the money is rightly spent. Training needsconsider both the organizations demands and that of the individuals.Diversification of product lines, new technology, and hence a new kind ofjob or a shift in organizational culture or ways of conducting business arecommon organizational needs that cover most employees in the company.On the other hand demands that pertain to individuals growth anddevelopment, including induction training for new hires, or trainingnecessitated by job rotation due to an organizations internal mobility

policies are examples of individual need based training.

The model we shall examine here is the Thayer and McGhee model. It isbased on the following three factors:

1. Organization analysis

2. Task analysis

3. Individual analysis

Organization Analysis

Total Organization Analysis is a systematic effort to understand exactlywhere training effort needs to be emphasized in an organization. It involvesa detailed analysis of the organization structure, objectives, humanresources and future business plans, and an understanding of its culture.

The first step in organization analysis is establishing a clear understandingof both short-run and long-run business and people goals. Long-termobjectives are the broad directions in which the organizations would moveover a long duration. These long-term objectives are then broken down into

specific strategies and short-term goals for each of the units/departments.In an organization, the cumulative effect of all these would ultimately leadto the long-term goal. Short-term goals are constantly in need ofadaptation to the changing environment, both external and internal.


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For an organization analysis, there are three essential requirements: (1) anadequate number of employees available to ensure fulfillment of thebusiness operation; (2) that employee performance is up to the requiredstandard; and (3) that the working environment in their units/departmentsis conducive to fulfillment of tasks.

In order to ensure the first two requirements a human resource inventoryneeds to be made. Data regarding positions, qualifications, vacancies,replacements and training time required for replacements have to beworked out. Job standards must also be worked out.

Various efficiency and productivity indexes, or ratios such a productivityratios, cost per unit etc, can be worked out to determine not only efficiencybut also adequacy, in terms of under-manning or over-manning, of theworkforce.

An important dimension of organizational need-based analysis, is thediagnosis of the state of the organization "climate" or culture. Whilerules, procedures, systems and methods all contribute to the making of theenvironment, much of it is also determined by the attitude that the"people" have in the organization-for instance, the attitude that topmanagement has towards its subordinate staff and the attitudes thatmembers have towards work, Managers and company procedures. Theseattitudes are learnt, they result from the persons experience both withinand outside the organization, and training inputs could be used to effectchanges of attitude and consequently of the organizational climate.

In analyzing the organization climate, both direct and indirect methodscould be used. Direct methods are observation, use of questionnaires, andinterviews. Reliance or indirect methods would not give a clearunderstanding of the attitudes and predispositions of employees. In fact,factors such as low absenteeism and low turnover are not by themselvesindicators of positive or negative attitudes, and high or low morale. It wouldbe better to make a careful analysis and study each indicator in aparticular situation in conjunction with more direct methods like attitudesurveys. Analysis and interpretation of the data may give clear clues notonly to attitudinal training needs but possibly also to kill training needs.

Task Analysis

This activity entails a detailed examination of each job, its components, itsvarious operations and the conditions under which it has to be performed.The focus here is on the "task" itself and the training required to perform it,


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rather than on the individual. Analysis of the job and its variouscomponents will indicate the skills and training required to perform the jobat the required standard.

Standard of Performance: Every job has an expected standard of

performance (SOP). Unless such standards are attained, not only will inter-related jobs suffer, but organizational viability will be affected, and so willthe expectations that have been set for that particular job itself. If thestandards set for the performance of a job are known, then it is possible toknow whether the job is being performed at the desired level of output ornot. Knowledge of the "task" will help in understanding what skills,knowledge and attitudes an employee should have.

Methods: If an employee is asked to perform a job, the exact componentsof the job and the standard of performance must be known. Task analysisentails not merely a simple listing of the various job components, but also

of the various sub-tasks. Conventional methods of job analysis are usuallysuitable for task analysis. They are:

1. Literature review regarding the job.

2. Job performance.

3. Job observation,

4. Data Collection regarding job interviews.

For blue-collar employees, more precise industrial-engineering techniques,like time and motion studies, could be used, and for white-collaremployees, work sampling observation, interviews, and job performancedata analysis could be employed. The focus in task analysis approach toidentifying training needs is with the clear objective of enhancing theperformance standard of a given task. This information is then utilised toestablish the training programme for the employee. It helps identify theskill required, either in terms of education or training, to perform the job,knowledge, and finally attitudinal pre-dispositions such as the attitudes,towards safety, or interpersonal competence that will ensure that the job isperformed optimally.

Individual Analysis

Individual analysis is the third component in identifying training needs. Thefocus of individual analysis is on the individual employee, his abilities, and


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the inputs required for job performance, or individual growth anddevelopment in terms of career planning.

The common source for this needs analysis usually forms parts of theperformance assessment process. Clues to training needs can also come

from an analysis of an individuals or a groups typical behavior. Theprimary sources of such information are:

(1) Observation at place or work, examination of job schedules, quantum ofspoilage, wastage, and clues about interpersonal relations of theemployees; (2) interviews with superiors and employees; (3) comparativestudies of good vs. poor employees, to identify differences, skills andtraining gaps; (4) personnel records; (5) production reports; and (6) reviewof literature regarding the job and machines used. Job-knowledge tests,work sampling and diagnostic psychological tests also provide informationabout employees.

Q.2 India is considered as the leading emerging economy. Indiasorganizational success is rooted in its culture; bring out Indianculture and historical perspective to HRM. Write a brief note onHuman relations movement in India.

Ans :- Human Relations Movement

Kautilya provides an account of the techniques of human resourcesmanagement as early as 4th century B.C. in the "Artha-Shastra". As per the

book, there existed logical procedures and principles in organizing labournamely the Shreni or guild system and in the principles of the co-operativesector. The wages were in terms of quantity and quality of work turned outand punishment for unnecessarily delaying the work or spoiling it. Thewriting of Kautilya provides an excellent discussion on staffing andpersonnel management, including the detailing of what today are called jobdescriptions, qualifications for jobs, methods of selection, employee andsupervisor development, formally established incentive methods (Sarasa-saama- daana- bheda- danda- catura, the Carrot and Stick approach) andeven the science of performance evaluation. The guild system waspioneered and closely followed by the establishment of the co-operative

sector of craftsmen and traders organizing themselves to promote theirprofessional interests. Numerous professional societies were similarlyformed each establishing systematic procedures and policies to nurturetheir own interests.


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Significantly, these practices also respected the principles of the division oflabour, which can easily be traced to the caste system that even today is ainseparable part of the Indian cultural system. The society got divided into

Individuals engaging themselves in activities such as teaching, sacrifice or

state management were designated as Brahmins

While those specializing in fighting were termed as Kshatriyas.

Individuals engaged in the areas of trade, business and agriculture werecalled Vaishyas and

Those devoting themselves in manual work were known as Shudras.

Herein hereditary facilitated the transfer of skills and training from onegeneration to another. Quickly even specialised skills became hereditary

suchas goldsmiths, weavers, potters, blacksmiths, carpenters, hunters,charioteers, snake charmers, architects, sculptors, armourers identified asseparate communities by themselves. Between the employer andemployees justice and equity laid a sound foundation for successfulenterprise.

During the medieval period, India experienced aggressions for around 700years, during the Mughal rule. While trade and commerce flourished,majority of the artisans and the craftsmen remained poor and lived simplelives compounded by the large and joint family system that prevailed. Lowwages, oppressive political conditions and poor physique characterised the

workplace. Nothing significantly changed during the British rule.Oppression and poor working conditions prevailed in all industries andintensified in the tea estates that were the key focus of the British forobvious reasons that tea was a key export product.

This prevailed till the enactment of the Factory Act of 1881. This coincidedwith the waves of industrialization and urban growth that India witnessed.The Act brought about the first set of formal guidelines and rules that theindustries had to comply with. Workers employed in the factories wereallowed a week off-day and provisions were made for supervision, qualityand hours of work. Sadly the act also established the minimum age of

children for employment to be seven years and the maximum workinghours for them to not exceed seven hours a day and only in the day-shift.

This set the stage for the organization of employees to ensure fair workand pay and in 1890, the first labour organization Bombay Mill Hands


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Association was established. In 1905, the printers Union at Calcutta and in1907, the Postal Union at Bombay were established. The Madras LabourUnion was organized thereafter in 1918. The Central Labour Board wasestablished in 1922 to bring together the different unions in the Bombaycity and the All India Trade Union Congress was organized. The formal

implementation of the Indian Trade Unions Act took place in 1926, onemore landmark in the history of industrial relations in the country. Therewas a large scale expansion of the trade union movement after the SecondWorld War especially after the independence. The union-governmentinteractions significantly stepped up to accommodate for the removal ofthe war-time restrictions on strikes, formation of three more central labourorganizations and the competition among them and the use of adjudicationrather than collective bargaining techniques to resolve issues. In 1960, 45percent of the total industrial workforce was claimed to be unionised.Today, the total membership is estimated to be around 4.3 million i.e., 28percent of total workforce.

The post-independence period also marked the formation of the PersonnelDepartment in different public and private sectors. Under the Factories Act,1948, employers had to employ a Welfare Officer in a factory employing500 or more workers. Similarly the Mines Act, 1952, empowers theGovernment to specify employment of welfare officer/officers. Whilewelfare constituted a large part of the responsibilities of the Personneldepartment, there were other tasks and responsibilities that were assignedas well.

The responsibilities included other varied functions including the

employment of suitable people, workplace safety and driving awareness,training and wage and salary administration. The Personnel departmenthowever operated in a somewhat isolated manner and executed tasks asassigned by the head of the organization / core business teams. Theinteractions with the other heads of departments were limited and only ona need-based rationale.

In the past two decades the workforce in India has evolved rapidly toemerge as a nation of intelligent, skilled and highly aware and matureprofessional, who stand shoulder-to-shoulder with the professional from theworld over. The workplace is an equitable one which believes in the values

of respect for the individual and aspiration to be the best in the world. Therole of the Human Resources function can no longer be ignored orsidelined. It is viewed as a strategic partner and has found a place at thetop management table. The Head of Human Resources function is selectedwith as much care and attention as the CEO and is consulted in all business


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decisions, irrespective of its direct/ indirect implications to humanresources. Being a HR professional is a conscious decision that a individualtakes early in his / her life and pursues it with dedication and commitment.

Human relations movement in

Human relations movement in India has evolved very differently ascompared to what we see in the developed economies of the USA and theUK. What is currently acting as a limitation is the enhanced awareness onthe need for research based HRM practices. While there is a lot of workhappening in the Indian education system to promote this, it is going totake a while before it can create a distinct body of knowledge that isreference-able. For now the industry relies on emulating westerns HRpractices and customizing on a as-needed basis for the Indian corporation.For the rest the Industry forums and consortiums like the NASSCOM act asa hub bringing together organizations on a regular basis to discuss

challenges and share best practices and identify ways and means toovercome them together. So far this has been successful and working tothe advantage of the Indian corporate. Leading MNC research andconsulting firms like Mercer and Hewitt too contribute to the industrythrough carrying out research and sharing reports on a regular basis. Theapproach however remains analytical and less prescriptive.

Q.3 A company is being set up by a group of 3 professionals. Thebusiness objective is to sell mobile phones of a Chinese companywhich has come up with an inexpensive range of handset rangingfrom Rs.1200 to Rs.7000. They need to submit a human resource

plan to their investors. Explain the process of Human ResourcePlanning system for this company, which covers all importantsteps needed for HRP.

Ans :- Thus, it will be noted that manpower planning consists inprojecting future manpower requirements and developing manpower plansfor the implementation of the projections.

A company is being set up by a group of 3 professionals. Thebusiness objective is to sell mobile phones of a Chinesecompany which has come up with an inexpensive range ofhandset ranging from Rs.1200 to Rs.7000.

Human Resource Planning


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Human resource or manpower planning is the process by which amanagement determines how an organization should move from its currentmanpower position to its desired manpower position. Through planning, amanagement strives to have the right number and the right kind of peopleat the right places, at the right time, to do things which result in both the

organization and the individual receiving the maximum long-rangebenefit".

The organizations business plan to invest in a particular product/market ora service will drive the HRP activity towards hiring to meet the businessneed. In the event an organization is divesting or shutting down aparticular business unit or a manufacturing division the HRP activitieswould focus on the redeployment of the workforce that will be renderedunemployed as a result of the business decision. An organization wantingto retain its current market share and revenue projection at status quowould be supported by HRP activities that are limited to only filling

positions falling vacant due to natural organizational attrition. Hence theHRP focus in a organizations is closely linked to the business plan and actsas a bridge between what an organization wishes to achieve and how it willgo about achieving it w.r.t. the human resources requirements.

The scope of HRP is futuristic in nature and usually runs parallel to theannual business planning exercise. It commences prior to the start of thecompanys new financial year. For example if the business year for acompany runs April to March. The business planning and the HRplanning activities for the New Year beginning in April is usuallycompleted and in place by the 1st week of April. Once the HR plan is

in place it is broken up into a quarterly or even a monthly plan which thenis the input for the recruitment team to go and hire accordingly.

Steps in Human Resource Planning:

The Human Resource Planning process consists of a set of activities, viz.

a) Forecasting: manpower requirements, either by using mathematicaltools to project trends in the economic environment and development inindustry, or in by using simple judgmental estimates based on the specificfuture business plans of the company;

b) Creating an inventory: of present manpower resources and assessingthe extent to which these resources are employed/ optimally;


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c) Identifying:manpower problems by projecting present resources intothe future to determine their adequacy, both quantitatively andqualitatively; and

d) Planning:the necessary programs of requirement selection, training,

development, utilization, transfer, promotion, motivation and compensationto ensure that future manpower requirements are properly met.

Q.4 Organizations hire candidate through various sources. Discussall the possible sources of recruitment. ?

Ans :- RecruitmentRecruitment and selection is the process of identifying the need for a job,defining the requirements of the position and the job holder, advertisingthe position and choosing the most appropriate person for the job.Retention means ensuring that once the best person has been recruited,they stay with the business and are not poached by rival companies.

The Recruitment Sources in the recruitment process are the sources ofcandidates. Generally, the HRM Function recognizes two main sources ofcandidates for the job positions: internal and external sources ofcandidates.

The internal recruitment sources : are very important, but they cannotbe used to fill every vacancy in the organization. It is very important torealize, that in many organization, the internal recruitment is divided intotwo separate processes: internal recruitment and promotions. Thepromotion is the move of the employee when the organization initiates thewhole process. The real internal recruitment is than a move of theemployee initiated by the employee him or herself.

The external recruitment sources : bring job candidates from theexternal environment using different techniques. The oldest, but still prettyefficient is a newspaper job advertisement. Many HRM Professionals do notbelieve in the power of the newspaper advertising, but for many jobs it isstill one of the best techniques with the best cost/income ratio.

The modern recruitment source: fully managed by the organization isthe web job advertisement. It is very cheap, but it can flood theorganization with many useless job resumes. This can make the finaldecision almost impossible. The cost/income ratio is always attractive, butthe success rate can be really low.


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The other external recruitment sources :are the recruitment agenciesand executive search companies. Their services are not cheap, but theorganization does not have to handle all that job resumes and the goodagency also makes follow ups of the job candidates in the recruitment

process.

A very special kind of the recruitment source :is the referralrecruitment, when the employees are paid to provide the organization withtheir friends as potential employees. This can look strange, but it canprovide the organization with many interesting candidates, who are notreachable via any other recruitment source.

INTERNAL RECRUITMENT

Internal sources of Recruitment: -

1. Present Permanent Employees: -Organizations consider the candidates from this source for higher level ofjobs due to availability of most suitable candidates for jobs relatively orequally to external sources, to meet the trade union demands and due tothe policy of the organization to motivate the present employees.2. Present temporary/casual Employees: -Organizations find this source to fill the vacancies relatively at the lowerlevel owing to the availability of suitable candidates or trade unionpressures or in order to motivate them on present job.3. Retrenched or Retired Employees: -Employees retrenched due to lack of work are given employment by the

organization due to obligation, trade union pressure etc. Sometimes theyare re-employed by the organization as a token of their loyalty to theorganization or to postpone some interpersonal conflicts for promotion.4. Dependents of Deceased, Disabled, retired and presentemployees: -Some organizations function with a view to developing the commitmentand loyalty of not only the employee but also his family members.5. Employee Referrals: -Present employees are well aware of the qualifications, attitudes,experience and emotions of their friends and relatives. They are also awareof the job requirements and organizational culture of their company. As

such they can make preliminary judgment regarding the match betweenthe job and their friends and relatives.Campus Recruitment:These candidates are directly recruited by the Company from theircollege/educational institution. They are inexperienced as far as work


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experience is concerned.6. Private Employment Agencies/Consultants: -Public employment agencies or consultants like ABC Consultants in Indiaperform recruitment functions on behalf of a client company by chargingfees. Line managers are relieved from recruitment functions and can

concentrate on operational activities.7. Public Employment Exchanges: -The Government set up Public Employment Exchanges in the country toprovide information about vacancies to the candidates and to help theorganization in finding out suitable candidates. As per the EmploymentExchange act 1959, makes it obligatory for public sector and private sectorenterprises in India to fill certain types of vacancies through publicemployment exchanges.8. Professional Organizations: -Professional organizations or associations maintain complete bio-data oftheir members and provide the same to various organizations on

requisition. They act as an exchange between their members andrecruiting firm.9. Data Banks: -The management can collect the bio-data of the candidates from differentsources like Employment Exchange, Educational Training Institutes,candidates etc and feed them in the computer. It will become anothersource and the co can get the particulars as and when required.10. Casual Applicants: -Depending on the image of the organization its prompt responseparticipation of the organization in the local activities, level ofunemployment, candidates apply casually for jobs through mail or

handover the application in the Personnel dept. This would be a suitablesource for temporary and lower level jobs.11. Similar Organizations: -Generally experienced candidates are available in organizations producingsimilar products or are engaged in similar business. The Management canget potential candidates from this source.12. Trade Unions: -Generally unemployed or underemployed persons or employees seekingchange in employment put a word to the trade union leaders with a view togetting suitable employment due to latter rapport with the management.13. Walk In: -

The busy organization and rapid changing companies do not find time toperform various functions of recruitment. Therefore they advise thepotential candidates to attend for an interview directly and without a priorapplication on a specified date, time and at a specified place.14. Consult In: -


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The busy and dynamic companies encourage the potential job seekers toapproach them personally and consult them regarding the jobs. Thecompanies select the suitable candidates and advise the companyregarding the filling up of the positions. Headhunters are also called searchconsultants.

15. Body Shopping: -Professional organizations and the hi-tech training develop the pool ofhuman resource for the possible employment. The prospective employerscontact these organizations to recruit the candidates. Otherwise theorganizations themselves approach the prospective employers to placetheir human resources. These professional and training institutions arecalled body shoppers and these activities are known as body shopping. Thebody shopping is used mostly for computer professionals. Body shopping isalso known as employee leasing activity.16. Mergers and Acquisitions: -Business alliances like acquisitions, mergers and take over help in getting

human resources. In addition the companies do also alliances in sharingtheir human resource on adhoc basis.17. E-recruitment: -The technological revolution in telecommunications helped theorganizations to use internet as a source of recruitment. Organizationsadvertise the job vacancies through the worldwide wed (www). The jobseekers send their applications through e-mail using the Internet.18. Outsourcing: -Some organizations recently started developing human resource pool byemploying the candidates for them. These organizations do not utilize thehuman resources; instead they supply HRs to various companies based on

their needs on temporary or ad-hoc basis.

EXTERNAL RECRUITMENTExternal sources of Recruitment: -1. Press AdvertisementsAdvertisements of the vacancy in newspapers and journals are a widelyused source of recruitment. The main advantage of this method is that ithas a wide reach

2. Educational Institutes

Various management institutes, engineering colleges, medical Colleges etc.are a good source of recruiting well qualified executives, engineers,medical staff etc. They provide facilities for campus interviews andplacements. This source is known as Campus Recruitment


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3. Placement AgenciesSeveral private consultancy firms perform recruitment functions on behalfof client companies by charging a fee. These agencies are particularlysuitable for recruitment of executives and specialists. It is also known asRPO (Recruitment Process Outsourcing)

4. Employment ExchangesGovernment establishes public employment exchanges throughout thecountry. These exchanges provide job information to job seekers and helpemployers in identifying suitable candidates

5. Labour contractorManual workers can be recruited through contractors who maintain closecontacts with the sources of such workers. This source is used to recruitlabour for construction jobs

6. Unsolicited ApplicantsMany job seekers visit the office of well-known companies on their own.Such callers are considered nuisance to the daily work routine of theenterprise. But can help in creating the talent pool or the database of theprobable candidates for the organization

7. Employee referrals / RecommendationsMany organizations have structured system where the current employeesof the organization can refer their friends and relatives for some position intheir organization. Also, the office bearers of trade unions are often awareof the suitability of candidates. Recruitment Management can inquire

these leaders for suitable jobs. In some organizations these are formalagreements to give priority in recruitment to the candidates recommendedby the trade union.

8. RECRUITMENT AT FACTORY GATEUnskilled workers may be recruited at the factory gate these may beemployed whenever a permanent worker is absent. More efficient amongthese may be recruited to fill permanent vacancies.

Q.5 Write short notes on:

A. MBO

Management by Objectives (MBO) is a process in which a manager and anemployee agree upon a set of specific performance goals, or objectives,and jointly develop a plan for reaching them. The objectives must be clear

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and achievable, and the plan must include a time frame and evaluationcriteria. For example, a salesperson might set a goal of increasingcustomer orders by 15 percent in dollar terms over the course of a year.

MBO is primarily used as a tool for strategic planning, employee

motivation, and performance enhancement. It is intended to improvecommunication between employees and management, increase employeeunderstanding of company goals, focus employee efforts uponorganizational objectives, and provide a concrete link between pay andperformance. An important factor in an MBO system is its emphasis on theresults achieved by employees rather than the activities performed in theirjobs.

Implementing an MBO Program

To be successful, an MBO program should be part of a small business's

overall system of planning and goal setting. The first step in implementingMBO is to establish long-range company goals in such areas as sales,competitive positioning, human resource development, etc. A smallbusiness owner may find it helpful to begin by defining the company'scurrent business and looking for emerging customer needs or markettrends that may require adaptation. Such long-range planning provides aframework for charting the company's future staffing levels, marketingapproaches, financing needs, product development focus, and facility andequipment usage.

The next step in establishing an MBO system is to use these long-range

plans to determine company-wide goals for the current year. Then thecompany goals can be broken down further into goals for differentdepartments, and eventually into goals for individual employees. As goal-setting filters down through the organization, special care must be taken toensure that individual and department goals all support the long-rangeobjectives of the business. Ideally, a small business's managers should beinvolved in formulating the company's long-range goals. This approachmay increase their commitment to achieving the goals, allow them tocommunicate the goals clearly to employees, and help them to create theirown short-range goals to support the company goals.

At a minimum, a successful MBO program requires each employee toproduce five to ten specific, measurable goals. In addition to a statement ofthe goal itself, each goal should be supported with a means ofmeasurement and a series of steps toward completion. These goals shouldbe proposed to the employee's manager in writing, discussed, and

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approved. It is the manager's responsibility to make sure that all employeegoals are consistent with the department and company goals. The manageralso must compare the employee's performance with his or her goals on aregular basis in order to identify any problems and take corrective actionas needed.

Formulating goals is not an easy task for employees, and most people donot master it immediately. Small business owners may find it helpful tobegin the process by asking employees and managers to define their jobsand list their major responsibilities. Then the employees and managers cancreate a goal or goals based upon each responsibility and decide how tomeasure their own performance in terms of results. In the Small BusinessAdministration publication Planning and Goal Setting for Small Business,Raymond F. Pelissier recommended having employees create a miniaturework plan for each goal. A work plan would include the goal itself, themeasurement terms, any major problems anticipated in meeting the goal,

a series of work steps toward meeting the goal (with completion dates),and the company goal to which the personal goal relates.

Small business owners may also find it helpful to break down employeegoal setting into categories. The first category, regular goals, would includeobjectives related to the activities that make up an employee's majorresponsibilities. Examples of regular goals might include improvingefficiency or the amount and quality of work produced. The secondcategory, problem-solving goals, should define and eliminate any majorproblems the employee encounters in performing his or her job. Anothercategory is innovation, which should include goals that apply original ideas

to company problems. The final category is development goals, whichshould include those goals related to personal growth or the developmentof employees. Dividing goal setting into categories often helps employeesthink about their jobs in new ways and acts to release them from thetendency to create activity-based goals.

Another requirement for any successful MBO program is that it provide fora regular review of employee progress toward meeting goals. This reviewcan take place either monthly or quarterly. When the review uncoversemployee performance that is below expectations, managers should try toidentify the problem, assign responsibility for correcting it, and make a

note in the MBO files.

Small Business Owner Involvement


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Given that MBO represents an unusual way of thinking about jobperformance for many employees, small business owners may find it bestto introduce MBO programs gradually and to include a formal trainingcomponent. A small business's managers can be introduced to MBOthrough a classroom seminar taught by the small business owner or by an

outside consultant. Either way, it is important that the managers beallowed to express any doubts and reservations they may have, and thatthe training include preparation of an actual goal by each participant.When MBO is brought back to the small business, it may be best to startslowly, with each employee only preparing a few goals. This approach willallow employees to learn to prepare goals that are achievable, developways to measure their own performance, and anticipate problems that willprevent them from attaining their goals.

Another factor determining the success of MBO programs is the directinvolvement of the small business owner. Pelissier noted that the small

business owner needs to champion the MBO system from the beginning, aswell as set an example for the company's managers, in order for it tosucceed. Since managers have a natural tendency to focus their attentionupon their own functions rather than on the goals of the overallorganization, it can be difficult to educate them about MBO. It is alsoimportant for the small business owner to remain patient during theimplementation phase: in fact, Pelissier claimed that it may take three tofour years before an MBO program creates quantifiable results in a smallbusiness. As David Dinesh and Elaine Palmer indicated in their article forManagement Decision, partial implementation is one of the major potentialproblems associated with MBO programs.

Implemented correctly, however, MBO can provide a number of benefits toa small business. For example, MBO may help employees understand howtheir performance will be evaluated and measured. In addition, by allowingthem to contribute to goal setting, it may increase the motivation andproductivity of a small business's employees. MBO also stands to provide asmall business's employees with the means to prioritize their work on adaily basis. Although employee performance evaluation is still a complextask under an MBO system, MBO can also provide an objective basis forevaluation. However, it is important to note that an employee's failure tomeet reestablished goals can be attributed to many things besides

personal failure. For example, the failure to meet goals could result fromsetting the wrong objectives, not taking into account company restrictionsthat may impinge upon performance, establishing an improper measures ofprogress, or a combination of all of these factors.

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Overall, establishing an MBO system in a small business may be difficult,but it is usually worth it. The most difficult aspect of implementing MBOmay be simply getting people to think in terms of results rather thanactivities. Even when an MBO system is implemented well, a small businessmay encounter problems. For example, employees may set low goals to

ensure attainment. Similarly, managers' objectives may focus on theattainment of short-term rather than long-term goals. Finally, employeesand managers alike may fall victim to confusion and frustration. Some ofthe most common reasons for the failure of an MBO program include a lackof involvement among the top management of a small business,inadequate goal setting on a company-wide basis, implementation of anMBO system that occurs too rapidly, or the failure to instruct a company'smanagers and employees in the basics of MBO. But even thoughestablishing an MBO program may be problematic, it can also offersignificant rewards to small businesses.

B. 360 Degree

360 Degree Appraisal

Typically, performance appraisal has been limited to a feedback processbetween employees and Managers. However, with the increased focus onteamwork, employee development, and customer service, the emphasishas shifted to employee feedback from the full circle of sources depicted in

the diagram below. This multiple-input approach to performance feedbackis sometimes called "360-degree assessment" to connote that full circle.

The 360 degree matrix

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There are no prohibitions in law or regulation against using a variety ofrating sources, in addition to the employees Manager, for assessingperformance. Research has shown assessment approaches with multiplerating sources provide more accurate, reliable, and credible information.For this reason, HR Management supports the use of multiple rating

sources as an effective method of assessing performance for formalappraisal and other evaluative and developmental purposes.

The circle, or perhaps more accurately the sphere, of feedback sourcesconsists of Managers, peers, subordinates, customers, and ones self. It isnot necessary, or always appropriate, to include all of the feedback sourcesin a particular appraisal program. The organizational culture and missionmust be considered, and the purpose of feedback will differ with eachsource. For example, subordinate assessments of a Managers performancecan provide valuable developmental guidance, peer feedback can be theheart of excellence in teamwork, and customer service feedback focuses

on the quality of the teams or agencys results. The objectives ofperformance appraisal and the particular aspects of performance that areto be assessed must be established before determining which sources areappropriate.

We shall discuss the contributions of each source of ratings and feedback.In addition, precautions are listed to consider when designing aperformance management program that includes 360-degree assessment.

Superiors: Evaluations by superiors are the most traditional source ofemployee feedback. This form of evaluation includes both the ratings of

individuals by Managers on elements in an employees performance planand the evaluation of programs and teams by senior managers

Q.6 Hawthorne study has played a critical role in human resourcedevelopment: Elucidate the Hawthorne study and explain itscontribution to human relations movement.

Ans.The Hawthorne effect is a form ofreactivity whereby subjectsimprove or modify an aspect of their behavior being experimentally

measured simply in response to the fact that they are being studied, not inresponse to any particular experimental manipulation.

The term was coined in 1955 by Henry A. Landsberge when analyzing olderexperiments from 1924-1932 at the Hawthorne Works (a Western Electric

http://en.wikipedia.org/wiki/Reactivity_(research)http://en.wikipedia.org/wiki/Hawthorne_Workshttp://en.wikipedia.org/wiki/Western_Electrichttp://en.wikipedia.org/wiki/Reactivity_(research)http://en.wikipedia.org/wiki/Hawthorne_Workshttp://en.wikipedia.org/wiki/Western_Electric

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factory outside Chicago). Hawthorne Works had commissioned a study tosee if its workers would become more productive in higher or lower levelsof light. The workers' productivity seemed to improve when changes weremade and slumped when the study was concluded. It was suggested thatthe productivity gain was due to the motivational effect of the interest

being shown in them. Although illumination research of workplace lightingformed the basis of the Hawthorne effect, other changes such asmaintaining clean work stations, clearing floors of obstacles, and evenrelocating workstations resulted in increased productivity for short periods.Thus the term is used to identify any type of short-lived increase inproductivity

The term gets its name from a factory called the Hawthorne Works, wherea series of experiments on factory workers were carried out between 1924and 1932.

This effect was observed for minute increases in illumination.

Evaluation of the Hawthorne effect continues in the modern era.

Most industrial/occupational psychology and organizational behaviortextbooks refer to the illumination studies. Only occasionally are the rest ofthe studies mentioned In the lighting studies, light intensity was altered toexamine its effect on worker productivity

Contiribution Human Relations Movement refers to those researchersoforganizational development who study the behavior of people in groups,

in particular workplace groups. It originated in the 1930s' Hawthornestudies, which examined the effects ofsocial relations, motivation andemployee satisfaction on factory productivity. The movement viewedworkers in terms of their psychology and fit with companies, rather than asinterchangeable parts.

"The hallmark of human-relation theories is the primacy given toorganizations as human cooperative systems rather than mechanicalcontraptions."

George Elton Mayo stressed the following:

1. Natural groups, in which social aspects take precedence overfunctional organizational structures

2. Upwards communication, by which communication is two way, fromworker to chief executive, as well as vice versa.

http://en.wikipedia.org/wiki/Hawthorne_Workshttp://en.wikipedia.org/wiki/Organizational_developmenthttp://en.wikipedia.org/wiki/Group_behaviourhttp://en.wikipedia.org/wiki/Hawthorne_effecthttp://en.wikipedia.org/wiki/Hawthorne_effecthttp://en.wikipedia.org/wiki/Social_relationhttp://en.wikipedia.org/wiki/Motivationhttp://en.wikipedia.org/w/index.php?title=Employee_satisfaction&action=edit&redlink=1http://en.wikipedia.org/wiki/Productivityhttp://en.wikipedia.org/wiki/Psychologyhttp://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Cooperationhttp://en.wikipedia.org/wiki/George_Elton_Mayohttp://en.wikipedia.org/wiki/Organizational_structurehttp://en.wikipedia.org/wiki/Communicationhttp://en.wikipedia.org/wiki/Hawthorne_Workshttp://en.wikipedia.org/wiki/Organizational_developmenthttp://en.wikipedia.org/wiki/Group_behaviourhttp://en.wikipedia.org/wiki/Hawthorne_effecthttp://en.wikipedia.org/wiki/Hawthorne_effecthttp://en.wikipedia.org/wiki/Social_relationhttp://en.wikipedia.org/wiki/Motivationhttp://en.wikipedia.org/w/index.php?title=Employee_satisfaction&action=edit&redlink=1http://en.wikipedia.org/wiki/Productivityhttp://en.wikipedia.org/wiki/Psychologyhttp://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Cooperationhttp://en.wikipedia.org/wiki/George_Elton_Mayohttp://en.wikipedia.org/wiki/Organizational_structurehttp://en.wikipedia.org/wiki/Communication

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3. Cohesive and good leadership is needed to communicate goals andto ensure effective and coherent decision making

(Wilson & Rosenfeld, Managing Organizations, McGraw Hill Book Company,London, p.9.)

It has become a concern of many companies to improve the job-orientedinterpersonal skills of employees. The teaching of these skills to employeesis referred to as "soft skills" training. Companies need their employees tobe able to successfully communicate and convey information, to be able tointerpret others' emotions, to be open to others' feelings, and to be able tosolve conflicts and arrive at resolutions. By acquiring these skills, theemployees, those in management positions, and the customer canmaintain more compatible relationships.

http://en.wikipedia.org/wiki/Leadershiphttp://en.wikipedia.org/wiki/Decision_makinghttp://en.wikipedia.org/wiki/Leadershiphttp://en.wikipedia.org/wiki/Decision_making

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