Human Resource Management

Meaning

Human resource management (HRM) covers acquiring, developing, rewarding and maintaining people so that the organisation and its employees both meet their goals. In a bank, where the product is service, staff quality is the main competitive asset.

Job analysis

Job analysis is the systematic study of a job to identify its activities and the attributes needed to perform them. Information is collected by observation, interviews and questionnaires. It has two outputs:

Job evaluation is different: it rates the relative worth of jobs to build a fair pay structure. It rates the job, not the person.

Recruitment and selection

Recruitment is searching for candidates and encouraging them to apply, so it is called a positive process. Selection is choosing the most suitable applicants and rejecting the rest, so it is called a negative process.

• Internal sources: promotion, transfer, internal vacancy notice. They are quick, cheap and motivating, but limit fresh ideas.
• External sources: advertisement, campus recruitment, employment agencies, walk-ins. They widen choice but cost more.

A typical selection sequence is: screening of applications, written test, interview, reference and background check, medical examination, appointment letter, followed by placement and induction (orientation).

Training and development

Training improves the skills needed for the present job; development prepares people, usually managers, for future responsibilities.

• On-the-job methods: job rotation, coaching, understudy, apprenticeship.
• Off-the-job methods: lectures, case study, role play, simulation, seminars.

Donald Kirkpatrick's model evaluates training at four levels, in this order:

1. Reaction - did trainees like it?
2. Learning - what did they learn?
3. Behaviour - do they apply it on the job?
4. Results - did the organisation benefit?

Performance appraisal

Performance appraisal is the systematic evaluation of an employee's work and potential. It supports decisions on promotion, pay, training and transfer.

Common rating errors:

• Halo effect - one good trait colours the whole rating; the term was coined by Edward Thorndike (1920). The reverse is the horn effect.
• Central tendency - everyone is rated average.
• Leniency or strictness - ratings are uniformly high or low.
• Recency - only recent events are remembered.

Compensation

Compensation is everything an employee receives for work.

• Direct: basic salary, allowances, bonus, incentives.
• Indirect: provident fund, gratuity, insurance, leave, medical benefits.

A sound pay system is internally equitable (supported by job evaluation), externally competitive and linked to performance.

Grievance handling

A grievance is a formal expression of dissatisfaction by an employee about work, pay or treatment. Sound handling is prompt, fair and documented.

• Open-door policy: the employee may take the complaint directly to senior management.
• Step-ladder procedure: the complaint goes first to the immediate supervisor and, if unresolved, moves up stage by stage to the department head, a grievance committee and top management, with a time limit at each step.

Exam pointers

• Job analysis produces the job description (about the job) and the job specification (about the person).
• Job evaluation fixes the relative worth of jobs for pay purposes.
• Recruitment is positive, selection is negative.
• Kirkpatrick's order is reaction, learning, behaviour, results.
• BARS joins a rating scale with critical incidents; 360-degree appraisal uses many raters.
• Halo effect: one trait influences the overall rating.