Career Planning & Management

Career Planning & Management
Instructor: Shahid Khan
Week - 2
1st March, 2012
APCOMS, Rawalpindi
Human Resource Management

Definition
HRM is concerned with the most effective use of people to achieve organizational and individual goals. It is the way of managing people at work, so that they give their best to the organization Invancevich and Glueck

Employee: Old vs. New
I will work hard for and act with loyalty towards my employer. In return I expect to be retained as an employee provided I do not act against the interests of the organization. I also expect to be given opportunities for development and promotion should circumstances make this possible.
I will bring to my work effort and creativity. In return I expect a salary that is appropriate to my contribution and market worth. While our relationship may be short term, I will remain for as long as I receive the developmental opportunities I need to build my career.
Agenda
1. Career??? Career Planning & Management What, Need, Process, Advantages, Limitations Organizational careers: the rumors of their death have been premature New psychological contracts
2.
3.
4.
Career
What?
Psychologists define career as, The pattern of work-related experience that span the course of a persons life. Arthur, Hall and Lawrence from the USA regard career as an evolving sequence of a persons work experience over time. Arnold defines career as the sequence of employment- related positions, roles, activities and experiences encountered by a person. However, careers are, to a certain extent, a property of organizations, and managed by them as part of HRM. Therefore, a balanced definition can be: a process of development by [an] employee along a path of experience and roles in one or more organizations.
Career
What?
The basic roles of HRM are to obtain and retain employees, and career systems deal with the latter role, of retaining (and sometimes releasing an excess of) employees.

What People Think of Careers
I didn't leave bodybuilding until I felt that I had gone as far as I could go. It will be the same with my film career. When I feel the time is right, I will then consider public service. I feel that the highest honor comes from serving people and your country. Arnold Schwarzenegger Poetry is not a career, but a mug's game. No honest poet can ever feel quite sure of the permanent value of what he has written: He may have wasted his time and messed up his life for nothing. T. S. Eliot But the problem is that when I go around and speak on campuses, I still don't get young men standing up and saying, 'How can I combine career and family?' Gertrude Stein

What People Think of Careers
A career is wonderful, but you cant curl up with it on a cold night. Marilyn Monroe
A lot of fellows nowadays have a B.A., M.D., or Ph.D. Unfortunately, they dont have a J.O.B. Fats Domino
By working faithfully eight hours a day you may eventually get to be a boss and work twelve hours a day. Robert Frost You are what you do. If you do boring, stupid, monotonous work, chances are youll end up boring, stupid, and monotonous. Bob Black Dont confuse having a career with having a life. Hillary Clinton
Agenda
2.
3.
4.

What?
Career planning is the process by which one selects career goals and the path to these goals. Career management is those personal improvements one undertakes to achieve a personal career plan. Career management is the process of designing and implementing goals, plans and strategies to enable the organization to satisfy employee needs while allowing individuals to achieve their career goals. Career planning and management is necessary to each and every employee in an organization.

What?
Career Management consists of personal improvements undertaken by the individual employee, training, development and educational programs provided by the organization and various institutes. The most important aspect of career planning & management is that every employee must accept his/her responsibility for development.

Need
To attract competent persons and to retain them in the organization. To provide suitable promotional opportunities. To enable the employees to develop and take them to meet the future challenges. To increase the utilization of managerial reserves within an organization. To correct employee placement. To reduce employee dissatisfaction and turnover. To improve motivation and morale.

Process
1. 2.
3.
4.
5. 6.
7.
Analysis of individual skills, knowledge, abilities, aptitudes etc. Analysis of career opportunities both within and outside the organization. Analysis of career demands on the incumbent in terms of skills, knowledge, abilities, aptitude etc., and in terms of qualifications, experience and training received etc. Relating specific jobs to different career opportunities. Establishing realistic goals both short-term and long-term. Formulating career strategy covering areas of change and adjustment. Preparing and implementing action plan including acquiring resources for achieving goals.

Advantages
For Individuals:
The process of career planning helps the individual to have the knowledge of various career opportunities, his priorities etc. This knowledge helps him select the career that is suitable to his life styles, preferences, family environment, scope for self-development etc. It helps the organization identify internal employees who can be promoted. Internal promotions, upgradation and transfers motivate the employees, boost up their morale and also result in increased job satisfaction. Increased job satisfaction enhances employee commitment and creates a sense of belongingness and loyalty to the organization.

Advantages
For Individuals:
Employee will await his turn of promotion rather than changing to another organization. This will lower employee turnover. It improves employees performance on the job by taping their potential abilities and further employee turnover. It satisfies employee esteem needs.
For Organizations:
A long-term focus of career planning and development will increase the effectiveness of human resource management.
Efficient career planning and development ensures the availability of human resources with required skill, knowledge and talent.

Advantages
For Organizations:
The efficient policies and practices improve the organizations ability to attract and retain highly skilled and talent employees. The proper career planning ensures that the women and people belong to backward communities get opportunities for growth and development.
The career plan continuously tries to satisfy the employee expectations and as such minimizes employee frustration.
By attracting and retaining the people from different cultures, enhances cultural diversity.
Protecting employees interest results in promoting organizational goodwill.

Limitations
Dual Career Families: With the increase in career orientation among women, number of female employees in on increase. With this, the dual career families have also been on increase. Consequently, one of those family members might face the problem of transfer. This has become a complicated problem to organizations. Consequently other employees may be at disadvantage. Low Ceiling Careers: Some careers do not have scope for much advancement. Employees cannot get promotions despite their career plans and development in such jobs.

Limitations
Declining Career Opportunities: Career opportunities for certain categories reach the declining stage due to the influence of the technological or economic factors. Solution for such problem is career shift. Downsizing/De-layering and Careers: Business process reengineering, technological changes and business environmental factors force the business firms to restructure the organizations by de-layering and downsizing. Downsizing activities result in fixing some employees, and degrading some other employees.
Agenda
2.
3.
4.

Organizational Careers

There is a change, a transformation, and a transition. Mounting the hierarchy is no longer the sole criterion. Inner satisfaction, life balance, autonomy and freedom have entered the formula. Growth for the sake of growth is the ideology of the cancer cell. (Edward Abbey) Climbing up the organizational ladder, just for the sake of being higher in the hierarchy, does not make sense. Realization of this notion has enabled significant changes to the meaning of career advancement. With the flattening of organizations and the elimination of entire managerial layers, career paths have become blurred since the 1980s and the 1990s.

Organizational Careers
These changes mean that a different approach to the management of careers should be sought, one that would cope with and fit the new reality of work and working life. The transformation of careers in general, and of psychological contracts specifically, is due to large economic, demographic and cultural forces, combined with business globalization and competitiveness. One aspect is the short horizons of career planning. Just-in-time and business process re-engineering (mostly in manufacturing), and the privatization of many services are translated into limited options for longterm career plans at organizational level.
Agenda
1. Career??? Career Planning & Management What, Need, Process, Advantages, Limitations Organizational Careers: The Rumors of their Death have been Premature New psychological contracts
2.
3.
4.

New Psychological Contracts Evolution of Employment Relationship
In lay terms, the psychological contract is The unspoken promise, not present in the small print of the employment contract, of what *the+ employer gives, and what employees give in return.
Such a contract is fundamentally different from the formal, legal employment contracts in their
context and expected impact. The evolution of the new psychological contracts led to a situation where there are no long-term contracts of loyalty and no mutual commitment.
Organizational commitment was commonly accepted as the desired norm, for both organizations
and employees. As a result the downsizing process has had very negative outcomes. Organizational commitment, motivational levels and satisfaction are associated with each other, and a high level of these will lead to improved performance and a tendency to remain in an org.

However, since mutual commitment has diminished or ceased to exist and the trust-based relationship has deteriorated in the industrial world, the relevance of the construct of organizational commitment has declined. Others argue for the need to maintain organizational commitment even in such times for the benefits it generates to organizations. For this purpose, new ideas need to be introduced to compensate for the loss of balance in the relationship equation. We can now find ideas based on Employability, with the organization being expected to invest in the training and development of its employees, and the employee being expected to exert effort and be flexible.

Through the concept of employability, employees will be able to find either good jobs if the company has no further need for their services, and the company will be released from a lifelong obligation to employees. This means a new deal, which is different from that of mutual commitment, and is not necessarily the one employees would prefer, nor the one that organizations would easily adopt. Now, a career is more than a single job, a single position or a single role. It is a developmental process of progression. The individual and the organization share duties and responsibilities, both are equal partners in the game. Employees do not always welcome such a transformation. It means no more lifetime employment (or a promise of such), no more mutual loyalty.

The typical traditional deal was: employees offer loyalty, conformity, commitment; employers offer security of employment, career prospects, training and development and care in trouble. The archetype was a full-time career with a single employer. Both sides based the relationship on trust. To a certain extent employees can easily understand and accept this type of relationship. Under the new deal, employees offer long hours, assume added responsibility, provide broader skills and tolerate change and ambiguity, whereas employers offer high pay, reward for performance and above all, the fact of having a job. When there is readiness for changes and adjusted expectations there will not be a process of disillusionment and a feeling of betrayal on the part of employees.

New Psychological Contracts Boundaryless Orgs & Careers

Boundaryless Organizations: Ashkenas et al. suggest that breaking down barriers is one of the ways in which organizations can struggle to survive and flourish. According to Ashkenas et al. there are FOUR types of barriers to overcome.
1.
2.
Vertical: Breaking down vertical barriers is crucial since hierarchical bureaucracies tend to restrict the flow of information, are reluctant to respond to changing environments and are inflexible in both their thinking and their actions. Horizontal: Breaking down horizontal barriers means, according to Ashkenas et al., eliminating the traditional barriers between the conventional functions and operations of organizations.

3.
Environmental: Breaking down the barriers between the organization and the environment or other organizations is complex, but working with joint ventures, suppliers, customers, government agencies, etc. blurs the boundaries. Geographical: Lastly, breaking down geographical boundaries is reflected at both the national and the international levels or in the form of virtual organizations. Boundaryless Careers: The boundaryless organization is the site of the boundaryless career.
4.
These four deviations from the traditional type of organization have a direct impact on individuals and, in particular, on organizational career systems.

The breaking down of hierarchical bureaucracies demolishes the old-style system of a career ladder, strict rules for promotion and upward movement.
The elimination of the barriers between organizational functions opens up new career paths that cross boundary lines within organizations.
High levels of interactivity with the environment, including competitors, enable new practices (e.g. secondments).
Finally, the global realm offers a wide range of opportunities to grow and develop anywhere, from home to the other side of the world.
There is exaggeration in the new deal and is criticized also. But, all in all, the new deal does not represent a full revolution, but a widespread evolution.

New Psychological Contracts - Boundaryless Orgs & Careers
Aspect
Environmental characteristic
Traditional deal
Stability
Transformed deal
Dynamism
Career choice made

Main career responsibility lies with:
Once, at early age in career

Organization
Series, at different age stages

Individual
Career horizon (workplace) Career horizon (time) Employer expects/Employee gives:
Single organization Long Loyalty and commitment
Several organizations Short Long-time working hours
Employer gives/Employee expects:
Job security
Investment in employability
Progress criteria
Advancement according to tenure
Advancement according to results and knowledge
Success means
Winning the tournament i.e. progress on the hierarchy ladder

Formal programs, generalist
, Inner feeling of achievement
Training
On-the-job, company specific, sometimes ad hoc
Agenda
1. Career??? Career Planning & Management What, Need, Process, Advantages, Limitations Organizational Careers: The Rumors of their Death have been Premature New psychological contracts
2.
3.
4.
Thank You
Questions???

Instructor: Shahid Khan
Week 3
8th March, 2012
APCOMS, Rawalpindi

Balancing Individual & Organizational Needs
Herriot and Pemberton offer the model presented in next slide. They outline four properties they feel an established career model should possess: 1. Conceptualization (i.e. taking into account not merely the organization, but also the business, political and economic environment) 2. Cyclical and processual nature of the model 3. Subjectivity (rather than normativity) for the meaning of career success 4. Interactive nature in the sense of relationship between the organization and the individual.

Balancing Individual & Organizational Careers

Shahid Khan
Week 4
20th December, 2011
APCOMS, Rawalpindi
Managing the Performances

Concept
In the absence of a carefully structured system of appraisal, people will tend to judge the work performance of others, including subordinates, naturally, informally and arbitrarily. The human inclination to judge can create serious motivational, ethical and legal problems in the workplace. Early motivational researchers were aware that different people with roughly equal work abilities could be paid the same amount of money and yet have quite different levels of motivation and performance. It was found that other issues, such as morale and self-esteem, could also have a major influence. As a result, the traditional emphasis on reward outcomes was progressively rejected. In the 1950s in the United States, the potential usefulness of appraisal as tool for motivation and development was gradually recognized. The general model of performance appraisal, as it is known today, began from that time.

Concept
After employee selection, performance appraisal is arguably the most important management tool a firm employer has at his disposal. The performance appraisal, when properly carried out, can help to fine tune and reward the performance of present employees. Strengths of the negotiated performance appraisal are its ability to promote candid two-way communication between the supervisor and the person being appraised and to help the latter take more responsibility for improving performance. In contrast, in the traditional performance appraisal, the supervisor acts more as a judge of employee performance than as a coach. By so doing, unfortunately, the focus is on blame rather than on helping the employee assume responsibility for improvement.

Performance

Actual Results vs. Desired results. Any discrepancy, where Actual is less than Desired, could constitute the performance improvement zone. Performance management and improvement can be thought of as a cycle: 1. Performance planning where goals and objectives are established. 2. Performance coaching where a manager intervenes to give feedback and adjust performance. 3. Performance Appraisal

Performance Appraisal
Performance appraisal is a formal, structured system that compares employee performance to established standards. Assessment of job performance is shared with employees being appraised through one of several primary methods of performance appraisals. Successful appraisal methods have clearly defined and explicitly communicated standards or expectations of employee performance on the job. The appraisal results are used to identify the better performing employees who should get the majority of available merit pay increases, bonuses, and promotions. By the same token, appraisal results are used to identify the poorer performers who may require some form of counseling, or in extreme cases, demotion, dismissal or decreases in pay. (Organizations need to be aware of laws in their country that might restrict their capacity to dismiss employees or decrease pay).

Why? (1) validate and refine organizational actions (e.g., selection, training, culture, policies etc); and (2) provide feedback to employees with an eye on improving future performance.


Performance Appraisal Results
"He's got two brains cells, one is lost and the other is out looking for it. "If you give him a penny for his thoughts, you'd get change.
"Some drink from the fountain of knowledge; he only gargled. CAREFUL THINKER: Wont take decision LOYAL: Cant get another job USES LOGIC ON DIFFICULT JOBS: Get someone else to do it
A KEEN ANALYST: Thoroughly confused EXCEPTIONALLY GOOD JUDGEMENT: Lucky CAREER MINDED: Back stabber JOB IS HIS FIRST PRIORITY: Too ugly to get a date

Controversy Controversy
Linking performance appraisals with pay raises and rewards.
Many appraisers feel uncomfortable with the combined role of judge and executioner. Appraisers often know their appraisees well, and are typically in a direct subordinate-supervisor relationship. They work together on a daily basis and may, at times, mix socially. Suggesting that a subordinate needs to brush up on certain work skills is one thing; giving an appraisal result that has the direct effect of negating a promotion is another. The result can be resentment and serious morale damage, leading to workplace disruption, soured relationships and productivity declines.

There is a critical need for remunerative justice in organizations. Performance appraisalwhatever its practical flawsis the only process available to help achieve fair, decent and consistent reward outcomes. It has also been claimed that appraises themselves are inclined to believe that appraisal results should be linked directly to reward outcomesand are suspicious and disappointed when told this is not. The advocates of linking PA to reward say that organizations must have a process by which rewardswhich are not an unlimited resourcemay be openly and fairly distributed to those most deserving on the basis of effort & results. Performance Appraisal and Organizational Development

Performance reviews can be regarded as learning events, in which individuals can be encouraged to think about how and in which ways they want to develop. This can lead to the drawing up of a Personal Development Plan (PDP) setting out the actions they propose to take (with the help of others, not least their managers) to develop themselves. To keep development separate from performance and salary discussions, development reviews may be held at other times e.g., anniversary of joining an organization. Objectives and Performance Standards (also MBO) Means vs. Ends Teams Performance Reward

Measurement: Managers performance may be measured with respect to meeting objectives. But of production staff, it can be measured with respect to attaining output. Performance vs. Potential or Competence Who should appraise (immediate boss, peers, immediate subordinate, self)? Would you study differently or exert a different level of effort for a college course graded on a pass-fail basis than for one in which letter grades from A to F are used? 360 Degree Feedback

Performance Appraisal 360 Degree Feedback

Confidentiality???

Performance Appraisal Results

The Boss asked for a letter describing Bob Smith for his performance appraisal: *Bob Smith, my assistant programmer, can always be found *hard at work in his cubicle. Bob works independently, without *wasting company time talking to colleagues. Bob never *thinks twice about assisting fellow employees, and he always *finishes given assignments on time. Often Bob takes extended *measures to complete his work, sometimes skipping coffee *breaks. Bob is a dedicated individual who has absolutely no *vanity in spite of his high accomplishments and profound *knowledge in his field. I firmly believe that Bob can be *classed as a high-caliber employee, the type which cannot be *dispensed with. Consequently, I duly recommend that Bob be *promoted to executive management, and a proposal will be *executed as soon as possible. A memo was soon sent following the letter: That idiot was reading over my shoulder while I wrote the report sent to you earlier today. Kindly read only the odd numbered lines (1, 3, 5, etc...) for my true assessment of him.


Process or Steps: To Improve Performance Appraisal: Focus on behavior rather than traits Keep a diary of incidents Focus more on future than past???? Link trainings to Performance Appraisal Use multiple evaluators (for subjectivity) Separate compensation conversation from PA Train evaluators

Shahid Khan
Week 5
29th December, 2011
APCOMS, Rawalpindi
Agenda
Week 3
1. Competency Mapping - What? Why?
Competence, competency
2.
Potential Appraisal What? Why? How? Philip Model, Input for Succession Planning Compensation Strategy & Structure What? Why? How?
Philip Model, Input for Succession Planning
3.

Competency
Competency is an underlying skill, potential characteristics, or motive demonstrates by various observable behaviors that contribute to outstanding performance in a job.
Competencies exist at different levels of personality. The various levels are:
Knowledge: Information that an individual has in a particular area (e-g, Accounting, HR etc). Skills: An individuals ability to do something well (e.g., the ability to make effective
presentations, or

to negotiate successfully). Behavior: Action of a person in a given situation. Traits: A typical way of behaving such as taking initiatives, showing flexibility.
Motives: A fundamental and often unconscious driver of thoughts and behavior for
example concern for excellence.

Competency Mapping
Personal characteristics (differentiating competencies) are hard to develop and it is more cost effective to select people having the desired personality traits. Knowledge and skills (essential competencies)
are easy to develop so training is cost effective.
Competency Mapping is a process of identifying key competencies (through job experts or past successful employees in similar position) for an organization and/or a job and incorporating those competencies throughout the various processes (i.e., job evaluation, PA, training, recruitment) of the organization.
Competency-based HR If it is possible to define the behaviors that create exemplary employees, and you can create a model to codify that, you can promote those who have it, hire those who have it, train those who dont have it on how to have it, compensate those who exhibit behaviors aligned against the model... thus drive your organization to achieve a higher level of success.

Maximizing Potential and how to unearth employee strengths

People get hired for what they know and are fired for how they behave. Dont focus too much on weaknesses but on possibilities and potential.
Make time for positive recognition with examples to make them realize what is valued more and to convert cant do to can do.
Ask the employee what he/she likes to do: Theres a funny equation applied to many promotions: People who excel at a specific job are promoted to management level. Often, youve taken the person out of the exact environment in which he or she succeeds and likespossibly reducing his or her success in the new position. Also, you cannot fully uncover a persons strengths without his or her input. Tap into what he or she discerns as his or her strengths by asking what he or she enjoys most, and why, and in what role he or she believes she or he is of most value to the organization.

Identify ways to apply existing strengths in new ways: Thomas Edison saw sewing-thread as a light bulb filament. Allow the employee to test-drive a new role: May be you re seeing the employee in his or her specific role, yet more of his or her strengths would blossom in another role. This test-drive might spark new ideas about increased value from the employee, and allow you to see where a role-shift may make sense for the company. These may be areas where the employee has not had a real opportunity to demonstrate the potential ability.

Potential Appraisal: Measuring an employees potential in order to gauge today what he could achieve tomorrow may be the stiffest challenges ever posed to the science of performance appraisal. People are like icebergs, what you see above the surface (Performance) is only a small part. A large part of the attributes needed to perform excellently in a future job which people call potential, is not immediately visible. It is hidden below the surface. Unleashing the iceberg may be the difficult, but it is also critical for corporate survival. Not only does potential appraisal help in catching high fliers but snapshot of breeding CEOs for the corporate.

Potential Appraisal: The potential appraisal system normally uses a five point grading scaleexcellent, very good, good/adequate, weak and insufficient to evaluate employees on the four broad attributes of: 1. Conceptual effectiveness: Vision, Business orientation, Entrepreneurial orientation, Sense of reality 2. Interpersonal effectiveness: Network directedness, Negotiating power, Personal influences, Verbal behavior 3. Operational effectiveness: Result orientation, Individual effectiveness, Risk-taking, Control 4. Achievement motivation: Drive, Professional, ambition, Innovativeness, Stability

Fig: Philip Model (Matrix Model)

Low potential-low performance: It defines these employees as question marks. The company asks such employees to improve their performance levels. If those efforts fail, it works towards a planned separation.
High potentiallow performance: These are the problem children, in 8 out of 10 cases, if location, boss, or job profile changes, they groom to become star performers. To tap their potential such employees are given a new scenario to work in and are closely monitored. However, if the performance levels still remain low, they are reclassified as question marks and the separation process is initiated.
High potentialhigh performance: These are the star performers. These are the race horses. They are to be kept engaged with complex assignments all the time and groomed to take up the top positions in the organization. Or they will leave.
Low potentialhigh performance: Defined as the solid citizens. High skilled but limited capability to grow beyond their current jobprofile they constitute 70 to 75% of the companies employees. The company constantly recognizes their limitations and look after their needs.

Potential appraisal along with performance appraisal provide a reasonable input to SUCCESSION PLANNING.

Shahid Khan
Week 6
29th December, 2011
APCOMS, Rawalpindi
Individual Career Models

Internal External & Organizational Careers
Internal Careers: a persons self-perception about his or her own career. An internal career is subjective, and thus the definition of internal career success depends on the inner feelings and values of the person. External Careers: how other people and organizations perceive a persons career. Evaluating career success by means of external evaluation is more objective than internal career measurement, but it still depends on the particular observers viewpoint. Success in an external career is assessed mainly in terms of hierarchy level and pace of progress on such a ladder, social status (e.g. occupational status), professional qualifications and financial success (i.e. income and other monetary rewards).

Internal External & Organizational Careers
Organizational Career: is a path people move along, in terms of the positions and the roles they fill during their working life. Career progress or advancement can be quite objective
and measurable within a single organization or between organizations with equivalent

promotion scales (e.g. army v. navy). However, such comparisons are less clear or may even be meaningless for dynamic careers, as moves involve multiple transitions. Here comparisons might be Impractical or irrelevant. (For example is the CEO of an organization employing 1000 people higher than a Vice President who manages 3000 employees in a company of 10 000?)
While organizations retain career systems through which they plan and manage peoples careers, it is people who have careers. People will plan and manage their careers, not always according to an organizations plans and schemes. It may be most appropriate to
consider careers as being under mutual ownership that of people and organizations.
We now look at individual career choice models.

Hollands RAISCE Model
Hand outs

Protean Career

From Greek Proteus god (changes appearance at his own will) Individual is the master of his career.

Career Success
There are two tragedies in life. One is to lose your hearts desire. The other one is to gain it. (G.B. Shaw)
There are two things to aim at in this life; first to get what you want; and, after that, to
enjoy it. Only the wisest of mankind achieve the second. (Logan Pearsall Smith) Criteria of career success is different for different people but mostly: The criteria for evaluating success can be, first, reaching what you aimed for, and second,
how far doing so helped to fulfill your needs. This takes us back to Shaw again: obtaining
entrance to the profession, organization or specific job you have always dreamed of does not necessarily mean that you will be happy or even satisfied with your career once you have achieved it. This sobering process is most apparent in jobs such as nursing (with high proportion of nurses leaving the profession).

Career Success
Think of two young men opting for a career in the army. One has set himself the goal of becoming a Captain. In the end he manages to reach the rank of Major. His friend set himself the target to become a LieutenantGeneral. In the end he is promoted to Colonel. The rank of the first is lower than that of the second, but the first one has exceeded his target whereas his friend has failed to achieve his. Who has the greater success the one who reached the higher rank or the one who surpassed his goal? Should success be measured externally or internally?

Derrs Framework of Career Success
Traditional Measures: formal education, lifelong employment with job security and hierarchical progress. Derrs Measures: (a) Getting ahead: Motivation derives from the need to advance both in professional standing and up the organizational ladder. (b) Getting secure: Having a solid position within the organization. (c) Getting high: Being inspired by the nature and content of the work performed. (d) Getting free: Being motivated by a need for autonomy and the ability to create ones own work environment. (e) Getting balanced: Attaching equal or greater value to non-work interests.

Derrs Framework of Career Success

Desert Generation
Hand Outs

Shahid Khan
Week 6
29th December, 2011
APCOMS, Rawalpindi
Compensation Strategy & Structure

Compensation
Compensation is the outcome (rewards) employees receive in exchange for their work Wage vs. Salary: (non-exempt vs. exempt) Salary vs. Benefits The compensation package offered a firms employees is important not only because it costs money, but because its likely to be the primary reason the employees work for the firm. Compensation packages with good pay and benefits can help attract and retain the best employees. An expectation that wages cover basic living expenses, keep up with inflation, leave some money for savings (perhaps for retirement) and leisure, increase over time, and are fair.

Objectives

Attract suitable staff. Retain qualified personnel. Develop reward structures that are equitable with consistent and fair pay relationships between differently valued jobs. Adjust pay structures to reflect inflationary effects. Ensure that rewards and salary costs adjust to changes in market rates or organizational change. Reward performance, responsibility, and loyalty. Comply with legal requirements.

Compensation Policy
1.
Compensation policy depends on certain criteria as below: Adequate: Minimal Governmental, union and managerial levels should be met.
2.
Equitable: Each person should be paid fairly, in the line with his or her effort, abilities.
Balanced: Pay, benefits & other rewards should provide a reasonable total rewards package.
3.
4. 5. 6. 7.
Cost-effective: The pay should not be excessive than what organization can afford.
Secure: Pay should be enough to help employees feel secure. Incentive providing: Pay should motivate effective and productive work. Acceptable to the employee:

Factors affecting Compensation Package
External Factors:
Industry, Competitors, Foreign Demand, Long Term Goals, Labor Market
Internal Factors:
Financial Conditions, HRM Application, Organizational Product Life Cycle, Organizational Culture
Other Factors: National Culture

Individualism/Collectivism: The individualistic cultures (US) adopt compensation strategies that reward individual performance, acquisition of skills and knowledge. In collectivistic society (Japan), the compensation of employees is on the basis of group performances recognize the importance of employee affiliations with groups.

Other Factors: National Culture Uncertainty Avoidance: methods by which a particular society deals with risk and the instability of their members. Fear of random events, value of stability and routines and the risk aversion are the hallmarks of high uncertainty avoidance (Italy, Greece etc.). On the other hand, welcoming random events, facing challenges and seeking risks characterize by the low uncertainty avoidance. Where the uncertainty avoidance is high, employers normally emphasize fixed pay than variable pay. When the low uncertainty avoidance (Singapore and Denmark), employers probably use incentive pay programs.

Other Factors: National Culture
Power Distance: The extent to which people accept a hierarchical system or power structure in the companies (status consciousness)
Masculinity-Femininity: It refers to whether masculine or feminine value is dominant in the society. Masculinity favors material possession (Germany). Feminity encourages caring and nurturing behavior (Finland and Norway). The compensation policies of the company of masculine culture are likely to focus mostly on material benefits. While that of feminine culture will focus on medical, children care etc as well. Product Life Cycle: Growth, Maturity, Decline

Pay Plans
Incentive Compensation Plan: Incentive compensation pays proportionately to employee performance. Incentives are typically given in addition to the base wage; They can be paid on the basis of individual, group, or plant-wide performance. Individual incentive plans encourage competition among employees, group or plant-wide incentive plans encourage cooperation and direct the efforts of all employees toward achieving overall company performance.

Pay Plans
Skill/Knowledge based Compensation Plan: Skill-based pay is a system that pays employees based on the skills they possess or master, not for the job they hold. As employees gain one skill and then another, their wage rate goes up until they have mastered all the skills. Team Based Compensation Plan: Recognizing the importance of close cooperation and mutual development in a work group (eg, self-managed teams), companies want to encourage employees to work as a team by offering pay based on the overall effectiveness of the team.

Pay Plans
Performance based Compensation Plan: Traditionally, pay was considered entitlement that employees deserve in exchange for showing up at work and doing well enough to avoid being fired. While base pay was given to employees regardless of performance, incentives and bonuses are extra rewards given in appreciation of their extra efforts. Pay-for-performance is a new movement away from this entitlement concept. It increases even the base payso-called merit increasesto reflect how highly employees are rated on a performance evaluation. Other incentives and bonuses are calculated based on this new merit pay, resulting in substantially more benefit for highly ranked employee performance.

Pay Structure
The way the organization structures its compensation packages is primarily a matter of organizational philosophy though the market trends play an important role. It can be using a single rate structure in which all the employees perform the same work receive the same pay. Or the second method is tenure based, that is based on the time for which an individual has been associated with the organization. The job evaluation methods give us the inputs for developing an organizational over all pay structure. Besides that other sources of information (surveys, reports etc.) can be utilized as well.

Job Evaluations & Market Considerations (Going Rates)
The job evaluation is a set of systematic procedures to determine the relative worth of jobs within the organization. Through job evaluations, jobs in the firm may be rated according to their relative importance. Each job might be given its own rate, or jobs of comparable importance may be grouped into a single wage classification, or pay grades (based on some grading systems). Job evaluations compare positions in an organization with respect to such factors as effort, skill, working conditions, responsibility, and so on. For the job evaluation to be useful, a detailed list of compensable factors needs to be articulated.

Job Evaluations & Market Considerations (Going Rates)
Job Evaluations are subjective and remain controversial because they have often been found to contain gender biases. In practice, results of job evaluations are often compromised by market considerations. For example, no matter what the firms job evaluation may indicate, it is unlikely that the firm will be able to pay wages drastically lower (or higher) than the going rate (due to competition or legal regulations). EXECUTIVES PAY:

Pay Equity

Internal Equity, External Equity, Cross Industry Equity Employees will act to restore equity if they perceive an imbalance. In evaluating the fairness of their pay, employees balance the ratio of their inputs (e.g., work effort, skills) and outcomes (e.g., pay, privileges) against those of their coworkers. Workers may thus experience guilt if they feel overcompensated, or they may feel anger if they perceive that they are being under-compensated. The greater the perceived disparity, the greater the tension. In order to relieve this tension, employees may seek balance in a number of ways:

Pay Equity
Modify input or output (e.g., if underpaid, a person may reduce his efforts or try to obtain a raise; if overpaid, he/she may increase efforts or work longer hours without additional compensation.
Adjust the notion of what is fair (e.g., if underpaid, a worker may think of himself as being the
recipient of other benefitssuch as doing interesting work; if overpaid, an employee may come to believe he deserves it).
Change source of equity comparison (e.g., an employee who has compared himself with a promoted
co-worker may begin to compare himself with another worker)
Attempt to change the input or output of others (e.g., asking others not to work so hard or to work harder).
Withdraw (e.g., through increased absenteeism, mental withdrawal or quitting). Force others to withdraw (e.g., trying to obtain a transfer for a co-worker or force him to quit).
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Career Planning &amp; Management

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Career Planning & Management

Instructor: Shahid Khan

Human Resource Management