College of Accountancy

INTRODUCTION TO HUMAN RESOURCE MANAGEMENT

By:
PROF. MARINO D. UMALI
Lecturer, Entrepreneurship, Management and Allied Subjects

Contents

+ HRM Concepts and Its Definition

+ Importance of HRM
+ Functions of HRM

Introduction:

Students are introduced to the management of an organization's workforce through the design
and implementation of effective human resources policies and procedures. Current Philippines
issues and practices are examined. Topics include the need for human resources management and
its growing professionalism; human resource planning including job design and analysis;
recruitment and selection; compensation; employee development; workplace health and safety;
and employee relations.

Human resource management over the years has served many purposes within an organization.
From its earliest inception as a primarily compliance-type function, it has further expanded and
evolved into its current state as a key driver of human capital development. In the book HR From
the Outside In (Ulrich, Younger, Brockbank, Younger, 2012), the authors describe the evolution
of HR work in “waves”

Wave 1 focused on the administrative work of HR personnel, such as the terms and
conditions of work, delivery of HR services, and regulatory compliance. This administrative side
still exists in HR today, but it is often accomplished differently via technology and outsourcing
solutions. The quality of HR services and HR’s credibility came from the ability to run
administrative processes and solve administrative issues effectively.

Wave 2 focused on the design of innovative HR practice areas such as compensation,

learning, communication, and sourcing. The HR professionals in these practice areas began to
interact and share with each other to build a consistent approach to human resource management.
The HR credibility in Wave 2 came from the delivery of best-practice HR solutions.

Wave 3 HR, over the last 15–20 years or so, has focused on the integration of HR
strategy with the overall business strategy. Human resources appropriately began to look at the
business strategy to determine what HR priorities to work on and how to best use resources. HR
began to be a true partner to the business, and the credibility of HR was dependent upon HR
having a seat at the table when the business was having strategic discussions.

In Wave 4, HR continues to be a partner to the business, but has also become a

competitive practice for responding to external business conditions. HR looks outside their
organizations to customers, investors, and communities to define success—in the form of
customer share, investor confidence, and community reputation. HR’s credibility is thus defined
in terms of its ability to support and drive these external metrics. Although each “wave” of HR’s
evolution is important and must be managed effectively, it is the “outside in” perspective that
allows the human resource management function to shine via the external reputation and
successes of the organization.
Exhibit 11.2 Evolution of HR Work in Waves (Attribution: Copyright Rice University,

The nature and scope of human resource management include the identification of human
resources needs, the assessment of available resources, the placement and retention of employees,
and the development and management of employee records. It also includes the provision of
training and development opportunities, as well as the creation of a positive work environment.

The ultimate goal of Human Resource Management is to ensure that the people working in a
company can contribute to its success.

Learning outcomes

 Develop the knowledge, skills and concepts needed to resolve actual human resource
management problems or issues.
 Manage the employment relationship, which is a shared responsibility between
employers, management, human resources specialists, and employees.
 Identify the human resources needs of an organization or department.
 Conduct a job analysis and produce a job description from the job analysis.
 Evaluate the procedures and practices used for recruiting and selecting suitable
employees.
 Assess training requirements and design a successful orientation and training program.
 Discuss workplace health and safety programs and the roles of the employer and the
employee in enforcing health and safety policies and procedures.
 Explain the responsibilities of management, HRM specialists, managers, and employees
in managing the employment relationship in a unionized or a non-unionized environment.

Human Resources Management has four main objectives:

1. To ensure that the company has the right number of employees with the right skills;
2. To ensure that employees are paid fairly and receive the benefits they are entitled to;
3. To ensure that employees are working in a safe and healthy environment;
4. To ensure that employees are motivated and productive.

These objectives are achieved through a variety of activities, including recruitment,

selection, induction, training and development, performance management, and health and safety
management.
 A. HRM Concepts and Its Definition

Human resource are an organization greatest assets.

Human Resource Management (HRM) is a collective term for all the formal systems
created to help in managing employees and other stakeholders within a company. Human
resource management is tasked with three main functions, namely, the recruitment
and compensation of employees, and designating work.

All other resources get connected through men.

Ideally, the role of HRM is to find the best way to increase the productivity of an
organization through its employees. Despite the ever-increasing rate of change in the corporate
world, the HRM role is not likely to change in a significant way.

To make them deliver they need to be a properly selected, properly trained and properly
motivated.

Meaning:

According to Byers & Rue – HRM is the function facilitating the most effective use of
people to achieve both organization and individual goals.

According to Michael Jucious - HRM is that field of management which deals with
planning, organizing, and controlling the functions of procuring, developing, maintaining and
utilizing a labour force such that organizational and individual goals are fulfilled.

HRM is a process of acquiring, training, appraising, and compensating employees such

that they are motivated to achieve both the organizational and individual goals.

B. IMPORTANCE OF HRM

Importance of human resources can be discussed at four levels:

 1. Corporate
HRM can help an enterprise in the following ways: attracting talent through effective
human resource program, developing necessary skills and attitude with training, securing
cooperation through motivation and retaining talent through the right policies.

2. Professional
HRM helps improve quality of work life and contribute to growth in the following ways:
opportunities for personal development, motivating work environment, proper allocation of work,
healthy relationship between individual and groups.

3. Social
Society benefits from good HRM in many ways: good employment opportunities,
development of human capital, generation of income and consumption and better lifestyles.

4. National
Drivers of development of a country, and deliver economic growth.

C. FUNCTION OF HRM
The process of HRM consists of 4 basic functions:
a. Acquisition of human resources – process of identifying and employing people
possessing required level of skills

For Organizational Goals, certain INPUTS are needed such as:

• Financial Resources.
• Physical Resources.
• Human Resources. For this topic our focus will be on Human Resources.
• Organization does not own people, unlike other resources, so this hardly meets proper
care and attention.
And at the same time humans are the most important assets.

There are few steps involved in acquisition of Human resources:

HUMAN RESOURCE PLANNING

• It is also known as Man Power Planning(MPP.)
• HRP is a process of FORECASTING, DEVELOPING and Controlling Human
resources in an organization.
• To have Right Numbers and right type of people at right place, which are capable of
finishing the task.
• HRP ascertains where the organization is and where it is going and what are the
implications of these assessments on future supplies and demand for human resources
and match them accordingly.
• According to Bealty and Schneider, HRP is a sequential process with five elements:
1. Input in HRP process.
2. Analysis of existing HR.
3. Forecast of future HR.
4. Implementation of HRP.
5. Evaluation and Re-Design of HRP.
Collection of Information, pertaining Corporate Objective, annual targets,
1. growth plans etc.
2. Forecasting Manpower Requirement.
3. Preparation of Inventory.
4. Matching Process (Manpower with manpower needs).
5. Preparation of plan.
6. Approval of HR plan.
7. Review of HR plan.

Thank you .. profmarckus

 1

College of Accountancy

DEVELOPMENT OF HUMAN RESOURCES

By:

PROF. MARINO D. UMALI

INTRODUCTION
Frederick Taylor, known as the father of scientific management, played a significant role in the
development of the personnel function in the early 1900s. In his book, Shop Management, Taylor
advocated the "scientific" selection and training of workers. He also pioneered incentive systems that
rewarded workers for meeting and/or exceeding performance standards. Although Taylor's focus
primarily was on optimizing efficiency in manufacturing environments, his principles laid the ground-
work for future HRM development. As Taylor was developing his ideas about scientific management,
other pioneers were working on applying the principles of psychology to the recruitment, selection,
and training of workers. The development of the field of industrial psychology and its application to the
workplace came to fruition during World War I, as early vocational and employment-related testing
was used to assign military recruits to appropriate functions. The Hawthorne Studies, which were
conducted in the 1920s and 1930s at Western Electric, sparked an increased emphasis on the social
and informal aspects of the workplace. Interpretations of the studies emphasized "human relations"
and the link between worker satisfaction and productivity. The passage of the Wagner Act in 1935
contributed to a major increase in the number of unionized workers. In the 1940s and 1950s, collective
bargaining led to a tremendous increase in benefits offered to workers. The personnel function evolved to
cope with labor relations, collective bargaining, and a more complex compensation and benefits
environment. The human relations philosophy and labor relations were the dominant concerns of HRM in
the 1940s and 1950s. HRM was revolutionized in the 1960s by passage of Title VII of the Civil Rights Act
and other anti-discrimination legislation—as well as presidential executive orders that required many
organizations to undertake affirmative action in order to remedy past discriminatory practices. Equal
employment opportunity and affirmative action mandates greatly complicated the HRM function, but
also enhanced its importance in modern organizations. As discussed more fully in a later section, these
responsibilities continue to comprise a major part of the HRM job. Finally, changes in labor force
demographics, technology, and globalization since the 1980s have had a major impact on the HRM
function. These factors also are discussed in more detail in a later section.

Meaning:

Is the process of improving, moulding and changing the skills, knowledge of the employee.

Human resource development helps organizations develop their workforce through

employee training and career development which improves organizational effectiveness and
performance.
Human resource development may include many different opportunities, activities, and
employee benefits, such as:
Performance management and development
Employee coaching
Mentoring
Succession planning
Tuition assistance
Organizational development
 2

Remember:

The focus of all aspects of Human Resource Development is on developing a

superior workforce so that the organization and its individual employees can accomplish
their work goals in service to customers.

Milestones in the Development of Human Resource Management

1890- 1910
Frederick Taylor develops his ideas on scientific management. Taylor advocates scientific selection
of workers based on qualifications and also argues for incentive-based compensation systems to
motivate employees.

1910- 1930
Many companies establish departments devoted to maintaining the welfare of workers. The discipline of
industrial psychology begins to develop. Industrial psychology, along with the advent of World War I,
leads to advancements in employment testing and selection.

1930- 1945
The interpretation of the Hawthorne Studies' begins to have an impact on management thought and
practice. Greater emphasis is placed on the social and informal aspects of the workplace affecting worker
productivity. Increasing The job satisfaction of workers is cited as a means to increase their productivity.
1945- 1965
In the U.S., a tremendous surge in union membership between 1935 and 1950 leads to a greater
emphasis on collective bargaining and labor relations within personnel management. Compensation and
benefits administration also increase in importance as unions negotiate paid vacations, paid holidays, and
insurance coverage.

1965- 1985
The Civil Rights movement in the U.S. reaches its apex with passage of the Civil Rights Act of 1964.
The personnel function is dramatically affected by Title VII of the CRA, which prohibits discrimination on
the basis of race, color, sex, religion, and national origin. In the years following the passage of the CRA,
equal employment opportunity and affirmative action become key human resource management
responsibilities.

1985- present
Three trends dramatically impact HRM. The first is the increasing diversity of the labor force, in terms
of age, gender, race, and ethnicity. HRM concerns evolve from EEO and affirmative action to
"managing diversity." A second trend is the globalization of business and the accompanying technological
revolution. These factors have led to dramatic changes in transportation, communication, and labor
markets. The third trend, which is related to the first two, is the focus on HRM as a "strategic" function.
HRM concerns and concepts must be integrated into the overall strategic planning of the firm in order
to cope with rapid change, intense competition, and pressure for increased efficiency.

HRM DEVELOPMENT AND IMPLEMENTATION RESPONSIBILITIES

While most firms have a human resources or personnel department that develops and implements
HRM practices, responsibility lies with both HR professionals and line managers. The interplay
between managers and HR professionals leads to effective HRM practices. For example, consider
performance appraisals. The success of a firm's performance appraisal system depends on the ability of
both parties to do their jobs correctly. HR professionals develop the system, while managers provide
the actual performance evaluations. The nature of these roles varies from company to company,
depending primarily on the size of the organization. This discussion assumes a large company with a
sizable HRM department. However, in smaller companies without large HRM departments, line
 3

managers must assume an even larger role in effective HRM practices. HR professionals typically assume
the following four areas of responsibility: establishing HRM policies and procedures,
developing/choosing HRM methods, monitoring/evaluating HRM practices, and advising/assisting
managers on HRM- related matters. HR professionals typically decide (subject to upper-management
approval) what procedures to follow when implementing an HRM practice. For example, HR
professionals may decide that the selection process should include having all candidates (1) complete an
application, (2) take an employment test, and then (3) be interviewed by an HR professional and line
manager.

Usually the HR professionals develop or choose specific methods to implement a firm's HRM practices.
For instance, in selection the HR professional may construct the application blank, develop a
structured interview guide, or choose an employment test. HR professionals also must ensure that the
firm's HRM practices are properly implemented. This responsibility involves both evaluating and
monitoring.

For example,
HR professionals may evaluate the usefulness of employment tests, the success of training programs,
and the cost effectiveness of HRM outcomes such as selection, turnover, and recruiting. They also
may monitor records to ensure that performance appraisals have been properly completed.

HR professionals also consult with management on an array of HRM- related topics. They may
assist by providing managers with formal training programs on topics like selection and the law, how
to conduct an employment interview, how to appraise employee job performance, or how to effectively
discipline employees. HR professionals also provide assistance by giving line managers advice about
specific HRM- related concerns, such as how to deal with problem employees.

Line managers direct employees' day-to-day tasks. From an HRM perspective, line managers are
mainly responsible for implementing HRM practices and providing HR professionals with necessary
input for developing effective practices. Managers carry out many procedures and methods devised by
HR professionals. For instance, line managers:

The development of HRM procedures and methods often requires input from line managers. For
example, when conducting a job analysis, HR professionals often seek job information from managers
and ask managers to review the final written product. Additionally, when HR professionals determine
an organization's training needs, managers often suggest what types of training are needed and who, in
particular, needs the training.

EMPLOYEES TRAINING

Equips with skills and knowledge required to perform their job role effectively. And the benefits of
these are increase employee productivity and job satisfaction.

is defined as a planned set of activities for imparting knowledge to employees, such that it leads to
a growth in job skills required for organizational growth. These could be technical, vocational, or
management skills.

Note that employee training isn’t the same as learning and development (L&D) Opens a new
window . While employee training is more production-centric and aimed at problem-solving, L&D is a
multilayered approach that facilitates a larger human resource development Opens a new window program
within the organization. Employee training is a short-term endeavor and focused primarily on improving
the production capacity of the organization, be it product or service.

For example, learning how to use a new software will fall under employee training. On the other
hand, learning a new programming language (with certifications/degrees) will come under the company’s
L&D program.
Better performance is the most obvious benefit of training – but there are several others as well.
 4

What Are the Benefits of Employee Training and Development?

1. Training has always been central to the employee experience, particularly in labor-intensive
industries such as manufacturing or education. In these sectors, employees need highly specific hard skills
to perform optimally in the workplace.

2. The need for employee training becomes more intense when we consider the impact of digital
transformation. Even in roles where occasional training was deemed sufficient, there is a clear need for
upskilling to sustain relevance

PwC’s survey Opens a new window of 22,000+ workers found that 53 & percent; believe that their
jobs will change/become obsolete due to automation. 77&per cent; said that they would have to learn new
skills or retrain entirely. Worryingly, 34&percent; of those without education/training beyond secondary
school aren’t learning digital skills fast enough.
To address this requirement, companies are investing heavily in employee training and development

Benefits to the employee

1. Targeted upskilling, reducing the effort needed to do the same job
2. Acquiring skills that can be useful even after one leaves the company
3. Increased compensation as a result of promotions via regular training
4. Nurturing of leadership potential, opening up new career possibilities
5. Increased productivity per employee, boosting revenue margins
6. Transferable knowledge leads to a snowballing effect where peers can teach peers, making the
process more cost-effective and collaborative
7. Fewer accidents in the workplace, lowering penalties and fines
8. Easier implementation of new tools as employees are trained on digital literacy
9. Bridging educational gaps, particularly or those without a college degree

These are some of the key benefits of employee training and development. Overall, it creates a safer,
more productive workplace where employees are confident about their capabilities. Companies can spend
less on new hires and operational supervisors, and managers do not have to continuously micromanage
their teams.

MANAGEMENT DEVELOPMENT

“Management development is the development of management done over and above its science and
theory, of its practice and application in organizations, corporations and institutions, alike in relation to
the organization and manager, so as to re-equip both to fulfill their purposes more effectively and in
harmony with each other and both with the environment in which they function and have their being and
hope to thrive upon and grow. (Nusrat Khan)
‘
Definition:
Management development is a systematic process through which managers develop their abilities
to manage. this process, managers get to learn more and increase their knowledge as well as they get to
improve their skills which benefit them as well as their organization. The role played by the organization
in management development is the establishment of programs and opportunities which will help in
development of their existing potential managers. Management development embraces the entire process
by which managers learn, progress and improve their competence to perform managerial tasks

MANAGEMENT DEVELOPMENT ACTIVITIES

1. Encourage growth and career development of employees as stated in the Philosophy of Human
Resource Management
 5

2. Improve skills and knowledge that can be immediately applied at work

3. Increase motivation and job satisfaction

4. Create a network of colleagues for problem-solving and support

5. Promote communication and planning throughout campus and department networks.

MANAGEMENT DEVELOPMENT APPROACHES WHICH WORK

Implementing an extensive management development program can be an expensive business. The
cost failure are high, not just financially but also for the credibility of those responsible for administering
and delivering it. A poorly executed management development can also seriously damage management
perceptions of the value of training. Clearly, getting it right is a pretty crucial issue.

1. Research has shown us that the factors which most typically contribute to the failure of
management development programs are as follows:

2. The program is design purely from the organization’s viewpoint, with a little or no though to
what’s in it for the individual involved.

3. The program is totally prescriptive and makes no allowance for flexibility in either its content or its
delivery.

4. The program makes unrealistic time demands

5. The program has a highly developed theoretical content, but provides little in the way of guidance
or support to help participants practice using these theories or apply them in the workplace.

6. The program context is derived from what trainers want to teach rather than from any real
understanding of what managers within the organization need to know and do.

Critical design issues would from management experience appear to be:

1. Flexibility – in the learning topics which can be studied and the learning methods available.

2. Practically – in providing practical ,tried and tested test tools, techniques and strategies rather than just
theories and concepts

3. Integration – in combining learning activities as far as possible with actual problems and experience in
the workplace.

4. Ongoing support – in making advice and coaching available on an adhoc day to day basis required.

CAREER DEVELOPMENT
is defined as the efforts that are made by the organization to equip its employees with the skills,
knowledge and experience. Actually that help them to perform the duties of their current as well as future
jobs effectively. The organization develops and implements certain policies including counselling the
employees, promotion and opportunities. Specifically to attain excellence that facilitate the employee to
prepare their career.
Development of career actually promotes the knowledge, skills, and experiences along with the
behaviour modification. Along with the techniques of refinement that promotes the addition of value for
the employees by improving their work.
 6

In career development, Human Resource Management has the vital importance that centers the
entire efforts of the organization. It is relatively different from the training in such a way that it has wide
scope. Also longer frame of time and broader focus. Moreover the purpose of training is limited to the
performance improvements. However the goal of development is to make employees more capable and
enriched.

In modern days the careers development not only fulfills the needs of the organization but also the
needs of the employees. Career development is looked as essential by the organizations due to the
following reasons.
It is a method of prevention from job burnout
The career information is provided to the employees
The quality of work life is improved
Also the affirmative action goals are met
In short, career development becomes essential for the organizations to be sustained in the
competitive global environment.
Two types of career development
Formal career development. This includes short-term training programs, education,
certifications, workshops, or seminars that can help build skill sets for a particular job or
industry.

Informal career development. This includes mentorship opportunities, networking events,

online courses, internships, and volunteering experiences.

Career Development Methods

There are many methods that are used extensively for the purpose of careers development.
However mostly these are used in combination of more than one method. Following are the commonly
used methods of career development

Discussion with Knowledgeable Individuals

In this method the subordinate is combined with his superior to agree on the best career
development activities. Hence in certain cases guidance counselors and psychologists provide this service.
Moreover in case of academic institutions like colleges and universities, specialized career planning and
development guidance is provided to the students. Professors are usually responsible for such guidance.

Company Material
There are certain organizations that have developed certain specific material for the development
of its employees. The developed material is in accordance with the needs of the organizations. Moreover
the job descriptions can be considered as good material that show the employees. Actually to decide
whether their strengths and weaknesses match with the requirement of any offering job within their own
organization.

Performance Appraisal System

The performance appraisal system in the organizations can also be regarded as a good source of
career development. When the strengths and weaknesses of employees are discussed with their relative
supervisors than the needs for the development of employees emerged clearly. If there is no possibility to
overcome the weakness of a certain employee, then there can be a solution of an alternative career path
for that employee.

Workshops
Certain organizations offer the workshops for their employees that last for two or more days. So
that the employees can be able to develop their career within the organization. The career objectives are
described and matched by the employees with the needs of the organizations. In other situations, the
 7

workshops are presented at the community level. So that the employees may be sent or they may start the
visit themselves.

Personal Development Plans (PDP)

There are some organizations that encourage their employees to present their own plans of
personal development. Such a plan consists of a summary of needs of personal development of employees
along with the specified action list for the achievement. So the management encourages the employees to
analyze their weaknesses and strengths.
Besides these methods of careers development. There are some other ways too like specialized
software packages. Also special websites for career development. These all must be in your mind.

Challenges in the Career Development

It is a clear fact for the organizations to initiate career development for the employees. However
the main problem is that the clear form of such development cannot be easily determined. Following are
the three major challenges that come in the way of career development.

Who will be Responsible

It has been proved effective by many organizations that the employees should take active part in
the planning and implementation of personal development plans of the employees. There are certain
situations that bring change in the organizations. Such as the responsibility for personal development is
taken by employees themselves. Like acquisition, mergers, employee empowerment and downsizing.
However the general guidance should be provided to the employees to take necessary steps. Especially for
their career development both within and outside the organizations.

How much Importance is Sufficient

The effectiveness of an organization is seriously harmed by specifying too much importance on
career development. When employees are provided with extreme career orientations, they become more
responsive toward their image rather than towards their performance. For this purpose the manager should
adopt certain steps like deep focus on advancement opportunities, job performance versus socializing and
managing impressions.

Some of the serious side effects resulting from development programs.

Dissatisfaction of employees
Poor performance
Unrealistic expectations from advancement

SUMMARY
There are certain obstacles in the way of career development that the organizations should remove
for the career advancement of their employees. A government study conducted in the year 1991 shows
that the minorities and women are not given the proper career development opportunities like mentoring,
networking and participation in the committees of policy making.
So the organizations should design broad based career development programs that educate and
train minorities both men and women employees of the organizations. Moreover there is another category
of employees that need special focus by the management of the organizations and this group is related to
the dual career. The organizations should design flexible work schedules, care facilities and
telecommuting. There are certain organizations that counsel both in career development.

End of topic - prof marckus

 College of Accountancy

RECRUITMENT AND SELECTION

by:

PROF. MARINO D. UMALI

OUTLINE:
INTRODUCTION
MEANING OF RECRUITMENT
PURPOSE AND IMPORTANCE
FACTORS AFFECTING RECRUITMENT
SOURCE OF RECRUITMENT
PROCESS OF RECRUITMENT
METHODS OF RECRUITMENT
MEANING OF SELECTION SELECTION
BARRIER TO EFFECTIVE SECLECTION
DIFFERENCE BETWEEN RECRUITMENT AND SELECTION

INTRODUCTION:

People are integral part of any organization today. No organization can run
without its human resources. In highly complex and competitive situation, choice of right
person at the right place has reaching implications for an organization’s functioning.
Employee well selected and well placed would not only contribute to the efficient
running of the organization but offer significant potential for future replacement.

RECRUITMENT
Meaning of Recruitment
- According to Edwin B. Flippo, Recruitment is a process of searching for
prospective employees and stimulating them to apply for jobs of an Organization.

- Kempner said that recruitment forms the first stage in the process which
continues with selection and ceases with the placement of the candidates.

PURPOSE AND IMPORTANCE:

1. To determine the present and future requirement of the organization in
conjunction with its personnel planning and job analysis activities.
2. To increase the job pool of job candidates at minimum cost.
3. To help increase the success rate of the selection process by reducing the
number visibly under qualified or job application.
4. To help reduce the probability that job applicants, once recruited selected will
leave the organization only after it short period of time.
5. To meet the organizations legal and social obligation regarding the composition
of its workforce.
6. Being identifying and preparing potential job applicants who will be
appropriate candidates.
7. To increase organization individual effectiveness in the short term and long
term.
8. To evaluate the effectiveness of various recruiting technique and sources for all
types of job applicants.

FACTORS INFLUENCING RECRUITMENT:

There are number of factors that affect recruitment. These are broadly classified
into two categories: INTERNAL FACTORS AND EXTERNAL FACATORS
 INTERNAL FACTORS: also called “endogenous factors” are the factors within
the organization that affect recruiting personnel in the organization. Internal forces e.g.
the factors which can be controlled by organization are:
Recruitment Policy
Size of Organization
Human Resource Planning
Cost of Recruitment
Growth expansion

EXTERNAL FACTORS: the external forces are the forces which cannot be
controlled by the organization. The major external forces are:
Supply and Demand
Labour Market
Image/Goodwill
Political-Social -Legal Environment
Unemployment Rate
Competitors

SOURCES OF RECRUITMENT
The searching of suitable candidates and informing them about the openings in
the enterprise is the most important aspect of recruitment process. There are several
sources of recruitment and broadly classified into: EXTERNAL SOURCE AND
INTERNAL SOURCE

Internal sources: In Internal recruitment seeks applicants for the positions from
those who are currently employed. Internal sources include:
- Present Employee
* Transfer
* Promotion
- Employees Referrals
- Former Employees
- Previous Applicants

External Sources: far outnumber the internal sources. It includes:

- Profession or Trade Associations
-Advertisements
- Campus Recruitment
- Employment Exchanges
- Walk-ins, Write-ins and Talk-ins
- Consultants
- Contractors
- Displaced Persons
- Radio and Television
- Acquisitions and Mergers
- Competitors
- E- Recruiting
INTERNAL vs EXTERNAL SOURCES - ADVANTAGES AND DISADVANTAGES

INTERNAL SOURCE
ADVANTAGES DISADVANTAGES
It is less costly It perpetuates the old concept of doing
things
Candidates are already oriented towards It abets raiding
company.
Organizations have better knowledge about Candidates ‘current work may be affected
the internal candidates
 Enhancement of employee morale and Politics play a greater role.
motivation

Good performance is rewarded Morale problem for those not promoted

EXTERNAL SOURCES
ADVANTAGES DISADVANTAGES
Benefits of new skills, new talents and new Better morale and motivation associated
experiences to organizations. with internal recruiting is denied to the
company.
Compliance with reservation policy It is costly.
become easy
Scope for resentment, jealousies and Chances of creeping in false positive and
heartburn are avoided. false negative errors.
Adjustment of new employees to the
organizational culture takes longer time.

RECRUITMENT PROCESS
- involves a systematic procedure from sourcing the candidates to arranging and
conducting the interviews and requires many sources and time.

PERSONNEL EMPLOYEE
PLANNING JOB ANALYSIS
REQUISITION

RECRUITMENT
JOB PLANNING SEARCHING
VACANCIES NUMBERS ACTIVATION
TYPES - SELLING APPLICANT POTENTIAL
- MESSAGE POOL HIRES
- MEDIA

SCREENING
STRATEGY
DEVELOPMENT
- WHERE APPLICANT
-HOW POPULATION
- WHEN EVALUATION
& CONTROL

1. JOB ANALYSIS
Is a process to identify and determine in details the particular job duties and
requirements and the relative importance of these duties for a given job.
- is a process where judgment are made about the data collected on a job.

Job Analysis consists of two parts:

Job Description:
- is a list that a person might use for general tasks, or functions and
responsibilities of a position.
 Job Specification:
- is a statement of the essential components of a job class including
a summary of the work to be performed, primary duties and
responsibilities, and the minimum qualifications and requirements
necessary to perform the essential functions of the job.

2. RECRUITMENT PLANNING
The first involved in the recruitment process is planning. Here, planning involves
to draft:
- a comprehensive job specification for the vacant position,
- outlining the major and minor responsibilities,
- the skills,
- experience,
- and qualifications needed;
- grade and level of pay
- starting date whether a temporary or permanent
- mention of special conditions, if any, attached to the job to be filled.

3. STRATEGY DEVELOPMENT:
Once it is known how many with what qualifications of candidates are required,
the next step involved in this regard is to devise a suitable strategy for recruiting the
candidates in the organization.

4. SEARCHING
This step involves attracting job seekers to the organization. There are broadly
two sources used to attract candidates. These are internal sources and the external sources.

5. SCREENING
Though some view screening as the starting points of selection, we have
considered it as an integral part of recruitment. The reason being the selection process
starts only after the applications have been screened and shortlisted.

6. EVALUATION AND CONTROL

Given the considerable cost involved in the recruitment process, its evaluation and
control is therefore imperative.

The cost generally incurred in the a recruitment process include:

- salary of recruiters
- cost of time spent for preparing job analysis, advertisement
- administrative expenses
- cost of outsourcing or overtime while vacancies remain unfilled
- cost incurred in recruiting unsuitable candidates

METHODS OF RECRUITMENT
Dunn and Stephen have broadly classified methods of recruitment into three
categories.
1. Direct Method - in this method, the representatives of the organization are
sent to the potential candidates in the educational and training institutes. They
establish contacts with the candidates seeking jobs.
2. Indirect Methods - include advertisements in newspaper, on the radio and
television in professional journals, technical magazines, etc. This method is useful
when:
- Organization does not find suitable candidates to be promoted to fill up
the higher posts.
- when the organization wants to reach out to a vast territory and,
- when organization wants to fill up scientific, professional and technical
posts.
3. Third Party Methods - this include the use of private employment agencies,
management consultants, professional bodies/associations, employee
 referral/recommendations, voluntary organizations, trade unions, data banks,
labour contractors, etc. To establish contact with the job seekers.

EMPLOYMENT AGENCIES
One of the agencies that helps to find jobs for person seeking employment or
assist employers in finding person to fill position that are open.

INTEREST APLLICANTS
Candidates send in their applications to the management either through post or e-
mail or a person or through the companies website and express their interest in
employment with the company.

MEANING OF SELECTION
- According to STONE - is the process of differentiating between applicants in
order to identify and hire those with a greater likelihood of success in a job.

- Dale Yodev said that Selection is the process in which candidates for
employment are divided into to two classes. 1. those who are to be offered employment
and 2. those who are not.

SELECTION PROCESS
BARRIER OF SELECTION

The main objective of selection is to hire people having competence and

commitment. This objective is often defeated because of certain barriers. The
impediments to effective selection of people at work can be explained as under:
- Ineffective Recruitment
- Perception
- Stereotyping
- Gender Issue
- Age/Race Issue
- Halo Effects
- Quota
- Fairness
- Validity
- Reliability
-Pressure
- Nepotism/favoritism
- Cost and time
DIFFERENCE BETWEEN RECRUITMENT AND SELECTION

BASIS RECRUITMENT SELECTION

MEANING It is an activity of It is a process of picking up
establishing contact more competent and
between employers and suitable employees
applicants
OBJECTIVE It encourages large number It attempts at rejecting
of candidates for a job unsuitable candidates

PROCESS It is a simple process It is a complicated process

HURDLES The candidates have not to Many hurdles have to be

cross over many hurdles. crossed

ECONOMY It is an economical method It is expensive method

APPROACH It is a positive approach It is a negative approach

End of Discussion - profmarckus

 1

College of Accountancy

INDUCTION PROGRAMME OF THE NEW EMPLOYEE

by:

PROF. MARINO D. UMALI

INTRODUCTION:

The first two to three months of any new employee is very crucial for an
organization. It is the most vulnerable time when a new staff can leave the company as he
may not find properly engaged in the company. It is possible that he might not have been
properly inducted into the organization.
Earlier induction process as considered tedious, time consuming and an overall
waste of resources, but now employers and organization are taking the induction process
very seriously and consider it vital for employees retention.
There are specific companies who conducted excellent induction programs for
employees and make it highly engaging and interactive.

CONTENTS:

MEANING
DEFINITION
OJECTIVES
STEPS IN INDUCTION PROGRAMME
WHO & HOW DO THE INDUCTION
HOW TO CONDUCT INDUCTION SUCCESSFULLY
CONCLUSION

THE MEANING:

Induction ( orientation) is a process through which a new employee is introduced

to the job and the organization.
It is a technique by which a new employee is rehabilitated into his surroundings and
introduced to the practices, policies and the purposes of the organization.

An introduction programme is the process used within many business to welcome

new employees to the company and prepare them for their new role. Induction training
should included development of theoretical and practical skills but also meet interaction
needs that exist among them.

Induction is the process of introducing a new employee to him/her job to start his
work, Induction helps to reduce the anxiety of a new entrant in the organization and helps
him to feel a sense of people has been a common feature we come across in our everyday
life.

ACCORDING TO ARMSTRONG

Induction is the process of receiving and welcoming an employee when he first

joins a company and giving the basic information he needs to settle down quickly and start
work.
 2

ACCORDING TO EDWIN B. FLIPPO

Induction is the welcoming process to made the new employee feel at home and
generate in him a feeling of belongingness to the organization .

OBJECTIVES
1. To reduce the initial anxiety all new entrant feel when they join a new job in a new
organization.
2. To familiarize the new employees with the job, people, work place, work environment
and the organization.
3. To facilitate outsider-insider transition in an integrated manner.
4. To reduce exploitation by the unscrupulous co- workers.
5. To reduce the cultural shock faced in the new organization.

Example: Remember your own joining to you present College of Accountancy. On joining
the department, you may have been told about the College rules and regulations, the
procedure for academic activities such as sessional tests, assignments, seminar
presentation, summer training, semestral examination, papers to be taught with the names
of lecturers, etc.

PURPOSE OF INDUCTION OF NEW EMPLOYEES

1. Accommodating Employees
2. Becoming insider
3. Overcoming employees anxiety
4. Overcoming reality shock
5. Reducing employees turn over

STEPS IN INDUCTION PROGRAMME

Induction programme includes three steps:

1. General orientation – It includes guided tours in different departments of an
organization, introduction with fellow employees, supervisors and executives, information
about organizations mission vision, philosophy, achievements and future plans, etc.
2. Specific orientation – This is intended to help new employee to get familiar with their
new work environment. The supervisor or the departmental boss of the employee take him
on a round to his place of work and impart vocational guidance for his particular nature of
work.
3. Follow- up orientation - This orientation is conducted after some time of initial
induction of an employee. e..i. preferably within a period of of six month or so. The
purpose of such orientation is govern guidance and counsel to the employees to ensure that
they are reasonably satisfied to the organization.
 3

BENEFITS

1. A formal education programme may provide th following benefits to the new comer and
the organization.
A will designed induction programme reduces anxiety, nervousness and absenteeism and
employee turn over.
 4

2. An induction help to minimize the reality or cultural shock new employee undergo on
joining a new organization.

STEPS IN INDUCTION OF NEW EMPLOYEE

1. Welcome to the organization

2. Explain about the company
3. Show the department location when the new recruit will work
4. Give company’s manual to the new recruit
5. Give details about pay scales
6. Explain about the future training opportunities and career prospectus.
7. Clarify doubts be encouraging to employee to come out with questions.

WHO & HOW DO THE INDUCTION

1. HR department is responsible to execute the induction programme.
2. HR Manager or an HR representative conducts this programme.
3. Each industry/ sector develops its own procedure as per needs.

ORGANIZATIONAL ISSUES

* HISTORY OF THE COMPANY

* NAME AND TITLES OF KEY POSITIONS
* PROBATIONARY PERIOD
* PRODUCT/SERVICES OFFERED
* OVERVIEW OF THE COMPANY’S PROCEDURES
* DISCIPLINARY PROCEDURE

JOB DUTIES

* JOB LOCATIONS
* JOB TASKS
* JOB SAFETY NEEDS
* OVERVIEW OF JOBS
* JOB OBJECTIVES
* RELATIONSHIP WITH OTHER JOB

EMPLOYEES BENEFITS
* PAY SCALES
* VACATIONS, HOLIDAYS
* TRAINING AVENUES
* INSURANCE, MEDICAL AND RETIREMENT BENEFITS

HOW TO CONDUCT INDUCTION SUCCESSFULLY

1. A SYSTEMATIC PLAN SHOULD BE FOLLOWED.

2. A CHECK LIST OF POINTS TO BE INCLUDED IN INDUCTION SHOULD BE
PREPARED.
3. AN INDUCTION BOOKLET SHOULD BE PROVIDED.
4. ANYONE WHO IS PROMOTED, TRANSFERRED FROM ONE JOB TO ANOTHER
SHOULD BE ALSO INDUCTED.
5. THE AIM SHOULD BE TO CONVEY A CLEAR PICTURE OF THE WORKING OF
THE ORGANIZATION.
 5

CONCLUSION

In my words, Induction / Orientation play important role in the success of an

organization by acquainting an new employee to the new environment, rules and
regulations who in turn helps in better performance.

End of Lesson - [Link]

 College of Accountancy
MOTIVATION IN HUMAN RESOURCE MANAGEMENT
By:

PROF. MARINO D. UMALI

INTRODUCTION
To motivate people it is necessary to appreciate how motivation works. This means
understanding motivation theory and how the theory can be put into practice.

DEFINITIONS
Motivation refers to the internal and external forces that stimulate desire and energy in people to be
continually interested and committed to a job, role or subject or to make effort to gain a goal. Motivation
can also be defined as a state of mind filled with energy and enthusiasm which drives a person to
achieve a desired goal. (Chris Cebeller) Motivation is a process that initiates, guides and maintains goal
oriented behavior. According to Chaudthary and Sharma, Motivation is an interior drive that causes
a person to take action. According to Stephen P Robins, motivation is the willingness to exert
high levels of effort towards organizational goals.

TYPES OF MOTIVATION
There are two types of motivation; Intrinsic & Extrinsic motivation

Intrinsic motivation

Intrinsic motivation can arise from the self-generated factors that influence people’s behaviour. It is not
created by external incentives. It can take the form of motivation by the work itself when individuals feel
that their work is important, interesting and challenging and provides them with a reasonable degree of
autonomy (freedom to act), opportunities to achieve and advance, and scope to use and develop their
skills and abilities. Deci and Ryan (1985) suggested that intrinsic
motivation is based on the needs to be competent and self-determining (that is, to have a choice).
Intrinsic motivation can be enhanced by job or role design. According to an early writer on the
significance of the motivational impact of job design (Katz, 1964): „The job itself must provide sufficient
variety, sufficient complexity, sufficient challenge and sufficient skill to engage the abilities of the
worker.‟
 In their job characteristics model, Hackman and Oldham (1974) emphasized the importance of the core
job dimensions as motivators, namely skill variety, task identity, task significance, autonomy and
feedback.

Extrinsic motivation

Extrinsic motivation occurs when things are done to or for people to motivate them. These
include rewards, such as incentives, increased pay, praise, or promotion; and punishments, such as
disciplinary action, withholding pay, or criticism. Extrinsic motivators can have an immediate and
powerful effect, but will not necessarily last long. The intrinsic motivators, which are concerned with the
quality of working life (a phrase and movement that emerged from this concept), are likely to have a
deeper and longer-term effect because they are inherent in individuals and their work and not imposed
from outside in such forms as incentive pay.

MOTIVATIONAL FACTORS

There are several factors that motivate a person to work. The motivational factors can be broadly divided
into two groups:

MONETARY FACTORS:

Salaries or wages

Salaries or wages is one of the most important motivational factors. Reasonable salaries must be paid on
time. While fixing salaries the organization must consider such as: Cost of living Company ability to pay
etc.

Bonus:

It refers to extra payment to employee over and above salary given as an incentive. The employees must
be given adequate rate of bonus.

Incentives:

Incentives are motivators that are often monetary. The organization may also provide additional
incentives such as medical allowance, educational allowance etc.

Special individual incentives:

The company may provide special individual incentives. Such incentives are to be given to deserving
employees for giving valuable suggestions.

NON MONETARY FACTORS:

Status or job title:

By providing a higher status or designations the employee ought to be motivated. Employees prefer and
proud of higher designations.
Appreciation and recognition:

Employees must be appreciated for their services. The praise should not come from immediate superior
but also from higher authorities.

Delegation of authority:

Delegation of authority motivates a subordinate to perform the tasks with dedication and commitment.
When authority is delegated, the subordinate knows that his superior has placed faith and trust in him.

Working conditions:

Provision for better working conditions such as air-conditioned rooms, proper plant layout, proper
sanitation, equipment, machines etc, motivates the employees.

Job security:

Guarantee of job security or lack of fear dismissal, etc can also be a good way to motivate
the employees. Employees who are kept temporarily for a long time may be frustrated and may leave
the organization.

Job enrichment:

Job enrichment involves more challenging tasks and responsibilities. For instance an executive who
is involved in preparing and presenting reports of performance, may also asked to frame plans.

Workers participation:

Inviting the employee to be a member of quality circle, or a committee, or some other form of
employee participation can also motivate the work- force.

Cordial relations:

Good and healthy relations must exist throughout the organization. This would definitely motivate the
employees.

Good superiors:

Subordinates want their superiors to be intelligent, experienced, matured, and having a good
personality. In fact, the superior needs to have superior knowledge and skills than that of
his subordinates. The very presence of superiors can motivate the subordinates.

Other factors:

There are several other factors of motivating the employees:

Providing training to the employees.

Proper job placements.

Proper promotions and transfers.

Proper performance feedback.

Proper welfare facilities.

Flexible working hours.

MOTIVATION STRATEGIES

Motivation strategies aim to create a working environment and to develop policies and practices that
will provide for higher levels of performance from employees. These strategies are;

1. Set goals. Be sure they are realistic and achievable. Make then small to start.
2. Establish rewards for progress toward your goals.
3. Expect set-backs and when they happen, re-directed and renew your energy toward your goals.
Don't give up.
4. Use the power of positive thinking and believe in yourself. Overcome discouragement.
5. Tell others what you are trying to accomplish and seek support from loved ones.
6. Learn to say no to options and distractions that deter you from your goal. Obstacles are what
you see when you take your eyes off the goal.
7. Establish routine and regular exercises; meditation, prayer or yoga, even if it's only 15 minutes a
day to start. This will help you to cultivate discipline.
8. Use positive imagery to help you achieve your goals. Imagine yourself as you will be and feel
when your goal is achieved.
9. Spend time reflecting or talking to others about what has stopped to you from achieving your
goals in the past.
10. Post reminders and inspirational quotes in prominent places about what you want to achieve.
11. Get professional help and support to overcome physical and mental roadblocks(depression and
anxiety are just two examples) and to bolster your efforts, no matter how small they seem.
12. Practice extreme self-care. Good health is essential to positive thinking and feeling, which will
take you a long way toward achieving your goals.

NEED AND IMPORTANCE OF MOTIVATION

Motivation offers several importance to the organization and to the employees:

Higher efficiency

Reduce absenteeism.

Improves a corporate image.

Good relations.

Improved morale.

Reduced wastage and breakages.

Facilitates initiative and innovation.

CHARACTERISTICS OF MOTIVATION
 Motivation is a process of inspiring and energizing, reducing and activating employees for higher level of
performance. This process starts with unsatisfied needs, moves through tension, drives and goal
achievement, finally it ends with the reduction of tension aroused by unsatisfied needs. Motivation is a
continuous ongoing process rather than one short affair. Because an individual has unlimited wants and
needs. As soon as the need is fulfilled, another will appear. Hence motivation should go continuously
.Motivation is a complex subject in the sense that the individuals wants and needs maybe unpredictable.
The level of need of a person depends on his/her physiological aspects. Motivation should be directed
towards the achievements of stated goals and objectives. From the view point of organization, the goal is
to achieve high productivity through better job performance. By the term motivation, we mean positive
motivation which is related to the process of stimulating employees for good performance. But it is not
necessary that all the time motivation must be positive, rather sometimes it can be negative also. The
Negative motivation is also known as punishment which is not desired by employees. As motivation is
person specific, it is related with a personal behavior of an employee. Behavior is a series of activities
undertaken by an individual in the organizational workplace. The behavior is directed towards the
attainment of goals and objectives.

RELATIONSHIP BETWEEN MOTIVATION AND PERFORMANCE

The observed differences in job performance among people doing identical work reflect differences in
individual knowledge, skills and abilities, working environment and the extent to which individuals are
prepared (Motivated).

Performance diagram

Job performance = Motivation X Ability (Knowledge and skills) X Environment (working conditions)
MOTIVATION THEORIES

1. Instrumentality theory

„Instrumentality‟ is the belief that if we do one thing it will lead to another. In its crudest form,
instrumentality theory states that people only work for [Link] theory emerged in the second half of
the 19th century with its emphasis on the need to rationalize work and on economic outcomes. It
assumes that people will be motivated to work if rewards and penalties are tied directly to their
performance; thus the awards are contingent upon effective [Link] theory has its
roots in the scientific management methods of Taylor(1911), who wrote: „It is impossible, through any
long period of time, to get work men to work much harder than the average men around them unless
they are assured a large and permanent increase in their pay.‟

This theory provides a rationale for incentive pay, albeit a dubious one. It is based on the principle of
reinforcement. Motivation using this approach has been and still is widely adopted and can be successful
in some circumstances. But it is based exclusively on a system of external controls and fails to recognize a
number of other human needs. It also fails to appreciate the fact that the formal control system can be
seriously affected by the informal relationship existing between workers.

Example of application

Jess Bezos is an American internet and aerospace entrepreneur, media proprietor and investor. He is best
known as the founder, chief executive officer and president of Amazon. Of recent workers in Amazon and
other e-commerce businesses have come out to complain about the companies‟ policies .Employees
are on temporary contracts and to a high extent controlled, monitored and rewarded based on how
efficient they are. (Piece rate)Piece rate is a type of pay where employees are paid depending on their
output

Criticisms of this theory


Over state on economic needs, he focused only on money other than other needs of the
employees. Unsuitable for small scale businesses
2. Maslow's Hierarchy of Needs

Another one of the motivational theories in business is Maslow's hierarchy of needs,which identifies a
person's most basic needs on a progressive pyramid, ending with a person's least basic needs. Maslow's
theory states that only unsatisfied needs can be used to motivate a person. For example, if a person
makes a lot of money, he no longer views money as a motivating factor in his work. The needs that
Maslow identified include physiological, safety, social, esteem and self-actualization.

3. The ERG Theory (Alderfer 1972)

To bring Maslow‟s need hierarchy theory of motivation in synchronization with empirical research,
Clayton Alderfer redefined it in his own terms. His rework is called as ERG theory of motivation. He re-

categorized Maslow‟s hierarchy of needs into three simpler and broader classes of needs:Existence
needs- These include need for basic material necessities. In short, it includes an individual‟s physiological
and physical safety needs.

Relatedness needs- These include the aspiration individuals have for maintaining significant
interpersonal relationships (be it with family, peers or superiors),

getting public fame and recognition. Maslow‟s social needs and external

component of esteem needs fall under this class of [Link] needs- These include need for
self-development and personal growth and advancement. Maslow‟s self -actualization needs and
intrinsic component of esteem needs fall under this category of need.

Implications of the ERG Theory

Managers must understand that an employee has various needs that must be satisfied at the same time.
According to the ERG theory, if the manager concentrates solely on one need at a time, this will not
effectively motivate the employee. Also, the frustration- regression aspect of ERG Theory has an added
effect on workplace motivation. For instance- if an employee is not provided with growth and
advancement opportunities in an organization, he might revert to the relatedness need such as
socializing needs and to meet those socializing needs, if the environment or circumstances do not
permit, he might revert to the need for money to fulfill those socializing needs. The sooner the manager
realizes and discovers this, the more immediate steps they will take to fulfill those needs which are
frustrated until such time that the employee can again pursue growth.

4. McClelland's Human Motivation Theory

It states that every person has one of three main driving motivators: the needs for achievement,
affiliation, or power. These motivators are not inherent; we develop them through our culture and life
[Link] like to solve problems and achieve goals. Those with a strong need for affiliation
don't like to stand out or take risk, and they value relationships above anything else. Those with a strong
power motivator like to control others and be [Link] can use this information to lead, praise, and
motivate your team more effectively, and to better structure your team's roles.

5. Mc Gregor’s theory X and theory Y

Theory Y

Theory Y, set forth by 20th-century author Douglas McGregor, encompasses the premise that employees
naturally love to work, finding inherent satisfaction in their careers. The focus of supervision under
Theory Y is the managers' role as facilitators and teachers. Theory Y managers believe that all they have
to do is provide a pleasant, healthy, engaging work environment and employees will be highly motivated
from within.

Example of application

Emma is a data entry personnel working under Tina a marketing manager, Emma has ideas about a new
marketing campaign and though it is necessarily not his job,Tina encourages this. Tina shares Emma‟s
ideas with other managers and sometimes the chief marketing officer if she feels Emma‟s ideas are
strong [Link] loves that Tina sees his creativity and hopes to foster it. What type of theory is
this?

a. Theory X

Theory X, also composed by McGregor, is the polar opposite of Theory Y. Theory X puts forth the premise
that people, by nature, dislike working and only do it because they have to. Theory X managers place
more of an emphasis on motivating and monitoring employees. The basic premise of Theory X
supervision is that employees will slack off whenever they can and try to get away with anything they
can. Therefore, it is the manager's responsibility to keep employees productive and in line with company
policies.

6. Reinforcement theory

As experience is gained in taking action to satisfy needs; people perceive that certain actions help to
achieve their goals while others are less successful. Some actions bring rewards; others result in failure
or even punishment. Reinforcement theory as developed by Hull (1951) suggests that successes in
achieving goals and rewards act as positive incentives and reinforce the successful behavior, which is
repeated the next time a similar need emerges. The more powerful, obvious and frequent there in-
forcement, the more likely it is that the behavior will be repeated until, eventually,it can become a more
or less unconscious reaction to an [Link], failures or punishments provide negative
reinforcement, suggesting that it is necessary to seek alternative means of achieving goals. This process
has been called „the law of effect‟.

7. Herzberg Motivation/Hygiene Theory

Herzberg‟s motivation/hygiene theory is also known as the two-factor theory. Herzberg started the
study of job satisfaction in the 1950‟s in Pittsburg. The basis of Herzberg‟s work is in the Maslow‟s

Hierarchy of Needs. He started with the idea that what causest he job satisfaction are the opposite of
those things that cause job [Link], after studying thousands of books he couldn't draw
any guidelines. He conducted a survey where he asked participants to identify those things that made
them feel positive with their job and those that made them feel negative. As a result Herzberg found out
that what makes people happy is what they do or the way they‟re utilized and what makes people
unhappy is the say they‟re treated. Things that make people satisfied at work are different from those
that cause dissatisfaction so those two feelings can‟t be opposite. Based on these findings Herzberg
created his theory of Motivators and Hygiene factors. Both factors can motivate workers but they work
for different [Link] factor tend to cause only short-term satisfaction to the workers while
motivators most probably cause longer-term job satisfaction.

Motivators

They are also known as satisfiers. Satisfiers are all intrinsic [Link] factors were those
that could motivate the individual to improve their work [Link] include:

Achievement

Work itself

Responsibility

Advancement

Growth

Hygiene factors

They are extrinsic motivational factors also referred to as dissatisfiers. Hygiene factors are those that if
absent, caused [Link] include:

Salary

Working conditions

Relationship with the supervisor and fellow workers

First, Company policy and administration higher performance than easy goals, no goals, or even the
setting of an abstract goal such as urging people to do their best.

Second, holding ability constant, as this is a theory of motivation, and given that there is goal
commitment, the higher the goal the higher the performance.
Third, variables such as praise, feedback, or the involvement of people in decision-making only influence
behavior to the extent that it leads to the setting of and commitment to a specific difficult goal.

Fourth, goal-setting, in addition to affecting the three mechanisms of motivation, namely, choice, effort,
and persistence, can also have a cognitive benefit. It can influence choice, effort, and persistence to
discover ways to attain the [Link] route individuals can take to set their goals is so follow ( STD)
that is, setting their goals to be Specific , Time-bound , and difficult. A goal can be made more specific
by:

Quantification (that is, making it measurable), such as by pursuing "increase productivity by 50%"
instead of "increase productivity",Enumeration, such as by defining tasks that must be completed to
achieve the goal in stead of only defining the goal.

Setting goals can affect outcomes in four ways:

Choice

Goals may narrow someone's attention and direct their efforts toward goal-relevant activities and away
from goal-irrelevant actions.

Effort

Goals may make someone more effortful. For example, if someone usually produces 4widgets per hour
but wants to produce 6 widgets per hour, then they may work harder to produce more widgets than
without that goal.

Persistence

Goals may make someone more willing to work through setbacks.

Cognition

Goals may cause someone to develop and change their behavior.

Limitations to this theory

In an organization, a goal of a manager may not align with the goals of the organization as a whole. In
such cases, the goals of an individual may come into direct conflict with the employing [Link]
setting also may impair performance in certain situations. Such situations include when an individual
becomes overly focused on accomplishing a previously-set goal that they end up under performing on
current tasks.

Goal setting may encourage simple focus on an outcome without openness to exploration,
understanding, or growth. A solution to this limitation is to set learning goals as well as performance
goals, so that learning is expected as part of the process of reaching goals.

Criticisms of Herzberg’s theory It overlooks situational variables (extra pay) It assumes a correlation
between satisfaction and productivity but his research stressed upon satisfaction and ignored
productivity. No comprehensive measure of satisfaction was used. The theory ignores blue collar
workers. In brief; Motivate by using Motivators. Ensure Hygiene factors are met.

8. Expectancy theory
Expectancy theory is about the mental processes regarding choice, or choosing. It explains the
processes that an individual undergoes to make choices."This theory emphasizes the needs for
organizations to relate rewards directly to performance and to ensure that the rewards provided are
those rewards deserved and wanted by the recipients."An individual makes choices based on estimates
of how well the expected results of a given behavior are going to match up with or eventually lead to the
desired [Link] can be motivated towards goals if they believe that there is a positive
correlation between efforts and [Link] introduced three variables within the expectancy
theory which are valence (V),expectancy (E) and instrumentality (I).

Expectancy: effort → performance (E→P)

Instrumentality: performance → outcome (P→O)

Valence: V(R) outcome → reward

Expectancy is the belief that one's effort (E) will result in attainment of desired performance (P) goals.
Usually based on an individual's past experience, self-confidence and the perceived difficulty of the
performance standard or goal.

Self-confidence – the person's belief about their ability to successfully perform a particular behavior.
The individual will assess whether they have the required skills or knowledge desired to achieve their
goals.

Goal difficulty – when goals are set too high or performance expectations that are made too difficult.
This will most likely lead to low expectancy. This occurs when the individual believes that their desired
results are unattainable.

Perceived control – Individuals must believe that they have some degree of control over the expected
outcome. When individuals perceive that the outcome is beyond their ability to influence, expectancy,
and thus motivation, is low.

Instrumentality

is the belief that a person will receive a reward if the performance expectation is met. This reward may
present itself in the form of a pay increase,promotion, recognition or sense of accomplishment.

Valence

is the value an individual places on the rewards of an outcome, which is based on their needs, goals,
values and sources of motivation.

The model below shows the direction of motivation, when behavior is energized:

Motivational Force (MF) = Expectancy x Instrumentality x Valence

When deciding among behavioral options, individuals select the option with the greatest amount of
motivational force (MF).Examples of valued outcomes in the workplace include, pay increases and
bonuses,promotions, time off, new assignments, recognition, etc. If management can effectively
determine what their employee values, this will allow the manager to motivate employees in order to
get the highest result and effectiveness out of the workplace.

Criticisms

Critics of the expectancy model include Graen (1969), Lawler (1971), Lawler and Porter (1967), and
Porter and Lawler (1968). Their criticisms of the theory were based upon the expectancy model being
too simplistic in nature;Edward Lawler claims that the simplicity of expectancy theory is deceptive
because it assumes that if an employer makes a reward (such as a financial bonus or promotion)enticing
enough, employees will increase their productivity to obtain the [Link], this only works if the
employees believe the reward is beneficial to their immediate needs. For example, if a person in the
armed forces or security agencies is promoted, there is the possibility that he or she will be transferred
to other locations. In such cases, if the new posting is far from their permanent residence where their
family resides, they will not be motivated by such promotions and the results will backfire. Assuch, the re

9. Goal Theory
Studies by Edwin A. Locke and his colleagues have shown that more specific and ambitious goals lead to
more performance improvement than easy or general [Link] long as the person accepts the goal, has
the ability to attain it, and does not have conflicting goals, there is a positive linear relationship between
goal difficulty and task [Link] essence of the theory is fourfold.

First , difficult specific goals lead to significantly higher performance than easy goals, no goals, or even
the setting of an abstract goal such as urging people to do their best.

Second, holding ability constant, as this is a theory of motivation, and given that there is goal
commitment, the higher the goal the higher the performance.

Third, variables such as praise, feedback, or the involvement of people in decision-making only influence
behavior to the extent that it leads to the setting of and commitment to a specific difficult goal.

Fourth , goal-setting, in addition to affecting the three mechanisms of motivation, namely, choice, effort,
and persistence, can also have a cognitive benefit. It can influence choice, effort, and persistence to
discover ways to attain the [Link] route individuals can take to set their goals is so follow (STD)
that is, setting their goals to be Specific, Time-bound, and difficult.

A goal can be made more specific by: Quantification (that is, making it measurable), such as by pursuing
"increase productivity by 50%" instead of "increase productivity",Enumeration, such as by defining tasks
that must be completed to achieve the goal instead of only defining the goal.

Setting goals can affect outcomes in four ways:

Choice

Goals may narrow someone's attention and direct their efforts toward goal-relevantactivities and away
from goal-irrelevant actions.
Effort

Goals may make someone more effortful. For example, if someone usually produces 4widgets per hour
but wants to produce 6 widgets per hour, then they may work harderto produce more widgets than
without that goal.

Persistence

Goals may make someone more willing to work through setbacks.

Cognition

Goals may cause someone to develop and change their behavior.

Limitations to this theory

In an organization, a goal of a manager may not align with the goals of the organization as a whole. In
such cases, the goals of an individual may come into direct conflict with the employing [Link]
setting also may impair performance in certain situations. Such situations include when an individual
becomes overly focused on accomplishing a previously-set goal that they end up under performing on
current tasks.

Goal setting may encourage simple focus on an outcome without openness to exploration, derstanding,
or growth. A solution to this limitation is to set learning goals as well as performance goals, so that
learning is expected as part of the process of reaching goals ward is valued negatively to the person
receiving it.

10. Equity Theory

Adam‟s Equity Theory of Motivation, was developed in 1963 by John Stacey Adams,a workplace
behavioral [Link] Theory is based on the idea that individuals are motivated by fairness. In
simple terms, equity theory states that if an individual identifies an inequity between themselves and a
peer, they will adjust the work they do to make the situation fair in their eyes. As an example of equity
theory, if an employee learns that a peer doing exactly the same job as them is earning more money,
then they may choose to do less work, thus creating fairness in their eyes.

Adam‟s Equity Theory tells us that the higher an individual‟s perception of equity (fairness), then the
more motivated they will be. Conversely, an individual will be demotivated if they perceive unfairness.

Equity Theory Examples

You can identify Equity Theory in the workplace by listening to the phrases that people use in
conversation. Most commonly an individual will compare the role that they do to someone who is
getting paid more than they are. Equity theory is in play when individuals say things like:

“Eric earns more than I do, but doesn‟t do nearly as much work!”
“I get paid a lot less than Opio, but this place would fall apart without me!”

“Did you hear that the new guy earns UGX 1,000,000 more

and works fewer hours!

How is that fair?”

As you can see, in each of these examples someone is comparing their own compensation and

effort against someone else‟s.

Equity Theory Summary

In essence, the Equity Theory of Motivation proposes that high levels of employee motivation in the
workplace can only be achieved when each employee perceives their treatment to be fair relative to
others. Employees will compare themselves to other groups both inside and outside of the organization.
In doing so, they will compare the total of all inputs against the total of all outputs. If they perceive
unfairness they will adjust their inputs to compensate, working more or working less, depending on if
their situation is positive or negative relative to the group or person being compared.

Social Learning Theory

It states that people learn from one another via; observation, imitation and modeling.

Albert Bandura‟s theory added a social element arguing that people can learn new information and
behavior by watching other people which is known as observational theory of [Link]
believed that direct reinforcement could not account for all type of learning.

Forms of reinforcement

There are three forms of Reinforcement

Direct Reinforcement

Occurs when an individual watches a model perform, imitates that behavior and is reinforced or
punished by some individual.

Vicarious Reinforcement

The observer anticipates receiving a reward for behaving in a given way because someone else has been
rewarded.

Self-Reinforcement

The individual strives to meet personal standard and does not depend on or care about the reaction of
others.

The modeling process

Attention
Retention

Motor Reproduction

Motivation
End of Discussion Thank you

Happy studying….. profmarckus

 College of Accountancy

ORGANIZATION IN OF HUMAN RESOURCES MANAGEMENT

By:

PROF. MARINO D. UMALI

INTRODUCTION

The presence of a human resources department is important in any company, regardless of the size
of an organization. The organizational structure of an HR department can have a big impact on business
functions, productivity and efficiency. In this article, we explain what an HR department is, its functions,
how an HR department is structured, steps to structure an HR department and some tips for structuring an
HR department.
A human resources (HR) department is a company division that manages employees, ensures their
satisfaction and that they have what they need to perform their job. HR departments work to give a
company a defined structure and improve a company's productivity and workplace culture. In a business
environment that's constantly changing, HR departments can make it easier for companies to find qualified
employees.

An HR department handles activities related to an organization's personnel. HR departments are

often responsible for finding, screening, interviewing, onboarding and training job candidates. HR
departments also oversee employee compensation and benefit programs. They make sure the company is in
compliance with all labor laws, including applicable employment regulations based on the geographical
area the business operates in such as the number of allowable breaks for employees .

Another responsibility of an HR department involves managing employee relations and mediating

areas of conflict to keep the work environment running efficiently. HR departments often encourage
employees to bring their concerns directly to them. The department can also play a crucial role in ensuring
employees stay productive and on task. Many departments use performance improvement plans to help
employees improve their performance level and better meet objectives. Many HR departments also
routinely gauge employee satisfaction through surveys and questionnaires.

How is an HR department structured?

Factors such as the type of industry, size of the organization, business climate and budget of the
organization can influence how a company decides to structure their HR department.

Here are the different ways companies can structure their HR departments:

Centralized structure

Most larger organizations have a centralized HR structure, where a corporate office makes
decisions on behalf of the entire organization and supports activities for the whole company. Centralized
structures often operate hierarchically, with a designated HR manager that reports to upper management,
who gives them a set of goals to meet with the HR team. There are often separate managers for recruitment
and employee development, who both report to the designated HR manager of the [Link]
that use a centralized structure hire HR personnel with background and training, specifically in human
resources. Consolidating HR activities into one location can also improve operational efficiency because all
divisions and components of the organization receive the same, consistent training and compensation.

Decentralized structure
 With a decentralized structure, the company distributes HR functions across different units of the
business, such as geographical area, product line or department. The HR team often operates independently
of other units and there are multiple points of authority that make decisions. A decentralized structure can
also mean each department in a company takes an active part in the decision-making before HR makes a
final [Link] advantage of a decentralized HR structure is that it can often increase the
communication level between employees and management and improve the working relationship between
the two. A decentralized model can also increase flexibility in the company because it allows departments
to address their needs to management separately.

Matrix structure

A matrix structure combines the centralized and decentralized structure, with a central department
but independent HR functions that are specific to different business units. In this structure, personnel can
report to the designated HR manager but also report to separate departments in the [Link]
businesses use a matrix structure because it can make it easier to assign a separate HR professional to
handle a certain aspect of human resources, such as employee benefits, as the company grows in size. A
matrix structure can be advantageous because having different levels of HR can help ensure that important
information becomes widely shared, therefore allowing for a faster response.

Outsourced structure

With an outsourced structure, a company often hires an outside agency or third party that
becomes solely responsible for the primary HR functions in the company. This structure is common in
smaller organizations that typically don't have the resources or budget to hire in-house HR staff. An
outsourced structure can be beneficial for a company that wants to control costs and save time, which
enables management to focus more on business processes within the company.

How to structure an HR department

It's important to be aware of what your company's growth projections look like and what your needs
are before deciding on a structure. Here are a few steps to help you effectively structure your HR
department:

1. Understand key functions and company needs

Understanding and identifying the functions of an HR department and how it strengthens

organizational goals is an important first step in structuring a department. Most companies have a
consistent need for recruitment, training and development, conflict resolution and compensation and
benefit administration. Smaller companies often have different HR needs than larger ones, and identifying
the specific HR needs of your company can help you decide on the right structure.

2. Choose a structure that meets your goals

Thinking about the distinct divisions in your company, the size of your company and your
company's operational plan can help you decide on a structure that best meets the needs of the
organization. It's important to consider the size of your team in deciding on an HR [Link] you have a
larger company, you may want to think about hiring different positions that oversee separate aspects of
human resources. If you have a smaller company, you may want to look into outsourcing an HR
department and check that the third party you choose offers everything you require.

Identify your HR team competencies

Competencies are knowledge, skills, abilities and characteristics that contribute to individual
performance. In building an HR team, you may look for certain core competencies to better ensure your
HR department can effectively manage employees in the company. Here are some competencies often
required of an effective human resources professional:

ROLE OF HR MANAGER
The human resources team is responsible for a wide range of responsibilities, including human
resource planning, job analysis, hiring candidates, and retaining them, to name a few.
Let’s understand the responsibilities and role of HR managers in detail!

1. Human Resource Planning

The role of human resources managers is to plan and execute organizational objectives in
collaboration with executives. As such, they play a critical function in HRP, which involves identifying,
preparing, and achieving business goals. It helps ensure an organization has the right number of employees
with the necessary skills to meet its goals.
This involves forecasting future staffing needs and ensuring that the recruitment and training
programs can meet these needs. HR managers also play a key role in succession planning and guaranteeing
a pool of talent is ready to step into senior positions as they become available.

This proactive participation in planning enables HR managers to understand the activities required
to support the company’s sustainable growth. This, in turn, empowers HRs to assign the right resources to
the right project and ensures timely delivery.

The HR roles and responsibilities also include analyzing and acknowledging team leaders about
their expected vs. actual results. They also help TLs better understand their target and create strategies to
achieve them.

2. Job Analysis and Design

As mentioned above, human resource planning requires assigning the right resources to the right
project. And if the right person is not in the organization, HR managers are responsible for designing the
job analysis to hire them.
The job analysis includes
Job description
Employee’s position in the organization
Who should the employee report to
Resources the employee will need to perform the job efficiently
Individual data related to the post, such as technical skills, work experience, etc.
 Work schedule
Salary, incentives, and other employee benefits
Personal attributes, such as personality, values, and interests

In addition to this, the responsibilities and role of HR manager include the following:

Job rotation: Transferring employees from one task to another depending on the requirement and
their skills

 Job enlargement: Merging previously distributed (similar) functions into one job

 Job enrichment: Adding more responsibility and role of hr manager to an employee’s job
 Creating high-performance working groups: Building teams to complete tasks that require high
levels of performance
3. Hiring Candidates

Finding and hiring the right talent is a very complex process. Modern HR departments do more
than post job requirements in portals to fill open positions. They develop strategic solutions to attract
suitable candidates to fulfill the demands of the business.
An HR manager might also be responsible for a company’s employer brand reputation—or guiding the
branding strategy. Employer branding is critical to communicating a company’s culture and work-life
balance to potential employees.
As more and more candidates search for open positions via social media, managing employer brand
will likely overlap with an HR manager’s job duties. From screening potential candidates on job portals
and social platforms like LinkedIn to interviewing them, the HR department has to follow an organized
approach to hiring the best suitable employee for the organization.
Once an applicant is selected, HR professionals design offer letter documents, scan them to email
them to the candidate, and conduct onboarding procedures. If a candidate backs out at the last moment, HR
managers are bound to convince them to join the organization. HR managers must repeat the recruitment
process to fill open positions if they insist on not joining.
4. Offboarding Candidates

When a top-performing employee leaves a company, it can be disruptive if not handled properly.
However, with careful off-boarding and transition planning, the company can minimize negative impacts
and gain some benefits.
First, the departing employee should be encouraged to document their knowledge and train their
replacement. This passing of the baton helps retain institutional knowledge and prevents productivity
declines. The employee should feel good about making this contribution to the company on their way out.

 Second, HR should conduct exit interviews to understand why the employee is leaving and their
overall experience at the company. This provides useful feedback for improving the retention of other top
talent. HR can also understand whether the departing employee would consider returning someday.
Third, the company should be on good terms with valuable employees. If the employee had a
positive experience, they would be more likely to recommend the company to potential hires and
customers even after leaving. HR should collect references and keep in touch.
 Finally, when top talent leaves to gain broader experience and new skills, they become stronger
candidates to be rehired later. HR should keep a talent pipeline that includes alumni who understand the
company culture and can make immediate contributions upon returning. Losing top employees is
inevitable, but it does not have to detrimentally impact the company. A smooth transition can produce net
benefits.

5. Training and Development

One of the major responsibilities and roles of HR manager is hiring the best candidates, and it is
just half the job. First, the HR team must train and up-skill them to maximize their return on investment.
The Human Resources department is responsible for developing and administering training and
development programs. Training and development programs are designed to improve employees’
performance and help them adapt to changes in the workplace. These programs can include classroom
training, on-the-job training, and online training.
An onboarding video is one effective and time-efficient tool that HR managers can use to facilitate
onboarding for new hires. It showcases the company’s mission and vision and includes practical
information such as company policies.
To ensure that new hires, especially those whose first language is not English, don’t miss any
critical details, adding subtitles to the videos can help them better understand and follow the content,
resulting in a more impactful onboarding process.
The type of training and development new employees require depends on their experience.
6. Design Workplace Policies

HR manager roles and responsibilities include designing workplace policies to reduce conflicts and
legal issues and improve employee productivity. These policies are designed to protect the interests of both
employees and employers alike.
Though workplace policies differ from organization to organization, the things it include remain the
same in every company, such as –
Standard operating procedures
 Anti-harassment and non-discrimination
 Paid leaves, sick leaves, and time-off benefits
 Meal and break periods
 Time tracking
 Employee attendance and punctuality
HR managers must also comply with federal, state, and local laws while designing workplace
policies. Some laws require managers to communicate workplace policies in writing. If you are an HR
manager (or aspiring to be), stay on top of the local laws, including the national labor relations act, to avoid
issues later.
Additionally, follow these best practices.
· Involve your employees in the early stages of developing workplace policies.
· Policies should be clear and concise, and easy to understand.
· Policies should be designed to achieve the desired outcomes and be flexible enough to accommodate
changing circumstances.
· Implementation and enforcement of policies should be consistent and fair. Regular review of policies is
necessary to ensure they remain effective. Create documentation of policies like Wiki pages, blogs, and
guides that make information and policies more accessible.

7. Performance Management

General human resources manager roles and responsibilities are closely related to training,
including examining employee performance records to identify the scopes of improvement and arranging
training workshops to upskill them.
93% of employees say professional growth is a priority. You can create a positive environment and
boost employee loyalty by allowing employees to learn something new and grow professionally.
Besides, improving your employees’ skills brings additional benefits to the organization.
 First, they feel they are a vital part of the company
 Second, due to increased job satisfaction, they will give their best in each task.
That said, here’s how you can monitor employee performance

Define the duties of the HR manager and the responsibilities each employee needs to perform daily.
Keep track of employee productivity levels
Compare employee productivity levels to company goals and objectives.
Communicate with employees regularly to provide feedback and coaching.
Encourage employees to set personal performance goals.
Recognize and reward employees for meeting or exceeding performance goals.
The way you help employees improve their performance depends on the available resources. For
instance, if you have a high budget, you can arrange for trainers to analyze and train them to achieve better
results personally. If not, you can enroll them to attend conferences, webinars, online courses, etc.
What do you think? Isn’t performance a key role of an HR manager?
8. Maintaining Work Culture

HR roles and responsibilities shape and maintain organizational culture. Therefore, creating a
positive impression of the company from day one is essential so the new employees know what to expect.
Besides, a person’s performance depends mainly on his working environment.
Therefore, you need to instill a certain level of comfort to eliminate any stressful atmosphere that might
affect employees’ performance.
Having an open-door policy is vital so employees can communicate their problems freely. This
helps improve employee job satisfaction and retain talent.
Additionally, consider planning company events where employees can showcase their
non-work-related talents like singing, dancing, mimicry, etc. It enhances the overall brand image and
spreads positivity throughout the organization.

9. Resolve Conflict
In every organization, employees come from diverse backgrounds. And when people with opposite
opinions meet, the chances of conflict rise significantly. Whether the issue is between two employees or an
employee and the management, the human resources management has to mediate conflict resolution.
Besides, the HR manager must listen to both parties without being biased or judgemental. They also
need to go to the root of the matter, which includes questioning other employees.
Depending on the type of conflict, HR managers also hold the right to fire an employee. However, this
situation usually arises in cases of harassment in the office.

10. Ensure the Health and Safety of Employees

Employees are an important asset of the organization. Unless they are safe and healthy, they won’t
be able to give their best to the company. Thus, HR managers need to ensure the health and safety of
employees.
How you plan for your employee’s health and safety will depend on your company policies. For
instance, HR managers must ensure they are coming and reaching safely for organizations that provide cab
services to their staff. It usually requires them to track the GPS of company cabs, call the employee or
driver, and keep a tab on the expected vs. actual arrival time.

Other roles and responsibilities of an HR manager, in terms of the health and safety of employees,
include:
Arranging an on-premise doctor for emergencies
 Arranging an on-premise ambulance
 Setting employee health benefits
 Prioritizing educational training like health and safety courses for employee learning.
 Setting up a sick room in the office for employees to rest if they are unwell.
 Organizing fire safety training workshops
 Ensuring the food in the canteen (if you have it) is hygienic

11. Handling Company Payroll Operations

Processing a company’s payroll involves many steps –

First, an employee’s gross salary or wages must be calculated based on their position, experience,
qualifications, and hours worked. Following this, compulsory deductions like taxes and medical insurance
must be withheld from the gross income. The net pay after deductions is the real take-home amount the
employee obtains.
In addition to deductions, the payroll process also involves adding other components to an
employee’s pay, such as bonuses, commissions, reimbursements, and benefits. The Human Resources team
has to account for all these additions and subtractions to determine the final net pay for each pay
[Link] must also keep clear records of all the calculations and payments for transparency and
accounting purposes.
Other aspects of payroll include:
Ensuring all employees are paid accurately and on time per their employment contracts. This
includes issuing paychecks, direct deposits, etc.
 Use time tracking software to monitor employees’ leaves, and paid time off and ensure these are
accounted for in the payroll calculations
The management of employee benefits, such as health insurance premiums, retirement plans, stock
options, etc., involves calculating the corresponding costs and deducting them from employee paychecks.
Staying up-to-date with all payroll legislation and ensuring the company complies with pay,
deductions, taxation, record-keeping rules, etc.
Addressing any employee payroll inquiries or issues promptly.
 Optimizing the payroll process for efficiency using payroll software, standardizing procedures, and
minimizing errors.
13. Maintain Employee Records

With numerous staff, HR departments must maintain detailed records for each person.
Well-organized employee records serve many important purposes within a company.
 Employee records provide a history of each individual that can be referenced as needed, including
personal details, emergency contacts, compensation and benefits, performance reviews, disciplinary issues,
etc. Having these records easily accessible gives HR a complete picture of any employee.
 The records help identify skills gaps across the workforce. By reviewing each employee’s skills,
experience, and development areas, HR can pinpoint organizational needs for training, recruitment, or
other talent management initiatives. Keeping skills inventories up-to-date is crucial.

14. Promotions & Appraisals

The performance appraisal process aims to evaluate an employee’s performance annually, enabling
managers to assess their progress and identify areas of improvement. The HR department plays a crucial
role in ensuring the smooth execution of this process, which includes addressing any weaknesses and
providing feedback to employees.
To conduct effective appraisals, the HR team should clearly understand each employee’s roles and
responsibilities. Before starting the appraisal process, HR professionals should consult with different
department heads to get insight into the duties assigned to each staff member, allowing HR to evaluate
employees based on their strengths and assigned task performance.

Additionally, it is important that employees are informed of the evaluation criteria and that the process is
transparent.

HR should communicate expectations, goals, and measurement standards to all staff before appraisals.

Employees can actively participate in their performance reviews with open communication and proper
preparation.

Overall, successful appraisals depend on HR setting clear expectations, understanding employee

responsibilities, and ensuring fair and transparent processes. With the proper foundation, reviews can
provide constructive feedback to help employees continuously improve.

THE IMPORTANCE OF HR ROLES IN ORGANIZATIONS

HR departments are indispensable in companies of all sizes and across all industries. HR
professionals handle many critical responsibilities that contribute to a company’s success.
Recruiting and hiring top talent is one of the most visible HR duties and responsibilities of an HR
manager. HR teams develop job descriptions, post openings, screen applicants, conduct interviews, make
hiring recommendations, and onboard new employees. They ensure the company has the skilled people it
needs to achieve its goals.
HR also manages employee relations and retention. They oversee workplace culture, resolve
conflicts, administer performance reviews, provide coaching, and enforce policies. By fostering positive
and productive work environments, HR helps reduce turnover and keep employees engaged. Human
resources (HR) leverages data analysis to gain insights for strategic workforce planning and talent
management.
HR duties and responsibilities of HR managers extend to nearly every area of an organization. The
work HR professionals do behind the scenes is essential for building strong, successful companies with
motivated, thriving employees. HR roles and responsibilities require employment law, training, diversity,
and organizational psychology expertise. Despite being an often overlooked function, HR is one of the
most fundamental components of any successful business.
Human resources teams handle multifaceted and far-reaching responsibilities. From talent
acquisition to employee relations, compensation, development, and more, HR is indispensable in
recruiting, supporting, and retaining the people who drive companies forward.
Even after an employee departs, retaining their records is wise. Former employee information
remains relevant for providing references, calculating pensions and benefits, documenting tenure, and
defending legal claims. Storing past employee records makes retrieval easy while optimizing storage space.

By analyzing aggregated employee records, HR can identify trends and patterns, empowering the
department to make informed decisions based on data. Performance, retention, absenteeism, training needs,
and compensation metrics can be compiled to guide policy improvements.

Bonus: Use Technology to Your Advantage

Modern human resource leaders make the most of technology to streamline their work. Whether
you want to increase employee engagement, enhance employee training activities, or improve employee
relations, the right HR tool can help you.
You can also automate payroll processing, stay updated with legal regulations, understand the Civil
Rights Act, manage internal complaints, identify training needs, and minimize change resistance from one
platform!
There are various roles and responsibilities of an HR manager that are critical to the overall
well-being of the organization. Whether you’re one of those larger organizations with thousands of
employees or fall in the smaller companies category, technology can be a game changer for your human
resources department!

Conclusion
Key Takeaways:
1.A core HR role and responsibility is managing talent acquisition and retention through
recruitment, on boarding, performance management, etc. HR helps build a skilled and engaged
workforce.
[Link] ensures legal compliance with employment laws and regulations. They also create
internal policies on workplace standards, codes of conduct, benefits, etc.
[Link] nurtures company culture and employee experience through strong communications.

HRD vs HRM

Human Resource Management (HRM)

 is a branch of management; that is concerned with making best possible use of the enterprise’s
human resources, by providing better working conditions, to the employees. It involves those activities that
arrange and coordinates the human resources of an entity. Further, it aims at maintaining good relations at
various levels of management.
Human Resource Management, shortly known as HRM refers to a systematic branch of
management that is concerned with managing people at work so that they can give best results to the
organization. It is the application of management principles to the people working in the organization. It
aims at improving the performance and productivity of the organization by finding out the effectiveness of
its human capital. Therefore, HRM is an art of placing the right person at the right job, to ensure the best
possible use of organization’s manpower.
The process involves an array of activities that begins with the recruitment, selection, orientation, &
induction, training & development, performance appraisal, incentives & compensation, motivation,
maintaining workplace safety, health & welfare policies, managing relationship with the organization,
managing change.

Human Resource Development (HRD)

On the other extreme, Human Resource Development (HRD) is a wing of HRM that keeps focusing
on the growth and development part of the organization’s manpower. There are many people, to whom
HRM and HRD convey the same meaning, but this is not true. We have compiled an article here, to make
you understand the differences between HRM and HRD. Have a look.
The term Human Resource Development or HRD refers to the development of people working in
an organization. It is a part of HRM; that aims at improving skills, knowledge, competencies, attitude and
behaviour of employees of the organization. The purpose of the HRD is to empower and strengthen the
abilities of the employees so that their performance will get better than before.
The term Human Resource Development or HRD refers to the development of people working in
an organization. It is a part of HRM; that aims at improving skills, knowledge, competencies, attitude and
behaviour of employees of the organization. The purpose of the HRD is to empower and strengthen the
abilities of the employees so that their performance will get better than before.

HRM differs with HRD in a sense that HRM is associated with management of human resources while
HRD is related to the development of employees. Human Resource Management is a bigger concept than
Human Resource Development. The former encompasses a range of organizational activities like planning,
staffing, developing, monitoring, maintaining, managing relationship and evaluating whereas the latter
covers in itself the development part i.e. training, learning, career development, talent management,
performance appraisal, employee engagement and empowerment.

LIMITATIONS OF HRM

HRM only a support function! - This department plays an important role as the liaison between the
organization and the employees. They also promote growth for both and help them reach their objectives.

Training programs only a cost! -There’s no getting around it: regardless of industry or size, your
employees need training. Whether your staff is mostly veterans with years of experience or workers fresh
out of high school or college, you need to deliver low cost employee training that helps them hit the mark.
Here are ten low- or no-cost employee training options that really work.

1. LinkedIn Learning
No sense in reinventing the wheel, especially when LinkedIn Learning offers tons of online classes
and seminars for free, covering topics that range from managing conflict to learning SEO. These courses
are led by well-known CEOs like Sheryl Sandberg and successful company founders that include Danny
Sullivan, co-founder of Search Engine Land and content strategist at Third Door media.
LinkedIn Learning has over 13,000 courses to choose from, and each one has at least a partially free
option. Subscriptions for individuals cost around $30 a month, but you may find that the innovative
training ideas presented in many of the courses pay for themselves. LinkedIn can also provide team pricing
options.
2. Mobile mentor coaching
Mobile mentor coaching may be just what employees need to do their jobs (and stick around). Put
simply, mobile mentors are senior employees who agree to be available on demand via text for employees
when questions or issue arise.
Research suggests that mentoring is especially valuable for diverse employees entering the
workforce, with caveats.
 Mentors need to be seniors at the company
 Mentors and mentees work best when paired using shared values and experiences
 Direct managers make great mentors
3. Lunch and learn
Employees have to eat, and although training every day on their lunch hour might prompt some
complaints, a regular monthly lunch-and-learn to deliver new information or discuss changes to
regulations, research, or procedures is generally accepted by employees.
Or consider a more informal gathering where everyone is invited to share something: a book they
read that is relevant to their job, new insights into projects, or anything that builds a shared bank of
knowledge and promotes collaboration.

4. DIY professional development

If your company fosters a culture that encourages employees to not only celebrate their
accomplishments and skills but also identify growing areas for improvement, consider giving employees
the opportunity to design their own professional development.
Sessions for personalized long- and short-term goal setting, mission statements, and identifying
skills in need of development make employees more invested in their own training. If you have a training
development expert on staff, they can help employees articulate where they want to go and the skills they
need to get there.

5. Recorded video training

The bigger the company, the more complex (and potentially expensive!) your training needs can be.
Innovative training ideas still need to be streamlined enough to cross continents and meet the needs of
employees in different roles.
Enter recorded video training. With this type of training, employees can access it quickly by phone
or laptop.

6. Apprenticeships
Maybe the idea of apprenticeships is daunting because it feels like you are pulling an employee off
their regular duties just to follow someone around, but it’s time to update that thinking.
Apprenticeships can function in a variety of ways – as cross training and as a mentorship, to name
two – and they deepen the knowledge, commitment, and capabilities of the mentee (while reinforcing and
deepening the knowledge of the mentor).
Apprenticeships can be set up in any way that makes sense to the people involved, too.
This may mean regularly scheduled meetings every day, once a week, or once a month, with text check-ins
or chats periodically. Yes, this is low cost employee training in that it does cost the time of the mentor, but
learning directly from an experienced person who is committed to another employee’s professional (and
personal) development is priceless.

7. Free training materials

Free training materials are everywhere. Vendors, federal training programs, and other online
materials can provide training, even if you have a tight (or non-existent) budget.

8. Online team trainings

If your company has a Slack channel, you are already set up to collaborate online!
Why not use that space to deliver online team trainings and webinars? Slack lets team members lead
Q&As, share documents, and otherwise coordinate across the office (or across the globe).
When Slack-ing isn’t an option, there are other ways to deliver affordable employee training online
with free learning management systems. You will still need to design your training, but you’ll be able to
save on the delivery and tracking.
 9. Identify homegrown experts
The most valuable asset in your company is the people. From the newest hire to the founding
executive, each employee brings talents and knowledge that you can tap into.
Do you have employees that design and build video games in their spare time? Maybe they’d like to
help develop a training that uses gamification (as long as you compensate them for their time!). Is your
CEO an exceptional leader, widely recognized in the industry? Tap them for a training session on how to
solve problems and overcome obstacles.
When you start looking, you may be shocked to uncover the variety of skills and understandings
employees have.
Even better, ask if anyone on your team has fun training ideas for employees that they would be
willing to share. This can be part of your regular lunch-and-learn, or it can be a standalone training.

10. Make training social

The lines between work and play are increasingly blurry, with millennials and Gen Z demanding
more personal fulfillment and engagement from their work. Any time you can add a social element to the
learning environment, do it.
This can include field trips, volunteer opportunities to build newly learned skills, or anything that
promotes a collaborative, engaging opportunity to learn new skills and apply them.
As fast as the world is moving these days, you cannot afford to skimp on training, but this doesn’t
mean you need to break the bank. These low cost employee training options focus on personalized learning
opportunities that capitalize on what your employees already know and shares it with your wider team.
Done well, it can engage and connect a team like nothing else.
Human resource management (HRM) is one of the most important aspects of management.
Regardless of which level or department a manager belongs to, he must know about the basic principles of
HRM. This is because all managers have to deal with people in one way or another. In order to excel in this
venture, a manager must be aware of the limitations of HRM too. A good understanding of HRM can boost
productivity as well as efficiency in a business organization.
Despite all the benefits that HRM offers, it also carries certain drawbacks. A good understanding of
these drawbacks can help managers implement HRM principles effectively and derive maximum benefits.

The following are some basic limitations of HRM:

1) Uncertainty of future
2) Problems of surplus staffing
3) Conservative attitudes of top-level management
4) Time-consuming
5) Expensive

CHALLENGES BEFORE HRM

Managing Human Resources in an organization has never been an easy task. In the past few years,
challenges of HRM have only grown with the rapid growth of technology, the fast-paced software updates
and remote working has made HR management even more challenging. For an effective HR management
system, the challenge of HRM is to make sure that the time, money, and resources of the organization are
well-spent. Furthermore, they make sure that employees have the required resources to perform their best
and reach their highest productivity levels.
As the demand for highly trained professionals at the ‘top of their game’ grows, it becomes a challenge
for HR managers to attract the best talents. Managers should pay attention to how well an employee fits into the
organization; along with the job role. Factors like an employee’s dedication, work ethic, and fit in your
company are more crucial than any other skills he/she might have at present.
Furthermore, one of the challenges of HRM is to market the company well enough to attract the top
talents. Also, this includes mentioning the USPs of working with your organization.

The Solution For This Challenge of HRM is:

 1. Creating videos of employee testimonial of working in the company
2. Building a reward system of referrals to encourage employees to bring in people to the company
3. Building a culture to captivate the top talents which include showing appreciation, encouraging
collaboration, and practicing transparent leadership.

1. Attracting Top Talent

As the demand for highly trained professionals at the ‘top of their game’ grows, it becomes a challenge
for HR managers to attract the best talents. Managers should pay attention to how well an employee fits into the
organization; along with the job role. Factors like an employee’s dedication, work ethic, and fit in your
company are more crucial than any other skills he/she might have at present.
Furthermore, one of the challenges of HRM is to market the company well enough to attract the top
talents. Also, this includes mentioning the USPs of working with your organization.

2. Embracing Change With An Open Mind

One of the major challenges in HRM is to keep up with continuous changes in the world Change is
the only constant, however, it is up to the HR managers to embrace the change, and prepare their employees for
the same. Since HR managers are the strategic resource planners of the organization they must ensure that the
company doesn’t have a deficit or a surplus of human resources.
Above all Solution For This Challenges of HRM is:
1. Having open, clear, as well as honest communication with employees.
2. Ensure that the employees are well equipped with the skills and resources to deal
with the change. When employees feel secure and capable, the outcome is more
likely to be positive.
3. Be a part of the high-level meetings to learn about the future requirements of the
company.

3. Developing The Leaders of Tomorrow

HR Managers constantly face the challenge of mentoring and developing the future pillars of an
organization. This is one of the trickier challenges HR Managers face because a lot of employees have a poor
relationship with their managers. However, developing your employees for better roles helps you save the costs
of recruiting and training a new employee. Furthermore, an employee that has grown within the company
has grassroots knowledge. While there isn’t a one size fits all solution here, HR managers can take steps to
develop employees into leaders of tomorrow.
For Developing The Leaders of Tomorrow in An Organization & Solving This Challenges of HRM You
Can Take The Following Steps:

1. Managers can work on this by providing specific training sessions to talented individuals.
2. Show employees a clear progression path ahead of them, this will increase the likelihood of them staying in
an organization.
3. Develop interpersonal skills.
4. Give the employee opportunities to lead and present to the team.

4. Building a Culture of Continuous Learning

Learning is a key factor in any organization. Upskilling employees help a company to gain an edge in
the market however, it is a difficult challenge in HRM. Likewise, employees feel stimulated, engaged, and gain
development opportunities. However, managers should ensure that the skills gained by a set of employees serve
to enhance their job roles. If the workplace has a culture of learning and developing oneself this will ensure that
every employee grows with every passing year.
Few Steps to Foster a Culture of Continuous Learning & Overcome This Challenge of HRM are:

1. Create a growth mindset where employees are willing to take feedback to learn and grow.
2. Teach managers how to give great feedback. What points should be covered, how to make it
objective, and how to make it easier for the receiver to receive it.
3. Set learning goals within teams. Set targets for employees to learn a certain skill or a piece of
technology every month.
4. HR managers can also use online learning, gamified learning, and microlearning.
5. Building a Diverse Team
As connectivity improves, the world becomes a smaller place. One of the HR challenges now faces is
the challenge of managing a workforce with diverse backgrounds, ideas, and experiences. Also, This challenge
of HRM comes with the responsibility to build a corporate work environment that’s welcoming for
everyone. Building an inclusive team doesn’t just bring fresh perspectives into the company but also builds a
chain of a diverse network. If different voices are heard in your organization, the company will be more
innovative and more sensitized to cultures.

The Solution For This Challenge of HRM is:

1. Conduct cultural awareness activities to help employees understand new and diverse backgrounds.
2. Team building activities will also enable the entire workforce to work as one team on common objectives.
3. Educate your leaders to be open-minded and inclusive.
4. Celebrate cultural diversity.
5. Encourage culturally diverse hires.

6. Looking After Health & Safety

Maintaining health and safety standards ranks very high on any HR Managers priority list. The
general well-being of employees is what keeps an organization running and growing. Along with physical
well-being, HR professionals must also closely monitor the workload and stress levels of employees in an
organization. A sustained period of high stress and anxiety is a cause of concern for the workforce.

Few Steps That You Can Take to Look After Your Employees are:
1. Build a system where work is divided equally amongst the employees
2. Managers should be trained to increase their emotional quotient to help employees better.
3. Employees should be trained to manage stress better with relaxation techniques.

7. Managing The Turnover Rates

One of the largest challenges of HRM is the challenge of reducing the turnover rates in an
organization. One solution to this is to create a quality employee experience. High turnover rates in any
organization lead to an increase in cost and use of resources. Apart from the cost, high turnover rates can also
affect the morale of employees in an organization. Understanding the problems of employees can play a major
role in reducing turnover rates.

The Solution For This Challenge of HRM is:

1. Always conduct exit interviews to truly understand the reason an employee is leaving the company.
2. Select the right candidate for the job
3. Training as well as the development of employee
4. Be friendly with the employees
5. Think if flexible work hours would work for your company

8. Globalization
HR managers often deal with teams and workforces in geographically distributed areas. A company’s
customer demographic is also more diverse. HR managers are tasked with devising new plans and strategies to
build an inclusive workforce that leverages the technology of the 21st century. In addition, managers must
embrace the diversity of their workforce, and work towards reaching a new audience through them. It might be
difficult to have the same effect virtually on an employee however, there is software that can help you build a
work culture online.

While This Can Be One of The Challenges in HRM it Can be Solved Through Simple Steps:
1. Ensure the correct systems are present for better management
2. Make sure that employees know where to connect in case they need any help
3. Be accepting of diverse cultures and languages

9. Compliance with Laws and Regulation

 Many HR professionals struggle with keeping track of laws as well as regulations applicable to the
company. Also, this one of the crucial challenges in HRM. Not having the correct policies in place can affect
the company’s growth and resources. Failure to have the right policies might lead to lawsuits, fines, or even
closure of the company at times. As well as HR professionals should always stay updated with the changes in
regulations ranging from labor laws, working conditions to CSR.
This challenge of HRM can be simply solved with the StartupHR toolkit. In short it is the largest
collection of HR documents, templates & policies, Therefore, it is easy to make legal policies for your
company.

10. Retaining Top Talent

Retaining top talent is a challenge of HRM that truly affects the organization. Not only nurture but also
retain the top talent is important in the organization. A high turnover rate is not only bad news for any company
but also it costs resources and adds pressure to the top management. Without the top talents working for your
organization, it will be difficult to truly build a company that lasts. Without a steady set of leaders, an
organization will suffer greatly.
However, there are a few steps that you can take to retain the top talents in your organization

Summary :

Human resource management over the years has served many purposes within an organization.
From its earliest inception as a primarily compliance-type function, it has further expanded and evolved
into its current state as a key driver of human capital development. In the book HR From the Outside In,
describe the evolution of HR work in “waves”
Information plays vital role in all organizational activities. Human resource planning is the process
of forecasting the supply and demand for human resources within the organization and developing action
plans for aligning the two.
Equal employment opportunities should follows the regulation exist in almost every aspect of the
employment relationship. The basic goal of all equal employment opportunity regulation is to protect
people from unfair or inappropriate discrimination in the workplace.
As the demand for highly trained professionals at the ‘top of their game’ grows, it becomes a
challenge for HR managers to attract the best talents. Managers should pay attention to how well an
employee fits into the organization; along with the job role.

End of Lecture for Midterm

Thank you .. profmarckus
 College of Accountancy
FINAL PERIOD

MODULE 1
by:

PROF. MARINO D. UMALI

Entrepreneurship,Management and Allied subjects Lecturer

Chapter 1: Organizational Behavior

Learning Objectives:

After reading this chapter, you should be able to understand and articulate answers to the
following questions:

1. What is organizational behavior (OB)?

2. Why does organizational behavior matter?
3. How can I maximize my learning in this course?
4. What research methods are used to study organizational behavior?
5. What challenges and opportunities exist for OB?

Understanding Organizational Behavior

Introduction
For so long, man made serious attempts to be productive, economic, or otherwise. He did it
either individually or in group. In his quest for fulfilling his dreams, he is always confronted
with the risk of failure, and the risk is most often associated with the human factor, i.e., him
and the others. Even if it was a machine that disrupted the production process, the person
who decided to buy or use the machine faces the risk of placing his character under
suspicion. It has become clear that the quality and quantity of the output of the individual, the
group, or the organization depend heavily on the actions of the person. It follows that those
who have knowledge of human behavior are better equipped to interact with
individuals, groups, or organizations

What Is Organizational Behavior?

Organizational behavior (OB) is defined as the systematic study and application of

knowledge about how individuals and groups act within the organizations where they
work. As you will see throughout this book, definitions are important. They are important
because they tell us what something is as well as what it is not. For example, we will not
be addressing childhood development in this course—that concept is often covered in
psychology—but we might draw on research about twins raised apart to understand
whether job attitudes are affected by genetics.

OB draws from other disciplines to create a unique field. As you read this book, you will
most likely recognize OB’s roots in other disciplines. For example, when we review
topics such as personality and motivation, we will again review studies from the field of
psychology. The topic of team processes relies heavily on the field of sociology. In the
chapter relating to decision making, you will come across the influence of economics.
When we study power and influence in organizations, we borrow heavily from political
sciences. Even medical science contributes to the field of organizational behavior,
particularly to the study of stress and its effects on individuals.
 Figure 1.3

OB spans topics related from the individual to the organization.

Those who study organizational behavior—which now includes you—are interested in

several outcomes such as work attitudes (e.g., job satisfaction and organizational
commitment) as well as job performance (e.g., customer service and counterproductive
work behaviors). A distinction is made in OB regarding which level of the organization is
being studied at any given time. There are three key levels of analysis in OB. They are
examining the individual, the group, and the organization. For example, if I want to
understand my boss’s personality, I would be examining the individual level of analysis.
If we want to know about how my manager’s personality affects my team, I am
examining things at the team level. But, if I want to understand how my organization’s
culture affects my boss’s behavior, I would be interested in the organizational level of
analysis.

Why Organizational Behavior Matters

OB matters at three critical levels. It matters because it is all about things you care about.
OB can help you become a more engaged organizational member. Getting along with
others, getting a great job, lowering your stress level, making more effective decisions,
and working effectively within a team…these are all great things, and OB addresses
them!

It matters because employers care about OB. A recent survey by the National
Association of Colleges and Employers (NACE) asked employers which skills are the
most important for them when evaluating job candidates, and OB topics topped the list
(NACE 2007 Job Outlook Survey, 2008).

The following were the top five personal qualities/skills:

1. Communication skills (verbal and written)

2. Honesty/integrity
3. Interpersonal skills (relates well to others)
4. Motivation/initiative
5. Strong work ethic

These are all things we will cover in OB.

Finally, it matters because organizations care about OB. The best companies in the
world understand that the people make the place. How do we know this? Well, we know
that organizations that value their employees are more profitable than those that do not
(Huselid, 1995; Pfeffer, 1998; Pfeffer & Veiga, 1999; Welbourne & Andrews, 1996).
Research shows that successful organizations have a number of things in common, such
as providing employment security, engaging in selective hiring, utilizing self-managed
teams, being decentralized, paying well, training employees, reducing status differences,
and sharing information (Pfeffer & Veiga, 1999). For example, every Whole Foods store
has an open compensation policy in which salaries (including bonuses) are listed for all
employees. There is also a salary cap that limits the maximum cash compensation paid to
anyone in the organization, such as a CEO, in a given year to 19 times the companywide
annual average salary of all full-time employees. What this means is that if the average
employee makes $30,000 per year, the highest potential pay for their CEO would be
$570,000, which is a lot of money but pales in comparison to salaries such as Steve Jobs
of Apple at $14.6 million or the highest paid CEO in 2007, Larry Ellison of Oracle, at
$192.9 million (Elmer-DeWitt, 2008). Research shows that organizations that are
considered healthier and more effective have strong OB characteristics throughout them
such as role clarity, information sharing, and performance feedback. Unfortunately,
research shows that most organizations are unhealthy, with 50% of respondents saying
that their organizations do not engage in effective OB practices (Aguirre et al., 2005).

In the rest of this chapter, we will build on how you can use this book by adding tools to
your OB Toolbox in each section of the book as well as assessing your own learning
style. In addition, it is important to understand the research methods used to define OB,
so we will also review those. Finally, you will see what challenges and opportunities
businesses are facing and how OB can help overcome these challenges.

Adding to Your OB Toolbox

Your OB Toolbox

OB Toolboxes appear throughout this modules. They indicate a tool that you can try out
today to help you develop your OB skills.

Throughout the module, you will see many OB Toolbox features. Our goal in writing this
book is to create something useful for you to use now and as you progress through your
career. Sometimes we will focus on tools you can use today. Other times we will focus on
things you may want to think about that may help you later. As you progress, you may
discover some OB tools that are particularly relevant to you while others are not as
appropriate at the moment. That’s great—keep those that have value to you. You can
always go back and pick up tools later on if they don’t seem applicable right now.

The important thing to keep in mind is that the more tools and skills you have, the higher
the quality of your interactions with others will be and the more valuable you will
become to organizations that compete for top talent (Michaels, Handfield-Jones, &
Axelrod, 2001). It is not surprising that, on average, the greater the level of education you
have, the more money you will make. In 2006, those who had a college degree made 62%
more money than those who had a high school degree (U.S. Bureau of Labor Statistics).
Organizations value and pay for skills as the next figure shows.

Figure 1.4

Education and training have financial payoffs as illustrated by these unemployment and
earnings for workers 25 and older.
 Source: U.S. Bureau of Labor Statistics, [Link]

Tom Peters is a management expert who talks about the concept of individuals thinking
of themselves as a brand to be managed. Further, he recommends that individuals manage
themselves like free agents (Peters, 1997; Peters, 2004). The following OB Toolbox
includes several ideas for being effective in keeping up your skill set.

Your OB Toolbox: Skill Survival Kit

● Keep your skills fresh. Consider revolutionizing your portfolio of skills at least every 6
years.
● Master something. Competence in many skills is important, but excelling at something
will set you apart.
● Embrace ambiguity. Many people fear the unknown. They like things to be predictable.
Unfortunately, the only certainty in life is that things will change. Instead of running
from this truth, embrace the situation as a great opportunity.
● Network. The term has been overused to the point of sounding like a cliché, but
networking works. This doesn’t mean that having 200 connections on MySpace,
LinkedIn, or Facebook makes you more effective than someone who has 50, but it does
mean that getting to know people is a good thing in ways you can’t even imagine now.
● Appreciate new technology. This doesn’t mean you should get and use every new
gadget that comes out on the market, but it does mean you need to keep up on what the
new technologies are and how they may affect you and the business you are in.

Source: Adapted from ideas in Peters, T. (2007). Brand you survival kit. Fast Company.
Retrieved July 1, 2008, from [Link]

A key step in building your OB skills and filling your toolbox is to learn the language of
OB. Once you understand a concept, you are better able to recognize it. Once you
recognize these concepts in real-world events and understand that you have choices in
how you will react, you can better manage yourself and others. An effective tool you can
start today is journaling, which helps you chart your progress as you learn new skills. For
more on this, see the OB Toolbox below.

OB Toolbox: Journaling as a Developmental Tool

● What exactly is journaling? Journaling refers to the process of writing out thoughts and
emotions on a regular basis.
● Why is journaling a good idea? Journaling is an effective way to record how you are
feeling from day to day. It can be a more objective way to view trends in your thoughts
and emotions so you are not simply relying on your memory of past events, which can
be inaccurate. Simply getting your thoughts and ideas down has been shown to have
health benefits as well such as lowering the writer’s blood pressure, heart rate, and
decreasing stress levels.
● How do I get started? The first step is to get a journal or create a computer file where
you can add new entries on a regular basis. Set a goal for how many minutes per day
you want to write and stick to it. Experts say at least 10 minutes a day is needed to see
benefits, with 20 minutes being ideal. The quality of what you write is also important.
Write your thoughts down clearly and specifically while also conveying your emotions
in your writing. After you have been writing for at least a week, go back and examine
what you have written. Do you see patterns in your interactions with others? Do you
see things you like and things you’d like to change about yourself? If so, great! These
are the things you can work on and reflect on. Over time, you will also be able to track
changes in yourself, which can be motivating as well.
Sources: Created based on ideas and information in Bromley, K. (1993). Journaling:
Engagements in reading, writing, and thinking. New York: Scholastic; Caruso, D., &
Salovey, P. (2004). The emotionally intelligent manager: How to develop and use the four
key emotional skills of leadership. San Francisco: Jossey-Bass; Scott, E. (2008). The
benefits of journaling for stress management. Retrieved January 27, 2008, from
[Link]: [Link]

The Goals of Organizational Behavior

The three goals of OB are as follows:

1. to explain behavior;
2. to predict behavior; and
3. to control behavior.

The Places Where The Person Exhibits His Behavior

In explaining behavior as a goal, OB needs to systematically describe how people behave

under a variety of conditions, and understand why people behave as they do.
OB must be used to predict behavior so support can be provided to productive and
dedicated employees, and measures could be instituted to control disruptive and less
productive ones.
OB can offer some means for management to control the behavior of employees. As
control is an important component of effective performance, the usefulness of
OB must not be overlooked.

The Elements of Organizational Behavior

1. people
2. structure
3. technology
4. environment

The internal social system of the organization is composed of people consisting of

individual persons and groups. The individual person is inducted as a member of a formal
group, but soon, he or she may become a member of an informal group.
The structure defines the formal relationship of people in the organization. It describes
how job tasks are formally divided, grouped, and coordinated.
Technology refers to the combination of resources, knowledge, and techniques with
which people work and affect the task that they perform. It consists of buildings, work
processes, and assembled resources.
Environment refers to institutions or forces outside the organization that potentially affect
the organization's performance. It includes suppliers, customers, competitors,
government regulatory agencies, public pressure groups, and the like.

The Benefits of Studying Organizational Behavior

The study of OB offers certain benefits. They are as follows:

1. development of people skills;

2. personal growth;
3. enhancement of organizational and individual effectiveness; and
4. sharpening and refinement of common sense.

Development of People Skills

Two types of skills that a person will need to succeed in his chosen career:
1. the skill in doing his work; and
2. the skill in relating with people.

Isn’t OB Just Common Sense?

As teachers we have heard this question many times. The answer, as you might have
guessed, is no—OB is not just common sense. As we noted earlier, OB is the systematic
 study and application of knowledge about how individuals and groups act within the
organizations where they work. Systematic is an important word in this definition. It is
easy to think we understand something if it makes sense, but research on decision making
shows that this can easily lead to faulty conclusions because our memories fail us. We
tend to notice certain things and ignore others, and the specific manner in which
information is framed can affect the choices we make. Therefore, it is important to rule
out alternative explanations one by one rather than to assume we know about human
behavior just because we are humans! Go ahead and take the following quiz and see how
many of the 10 questions you get right. If you miss a few, you will see that OB isn’t just
common sense. If you get them all right, you are way ahead of the game!

Activities:
Understanding Your Learning Style

Learning Objectives

1. Understand different dimensions of learning styles.

2. Diagnose your own learning style.
3. Explore strategies for working with your preferred learning style.

Learning Styles

In order to maximize your learning in this course and in any learning situation, it’s
important to understand what type of learner you are. Some people learn better by seeing
information. For example, if you notice that you retain more information by reading and
seeing diagrams and flow charts, you may be a visual learner. If you primarily learn by
listening to others such as in lectures, conversations, and videos, you may be an auditory
learner. Finally, if you have a preference for actually doing things and learning from trial
and error, you may be a kinesthetic learner. If you are unaware of what your primary
learning style is, take a moment to diagnose it at the Web site listed below.

What Is Your Learning Style?

Take the following online learning style quiz to find out what type of learner you are:

Now that you have established which type of learner you are, let’s go through some
recommendations for your style. Here are some learning recommendations.[1]
● If you are a visual learner,
o draw pictures and diagrams to help you understand;
o take careful notes during class so you can refer back to them later on;
o summarize the main points of what you learn using charts.
● If you are an auditory learner,
o join study groups so you can discuss your questions and ideas and hear responses;
o write down any oral instructions you hear in class right away;
o consider taping lectures if your professor says it is OK and view online lectures on topics
you are interested in.
● If you are a kinesthetic learner,
o schedule your homework and study sessions so you can take breaks and move around
between reading your notes or chapters;
o take good notes during class—this will force you to pay attention and process
information even when you feel like you are “getting it”;
o don’t sign up for long once-a-week classes—they normally require too much sitting and
listening time.

For various reasons, using flash cards seems to help with all three learning styles. For
example, for an auditory learner, saying the answers aloud when using flash cards helps
 to solidify concepts. For a visual learner, seeing the answers written down on the flash
card can be helpful. And for the kinesthetic learner, the act of creating and organizing
flash cards helps the concepts stick.

Figure 1.5

While individuals tend to have a dominant, or primary, learning style, being able to adapt to different learning situations is a big plus, so
anytime you get a chance to learn in a new way, grab it. The more you practice, the better you will become at learning to process information in
different ways.
Kozminski University – Group Work – CC BY-NC-ND 2.0.

Understanding How OB Research Is Done

Learning Objectives

1. Learn the terminology of research.

2. Understand the different types of OB research methods used.

OB Research Methods

OB researchers have many tools they use to discover how individuals, groups, and
organizations behave. Researchers have working hypotheses based on their own
observations, readings on the subject, and information from individuals within
organizations. Based on these ideas, they set out to understand the relationships among
different variables. There are a number of different research methods that researchers use,
and we will discuss a few of these below. Imagine that your manager has asked you to
find out if setting goals will help to make the employees at your company more
productive. We will cover the different ways you could use research methods to answer
this question, impress your boss, and hopefully get a promotion.

Surveys

Surveys are one of the primary methods management researchers use to learn
about OB. A basic survey involves asking individuals to respond to a number of
questions. The questions can be open-ended or close-ended. An example of an
open-ended question that could be used to address your manager’s question would be to
ask employees how they feel about goal setting in relation to productivity, then
summarize your findings. This might work if you have a small organization, but
open-ended surveys can be time consuming to summarize and hard to interpret at a
glance. You could get more specific by asking employees a series of close-ended
questions in which you supply the response key, such as a rating of 1 to 5. Today it is
easy to create online surveys that quickly compile the results automatically. There are
even several free survey tools available online such
as [Link] and [Link] or you can use
paper-and-pencil surveys.

Figure 1.6

Researchers may even use a handheld device to randomly or systematically survey participants about key aspects of
their day to get a more dynamic view. This is called time sampling.
Department of Computer and Information Science NTNU – Researcher’s Night 2014 – CC BY-NC 2.0.

Sample Survey About the Effectiveness of Goal Setting

Instructions: We would like to gather your opinions about different aspects of work.
Please answer the following three questions using the scale below:

Response Scale:

1=Strongly disagree

2=Disagree

3=Neither agree nor disagree

4=Agree

5=Strongly agree

Setting goals at work helps me to focus 1 2 3 4 5

Goal setting is effective in improving performance 1 2 3 4 5

I get more done when I use goal setting 1 2 3 4 5

Regardless of the method you choose to collect your information, the next step is to look
at the average of the responses to the questions and see how the responses stack up. But
this still wouldn’t really answer the question your boss asked, which is whether using
goal setting would help employees be more effective on the job. To do this, you would
want to conduct a field study.
Field Studies

Field studies are also effective ways to learn about what is truly going on within
organizations. There are survey field studies like the one above, but more compelling
evidence comes from field studies that employ an experimental design. Here you would
assign half the employees at your company to the goal setting condition and the other half
to the control group condition. The control group wouldn’t get any information on goal
setting but the treatment group would. If you found that the treatment group was more
effective than the control group, you could tell your boss that goal setting works.

Laboratory Studies

OB researchers are often interested in basic research questions such as “Can we show that
goal setting increases performance on a simple task?” This is how research on goal
setting started, and it is also how we can establish the conditions under which it works
more or less effectively. Again, to address this, researchers may conduct a lab study in
which one group is assigned one condition and the other group is assigned the control
condition (generally the control condition involves no change at all). You may even have
been involved in a lab study during your time at your university. One of the most
important concepts to understand with lab studies is that they give the researcher a great
deal of control over the environment they are studying but do so in a less “realistic” way,
since they are not studying real employees in real work settings. For example, in a lab
study, a researcher could simulate hiring and firing employees to see if firing some
employees affected the goal-setting behavior of the remaining employees. While this
wouldn’t be legal or ethical to do in a real organization, it could be a compelling lab
study. At the same time, however, firing someone in a lab setting does not necessarily
carry the same consequences as it would in real life.

Case Studies

Case studies are in-depth descriptions of a single industry or company. Case writers
typically employ a systematic approach to gathering data and explaining an event or
situation in great detail. The benefits of case studies are that they provide rich
information for drawing conclusions about the circumstances and people involved in the
topics studied. The downside is that it is sometimes difficult to generalize what worked in
a single situation at a single organization to other situations and organizations.

Meta-Analysis

Meta-analysis is a technique used by researchers to summarize what other researchers

have found on a given topic. This analysis is based on taking observed correlations from
multiple studies, weighting them by the number of observations in each study, and
finding out if, overall, the effect holds or not. For example, what is the average
relationship between job satisfaction and performance? Research shows that, looking
across 300 studies, the relationship is moderately strong (Judge et al., 2001). This is
useful information because for years people had thought that the relationship did not
exist, but when all the studies to date were examined together, the original beliefs about
the satisfaction–performance relationship deteriorated. The advantage of meta-analysis is
that it gives a more definitive answer to a question than a single study ever could. The
downside is that meta-analysis is only possible if sufficient research has been done on the
topic in question.

Measurement Issues in OB
 Another important thing to understand is the difference between reliability and validity.
Imagine you own a trucking company. A major component in trucking is managing the
weight of different cargo. If you had a scale that gave you the same weight three times,
we would say that was a very reliable scale. But, if it turns out the weights given are in
kilograms instead of pounds, it would not be a valid measure if you charge for delivery
by the pound.

Finally, much of management research addresses correlations between two concepts

rather than actual causation. Correlation simply means that two things co-vary. For
example, it would be inaccurate to assume that because 99% of the people who died this
year also drank water, consuming water kills people. Yet many people claim their product
caused a positive outcome when, in fact, the data do not support their claim any more
than the water example. This brings up something that confuses even seasoned
researchers. When you have only one observation it is called a datum. When you use the
word data, it refers to multiple observations, so it is always plural.

Exercises:

Trends and Changes

Learning Objectives

1. Understand current challenges for OB.

2. Understand current opportunities for OB.

Challenges and Opportunities

There are many trends within the workplace and around the globe that have and
will continue to affect the workplace and your career. We are sure you have noticed many
of these trends simply by reading newspaper headlines. We will highlight some of these
trends along with the challenges and opportunities they present for students of
organizational behavior.

Ethical Challenges

Business ethics refers to applying ethical principles to situations that arise at

work. It feels like it’s been one ethical scandal after the other. Enron Corp., AIG, Tyco
International, WorldCom, and Halliburton Energy Services have all been examples of
what can be described in terms ranging from poor judgment to outright illegal behavior.
The immediate response by government has been the Sarbanes-Oxley Act, which went
into effect in 2002. This act consists of 11 different requirements aimed at greater
accountability, which companies must comply with in terms of financial reporting. And
while there may be some benefit to businesses from complying with these rules (Wagner
& Dittmar, 2006), few see this as the long-term solution to dealing with unethical
behavior. The challenge is to continue to think about business ethics on a day-to-day
basis and institute cultures that support ethical decision making. The opportunity for
organizations to be on the forefront of ethical thinking and actions is wide open. OB
research finds that the most important determinant of whether a company acts ethically is
not necessarily related to the policies and rules regarding ethical conduct but instead
whether it has a culture of consistently ethical behavior and if leaders are committed to
this ethical behavior (Driscoll & McKee, 2007).

OB Toolbox: Take an Ethics-at-Work Audit

 ● Do you integrate ethics into your day-to-day decisions at work? It’s easy to think about
ethics as something big that you either have or don’t have, but the reality is that ethical
decisions are made or not made each and every day.
● Do you take the “front page” test when making important decisions at work? Thinking
about how you would feel if the decisions you are making at work showed up on the
front page of your local newspaper can help you avoid engaging in questionable
behavior.
● Do you role model ethics at work? Seeing others engage in unethical behavior is the
start of a slippery slope when it comes to ethics. Consider the decisions you are making
and how they are consistent or inconsistent with how you would like to be seen by
others.
● Do you consider if rewards are distributed ethically at work? Situations in which there
are “haves” and “have nots” are breeding grounds of unethical behavior. Maintaining
pay equity can help keep everyone more honest.
● Have you held a “risk brainstorm” at work? If you ask those around you if they see any
situations that are challenging ethical behavior, you can uncover some seriously risky
situations and avoid them.

Sources: Adapted from ideas in Callahan, D. (2004). The cheating culture: Why more
Americans are doing wrong to get ahead. New York: Harcourt Books; Toffler, B. L.
(2003). Five ways to jump-start your company’s ethics. Fast Company. Retrieved May 4,
2008, from [Link] Trevino, L. K.,
Weaver, G. R., & Reynolds, S. J. (2006). Behavioral ethics in organizations: A
review. Journal of Management, 32, 951–990.

Lack of Employee Engagement

Studies suggest that fostering engagement, a concept related to passion, in

employees has a significant impact on the corporate bottom line. Gallup, for instance, has
been on the forefront of measuring the impact of what is called employee
engagement. Employee engagement is a concept that is generally viewed as managing
discretionary effort, that is, when employees have choices, they will act in a way that
furthers their organization’s interests. An engaged employee is a person who is fully
involved in and enthusiastic about their work (Employee engagement, 2008). The
consulting firm BlessingWhite offers this description of engagement and its value:
“Engaged employees are not just committed. They are not just passionate or proud. They
have a line-of-sight on their own future and on the organization’s mission and goals.
They are ‘enthused’ and ‘in gear’ using their talents and discretionary effort to make a
difference in their employer’s quest for sustainable business success” (BlessingWhite,
2008).

Engaged employees are those who are performing at the top of their abilities and happy
about it. According to statistics that Gallup has drawn from 300,000 companies in its
database, 75%–80% of employees are either “disengaged” or “actively disengaged”
(Gallup Press, 2006).

That’s an enormous waste of potential. Consider Gallup’s estimation of the impact if

100% of an organization’s employees were fully engaged:

● Customers would be 70% more loyal.

● Turnover would drop by 70%.
● Profits would jump by 40%.

Job satisfaction studies in the United States routinely show job satisfaction ratings of
50%–60%. But one recent study by Harris Interactive of nearly 8,000 American workers
went a step further (Zinkewicz, 2005). What did the researchers find?

● Only 20% feel very passionate about their jobs.

● Less than 15% agree that they feel strongly energized by their work.
● Only 31% (strongly or moderately) believe that their employer inspires the best in them.

It is clear that engagement is both a challenge and an opportunity for OB.

Technology

Figure 1.7

A consequence of greater connectivity is the potential for more work–family spillover and conflict.
Ben W – John Woo style – CC BY-NC 2.0.

Technology has transformed the way work gets done and has created many great
opportunities. The nexus of increasing personal computing power, the Internet, as well as
nanotechnology are allowing things to be created that weren’t even imaginable 50 years
ago. And the rate of technological change is not expected to slow down anytime soon.
Gordon Moore, a co-founder of Intel Corp., shocked the world in 1975 with what is now
termed Moore’s Law, which states that computing power doubles every 2 years. This
explains why a 4-year-old computer can barely keep up with the latest video game you
have purchased. As computers get faster, new software is written to capitalize on the
increased computing power. We are also more connected by technology than ever before.
It is now possible to send and receive e-mails or text messages with your coworkers and
customers regardless of where in the world you are. Over 100 million adults in the United
States use e-mail regularly (at least once a day) (Taylor, 2002) and Internet users around
the world send an estimated 60 billion e-mails every day (CNET UK., 2006), making
e-mail the second most popular medium of communication worldwide, second only to
voice. Technology has also brought a great deal of challenges to individuals and
organizations alike. To combat the overuse of e-mail, companies such as Intel have
instituted “no e-mail Fridays,” in which all communication is done via other
communication channels. The technology trend contains challenges for organizational
behavior.

Flattening World

Thomas Friedman’s book The World Is Flat: A Brief History of the Twenty-First
Century makes the point that the Internet has “flattened” the world and created an
environment in which there is a more level playing field in terms of access to
information. This access to information has led to an increase in innovation, as
knowledge can be shared instantly across time zones and cultures. It has also created
intense competition, as the speed of business is growing faster and faster all the time. In
his book Wikinomics, Don Tapscott notes that mass collaboration has changed the way
work gets done, how products are created, and the ability of people to work together
without ever meeting.

There are few barriers to information today, which has created huge opportunities around
the globe. Marc Andreessen, cofounder of Netscape Communications Corporation, notes,
 “Today, the most profound thing to me is the fact that a 14-year-old in Romania or
Bangalore or the Soviet Union or Vietnam has all the information, all the tools, all the
software easily available to apply knowledge however they want” (Friedman, 2005) Of
course, information by itself is not as important as having the right information at the
right time. A major challenge for individuals in the flattened world is learning how to
evaluate the quality of the information they find. For tips on how to evaluate the quality
of information, see the OB Toolbox below.

OB Toolbox: Tips for Evaluating the Quality of Information

Here are a few Internet resources to refer to when evaluating information you find on the
Web:

● [Link]
● [Link]
● [Link]

Sustainability and Green Business Practices

The primary role of for-profit companies is to generate shareholder wealth. More

recently, the concept of the triple bottom line has been gaining popularity. Those
subscribing to the triple bottom line believe that beyond economic viability, businesses
need to perform well socially and environmentally. While some organizations have
embraced the concepts underlying the triple bottom line, businesses are also undergoing a
great deal of “greenwashing,” which refers to the marketing of products or processes as
green to gain customers without truly engaging in sustainable business
practices. Sustainable business practices are those that meet the present needs without
compromising the needs of future generations. The challenge is to reconcile the
accountability that publicly owned firms have in generating wealth for their shareholders
while attending to the triple bottom line. On the other hand, organizations also have an
opportunity to leverage a proactive stance toward innovative processes that can result in
even greater profits for their products. For example, sales of the Toyota Prius, which
combines combustion engine efficiency with hybrid electric technology, have been
dramatic and have helped propel Toyota to record market share and profits. An unlikely
leader in the sustainability movement is Wal-Mart. Wal-Mart hired Adam Werbach, the
former president of the Sierra Club, to help train 1.3 million North American Wal-Mart
employees about sustainability. Wal-Mart has also been pressuring suppliers to produce
compact fluorescent lightbulbs with less mercury and has slashed the resources needed in
packaging by requiring all suppliers to make packages smaller (Fetterman, 2006; Sacks,
2007). In the future, increasing interdependence between businesses, governmental
agencies, and NGOs is bound to effect change throughout the economy (Campbell, 2007;
Etzion, 2007).

Aging Workforce and the Millennial Generation

You have probably heard that the American workforce is aging. Over the next 30
years, 76 million baby boomers will retire, but there will only be 46 million new workers
from Generations X and Y entering the labor force. This demographic trend creates both
challenges and opportunities for organizations.

The aging trend has been predicted for decades. “The number of U.S. workers
over the age of 40 has increased significantly over the past 30 years. By 2010, more than
51% of the workforce will be 40 or older, up almost 20% over 30 years. At the same
time, the portion of the workforce aged 25 to 39 will decline by nearly 3%. The number
of workers aged 55 and older will grow from 13% of the labor force in 2000 to 20% in
2020” (Mosner, Spiezle, & Emerman, 2003). There will be record numbers of
retirements. Aging workforces can create great opportunities for industries such as
health care, but it can also mean great challenges lie ahead as entire industries related to
basic infrastructure face massive retirement projections. For example, everything from air
traffic controllers to truck drivers are predicted to be in huge demand as thousands of
retiring workers leave these industries at roughly the same time (Ewart, 2008; Watson,
2008).

Figure 1.9 Percentage of Labor Force by Age Group for 2004 and Projections for 2014

Source: U.S. Department of Labor, Bureau of Labor Statistics Occupational Outlook Handbook 2006–2007 edition. Retrieved October
15, 2007, from [Link]

The Millennial Generation (which includes those born between 1980 and 2000) differs
from previous generations in terms of technology and multitasking as a way of life.
Having never known anything different, this population has technology embedded in
their lives. In addition, they value teamwork, feedback, and challenging work that allows
them to develop new skills. If you are in this generation or know those who are, you
know there is an expectation of immediate interaction (Oblinger, 2003). The challenge
for organizational behavior is to keep individuals from different generations
communicating effectively and managing people across generational lines despite
different values placed on teamwork, organizational rewards, work–life balance, and
desired levels of instruction.

The Global Marketplace for Staffing: Outsourcing

Figure 1.10

A shamrock organization includes an equal number of regular employees, temporary employees, and consultants and contractors.

Outsourcing has become a way of life for many organizations—especially those

based in the United States that are outsourcing to other countries where labor is relatively
inexpensive. Outsourcing refers to having someone outside the formal ongoing
organization doing work previously handled in-house. This practice can involve
temporary employees, consultants, or even offshoring workers. Offshoring means
sending jobs previously done in one country to another country. Nowhere is there more
outsourcing and offshoring than in the software technology industry. A survey of
software developers revealed that 94% outsource project work, and when they offshore,
the work most frequently goes to India, Singapore, Russia, and China (McGee, 2007).
Microsoft has been expanding their use of employees in Canada for a variety of reasons
such as closer proximity to Microsoft’s headquarters in Seattle, Washington, as well as
similarity of language and time zones. Across industries, more than 80% of boards of
directors in the United States have considered offshore outsourcing (Diana, 2003).
Charles Handy, author of The Age of Paradox, coined the term shamrock organization,
which is an organization comprising one-third regular employees, one-third temporary
employees, and one-third consultants and contractors. He predicts that this is where
organizations are headed in the future. The darker side of the changing trend in
organization composition revolves around potential unemployment issues as companies
move toward a shamrock layout. Fortunately, this shift also presents an opportunity for
organizations to staff more flexibly and for employees to consider the tradeoffs between
consistent, full-time work within a single organization versus the changing nature of
work as a temporary employee, contract worker, or consultant—especially while
developing a career in a new industry, in which increased exposure to various
organizations can help an individual get up to speed in a short amount of time. The
challenge for organizational behavior is managing teams consisting of different
nationalities separated not only by culture and language but also in time and space.

Exercises:

Chapter Quiz