Month: February 2010

Strategic Role of HRM During Recession

HRM is a strategic approach of managing the most valuable assets of any Organization, most important asset of any organization are those individuals who contribute or work for achieving the business objectives set by organizations. There are different terms which replaced HRM with the passage of time in managing the peoples in an organization i.e. HR, Personnel management etc HRM is basically all about employing people, managing people, developing resources, marinating and utilizing the services according to the job and requirements set by organization. HRM has become more important now as economies are slowing down and peoples are losing their jobs in large numbers through out the world. How HRM can play a role in recession is discussed further in the article; one way is to keep the organization running in a smooth way to survive the period of recession. There are several other things which HRM professionals can do, like focusing on cost cutting and most importantly managing the FTEs in organization. HRM is one of the most important factors that, in any organization play an important role as a change agent during the period of recession; HRM has to assist top management in recession period.  Recession provides an opportunity to HRM and organizations to cancel out old policies and introduce some new and modern techniques with high standard to make their organizations better than before to keep...

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Employee Training and Development

Employee training and development is part of the field of human resource management. It is concerned with activities related to the management of an organization, its aim is to better the performance of groups and individuals in an organizational setting. Employee training and development is known by many names, including human resource development, employee development and learning and development. The quality of employees and their development through education and training is a major factor in determining profitability [long-term] of a business. It is a good policy to invest in the development of employee skills, especially if the employees are good at their jobs. Training and development not only help the employees to better their performance, but it also increases productivity. Training is mostly associated with new employees, which is a mistake because current/old employees also benefit from it. Training helps employees to adjust to rapid changes in job requirements and keeps them updated to new technologies and methods. Training may include some of the following methods; other such methods are mentioned and explained further below: •    Job rotation •    Lectures •    Role playing and simulation •    Apprenticeships •    Audiovisual methods •    Internships and assistantships •    Programmed learning or laboratory training Purpose of Training and Development The purpose of training and development as mentioned above is simply to enhance employee knowledge about particular methods to improve their job performance. It...

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Working Capital or Net Working Capital

Working capital or net working determine the operational efficiency and ability of the company to pay its short term obligation. The value of working capital is equal to current assets minus current liabilities as mentioned below. Working Capital or Net Working Capital  = Current Assets – Current Liabilities Increase in working capital value show positive indication which means company current assets are greater than current liabilities so it can easily meet its short term obligations. Secondly greater value of working capital shows operational efficiency of the company. The operational efficiency can be determine the sales turnover and converting the account receivable into cash within a shorter period of time. Vice versa negative value of working capital indicates the danger signal to the company  because the company obligation are greater than current assets and it cannot payback the liabilities of creditors on time. These types of situation will leads the company towards the...

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Quick Ratio or Acid Test Ratio

A quick ratio or acid ratio determine the company ability to meet its short term obligation by converting current assets into cash at short period of time of one month. The need of quick ratio arise to measure the liquidity of the company more accurately by eliminating the some current assets from current assets as mentioned below. Formula Acid or Quick Ratio = Current assets – Inventory / Current liabilities The reason for removing inventory from the current assets because sometimes it take lot of time to convert itself into cash. The pile up inventories in the company most of the times increase the current ratio which show wrong indication for this reason it is preferred to use quick ratio in combination of current ratio to determine the difference. Incase if the difference between current ratio and quick ration is huge than it means company majority current assets are in the form of inventory. In this example company have total current assets of $1000 dollars out of which $400 are inventory and having total liabilities of $1200, the quick ratio will be: Acid or Quick Ratio = $1000 – $400/ $1200 = $600/$1200 = 0.5x It means the company can pay off its 50% liabilities through the current assets which clearly shows negative indication. The current ratio greater than 1.0 indicates better liquidity position of the company. Higher the...

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Employee Relations

The term employee relations was actually conceived as a replacement for the term industrial relations, but its exact meaning in today’s workplace needs to be clarified. “Employee relations basically involves the body of work concerned with maintaining employee-employer relation, which contributes to satisfactory productivity, increase in employee morale and motivation.” So, in essence employee relation is concerned with resolving problems and preventing them from occurring in the first place which may involve individuals who affect work situations. Supervisors are advices on how to correct poor employee performance and situations of misconduct by an employee. In such instances, regulation, discipline and other requirements are bound to be considered in effect of disciplinary actions to resolve employee grievances and appeals. Information is also provided to employees so that a better understanding of management’s goals and policies along with company objectives is promoted in the right way. Besides that information on how to correct poor performance is also given to the employees as well as information on, off duty or on duty misconduct and addressing personal issues which may affect them and their work in the workplace. Employees are advised about applicable legislation, regulations and agreements as well as their rights when it comes to appealing, grievances, whistle-blowing, discrimination and protection rights. What is the meaning of employee relations to employers? Some conclusions taken from research are given below: • Public sector...

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Employee Rewards

Recognition and rewards are powerful tools of motivation and performance improvement in employees. Rewards can be of two different kinds, monetary and non-monetary. Monetary awards have known to bring about more motivation in employees than non-monetary awards; however recent studies beg to differ. Rewards and recognition usually have direct cost associated to them, for instance stock awards, cash bonuses or a variety of paid perks by the company which may include paid parking, gift certificates, car allowances etc. However other rewards, “non-monetary” that is, may be less tangible but still quite effective. These intangible rewards may include informal or formal acknowledgement of an employee and his work, more enjoyable job assignments, different training opportunities etc.  The primary goal of rewards as defined by Jack Zigon is “something that increases the frequency of an employee action” [1998]. Allen and Helms say that, “rewards systems should be closely aligned to organizational strategies, to achieve desired goals” [2002]. Keller suggests that “people are motivated to higher levels of job performance by positive recognition from their managers and peers.” Recent research has shown that some employees are chiefly motivated by monetary rewards, and try to improve their job performance to achieve these rewards. Then again, some people see monetary rewards as vulgar and are discouraged by such offers. So it is important to understand, that not everyone can be motivated to increase work...

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Job Analysis

Job analysis is the process which uses a variety of methods to analyze the requirements of a job. It identifies and determines in detail specific duties in a particular job, its requirements and the relative importance of these duties for it. One of the important concepts about job analysis is that, the analysis conducted is of the job rather than of a person. Though the data collected for job analysis may be from incumbents through different questionnaires and interviews, the actual product of the analysis is the specification or description of the job, not of the person. Job analysis requires for a job to be investigated in sufficient detail to enable assessment of the performance of the workers already working in a particular position and to recruit further workers for a particular job. The application of Job Analysis The purpose of job analysis is basically to document and establish how a job relates to employment procedures for instance, selection, performance appraisal, training and compensation. Job analysis includes the following activities: •    Analyzing the work tasks, responsibilities and duties that need to be completed by the employee, filling the position •    Reviewing job responsibilities of current employees •    Conducting research •    Viewing sample job description and highlighting similar jobs in research •    Sharing research with other companies about similar job descriptions •    Articulating most possible and important outcomes or contributions...

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SHRM – Strategic Human Resource Management

Strategic human resource management or SHRM is a branch of HRM. It emerged from the discipline of human resource management and is a fairly new field. Strategic HRM is defined as “the linking of human resources with strategic goals and objectives in order to improve business performance and develop organizational culture that foster innovation and competitive advantage.” SHRM in an organization means “to accept and involve the functions of HR as a strategic partner in formulating and implementing the company’s strategies through human resource activities which may involve recruiting, selecting, rewarding and training company personnel. In spite of the similarity in names, HRM and SHRM are two different practices; SHRM is basically a part of the complete HRM process. Besides that SHRM focuses more on long-term objectives rather than the in-house objectives with employees dealt by HRM. In the late 1980’s writers started stating strong opinions for a much more strategic approach to managing people than was the standard practice of that time. They clamored for the change of traditional management practices of industrial relations and people to the modern more improved ones. The center point of SHRM is to address and solve problems that effect management programs centering on people in the long run and more than often globally. We can say that the main goal or objective of SHRM is to increase productivity not only in the...

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Recruitment

Recruitment refers to the process of finding candidates for a particular cause mainly jobs, army. It involves selecting and screening qualified persons for a particular job at an organization. Large sized organizations usually use professional recruiting companies or outsource the process of recruiting candidates for them. These candidates are selected on the basis of interviews and tests conducted by the recruiters. The recruiters aspire to channel potential candidates into the hiring organization with the process of applications. The hiring agencies are paid by the companies as a general rule instead of the candidates. It has been suggested by David Lord of ‘Executive Search Information Services’ that, “retained search is a management consulting service. Contingency recruiting is one of many forms of candidate identification, no more, no less.” The recruiting phase includes the following steps: • Sourcing candidates through advertising or other means • Screening potential candidates according to the job requirement • Selecting candidates on the basis of interviews and tests conducted The recruitment business has five kinds of agencies: • Traditional agency/employment agency • Headhunters • Niche recruiters • In-house recruiters • Sourcing firms The recruiting phase includes the following steps: • Sourcing candidates through advertising or other means • Screening potential candidates according to the job requirement • Selecting candidates on the basis of interviews and tests conductedThe recruitment business has five kinds of agencies: • Traditional agency/employment agency • Headhunters •...

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The Selection Process

Selection is a procedure where the most suitable candidate is chosen for a particular job, from amongst the available list of applicants that have applied for the job. It is a process determining the experience, skill, qualification and knowledge of an applicant with the intention of ascertaining his/her suitability for the job. Selection takes place on the basis of the condition that an individual finds himself in, though selection can be on any basis and in anything in the world, but in business management selection is based not only on the skill that the person possesses, but on how that skill, experience and knowledge is right for the job at hand. However selection can only take place where there is diversity in skill and experience, for instance: there is a class containing 10 business graduates who the same training and skills, but selection will be based on how these 10 differ in using their skills to the best possible advantage; whoever has the best result will be selected. The most known mistake that most people make is that they mix selection with recruitment, when it is not so. Recruitment and selection are interrelated but different; they should not be seen or perceived as the same. One can say that selection is part of recruitment, recruitment comes first and selection follows. The difference is defined more clearly as follows: “recruitment...

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