MBA0043 - Human Resource Management

Assignment Set – 1

Q1. Trace the phases of evolution of human resource management.

Ans: Evolution of the Human Resource Management

The historical background to the management techniques of human resources are in vogue
since ancient times. It’s only in the past 100 odd years that the techniques and study of
human behaviour at work has become formal and structured with certain basic practices
established as core and a host of other practices left to each organization to design and
implement as per their individual business driven practices. As per Fisher, Schonfeldt and
Shaw, in their book titled Human Resources Management, they have characterised the
history of HRM as having evolved through four broad phases, the Craft system, the scientific
system, the human relations approach and the prevalent organizational science-human
resources approach.

The Craft system refers to early trends noticed in Egypt and Babylon, where skills based
training was provided to people to ensure a steady flow of craftsmen required to build huge
monuments. By the 13th century, subsequently the trend was noticed in Europe and later
craft guilds evolved to ensure not only the skill acquisition but regulate the conditions of
employment, level of skill and improved production techniques. Most relevant in the
domestic industry where generations of skilled workers trained and became experts in a
particular skill.

The Scientific Management approach was a key part of the industrial revolution typical
of the nineteenth and early twentieth century. It was instilled in the principles of mass
production and organization of work – simple work skills and supervisory/managerial skills.
This rapidly emerged as the assembly line approach to managing workflow, which later
Fredrick Taylor (1856-1915) pioneered based on the philosophy that employees wanted to
be used efficiently and money being the primary motivator. Over a period of time this was
proved wrong as employee dissent grew and union issues surfaced. It was during this phase
that employee welfare as a key HR practice emerged which redressed employee issues like
recreational facilities, medical program and employee grievance systems.

The Human Relations approach was an outcome of the famous studies undertaken by US
social scientist Elton Mayo and Fritz Roethlisberger at the Western Electric’s Hawthorne
plant in Chicago.

Leadership Style and Practices: As a consequence of the Hawthorne Studies, worker

attitudes, morale, and group influences became a concern of researchers. A notable
development of the nature occurred shortly after World War II at the University of Michigan.
A group of social scientists formed an organization, later to be called the Institute for Social
Research, to study those principles of leadership that were associated with highest
productivity.
Based upon work with clerical and production employees, an important conclusion was that
supervisors of high-producing units behaved differently from those of low-producing units.
Among the differences in style noted were that supervisors of productive groups in
comparison to their lower producing counterparts were:

· More emotionally supportive of subordinates.

· More likely to pay a differentiated role – plan, regulate, and coordinate

the activities of subordinates, but not become directly involved in work
tasks.

· More likely to exercise general rather than close or light supervision.

· The origin and progress of the human relations movement (particularly in U.S.A.) has been
due to certain social and cultural forces working there, such as Recognition of the dignity of
the individual and his personality. The individual has a lot of freedom of choice and the idea
of decision-making by oneself is deep-rooted in the national tradition.

· A child is brought up to value independence and encouraged to think on his own and not to
be dependent on parents.

· Virtual disappearance of owner managers and the growth of professional managers

capable of managing according to professional code.

· Strong organizations of labour, at all levels, calling for higher skills in communication and
participative behaviour on the part of the management.

· Shortage of labour led to skilled labour being treated as nearly irreplaceable. Hence, much
greater care in utilising this scarce and valuable resource had to be thought of in the form of
"Human Relations."

· Higher standards of living of American labour. Since their physical and security needs were
generally satisfied, increased participation alone could satisfy their emerging social and ego
needs.

During the early 1970s, the human potential (meaning development of one’s potential)
movement began to appear in work settings. Management awareness training and
assertiveness training represent two other techniques related to the development of human
potential. Both are designed to deal with the problem of job discrimination against women.
In management awareness training, managers are made more sensitive to their sexist
attitudes (such as thinking of all engineers are male) and in changing their attitudes.

Finally the Organizational Sciences approach to human resources management has

brought the focus to the scientific process within organizations that can impact employee
experience, and less on just the individual. Today’s organizations focus on building their
processes and policies and compete to emerge as ‘preferred employers’ (best employer). It
is not uncommon for competing organizations to woo the employees through advertising
more and better employee-friendly initiatives like work-from-home jobs, careers for married
couples, global work assignments and internal job postings and world class workplace
infrastructures from in-campus cricket grounds to gymnasiums for employee wellbeing. This
is the HR that we now see around us.

Q2. Explain the various techniques and methods used in selecting employees.

Ans : Selection Techniques

There is no shortcut to fair and accurate evaluation of a candidate. As mentioned earlier,

the hiring procedures are therefore, generally long and multiple. Organizations are
constantly evaluating the selections tools they use to hire and keep innovating to ensure
they hire quality candidates.

The following are popular methods commonly used:

1 Initial or preliminary interview

2 Application blank or blanks.

3 Check of references.

4 Skill / Psychological tests.

5 Employment interview

6 Approval by the manager.

7 Medical examination.

8 Induction or orientation.

Preliminary Interview

The more non-selective the recruitment programme, the more likely it is that a preliminary
interview will be required. This initial interview is usually quite short and has as its object
the elimination of the obviously unqualified. In many instances it is a over-telephone / short
face-to-face interview conducted at a desk. The facts and impressions collected are of the
type generally obtained in an initial interview. Many firms do not bother to initiate any
paperwork at this early stage. If the applicant appears to have some chance of qualifying for
existing job openings, he or she is given the application blank to complete.

Application Blank

An application blank is a traditional, widely accepted template for getting information from a
prospective applicant. This enables the recruiter to qualify the candidate to the next level in
the selection process and is used extensively subsequently during the selection process. The
blank aids in the interview by indicating areas of interest and discussion. It is a good means
of quickly collecting verifiable basic historical data from the candidate. It also is a excellent
document to share with the manager and with the interviewers and is a useful device for
storing information for, later reference.

Check of References

The use of references is common in most selection procedures. It involves minimum of

effort and time/money. The objective is to obtain evaluation of prior employers and
professional colleagues, who have known the candidate in a professional capacity. Checks
on references are made by mail or telephone, and occasionally in person, and by using a
reference form.

Skill & Psychological Tests

The next step in the procedures outlined above is that of testing. The use of tests is
common and most popular in the lower levels in an organization. It serves as a excellent
qualifying criteria and in jobs that are dependent on a skill or a specific competency it is
very useful. The objectivity of the test results make it especially popular and a fair
assessment of the individual.

Interviewing

Interviewing is probably the most widely used single method of selection. A substantial
amount of subjectivity, and therefore, unreliability, is to be expected from interviewing
when used as a tool of evaluation.

The interview consists of interaction between interviewer and applicant. If handled properly,
it can be a powerful technique in achieving accurate information and getting access to
material otherwise unavailable. Organizations aware of the challenges of using interviews
have come up with a variety of ways to overcome the subjectivity. The use of multiple
rounds of interview (even upto 8-10 rounds) and use of panel interviews are some common
work-around.

Approval by the Manager

Following the outlined procedure, we should now be of the opinion that a candidate who has
successfully completed all steps so far should be hired. In executing the recruitment unit
screening functions, the emphasis tends to be more on formal qualifications and general
suitability. When the manager takes over, the emphasis tends to switch toward more
specifically job oriented worker characteristics such as training and relevant past
experience.

Medical Examination

The medical examination is an employment step found in most businesses. It can vary from
a very comprehensive examination and matching of an applicant’s physical capabilities to
job requirements to a simple check of general physical appearance and well-being. In the
selection procedure the physical examination has at least three basic objectives. First, it
serves to ascertain the applicant’s physical capabilities.

The second objective of the examination is to protect the company against unwarranted
claims under workers’ compensation laws, or against lawsuits for damages. And the final
objective is to prevent communicable diseases from entering the organization.

Induction

Induction is concerned with introducing or orienting a new employee to the organization.

Organizations could have induction programs of duration of
1-3 days and even up to 1/3/6 months. Common objectives of an Induction program can be
listed as covering:

1. Overview of the organization, its history, its hero’s and important stories in the life of the
firm so far like mergers, acquisitions, JV’s, expansion in new countries etc…

2. Organization Vision / Mission and Objectives statement, its structure, hierarchy of the top
and the senior management, structure of the teams/divisions, focus on the division the
employee/s is/are joining

Organizations also build processes by which the new employee provides feedback on the on
boarding experience and use this information to improve the Induction process. In as much
as various firms report that over half of their voluntary resignations occur within the first 6
months, proper orientation can do much to reduce this problem and its accompanying costs.

Q3. A company is being set up by a group of 3 professionals. The business

objective is to sell mobile phones of a Chinese company which has come up with
an inexpensive range of handset ranging from Rs.1200 to Rs.7000. They need to
submit a human resource plan to their investors. Explain the process of Human
Resource Planning system for this company, which covers all important steps
needed for HRP.

Ans: Process of Human Resource Planning

The process of Human Resource Planning is one of the most crucial, complex and continuing
managerial functions which, according to the Tata Electrical Locomotive Company,
"embraces organization development, management development, career planning and
succession planning".

It may be rightly regarded as a multi-step process, including various issues, such as:

1. Deciding goals or objectives;

2. Estimating future organisational structure and manpower requirements;

3. Auditing Human resources both internally and externally

4. Planning job requirements and job descriptions/person specifications; and

5. Building a plan

Human Resource Planning is not only done by organizations and corporate bodies. It is a
prevalent practice at different levels:

i) At the country’s national level, it is generally done by the Government and covers items
like population projections, programme for economic development, basic and advanced
educational infrastructure and opportunities, occupational distribution across urban and
rural areas, industrial and geographical mobility of employable people.

ii) At the state level, it may be done by the state government and would include manpower
planning for the needs of the agricultural, industrial and service sector.

iii) At the specific industry level, it would include manpower needs forecast for specific
industries, such as engineering, heavy industries, consumer goods industries, public utility
industries, etc.

iv) At the level of the individual organization/ unit, it would relate to the planning of
manpower needs for each department and for various types of personnel.

Human Resource Planning System

The steps in the HRP process is a systematic set of activities carried out in a chronological
manner. Each step needs to be evaluated and debated with all possible information
gathered from the external as well as internal environment. Table 3.1 highlights the steps in
the process.

We will attempt to discuss in details the critical steps that are part of the above system.

A. Purpose of Human Resource Planning: Human Resource Planning fulfils individual as well
as organizational goals. What it essentially amounts to is “striking a balance” between the
future human resources needs and the future enterprise needs. And this is done with the
clear objective of maximizing the future return on investment in human resources. And this
objective may be laid down for a short-term (i.e. for one year).

B. Estimating/Forecasting the future Manpower Requirements: the first step in the process
is to arrive at the desired organizational structure at a given point in time. Mapping this
structure with the existing structure helps in identifying the gap in resources requirement.
The number and type of employees needed have to be determined. In addition to the
structure there are a number of external factors that affect this determination. They include
business forecasts, competitor strategy, expansion plans, product/skills mix changes,
profit/revenue growth projections, in addition to management philosophy and government
policies. This step also includes an analysis of the external labour/talent environment, its
demographics, demand/supply of the required talent, and cost considerations.

Forecasting provides the basic premises on which manpower planning is done. Forecasting
is necessary for various reasons, such as:

a) The challenges of the general economic business cycles have an influence on the short-
range and long-run plans of all organizations. These are inflation, wages, prices, costs and
raw material supplies.

b) An expansion / growth initiative might need the business to use additional machinery and
personnel, and a re-allocation of facilities, all of which call for adequate advance planning of
human resources.

c) Changes in management philosophies and top management leadership styles.

d) The use of new technology (such as the introduction of automatic controls, or the
mechanization of materials handling functions) requiring a change in the skills of workers,
as well as a change in the number of employees needed.

e) Very often, changes in the quantity or quality of products or services require a change in
the organization structure. Plans have to be made for this purpose as well.

C. Auditing Human Resources: Once the future human resource needs are estimated, the
next step is to determine the present supply of manpower resources. This is done through
what is called "Skills Inventory". A skills inventory contains data about each employee’s
skills, abilities, work preferences and other items of information which indicate his worth to
the company. Skills inventory are also referred to as competency dictionaries. This
information is usually retained as part of the performance management system with the HR
department. This step in the HRP system helps identify the existing profile of the manpower
and its efficiency. It helps highlight where the organization is vs. where it ought to be. The
step concludes with identifying clear gaps in the skills / manpower mix required to meet the
upcoming business objectives.

D. Job Analysis: After having decided how many persons would be needed, it is necessary to
prepare a job analysis. The recorded details of training, skills, qualification, abilities,
experience and responsibilities, etc. as needed for a job are studied. Job analysis includes
the preparation of job descriptions and job specifications.

F. Specific roles/disciplines being hired for, of them which roles are pivotal for the business

• Competencies and capabilities needed

• Manager vs. employee hiring
• Hire internally vs. External sourcing
• Planning for new skills through training existing staff vs. hiring new teams
• In case of surpluses, planning for redeployment / reduction in workforce as required
• Succession planning for key positions in the company

Q4. Explain Thayer and McGhee ‘Assessment of training requirement’ model.

Ans: Assessment of Training Requirement

Given the investment that organizations make in training it is critical for organizations to
ensure that the money is rightly spent. Training needs consider both the organization’s
demands and that of the individual’s. Diversification of product lines, new technology, and
hence a new kind of job, or a shift in organizational culture or ways of conducting business
are common organizational needs that cover most employees in the company. On the other
hand demands that pertain to individual’s growth and development, including induction
training for new hire’s, or training necessitated by job rotation due to an organization’s
internal mobility policies are examples of individual need based training.

The model we shall examine here is the Thayer and McGhee model. It is based on the
following three factors:

1. Organization analysis

2. Task analysis

3. Individual analysis

Organization Analysis

Total Organization Analysis is a systematic effort to understand exactly where training effort
needs to be emphasized in an organization. It involves a detailed analysis of the
organization structure, objectives, human resources and future business plans, and an
understanding of its culture.

The first step in organization analysis is establishing a clear understanding of both short-run
and long-run business and people goals. Long-term objectives are the broad directions in
which the organizations would move over a long duration. These long-term objectives are
then broken down into specific strategies and short-term goals for each of the
units/departments. In an organization, the cumulative effect of all these would ultimately
lead to the long-term goal. Short-term goals are constantly in need of adaptation to the
changing environment, both external and internal.

For an organization analysis, there are three essential requirements: (1) an adequate
number of employees available to ensure fulfilment of the business operation; (2) that
employee performance is up to the required standard; and (3) that the working
environment in their units/departments is conducive to fulfilment of tasks.

In order to ensure the first two requirements a human resource inventory needs to be
made. Data regarding positions, qualifications, vacancies, replacements and training time
required for replacements have to be worked out. Job standards must also be worked out.

Various efficiency and productivity indexes, or ratios such a productivity ratios, cost per unit
etc, can be worked out to determine not only efficiency but also adequacy, in terms of
under-manning or over-manning, of the workforce.

An important dimension of organizational need-based analysis, is the diagnosis of the state

of the organization "climate" or “culture”. While rules, procedures, systems and methods all
contribute to the making of the environment, much of it is also determined by the attitude
that the "people" have in the organization-for instance, the attitude that top management
has towards its subordinate staff and the attitudes that members have towards work,
Managers and company procedures. These attitudes are learnt, they result from the
person’s experience both within and outside the organization, and training inputs could be
used to effect changes of attitude and consequently of the organizational climate.

In analyzing the organization climate, both direct and indirect methods could be used.
Direct methods are observation, use of questionnaires, and interviews. Reliance or indirect
methods would not give a clear understanding of the attitudes and predispositions of
employees. In fact, factors such as low absenteeism and low turnover are not by
themselves indicators of positive or negative attitudes, and high or low morale. It would be
better to make a careful analysis and study each indicator in a particular situation in
conjunction with more direct methods like attitude surveys. Analysis and interpretation of
the data may give clear clues not only to attitudinal training needs but possibly also to kill
training needs.

Task Analysis

This activity entails a detailed examination of each job, its components, its various
operations and the conditions under which it has to be performed. The focus here is on the
"task" itself and the training required to perform it, rather than on the individual. Analysis of
the job and its various components will indicate the skills and training required to perform
the job at the required standard.

Standard of Performance: Every job has an expected standard of performance (SOP).

Unless such standards are attained, not only will inter-related jobs suffer, but organizational
viability will be affected, and so will the expectations that have been set for that particular
job itself. If the standards set for the performance of a job are known, then it is possible to
know whether the job is being performed at the desired level of output or not. Knowledge of
the "task" will help in understanding what skills, knowledge and attitudes an employee
should have.

Methods: If an employee is asked to perform a job, the exact components of the job and
the standard of performance must be known. Task analysis entails not merely a simple
listing of the various job components, but also of the various sub-tasks. Conventional
methods of job analysis are usually suitable for task analysis. They are:

1. Literature review regarding the job.

2. Job performance.

3. Job observation,

4. Data Collection regarding job interviews.

For blue-collar employees, more precise industrial-engineering techniques, like time and
motion studies, could be used, and for white-collar employees, work sampling observation,
interviews, and job performance data analysis could be employed. The focus in task analysis
approach to identifying training needs is with the clear objective of enhancing the
performance standard of a given task. This information is then utilised to establish the
training programme for the employee. It helps identify the skill required, either in terms of
education or training, to perform the job, knowledge, and finally attitudinal pre-dispositions
such as the attitudes, towards safety, or interpersonal competence that will ensure that the
job is performed optimally.

Individual Analysis

Individual analysis is the third component in identifying training needs. The focus of
individual analysis is on the individual employee, his abilities, and the inputs required for job
performance, or individual growth and development in terms of career planning.

The common source for this needs analysis usually forms parts of the performance
assessment process. Clues to training needs can also come from an analysis of an
individual’s or a group’s typical behaviour. The primary sources of such information are:

(1) Observation at place or work, examination of job schedules, quantum of spoilage,

wastage, and clues about interpersonal relations of the employees; (2) interviews with
superiors and employees; (3) comparative studies of good vs. poor employees, to identify
differences, skills and training gaps; (4) personnel records; (5) production reports; and (6)
review of literature regarding the job and machines used. Job-knowledge tests, work
sampling and diagnostic psychological tests also provide information about employees.
Q5. Write short notes on:
• Succession Planning
• Career Planning

Ans: Succession Planning

Succession planning involves having senior executives periodically review their top
executives and those in the next-lower level to determine several backups for each senior or
key position in the firm. It takes years of grooming to develop effective senior managers
and this is a talent challenge that all organizations face today. Traditionally succession
planning was restricted to senior-level management positions and this was either an
informal or formal process.

Over the years succession planning has established itself as a key HR activity in most
organizations with formal processes that ensure it is reviewed regularly and scientifically. In
smaller organizations it is yet an informal succession planning process where the individual
manager identifies and grooms his or her own successor.

Succession planning involves an examination of strategic (long-range) plans and HR

forecasts for all identified key positions in an organizations. It includes positions that are
critical for the business and for its continuity and not just the senior level positions. It
includes a review of the data on all potential candidates who might be able to move to these
positions either right-away or in the near future. The objective is to identify employees with
potential and increase managerial depth as well as promoting from within the company. This
is usually an exercise undertaken one a year and usually runs parallel to the performance
appraisal process. This exercise is carried out by the senior management team of the
unit/subsidiary and facilitated by the HR team. Usually, committees of top managers’ work
together to identify high potential candidates within their team and then out-line
developmental activities for them. They may also include a formal assessment of the
performance and potential of candidates and written individual development plans for
candidates.

A succession planning exercise concludes with an organization chart of all key positions with
listing of possible potential candidates and the readiness rating for each potential candidate.
For example a position that can immediately be filled is rated higher than a position which
does not have a ready-now candidate. Other components include performance appraisal of
these employees, and individual development plans and management development
programs. Additionally, the factors rated as most important in selecting specific
internal/external potential candidates for grooming includes: past job performance, past
positions or prior employment, perceived credibility, area of expertise and career paths and
values and attitudes.

Benefits: There are many benefits of having a formal Succession Planning System:

1. Provides a clear context to strategic business planning as the key positions for the
business’s success are what are being planned for.
2. Provides a more systematic basis to judge the risk of making particular succession and
developmental moves.

3. Bring focus to systematized succession a plan that scientifically identifies potential

candidates to ensure business continuity.

4. Enables the identification of high potential and future leaders, whereby the thereafter the
manager/HR can engage with them for leadership development initiatives.

5. Reduces randomness of managerial movements.

6. Helps anticipate problems before they get started – and thereby avoid dysfunctional
situations.

7. Provides scientific approach for arriving at succession decisions as part of the overall
human resource planning exercise – connecting formats (data, timing) with process
(judgement, discussions, analyses)

8. Helps plan for internal promotion opportunity

9. Provides early warning if succession does not exist for a position allowing for lateral hiring
from the market.

Regardless of what type of succession planning program is used (formal or informal); most
successful programs obtain the support of top management.

2) Career Planning :

A broad view of career is defined as an “individually perceived sequence of attitudes and

behaviour work-related activities and experiences over the span of a person’s life.” In
normal parlance the term career has both an internal and an external focus. An internal
focus and refers to the way an individual views his/her career and the external or objective
focus and refers to the actual series of job positions held by the individual. The dynamics of
career development in an organizational context has two dimensions:

· How individuals plan and implement their own career goals (career planning), and

· How organizations design and implement their career development programs (career
management).

Career planning is a deliberate attempt by an individual to become more aware of their

skills, interests, values, opportunities and constraints. It requires an individual thinking to
identify career-related goals and establishing plans towards achieving those goals. Often it
is a self-driven process, which every professional (irrespective of the nature of employment)
spends some time to dwell on and discuss it with peers or superiors and frame it. It is also
viewed from time to time that the individual looks for possible new career options. Having a
career plan builds a commitment towards achieving it and is viewed as an excellent personal
goal-setting exercise for self motivation.

Career management is considered to be an organizational process that involves preparing,

implementing and monitoring career plans undertaken by an individual alone or within the
organizations career systems. Organizations establish policies that provide for multiple
career path options that an employee can choose from and pursue. This is supported with a
lot of training and development activities that are agreed to with the manager and planned
carefully and executed.

A variety of career development activities and tools exists for use in organizations. HR
managers should be familiar with these components because the managers often serve as
internal consultants responsible for designing the career development systems. Some of the
activities described are individual career planning tools and others are commonly used for
organizational career management. In general the most effective career development
programs will use both types of activities.

Q6. Discuss Individual evaluation methods used for performance appraisal.

Ans : Individual evaluation Methods

There exists five ways to evaluate an employee individually. Here the employee is evaluated
one at a time without directly comparing him/her with other employees.

Graphic rating scale: The most widely used performance rating technique is a graphic
rating scale (eg. a 3, 4 or 5 or even 10 point rating scale). In this technique, the evaluator
is presented with a list of assessment characteristics and asked to assign a number rating to
the employee on each of the characteristics listed. The number of characteristics might vary
from a few to several dozen. It aims to measure the quality of performance and ability to do
the present job.

The ratings can be in a series of boxes, or they can be on a continuous scale (0-9) or so. In
the latter case, the evaluator places a check above descriptive words ranging from none to
maximum. Typically, these ratings are then assigned points. For example, outstanding may
be assigned a score of 4 and unsatisfactory a score of 0. Total scores are then computed. In
some plans, greater weights may be assigned to more important traits. Evaluators are often
asked to provide supporting comments for each rating in a sentence or two.

Forced choice: The forced-choice method of evaluation was developed because other
methods used at the time led to a preponderance of higher ratings, which made promotion
decisions difficult. In forced choice, the evaluator must choose from a set of descriptive
statements about the employee. The two-, three-, or four-statement items are grouped in a
way that the evaluator cannot easily judge which statements apply to the most effective
employee.
Typically, HR specialists/consultants prepare the items for the form, and Managers or other
HR specialists rate the items for applicability; that is, they determine which statements
describe effective and ineffective behaviour. The Manager then evaluates the employee. The
HR Department adds up the number of statements in each category (for example, effective
behaviour), and they are summed into an effectiveness index. Forced choice can be used by
superiors, peers, subordinates, or a combination of these in evaluating employees.

Essay evaluation: In the essay technique of evaluation, the evaluator is asked to describe
the strong and weak aspects of the employee’s behaviour. In very few organizations, the
essay technique is the only one used; in others, the essay is combined with another form,
such as a graphic rating scale. The essay summarizes and elaborates on some of the
ratings, or discusses added dimensions which are not captured by the scale. Wherever it is
used the essay, the can either be open ended or as in most cases there are guidelines on
the topics to be covered, the purpose of the essay, and so on. The essay method can be
used by evaluators who are superiors, peers, or subordinates of the employee to be
evaluated. It is not a very popular method in the industry.

Management by objectives: one of the most popular individual evaluation methods in use
today is Management by Objectives (MBO). In this system, the Manager and employee to be
evaluated jointly set objectives/targets in advance for the employee to try to achieve during
a specified period. And usually the objectives framed are of quantitative nature. MBO is a
very common industry practice. At the beginning of the year clear objectives are laid down
for achievement during the course of the year. These objectives are popularly called by the
following names:

1. KRA-key result areas

2. KPA -key performance areas

3. Targets

4. Commitments

These objectives are designed using the SMART framework as in… Specific, Measurable,
Achievable, Results oriented and Time bound. All objectives must conform to this
framework. Thereafter the objectives are broken up into half yearly, quarterly and maybe
monthly objectives, again keeping in mind the SMART framework. All along the process both
the employee and the manger are in consensus of the objectives and the timelines as well
as the deliverables.

MBO is one of the most effective methods for performance review primarily because it is
identified at the beginning of the review period and is regularly reviewed for achievements
and modified on-going again in consensus between the employee and the manager.

At the end of the review year, the MBO’s are reviewed for completion with the SMART
framework.
In case of a new employee or someone moving jobs/assignments between teams; after
about 6-8 weeks of being in the job this process is undertaken and the objectives are set.

The evaluation too is a joint review of the degree of achievement of the objectives. This
approach combines the manager and self-evaluation systems.

Critical incident technique: In this technique, HR specialists and operating managers

prepare lists of statements of very effective and very ineffective behaviour for an employee.
These are the critical incidents. The HR specialists combine these statements into
categories, which vary with the job. Once the categories are developed the statements of
effective and ineffective behaviour are provided to the managers. The manager maintains a
log for each employee right through the evaluation period. The manager "records” examples
of critical (outstandingly good or bad) behaviours in each of the categories, This log is used
to evaluate the employee at the end of the period. The manager can be specific in making
positive and negative comments, and it avoids “recency” bias. The critical incident technique
is normally to be used by superiors than in peer or subordinate evaluations.

Checklists and weighted checklists: Another type of individual evaluation method is the
checklist. In its simplest form, the checklist is a set of objectives or descriptive statements.
If the manager believes that the employee possesses the trait listed, the manager checks
the items; if not it is left blank. A rating score from the checklist equals the number of
checks.

Behaviourally anchored rating scales: the most prevalent technique which is a variation
of the critical incident approach is the behaviourally anchored rating scale (BARS). This
technique is also called the behavioural expectation scale (BES).
 MBA0043 - Human Resource Management

Assignment Set – 2

Q1. Explain Wage Administration policy. What are the ways by which wages and
salaries are managed in India?

Ans : Wage & Salary Administration

The term compensation management, or alternatively, wage and salary administration

revolves around designing and managing policies and methods of disbursing employee
compensation. Traditionally it includes such areas as job evaluation, maintenance of wage
structures, wage surveys, incentives administration, wage changes and adjustments,
supplementary payouts, profit sharing, control of compensation costs, and other related pay
items.

Salaried often implies a status distinction, because those who are on salary are generally
white-collar, administrative, professional, and executive employees, whereas wage-earners
are designated as hourly, non-supervisory, or blue-collar. Wage-earners in some
organizations do receive full wage if they are absent for such reasons as sickness, whereas
salaried employees, especially at the lower levels, often receive overtime pay when they
work over the standard work week.

Compensation/ salary systems are designed to ensure that employees are rewarded
appropriately depending on what they do and the skills and knowledge (intellect) required
for doing a specific job. It must therefore provide for the following key factors in order to be
effective: The following factors may be helpful to raise the effectiveness of employees

— Signal to the employee the major objectives of the organizations – therefore it must link
to the overall goals and objectives of the company. For example if doing a quality job is
critical for the company its compensation system has to ensure that this is adequately
rewarded. On the other hand if a company values productivity and units produced, the
compensation system would be designed such that productivity is rewarded.

— Attract and retain the talent an organization needs – the need to benchmark salaries to
the prevalent market standard for that job /skill so that the company is able to attract the
right talent. If a enterprise pays a salary lower that what the market does for that
job/responsibilities, the probability that suitable candidates would take the job offer and join
the company. Even if they do join subsequently when they find that the market pays more
for that job they would quickly find a more remunerative job and leave the company.
In India, wages are classified as below :

Minimum wage: A minimum wage has been defined by the Committee as "the wage which
must provide not only for the bare sustenance of life, but for the preservation of the
efficiency of the worker. For this purpose, the minimum wage must provide for some
measure of education, medical requirements and amenities". In other words, a minimum
wage should provide for the sustenance of the worker’s family, for his efficiency, for the
education of his family members, for their medical care and for some amenities. It is very
difficult to determine the minimum wage because conditions vary from place to place,
industry to industry and from worker to worker. However, the principles for determining
minimum wages were evolved by the Government and have been incorporated in the
Minimum Wages Act, 1948, the important principle being that minimum wages should
provide not only for the bare sustenance of life but also for the preservation of the efficiency
of the workers by way of education, medical care and other amenities.

Fair Wage: According to the Committee on Fair Wages, "it is the wage which is above the
minimum wage but below the living wage." The lower limit of the fair wage is obviously the
minimum wage; the upper limit is set by the "capacity of the industry to pay". Between
these two limits, the actual wages should depend on considerations of such factors as:

i) The productivity of labour;

ii) The prevailing rates of wages in the same or neighbouring localities;

iii) The level of the national income and its distribution; and

iv) The place of industry in the economy.

Living Wage: This wage was recommended by the Committee as a fair wage and as
ultimate goal in a wage policy. It defined a Living Wage as "one which should enable the
earner to provide for himself and his family not only the bare essentials of food, clothing
and shelter but a measure of frugal comfort, including education for his children, protection
against ill-health, requirements of essential social needs and a measure of insurance against
the more important misfortunes including old age". In other words, a living wage was to
provide for a standard of living that would ensure good health for the worker, and his family
as well as a measure of decency, comfort, education for his children, and protection against
misfortunes.

Generally, ascertaining wages and deciding who to pay what is a activity undertaken in the
beginning when a organization is set up. Thereon it is annual reviews to make corrections
per the country’s economic and market/industry trends. The management considers the
state of the labour market and takes into account of what he can afford to pay and the
value of the worker to him. The workers’ willingness for employment at the rate offered
implies that they agree to work at that rate, though they have had no part in fixing it.

1. Collective Bargaining: Collective bargaining is still in the initial stage in India. Although
it is a desirable development in the relations between management and labour, it cannot be
imposed upon either side by compulsion and should evolve naturally from within.
2. Voluntary Arbitration: In voluntary arbitration, both parties agree to refer their dispute
to mutually agreed arbitrator and his award becomes binding on the parties.

3. Wage Legislation: Wages are fixed according to law in some industries. The Central
Government and State Governments may fix minimum wages under the Minimum Wages
Act of 1948 for industries in which workers are exploited or too unorganized to protect their
own interests. In order to advise them in the matter of fixing minimum wages, the
Governments appoint Minimum Wages Committees and the Advisory Boards. The
Committees and the Advisory Boards consist of equal number of workers and employers
representatives and also independent members whose number should not exceed one- third
of the total number of members.

4. Conciliation: The Industrial Disputes Act, 1947, provides for consideration in case of
disputes between employers and workers. If an agreement is reached in the course of
conciliation proceedings, it becomes binding on the parties and takes effect from the date
agreed upon or from the date on which it is signed by the two parties. In case no agreement
is reached, the Conciliation Officer sends a full report of the proceedings. On receipt of this
report, the government may decide to refer the case to Industrial Tribunal for award.

5. Adjudication: Labour courts and Industrial Tribunals are set up under the Industrial
Disputes Act, 1947. On studying the awards one gets the impression that the adjudicators
are attempting to justify their decision in social and ethical terms. At the same time, there is
a desire to satisfy both parties to the dispute, and therefore, economic factors such as
capacity to pay, unemployment, profits, condition of the economy or welfare of the industry
concerned, are given due prominence.

6. Wage Boards: The boards are appointed by the Government and usually consist of
seven members – two representatives of management, two of labour, two independent
members and a chairman. The board is expected to take into account the needs of the
specific industry in a developing economy, the special features of the industry, the
requirements of social justice, and the necessity for adjusting wage differential in such a
manner as to provide incentives to workers for advancing their skill. Its recommendations
may be accepted by the Government either completely or partly, and may be statutorily
imposed on the industry in question, or may be rejected.

In a nutshell, wages are influenced both by social and economic factors. In one case,
economic factors may play a major role, whereas in another, social factors may be
predominant. Thus, wages are product of both social and economic factors.
Q2. Texas is a medium size, plastic manufacturing company. In this Company,
workers have developed grievances against management. For past 2 years, in
spite of making Profit, Company is not paying bonus to the workers. It is expected
that, if the grievances are not dealt, it might lead to severe consequences.
Imagine this situation and explain the grievance handling procedure, list each
steps of the procedure. Suggest few measures to avoid grievances.

Ans: The Grievance Handling Procedure

Principles suggested by the Indian Institute of Personnel Management for addressing the
grievance are as follows:

a) A grievance should be dealt within the limits of the first line manager.

b) The appellate authority should be made clear to the employee so that if he cannot get
satisfaction from his immediate manager, he should know the next step.

c) The grievance should be dealt with speedily.

d) In establishing a grievance procedure, if the grievance is against an instruction given by

a superior in the interest of order and discipline, the instructions must be carried out first
and then only employee can register his protest.

There should be no recourse to official machinery of conciliation unless the procedure has
been carried out without reaching any solution.

Grievance Machinery

A grievance machinery is usually thought of in connection with a company that deals with a
labour union. Though the union must be given some credit for stimulating the installation of
such procedures, all companies, whether unionized or not, should have established and
known methods of processing grievances.

To establish new grievance machinery, workers in each department and each shift shall
select, from among themselves and for a period of not less than one year at a time,
departmental representatives, and forward the list of persons so selected to the
management. Where the unions in the undertaking are in a position to submit an agreed list
of names, recourse to election may not be necessary. Nor will this be necessary when a
Works Committee is functioning satisfactorily, for the Works Committee’s member of a
particular constituency shall act as the departmental representative.

Grievance Handling

The details of the grievance procedure vary from industry to industry and from trade union
to trade union because of the variations in the size of organizations, trade union strength,
the management philosophy, the company traditions, industrial practices and in the cost
factor. An important aspect of the grievance machinery is the reassurance given to an
individual employee by the mere fact that there is a mechanism available to him which will
consider his grievance in a dispassionate and detailed manner, and that his point of view
will be heard and given due consideration. An employee’s conception of his problem(s) may
be quite biased. Venting his grievance and being heard gives him a feeling of being cared
for. He gets it "off his chest", so to say, and it does a lot of good for his morale as revealed
by the famous Hawthorne Studies.

Grievance Handling Procedure

Initial step

The greatest opportunity for the settlement of a complaint or grievance lies in the initial
step of the procedure. If there is no formal procedure and the firm announces an open-door
policy, then it is possible that the manager may get bypassed by the worker who would take
his grievance directly to the higher levels of management. But such bypassing not merely
undermines the manager’s authority, who loses face, but also creates an atmosphere of
win-or-loose in which both the worker and manager will try to prove the other wrong.

Intermediate step

As the figure indicates, the next step on the management side of the procedure is to submit
the dispute to middle management. Involving the manager’s, middle and senior-line
managers in the grievance process helps in two ways. Initially, the social barriers between
the various categories are, to some extent, broken by personal contact and mutual
understanding. Secondly, the problem-solving approach integrates the various levels in the
organization into a team to jointly overcome the problem which concerns not only the
worker but the manager as well. However, it is important to ensure that the line
management assumes prime responsibility for the settlement of a grievance. In many
organizations, the Personnel Department is injected into the procedure as a decision-making
power. On the union side, intermediate levels are represented by higher personnel in the
union hierarchy. In most of the organizations, the business agent, a full-time negotiations
specialist of the union, takes over the intermediate and sometimes the final step. The
presence of a business agent may explain why management is often outmanoeuvred by the
union. Business agents are specialists in union-management negotiations, and it is also their
full-time job. The line manager often considers grievance processing a minor, incidental,
and distasteful duty. This lack of specialization and interest on the part of line management
has led to the situation in which the staff personnel department is given authority to make
decisions about grievances.

Final Company-union step

Usually, the final step to be undertaken by the company and union is a discussion of the
grievance between representatives of top management and top union officials. For
management, it may be the President in important grievances, a Vice-president, or a high-
level Industrial Relations Executive but, for the union, it may be the President of the local
union, the Union Executive Committee, or a representative of the International Union. It is
difficult to secure an integration of interests at this high level.

Importance of Grievance Handling

What might happen if an organization does not provide some method by which a employee
can voice his complaints and obtain a explanation? The employee will be unhappy, his
productivity is impacted, he openly begins to share his discontent with not just his
colleagues but also outsider’s, friends, relatives, maybe even customers and vendors. Just
as the employee has all the right to voice a grievance, as employer (or the management)
owes it to the employee to respond suitably to the grievance. It is but commonsense that
the resolution of a problem rests on management. The earliest and clearest opportunity for
issue resolution is found at the first stage, before the grievance has left the jurisdiction of
the manager. For this reason, many firms have specifically trained their managers on how
to handle a grievance or complaint properly. If the dispute or grievance constitutes a
managerial problem it can often be resolved by the manager himself with the help of the HR
team. The following steps discuss how a grievance can be redressed:

1. Receiving the grievance: The manner and attitude with which the manager receives
the complaint of grievance is important. The basic premise is that the manager should at
the outset assume that the employee is fair in presenting his/her opinion/complaint. The
complaint should not be prejudged on the basis of past experience with this or other
employees. When a employee approaches the manager with a issue the manager needs to
make himself available to listen it all out and provide him/her the undivided attention.
Research confirms that managers who were more task-oriented, as contrasted with
managers who were more people-oriented, tended to experience a significantly higher
number of grievances being filed in their units.

2. Reviewing the grievance: Once a complaint is received all facts supporting the issue
needs to be gathered. Proper record keeping such as performance ratings, job ratings,
attending records, and suggestions are reviewed. In addition, with the increasingly legal
implications of modern labour-management relations, the manager should keep records on
each particular grievance. All action taken, discussions with the employee, summary and
what is agreed to all of it needs to be recorded.
3. Analysis and decision: With the problem defined and the facts in hand, the manager
must now analyze and evaluate them, and come to some decision. It is important for the
manager to involve others in the process to ensure that it is fair and is the best solution.
The manager must include the views of his own manager as he might not be aware of all
the implications of the problem and its resolution. Involving HR too is a recommended
process in all organizations. HR can then seek finance or legal counsel if required, before
any decision is taken. All involved in the decision making process need to be aware that the
decision may create an undesirable precedence within the department as well as the
company.

4. Response: Often it might not be possible to provide a positive resolution to the problem.
If the solution decided is adverse to the employee’s views, attention needs to be given to
the method of communication. Employees dislike managers who will take no stand, good or
bad. Clearly communicating the message and sharing as much information as possible
about the decision making process helps in establishing credibility to the process used to
make the decision. The manager can also invite HR or his manager to sit-in on the
conversation with the employee. As far as possible this should happen in a face-to-face
meeting. In the event an employee wishes to take the appeal beyond to the next stage of
the procedure he must be allowed to do so. The manager must have the opportunity to
explain his decision to the other members so they can take a well-informed decision.

5. Follow up: The objective of the grievance procedure is to resolve a disagreement

between an employee and the organization. Open communication is important for this
process. The purpose of phase is to determine whether the employee feels that the problem
has been sufficiently redressed. If follow up reveals that the case has been handled
unsatisfactorily, then redefinition of the problem, further fact-finding, analysis, solution and
follow up are required. At this stage the manager can step aside and allow someone else in
a position of authority like the HR or the manager’s manager to lead the process and close
it.

Q3. Define competency. How competency is linked to Human resource system.

Ans: Competency can be thought of a as a tool that can be used to map ‘best-in-class’
performance the best performer is always called the competent performer. Competencies
are based on Knowledge – information accumulated in a particular area of expertise,
Skills – the demonstration of the expertise, Motive – the recurrent thought that drives
behaviour, Attitude- self-concept, value and self image, Traits – a general disposition to
behave in a particular way.

Linking Competency to HR Systems –

One of the key benefits of the competency based management approach is its usage to
build all of the other HR systems such as recruitment, performance management, training
and development, career development, compensation management and Succession
planning. Let’s study them one by one.
Recruitment and selection: The Competency profile for a job serves as the reference for the
candidate hunt for the position. It is used at multiple stages in the recruitment and selection
process

· Job Description and competency profile shared with the recruitment consultant as well as
hosted on the company intranet and internet site for prospective applicants to view

· Use the competencies to design the appropriate selection tests and other methods

· Assessment forms for interviewers to contain the competency list and specify the desired
proficiency levels

Performance Management: Increasingly the focus in most organizations using competency

frameworks is to build competency based performance assessment processes. The
employees’ performance is assessed on the core tasks and results as well as on the
competencies required for the job he/she is doing. If there are gaps between the desired
proficiency and the current proficiency of the employee the employee is reviewed for
development initiatives to improve the competency. If the employee has competencies
above the desired proficiency he is potential talent and needs to be nurtured for other roles
and higher responsibilities.

Training Needs: as explained above the information on gaps in competencies are collated
for employees across the organizations and suitable training interventions are designed. The
methodology used for competency improvement is usually action learning based. Focus is
on internalising the learning by ensuring workplace application projects and activities.
Manager support in making competency training useful is important.

Career Planning: Competency assessments are popularly used for helping an employee
discover his strength competencies and therefore serve as effective means for the employee
to identify what roles/jobs can be best for the competencies the employee possesses. Most
career planning assessment and activities are built on enhancing the employee’s strength
areas and indentifying jobs that match the strengths.

Compensation philosophy: while there is significant work done in researching competency

based compensation, the practical application of competency based compensation system is
not as easy. The competency framework provides a common benchmarking of all jobs
across the organization on the competencies required and the proficiency level for the
competency. This framework is then mapped to levels or grades that create a job to level
mapping. The levels have ranges of compensation that can be paid for any job at a specific
level. For example if there are 25 job clusters in a company. Each job cluster can have
anywhere between 5 to 17 jobs. Each job in the job cluster is mapped to a level in the
company. So if a particular job cluster has 5 jobs each job has a set of competencies and
proficiency and this determines the level of the job and let us assumes it maps to Level 42
in the compensation system. All Level 42 jobs are mapped to compensation range with a
Minimum salary of Rs.45,000 and a maximum salary of Rs.1,20,000. This range specifies
the recommended salary range for a employee in this job. Ideally a new employee being
hired to this job should be paid not less than the minimum specified for this job. A employee
doing a extremely good job in the role and has been in the role for close to
3 years should be getting a salary closer to the maximum in the range.

Succession Planning: competency based management is most effective in succession

planning initiatives. Competency assessment is a widely used to identify and nurture talent
in organizations. Most succession planning decisions use the competency assessment data
for the employee and this along with the career planning data are used to ascertain
employee readiness and inclination for new roles and responsibilities in the critical roles
identified for succession planning.

Q4. Think of a situation in which an employee is to be dismissed from the

organization, what will be the fair steps of dismissal followed by the organization?

Ans: The following steps are followed for dismissal of an employee:

a) Charge Sheet is Framed and Issued:

The first step in the procedure is to have in-place a written complaint against the employee
in question, and which contains details of the offence with which he is charged, policy
breach and the allegation of misconduct made against him, and indicating the time limit
within which a reply to the charge sheet should be submitted to the due authorities. The
employee is called to put forth his case why a disciplinary action should not be taken
against him.

The contents and implications of the complaint/charge sheet may be explained to him in his
own language and in the presence of some reputable witness, before a copy of it is handed
over to him. If he refuses to accept it, it should be sent to his residential address "registered
post with acknowledgement due". If the employee refuses to take delivery of the registered
letter, or when it has been returned undelivered, it should be published in a local paper to
ensure its wide publicity.

b) Explanation Receipt:

The employee provides his explanation within the scheduled time allotted. He can also ask
for an extension of time for its submission, all in good faith.

c) Issue of Notice of Enquiry:

Upon receipt of the explanation from the employee it is reviewed. If found unsatisfactory, a
notice of enquiry, mentioning the time, date and place, has to be given to him in which the
name of the person or officer conducting the enquiry would also be mentioned. The
employee is required to be present at the appointed time and place, together with his
witness, if he has any.
d) Conducting the Enquiry:

On the appointed day and at the appointed place and time, the enquiry is held by the
Enquiry Officer in the presence of the employee. The contents of the charge sheet and an
explanation of the procedure to be followed at the enquiry are communicated to the worker.
If he pleads his innocence, the enquiry proceeds; but if he pleads guilty, unconditionally and
in writing, the enquiry is dropped.

e) Sharing Findings:

Once the enquiry is over, the Enquiry Officer has to give his findings, which should
invariably contain the procedure which was followed, the employee’s statements, all of the
documents produced and examined, the charges made and the explanations given and the
evidence produced. The officer should then record his own findings on each of the charges
and the grounds on which he has come to a particular conclusion. He should specifically
mention which charges have been proved and which have not been proved. He then submits
his findings to the authorities empowered to take the disciplinary action against the
employee. He, however, is not required to make any recommendations.

a) On receiving the report, the executive authorized to take a decision thereon passes an
order of action

b) Communication of the decision

A copy of the orders is then handed over to the employee.

In terminating the employment of a employee the following conditions must necessarily be

complied with for misconduct.

a) The misconduct of the employee is of such a nature as to indicate that his discharge or
dismissal would be an appropriate punishment and that this kind of punishment has been
provided in the companies policies or per statute

b) A fair and open enquiry must be held by the employer into the misconduct which an
employee has been charged with.

c) The enquiry should be held in such a manner as to ensure that it would be fair and proper
and in conformity with the principles of natural justice. The employee must be given an
adequate opportunity to defend himself and to present witness in support of his contention
or case.

d) The person holding the enquiry should not be someone who’s known to be biased has
personal/vested interest or was in anyway associated with the misconduct.

e) The order must be sensitively communicated to the employee against who it has been
passed.
Q5. Suggest few measures to improve employee morale.

Ans: Improving Morale

There are a number of measures which can be used to control the warning signals of low
morale. The following are the positive measures to be taken to bring job satisfaction to the
employees and reconcile individual interests with the interests of the organization.

1. Creation of whole jobs – Under this method, complete jobs are assigned to the
employees. The complexity of a job should be increased so that it may appeal to their
higher needs.

2. Job enrichment – Job enrichment tries to deal with dissatisfaction by increasing job
depth. Under this, individual employees may be given responsibility for setting their own
work pace, for concerning their own errors, and/or for deciding on the best way to perform
a particular task

3. Building responsibility into a job – Employees should be encouraged to participate and if

possible be held responsible for taking decisions. Some delegation of responsibility from the
manager tot he employee could be useful in improving employee ownership

4. Managerial effectiveness – This can be achieved by:

i) Developing work groups;

ii) Improving the social contacts of the employees- time away from work in team building
and fun activities;

iii) Managerial coaching discussed above

iv) Employee stress management activities

5. Flexing working hours – Flex time / work from home provisions allow employees to
arrange their work hours to suit their personal needs and life-styles. This is particularly
suited to situations with fluctuating workloads. Flex time employees are responsible for co-
ordinating their functions with other employees and thereby have more responsibility and
autonomy.

6. Rotation of jobs – This reduces employee’s boredom which arises out of the monotonous
nature of his work.

7. Incentive and Profit-sharing plans- Morale can be improved by effective incentive and
profit-sharing schemes. Incentive schemes are effective in improving workplace morale.
They need to carefully designed (preferably by experts) well communicated and
implemented to be effective. In addition to its economic aspects, profit-sharing has also
psychological aspects relating to friendly move by the management in providing the
employees an opportunity to participate in the profits.
Q6. Explain Victor Vroom’s Expectancy theory of motivation.

Ans: Victor Vroom’s Expectancy Theory of Motivation

The model is built around the concept of valence, instrumentality and expectancy and is
commonly called the VIE theory.

The ‘effort’ an individual puts into a task or a activity depends on 3 key factors: a) the effort
-> performance (E->P) expectancy, b) performance -> outcome (P->O) expectancy and c)
the outcome valences (V). This therefore impacts motivation. If any of the 3 is low the
motivation is low. The E->P Expectancy indicates the employees’ perception that his or
her effort will result in a particular level of performance. Its best represented as a
probability and ranges from 0.0 to 1.0. When the employee perceives that probability that
he/she can do a task well the effort expended is high and conversely when he/she perceives
that the probability that he/she cannot deliver the desired performance the effort expended
is far lower. The P->O Expectancy is the perceived probability that a specific performance
or behaviour will result in a specific outcome. When an employee perceives that the
performance will benefit him with a desirable outcome he will expand the effort directed
towards the performance that will get him/her the desired outcome. The Outcome
Valances is the third element in the expectancy theory. It indicates the feeling of
satisfaction/dissatisfaction that an employee feels towards the outcome. It is impacted by
the perception about how much the outcome will interfere or fulfil the person’s needs and
drives. It ranges from negative to positive, –1 to +1. It also is influenced by our personal
values. For example a company has newly implemented a work from home policy for a
particular team. If one of the employees’ in the team is a extrovert and his need for
affiliation is very high, hence there is positive outcome valence for group activities and other
group events that fulfil this need. As a result of the change in policy the employees’ E->P
expectancy relationship and the P->O expectancy drops and as a result the performance
drops. There is no longer a positive valance towards working in this team and the employee
will begin to look for a alternative opportunity wherein the outcome valence is positive and
he can apply the effort and performance to meet that outcome.