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Smart Ways to Compensate Employees

Smart Ways to Compensate Employees
Compensate Employees to Sustain Their Motivation Motivation is a big factor for consideration when it comes to retaining your employees. The employees have to be compensated for what they do for an organization – hold on folks, besides the salary prerequisites, there are many other things which help in retaining them in the company and sustain their motivation. #Direct Compensation: Employees expect fair wages commensurate with their skills, experience and job content. Wages should be ascertained keeping in mind the cost of living in the particular locality. These should be revised periodically to account for inflation so that the real wages do not go down over the time. Wages must have a system of yearly increments, which should be flexible enough to reward good performance. Legal Perspective: In India, the #Minimum Wages Act, 1948 provides for fixation and enforcement of minimum wages in respect of scheduled employments. A tripartite Committee Viz., “The Committee on Fair Wage” was set up in 1948 to provide guidelines for wage structures in the country. Article 39 states that the State shall, in particular, direct its policy towards securing (a) that the citizen, men and women equally shall have the right to an adequate livelihood and (b) that there is equal pay for equal work for both men and women.  #Fringe Benefits: These are also termed as indirect compensation that an organization provides to its employees which may include – insurance against accident, travel concessions, medical facilities, subsidized meals, uniforms, housing etc. The #Finance Act, 2005 has introduced a new chapter VII-H, ‘Income-tax on Fringe Benefits’. The Chapter now brings to tax the fringe benefits collectively enjoyed by the employees and which cannot be attributed to individual employees. The Fringe Benefit Tax is to be borne by the Employer. #Promotion: Employees expect to improve their position in the hierarchy over the time. This improvement in position is called promotion. It immensely helps an employee to feel important and useful to the firm. It enhances his/her status within and outside the organization. Through promotion, he/she looks forward to accomplishing more challenging tasks, including participation in the decision making process. Out of 440 million workers in India, 93% of the workers are in the unorganized sector. The contributions made by the unorganized sector to the national income, is very substantial as compared to that of the organized sector. It adds more than 60% to the national income while the contribution of the organized sector is almost half of that depending on the industry. In India, only about 8% of workers actually get the benefits available under various labor Acts. The rest 92% work in the unorganized sector, and either are not eligible for coverage. #Job Security: One main reason why people are reluctant to join small enterprises even at higher salaries is their ‘apprehension’ about ‘job security’. An enterprise that is able to dispel such apprehension benefits substantially in the long run. #Working Conditions: One primary cause of dissatisfaction of workers is ‘the quality of their working life’ which includes Reasonable hours of work A work place Tea breaks Provisions for a room for recreation, lunch etc. Availability of safety equipment and first aid facilities, and Water cooler, lavatory etc. These things may not improve #productivity, but will help in preventing job dissatisfaction among workers. The #management must also ensure that cordiality and friendliness is maintained between the workers. An environment should be created in which the superiors and senior employees and workers develop mutual respect for each other. The Ministry of Labor, Government of India and Labor Departments of the States and Union Territories are responsible for safety and health of workers. Directorate General of...
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Grading Your Employees’ Performance

Grading Your Employees’ Performance
How to Grade Your Employees on Their Performance Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. Organizational Development: Organizational Development denotes an overall and comprehensive development of an organization supported by the entire team of employees working for that organization. A useful technique in the management process that serves as a measure of performance and productivity is “performance evaluation” or performance appraisal. Performance refers to the degree of accomplishment of the task that makes up an individual’s job. Performance appraisal serves the following purpose: To assess the present levels of employee performance. To understand the future needs in training and development based on the strengths and weaknesses of the employees. To provide feedback on their performance. Serves as a basis for reward allocation, such as, increase in pay scale, promotions and many other decisions like, confirmations, transfer, demotion etc. , Establishes performance standards and offers scope for improvement. Acts as a motivational tool for workers to perform better. Checks and facilitates employees who exhibit poor performance. Also assesses behavioral pattern of the employees. People who work for big corporate companies identify themselves with the objectives of the company and expect feedback, either in the form of a compliment or criticism. Compliments act as morale boosters to perform better and criticism though initially might puncture the ego, induces the potential to perform, to prove oneself. Managers should never be reluctant on their part to appraise subordinates on the job expectations and demands. In an activity as important as managing, there must be no pitfalls to measure performance as accurately as possible. The Appraisal Process: The next important aspect in the appraisal process would be deciding the content to be appraised. Individual task outcomes where performance is evaluated on the outcomes delivered by the individuals, evaluation of personal characteristics and traits or behavior are done to rate the employees as to where they stand in terms of performance. Appraisal Techniques: The widely used managerial technique in the appraisal process is evaluating performance against verifiable objectives, which truly makes sense, because the employees would be blind folded if they don’t have the right direction to proceed. Evaluation can be done in a comprehensive, periodic or continuous fashion. It all depends on the nature of work done, company practice and other situational factors. Say, for instance, performance review can be done after the completion of a major project, that makes sense, doesn’t it? Periodical reviews: Formal reviews can be supplemented and supported with frequent and short informal reviews, for the superior- subordinate relationship to prosper and to keep communication channels open. All said and done, performance review based on verifiable objectives, although gives better vision and clarity, doesn’t allow the manager or subordinate to grow individually. It does not help in personality development, the emphasis ever being focused on accomplishing the operating objectives. The 360 Degree Apparaisal: The latest approach of performance evaluation is the 360 degree appraisal that well suits the managerial cadre. It provides for performance feedback from the full circle of daily contact, that a manager might have, ranging from customers, peers, subordinates, boss etc. , This also fits into organizations that have introduced teams, employee participation and total quality management...
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Scope and Characteristics of HRM

Scope and Characteristics of HRM
Scope and Characteristics of HRM 1. Personnel aspect: concerned with manpower planning, recruitment, selection, placement, transfer, promotion, training and development, lay off and retrenchment, remuneration, incentives, productivity, etc.; 2. Welfare aspect; dealing with working conditions and provision of amenities such as canteens, crèches, rest and lunch rooms, housing, transport, medical assistance, education, health, safety, recreation facilities, etc.; and 3. Industrial Relations aspect: the legal part which covers union-management relations, joint consultation, collective bargaining, grievance redress and disciplinary procedures, settlement of disputes, etc. Small Business Management and Marketing Essentials CHARACTERISTICS OF HUMAN RESOURCE MANAGEMENT: 1. It is an art and a science: The art and science of HRM is indeed very complex. HRM is both the art of managing people by recourse to creative and innovative approaches; it is a science as well because of the precision and demanding application of theory that is required. 2. It is pervasive: Development of HRM covers all levels and all categories of people, and management and operational staff. No discrimination is made between any levels or categories. All those who are managers have to perform HRM. It is pervasive also because it is required in every department of the organisation. All kinds of organisations, profit or non-­profit making, have to follow HRM. 3. It is a continuous process: First, it is a process as there are number of functions to be performed in a series, beginning with human resource planning to recruitment to selection, to training to performance appraisal. To be specific, the HRM process includes acquisition (HR planning, recruitment, selection, placement, socialisation), development (training and development, and career development), utilisation (job design, motivation, performance appraisal and reward management), and maintenance (labour relations, employee discipline, grievance handling, welfare, and termination). Second, it is continuous, because HRM is a never-ending process. 4. HRM is a service function: HRM is not a profit centre. It serves all other functional departments. But the basic responsibility always lies with the line managers. HRM is a staff function – a facilitator. The HR Manager has line authority only within his own department, but has staff authority as far as other departments are concerned. 5. HRM must be regulation-friendly: The HRM function has to be discharged in a manner that legal dictates are not violated. Equal opportunity and equal pay for all, inclusion of communities in employment, inclusion of tribal’s  and farmers in the benefits and non-violation of human rights must be taken care of by the HRM. 6. Interdisciplinary and fast changing: It is encompassing welfare, manpower, personnel management, and keeps close association with employee and industrial relations. It is multi- disciplinary activity utilising knowledge and inputs from psychology, sociology, economics, etc. It is changing itself in accordance with the changing environment. It has travelled from exploitation of workers to treating them as equal partners in the task. 7. Focus on results: HRM is performance oriented. It has its focus on results, rather than on rules. It encourages people to give their 100%. It tries to secure the best from people by winning the whole hearted cooperation. It is a process of bringing people and organization together so that the goals of each are met. It is commitment oriented. 8. People-centred: HRM is about people at work both as individuals and a group. It tries to help employees to develop their potential fully. It comprises people-related functions like hiring, training and development, performance appraisal, working environment, etc. HRM has the responsibility of building human capital. People are vital for achieving organizational goals. Organizational performance depends on the quality of people and employees. 9. Human relations philosophy: HRM is a philosophy and the basic assumption is that employees are human beings and not a factor of production like...
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Recruitment

Recruitment
Recruitment Process Recruitment refers to that process carried on by the company to attract suitable candidates possessing the appropriate characteristics to help the organization reach its objectives. According to Byars and Rue, “recruitment involves a pool of people from which qualified candidates for job vacancies can be chosen.” The basic purpose is to develop a group of potentially qualified people. Recruitment Policy: The policies of recruitment are derived from the personnel policies of the organization where the company has to give due importance to government reservations, quotas, policies regarding sons of the soil, personnel policies of other organizations regarding merit, internal sources, social responsibility in absorbing minority sections, women etc. Sources of Recruitment: INTERNAL SOURCES: This include 1.       Present permanent employees 2.       Present temporary/ casual employees 3.       Retrenched or retired employees 4.       Dependents of deceased, disabled, retired and present employees. Why internal source is considered to be a better choice? To motivate the present employees To improve the morale aspect “Known devils are better than unknown angels”-The credibility of the present employees are well known and they can                be judged easily  Loyalty and sense of belongingness is there on the part of current employees  The employees become highly committed when they are given a chance as they tend to shoulder more responsibility  Employees’ psychological needs, economic needs for promotion and higher income can be satisfied  Cost of selection can be minimized  Similarly cost of training, induction, orientation, period of adaptability to the organization gets reduced  Trade unions are happy  Social responsibility towards the employees are discharged  Good understanding and co-operation extended by co-workers  Stability of employment is assured EXTERNAL SOURCES: 1.       Educational and training institutes 2.       Private employment agencies/exchanges 3.       Public employment exchanges 4.       Professional associations 5.       Data banks 6.       Casual applicants 7.       Similar organizations 8.       Trade Unions 9.       Social media networking sites like Facebook and Linked in offer a huge platform for both recruiters and job seekers to find the best possible match.  Why external source is considered to be a better choice? · The suitable candidates with skill set, knowledge and talent are generally available · Latest knowledge, skill, innovations or creative talent can be infused into the organization · Candidates can be selected without any pre- conceived notions or reservations · The cost shelled out for these external sources are minimum since they are placed in minimum pay scale · Expertise, excellence and experience in other organizations can be easily brought into the organization · Human resources mix can be balanced with different background, experience, skill etc. · Existing personnel will also broaden their personality · Quality of human resource will improve in the long run by development of unique culture RECRUITMENT TECHNIQUES: The management has to contact the prospective employees through various means and stimulate them for applying to the post prescribed. A. Promotions: This is a good technique to stimulate internal employees as they will be willing to shoulder more responsibilities if they are assured of promotions B. Transfer: If employees are transferred to the places of their choice, it will stimulate them C. Recommendations of the present employees: Management can contact, persuade the outsiders to apply for job in the organization through the recommendations to the candidates by the present employees, trade unions etc. D. Scouting: This is another way of recruiting where the representatives of a particular organization are sent to various sources of recruitment to motivate the prospective candidates to apply for the jobs. The representatives provide the necessary information about the company and clarify doubts of the candidates. E. Advertising: Though the popular and widely accepted way of recruitment, still it proves to be one-way communication. Newspapers, Magazines of all types, television and internet are the possible sources of advertising channels and internet marketing leads the rest. The technique of advertising should...
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Objectives and Functions of HRM

Objectives and Functions of HRM
Objectives and Functions of HRM Human Resource Management is very challenging because of the dynamic nature of the people and it is not only managing men but involves administering a social system. According to Dale Yoder “Man power management is the function or activity in directing working men and women in maximizing their satisfaction in employment.” George R. Terry says, “Personnel management is concerned with the obtaining and maintaining of a satisfactory and satisfied work force.” OBJECTIVES OF HUMAN RESOURCE MANAGEMENT: 1. Social Objectives:   a) Facing the challenge of unemployment and providing people with maximum employment opportunities is the first and foremost priority of countries like India where there is pressure of population growth. b) The employees must be able to derive maximum satisfaction from the work performed. c) The system should facilitate harmony and co-operative endeavor for one and all. 2. Personal Objectives: Job satisfaction and rewards in the form of pay, promotion and recognition is aimed at, on the part of employees. This can be achieved by providing adequate remuneration, opportunities for advancement, facilities for training and development, job security and proper work. 3. Enterprise Objectives: This can be achieved by selecting the right people for the right job, empowering them through training, development and participation. FUNCTIONS OF HUMAN RESOURCE MANAGEMENT:  1. Planning: Assessment of future man power requirement is done with the help of man power inventory chart followed by the recruitment and selection process. A clean job description is needed to lure people with the right skills for the right position. It is the responsibility of the manager of a firm to lay down specifications of the qualities and skills required by the workers and determining sources from where the workers are to be recruited. Selection is done by means of written test and personal interviews. 2. Organizing: This involves proper designing of organizational structure, the inter relationship between jobs, establishing smooth channels of communication, assignment of authority, responsibility and creating accountability, establishing line and staff relationship etc. 3. Directing: Issuing orders and instructions down the line and motivating the work force to carry out those instructions satisfactorily. Positive motivation in the form of financial and non-financial incentives, a good working environment is essential on the part of the management. 4. Controlling: The motive is to ensure that performance of each worker coincides with the plans or standards. Bench marking, Total quality management and Six sigma are some of the popular concepts of standardization. → Scope and Characteristics of...
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