PEOPLE MANAGEMENT

DECISIONS BY BUSINESS
MANAGER
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Resources?
Role of a Manager (resource based view)
Finance

Plan

Infrastructure

Acquire

Machines

Deploy

Manpower

Manager

Monitor

Vendors

Assess

Clients

Develop

Permits..

Exit

Efficiency and effectiveness

in using the resource
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Management science, politics,

control and practice
Management as science

Management as politics

Successful managers are those who

have learned the appropriate body of
knowledge, skills and competencies, &
have developed an ability to apply them

Successful managers are those who

work out and cope with unwritten laws
in the organization. (knowledgeable
agents working in dynamic arena,where
resources and outcomes are shaped by
actions, networks, alliances)

(PODC- planning, organization, direction,

control)

MANAGEMENT
Management as practice

Management as control

Successful managers are those who can

work out and cope with contradictory
demands / purposes

Successful managers are those who can

exploit & control resources.

(activities aimed at continual melioration of

diverse, fragmented and contested complex

practices) Eg, INTEL

(structures and strategies are instrument

and techniques to control and raise
productivity) Eg, Old style manufacturing
companies

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Note: Politics is the often internally conflicting interrelationships among people in a society.

Source: Partly based on Watson TJ, Management, Organisation and Employment Strategy; 1986, Routledge & Kegan Paul: 29

Resource Planning
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Resource Planning:
We are looking for Flexibility of:
n Who do I need? (Functional)
n When? (Timing)
n At what cost? (Financial)
n What happens if I dont need them any more?

(Distancing Strategy)
n What numbers? (Numerical)

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Two thirds of US employers do not have any type of work force planning

Plan
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What one needs to do a good job?

Role analysis

Bada Bazar: What type of role? Does the person fit the role?

n Work activities/responsibilities

What to do?

n Job context (Unique factors that is important to

the business for its long term success):

n

How important the job is?

Impact & contribution, time horizon and ambit of

decision, Authority, Communication ambit, Span of
control, Innovation & complexity, Knowledge & its
application, risk to be undertaken
Capabilities

n Machine, tools, equipment, work aids

needed to do ?

n Skill, knowledge, experience, licenses

n Human behaviors / competencies
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n Performance standards

How to measure
what you are doing?
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Flow of resources within a system:

Inventory problem
n Dynamic system of stock and flow:
n
n
n
n
n

Stocks (no. of categories k) at a time t

Movement of stocks (flow) from t to t+h
Flows are due to promotion, wastage, recruitment
Change in flow due to change in internal culture,
span of control, automation
Probability attached to flow; arranged in transition
matrix: rows-position in time t, column time t+h

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Automation, learning, process improvement

Remember 1: In a steady state system,

everything being equal, no. of resources
required will progressively reduce.

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Source: Mathys, N. J., & Burack, E. H. (1993). Strategic downsizing: Human resource planning approaches. Human
Resource Planning,, 16(1): 71-85.

Remember 2: Slicing who is REALLY

required: Value creator vs value enabler
Compulsory
Not Unique
High Value

Core
Unique High

Value to orgn.

Value

Uniqueness of role requirement

Unique Low
Value

Not Unique
Low Value

Ancillary

Idiosyncratic

Incentive distribution?KM-PEOPLE-2016
Downsizing?

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Remember 3: Ratio of value produced by

employees vs cost of employing them
Amount of cost and value

Compensation &
Training/development

Value

Finishing school?

Time

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Remember 4: Optimizing your portfolio of

talent
Constraint analysis
n

Presence maximizes the performance: is there

any bottleneck task?
n Boeing 787 : facilitating global supplier partners
who shared design tasks, financial risks and
financial returns

Business restructuring.

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Remember 5: Optimizing portfolio of talent

Consider it as a challenge of capability planning :
not workforce planning
n Skill segmentation
Recruitment? Training? Retention?
1.
2.
3.

4.

Mission critical: absolutely key to ongoing

success.
Differentiating: with competitors (not
necessarily similar to mission critical skill)
Operational: to keep the operation going
(administration, maintenance) view them as
insurance
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Movable: Obsolete or less important

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Factors affecting Resource Planning

n Strategy:
n

Organic growth vs M&A

n Growth cycle (startup, scaling-up, maturity, declining)

n Type of industry (sunrise vs sunset)
n Environmental uncertainties (regulations, business climate,
n
n
n
n

labour market.)
Nature of jobs (standardized vs idiosyncratic; stretch roles)
Time horizons (short-term vs long term)
Level of automation/outsourcing
Type and quality of forecasting:
n
n
n
n

Reactive vs proactive
Narrow vs broad (aiming for exact numbers
Flexible vs inflexible (ease of reorientation
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Formal vs informal

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DOWNSIZING

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Downsizing: typology
n Downsizing strategy:
n
n
n

Retrenchment
Downscaling
Downscoping
n
n
n
n
n

Product line pruning

Withdrawal from market
Withdrawal from customer
Backward deintegration
Forward deintegration
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Downsizing program
Before the program:
n The decision to downsize
n Planning the downsizing program
n Making the announcement
n Implementing

During the program:

Develop greater flexibility
Foster innovation and creativity
Improve communication
Empower managers as organisational linking pins

Factors that influence downsizing success

The survivors level of trust in
leadership
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The survivors level of empowerment

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Definitely no downsizing
n Compensation:
n Large company performance linked incentive
n Across board percentage cut in salary
n Hour bank: Bank the overtime hours to be used when lesser
n
n
n
n

hours need to be worked (BMW)

Rather than outsourcing, bring jobs inhouse
Commercially sell internal services (JUSCO)
Role deployment
Consciously create three petaled or shamrock organisation:
n

Professional who provide core competencies who are paid for

time, hired on contract to smaller professional firms or selfemployed professionals who are paid for result, part-timers or
temporary or hourly workers. Fourth petal: consumers who do part
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of the work (bagging the purchase assembling furniture)

Recruitment & Selection

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Recruitment & Selection

Recruitment: A process of attracting people who
might make a contribution to the firm
Selection: Out of all those who wish to be part of
your company, selection process helps in:
1. Differentiating amongst them
2. Predicting their behavior once they are part of
company
n
n

Identify selection criteria. What are those?

Identify performance criteria. What are those?

Are selection tests obstacle to clear?

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Selection Ratio
n Selection ratio: reflects the calibre of those

selected (no of applicants vs nos selected)

If SR is one, no gain is possible via selecting
the best ones
n SR helps in estimating the average
performance of successful candidates through
utility analysis
n Actual selection ratio ranges between 0.30 to
0.70 range
n Rule of thumb (Smith & Robertson, 1993) says
produce 10 suitable candidate for each position
n

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Performance criteria
n Productivity (eg, sales, production, quality

errors amenable to easy measure)

n Judgement (eg, performance)
n Personnel related (eg, absentism, attrition,
accidents)
n Attachment (eg, OCB, job satisfaction,
n Well being (eg, mental health, physical health
or psychological health)

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CHALLENGE OF RIGHT
ADVERTISEMENT
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Do remember.
n Advertisement: job description, key

responsibilities, career prospects, salary (AND

NOT PERSONAL ATTRIBUTES)
n Provide realistic job preview, including warts,
etc; it is associated with improved levels of job
performance
It is better to use a good source of recruitment and
a poor method of selection, than the other way
round (through utility analysis: Boudreau & Rynes,
1985)
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BOUQUET OF SELECTION
METHODS
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Application forms SECOND MOST INFLUENTIAL TOOL

IN SELECTION PROCESS
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Biodata inputs
n Empirical approach:

Demographic variables (eg, gender, age, marital

status) is validated to be linked with criterion like attrition,
absenteeism, accident rates, performance
n Rational approach:
n Environmental inputs: people with similar patterns of
environmental inputs are likely to behave in similar
fashion situational factors or background data
n

Prior experiences: achievement biodata

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Biodata
n Biodata inventories are valid for predicting:

Training success (0.30)

n Job performance (0.35)
Cost effective tool for pre selection specially when
there is a large pool of applicants
Questionnaire validated helps to automate the
activity to scrutiny of biodata
Faking is easy, but research says that it is less for
empirical tested items (historical, objective), and
more for subjective items
Revisited every 3-5 years to ensure their accuracy,
and are specific to particular
job class
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n

n
n
n

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Other selection process

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Psychometric tests
n Psychometric measures:
n
n

Developed based on specific job related features, high

criterion related validity
Off the shelf poor criterion related validity they
dont predict work behavior
Cognitive ability tests: General Mental Ability g
n Valid in a wide variety of settings reg. performance
Personality measures: candidates disposition
n Personality construct (eg, conscientiousness) linked to
specific job competencies (eg, tendency to set goals)
linked to performance (eg, where incumbent has discretion
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about his activities) KM-PEOPLE-2016

Interview
n Combine situational and behavioral aspects:

Multimodal technique:
n

Project what his future behavior will be in a given situation

(situational interviewing): grounded in goal setting theory,
intention or goal is immediate persursor of a persons
behavior (what would you do if.)
Patterned Behavior Description Interviewing (PBDI) Past
behavior predicts future behavior how have you behaved
in past in given situation (what did you do when.)

n Inter rater reliability checks:

n

Train interviewers on observation,

judgemental skills, question formulation,
interpersonal skills
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Work sample tests

n to test ability (or trainability) to do rather than to

know
n
n
n
n

Psychomotor: eg machine test

Job related information: eg, insurance agent
Trainability tests: structured and controlled learning periods and
then demonstration by applicant: self-selection
Role plays:
n

Situational decision making: (eg, in tray exercises)

n

customer service, administrative efficiency, sales skills

managing a complex set of situations via notes, memos, emails, etc
written communication, decision-making, risk taking, administrative
abilities

GD/group decision making: assess managerial potential

n

KM-PEOPLE-2016 self confidence, resistance to

persuasiveness, oral communication,
stress, energy level, interpersonal contact, aggressiveness

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Assessment centers
n Standardised selection/evaluation method

where trained assessors observes candidates

on a series of exercises(eg, GD, in-trays,
presentations, role plays) and assess the
candidates on a set of competencies

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Assessment Center
n Measure competencies of a person to

evaluate:
n
n

For present role

For future role

n Against predetermined standards

n Characterised by multiples:
n
n
n
n

Candidates
Assessors or observers
Exercises, simulations or tests
Criteria or competencies
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Selection methods with high

validity
n Predictive validity - high:
n
n
n
n
n
n
n

Assessment centers
Work samples
Peer evaluation
Ability tests
Biodata (application form)
Structured, job related interviews
Uptodate work-centered personality tests

GMA and job

knowledge test
good predictor of
performance
and training
success

n Predictive validity low:

n
n
n

Ad hoc interviews
Personality tests
Reference checks

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DECISION MAKING

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Issues
n Are the instruments in use reliable and valid?

Across cultures?
n Are you guilty of spending needlessly on
redundant or useless selection process?
n Are your people trained to interpret the test
results well?
n Have you done utility (ROI) analysis?

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Predictive validity of a few

selection measures
Sr

Selection measure

Predictive validity

GMA

0.51

Work sample test

0.54

Adhoc interviews

0.38

Structured interviews

0.51

Reference checks

0.26

Assessment Centers

0.37

Biographical data measures

0.35

Typically validity scores of various selection process is

available:
General Mental Ability + Integrity (conscientiousness) = 0.65
GMA + structured interview = 0.63
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Schmidt & Hunter, 1998

Proper weight?
Competencies used in selection process were:
n
n
n
n
n

Motivation to succeed
Interpersonal skills
Commercial acumen
Reliability
Analytical ability

n Retail division: M*22+I*3+C+R+A

n Financial services division: M+I+C+R+A
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Overlapping redundancy
Job performance

Reference

Job performance

Personality test

Test

Interview
All testing primarily (generic!)
competencies

Personality test
Structured interview

Here, these are testing knowledge or skill,

Competencies and likely ability/behavior on job

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Cut-off scores and criterion related

validity
*

Work
performance

*
*

*
*

*
*

*
*

100 programmers
retain their combined
selection score and
correlate with
performance score after
a year

*
Best fit*line
*

*
*

Cut off
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Selection score

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Range of possible score

for selected candidates

Performance Management
System
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Performance Appraisal
n Retrospective collection of evidence
n
n

Done by supervisor: closed. Eg, ACR

Done by self, scrutinised by appraiser: open.

n Serves little purpose to improve performance

n Concept of performance management

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Performance Management
Performance Management System requires:
- Define performance
- what is expected (job analysis form)
- explicit and measurable goals (performance standards)
- agreement
Setting Goals
- Facilitate performance
- support performance
- periodic review (performance management demands daily
attention of manager!)
- Encourage performance
- clear feedback
- dialogue
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- distribute rewards KM-PEOPLE-2016
fairly (positive reinforcement)

MANAGEMENT CONTROL
SYSTEM (COUNT/OBSERVE
PAST)
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Control systems
n Diagnostic control systems
n Boundary control systems
n Interactive systems
n Belief systems

(Simon 1987, 1990)

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Controlling business strategy: key

variables to be analysed / balanced
n Diagnostic control system (mandated):
n

Motivate, monitor, reward achievement of

specified goal

n Belief system:
n

Used to inspire and direct new opportunities

n Boundary system:
n

Used to set boundaries to opportunity seeking

behavior

n Interactive control system (emergent):

n

Stimulate organisational learning, emergence

of new ideas and strategies
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Diagnostic control systems

n Formula for performance ~ formula for reward
n Typically includes four criteria:
n
n
n
n

Ability to set targets or standards (eg, from job analysis)

(eg, market intelligence, arms sales, drug discovery)
Ability to measure outputs (eg, teaching/training,
Accounts)
Ability for individuals to influence the process (line of sight)
The activity being measured represents a critical
performance variable for the firm
n

SPH meets all these criteria but still seems out of

control ..(why?)
Other control systems kicks in
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Is it only here and now, what about future?

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Designing the Appraisal Tool

n Role clarified
n What to Measure?
n

Work output (qualitative and quantitative)

Work process (throughput process linked)

Personal competencies / personality traits

n How to Measure?
n

Define a scale with appropriate definitions

n Relate with T&D efforts?

n

Record T&D received and needed

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n Link to rewards / promotion / new jobs

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Designing the Appraisal Tool

n Purpose: Collecting evidence to control, reward, train, career

growth. [Formal/informal; 360-270-180-90 degree]

n Design of form:
n Evidence that is in-disputable:
n

What to measure? Will it be hard-wired or left to appraiseappraiser to decide based on organisational requirements?
Use any framework to give an apparent quantifiable shape?
Eg, BSC. OR, allow it to be open to interpretation? Eg, essay
type like critical incident.
Represents critical performance criteria of the organisation
Ease of measurement /Ability to measure against a standard
Line of sight appraisees ability to influence outcome

n
n

How to measure? Formula,

etc
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Target setting conscious (KRA, etc); implicitly understood

WHAT TO MEASURE AND

APPROPRIATE WEIGHTS
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Framework for the design of

performance appraisal mechanisms
Knowledge of the transformation process OBSERVE
PERFECT
HIGH

Ability
to
Measure
Outputs
COUNT

LOW

IMPERFECT

Cell 1
(manufacturing,
service orgn)

Cell 2
Outputs
(sales)

Cell 4

Cell 3

Process & Output

(creative problem
Solving)

Process
(research)
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Job group, or job by job, or leave it open-ended?

Note: Process subsumes both work process and behavior

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SUBJECTIVE VS OBJECTIVE

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Subjective ratings - advantages

n Motivate organisational citizenship behavior

What are important drivers to long term success, eg,

mentoring, cooperation, teamwork
n Avoids distortionary behavior that results from
narrow measures
n Attracts and retains
n Team oriented and friendly culture
n Dont believe in star culture; promote from within
n Encourages building of firm specific human capital
n

n If pay-performance link is strong then, Essay approach,

n

Motivation and effort may be strong

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Rate each evidence,

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but final rating is
subjective

Subjective ratings pressure points

n

Politicized popularity contests:

n Better rating to those whom one likes
Written evaluations with private conversation
Filters few whose feedback is considered with more weight.
No point in objectivizing opinions.

Trustworthiness and fairness of those who are doing the

filtering
n Requires substantial resource of time and effort for a
responsibility that is not rewarded
Inflated ratings:
n Differentiation is hard work; needs to be accountable for
the evaluation given
n

Inflated rating, so most company

KM-PEOPLE-2016resort to forced curve
n

Reward for firm specific human capital

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Forced Ranking-advantages
n Person vs person basis rather than person vs

established standard basis

n
n
n
n

Forces honest appraisal

Helps in budgeting
Useful in result oriented teams like PSFs, where
jobs are relatively independent of each other
Best in firms with strong performance culture and
great leadership, and succession/recruitment
practice

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Forced Ranking-disadvantages
n
n
n
n
n
n
n
n

Intense internal conflict

High performing teams???
Should not be implemented for long duration
Innovation is stifled
Gaming the system by managers: politicized
Morale affected as each is constantly concerned about their
place in the team
Grading on the curve issue
Ought to be avoided when:
n
n

Compassion, niceness, stability are attributes,

Struggling with poor management or results,
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INHERENT CONFLICT

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Conflicts inherent in any PMP system

organization
seeking information
for developing
performance

Individual seeking valid

performance feedback

organization
seeking information
on which
to base rewards

Individual seeking
important extrinsic
reward
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Source: Anderson 1993, adapted from Mohrman et al 1989

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Potential solutions to appraisal

problems
n Uncoupling evaluation and development (two part)
n Uncoupling reward and evaluation report (Eicher, Loreal)
n Feedback ongoing and combined with coaching (action plan)
n Developing juniors make it rewarding for manager
n Instead of push, make it a pull system
n

Eliminate performance appraisal system (Bristol-Myers-Squibb)

n

Premise is that good performance is a function of organisational and

managerial context. (ongoing performance partnership)

n Boss-subordinate relationship
n

Tell and sell, tell and listen, problem solving

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