Answer to the Question no 7 (a)

PERFORMANCE MANAGEMENT SYSTEM (PMS) Performance management system (PMS) is a comprehensive process of evaluating the performance of an employee based on the pre-determined targets. The system focuses on planning and evaluation of performance and feedback for improvements. The purpose of performance management is to establish objective criteria against which unit an individual performance can be measured, to provide performance fee back and to enhance performance continuously. Performance management involves establishing objective criteria for unit and individual performance feedback, identifying development needs and systematically addressing performance problems or rewarding extraordinary performance. The performance management system has following characteristics: Performance Planning - provides information on establishing performance expectations and goals for employees to channel their efforts toward achieving organizational objectives. Monitoring Employee Performance provides information on the requirements to conduct at least one formal written progress review for all employees. Employee Development provides information on the importance of evaluating and addressing employee development to increase the effectiveness of an organization. Evaluating Employee Performance provides information on evaluating employee performance against the elements and standards in an employee's performance plan and assigning a summary rating of record. Recognition provides information on a large variety of informal and formal recognition programs, which can be used to recognize and reward employee excellence.

For example, if the CEO asked for a 3% increase in gross margin, this objective would be cascaded down to every department, team and individual who can influence the increase in gross margin. Those who are successful at achieving this objective will get a favorable review, those that could not, will get an unfavorable performance evaluation in the absence of extenuating circumstances. The process of Performance Management therefore drives organizational performance outcomes. Employees that achieve the organizational goals are rewarded with favorable reviews and bonuses in line with their performance and contribution to the organization. Benefits of PMS: 1. Communication improves: The employee and manager communicate more frequently and agree on changed objectives to suit continuing changes in conditions and priorities. If the organization is using a Performance Management product that has a performance diary, both the manager and employee attend the review meeting with copies of their performance diary notes. This

contains content from the performance period to be reviewed. Given that both have content, they feel much better prepared and stress is lower than if they were attending a meeting not aware of the subject matter.

2. Everyone Knows the Rules

Where there is a well structured Performance Management system that is effectively communicated, employees are assessed on achievement of objectives that have been clearly identified and agreed to and Managers have a better framework to assess an employees performance as they are familiar with the criteria to assess the employee. The outcome is that both individuals have an informed discussion and focus on achievement of both personal and business objectives, not on issues that are irrelevant.

3. Better Recording Opens Up Communication

If the organization has a system with a performance diary, then both parties are prepared with relevant content to discuss. They have diary notes that relate to performance during the entire performance period. This raises confidence and reduces stress levels. Both parties feel more comfortable and they can have a content rich and factual discussion about performance.

4. Frequent Communication Reduces Stress

Given that these performance reviews happen more frequently, the discussion centers on performance of objectives rather than being dominated by the employees needs. The needs of the business are discussed more frequently to achieve specific performance outcomes. This means both the employee and manager communicate more effectively and achieve better outcomes. Emotionally charged discussions tend to be displaced by business focused discussions on achievement of objective outcomes.

5. Appraisals Become Relevant for Everyone

By conducting more frequent reviews, objectives can be adjusted and modified to suit changing business conditions. This dramatically increases the probability that the objectives are relevant and are able to be acted upon during the performance period. By reviewing more frequently, all managers and employees start to plan and execute to clearly think out objectives. This results in better resource management and enables managers to work on the business, not in the business.

6. Employee Learning and Development Starts to Happen

Given that most Performance Management systems require managers and employees to commit to a development plan, employees experience real personal development and become more engaged with the organization. They feel part of the organization and start to understand that they and the organization are interdependent. The organization develops the employee and the employee works towards developing the organization by achieving its goals. If Performance Management is implemented correctly with specific objectives tied to the strategic and operational plan, organizational performance outcomes will likely increase very quickly.

Answer to the Question no 7 (c) Non Monetary rewards

Organizations are using non monetary forms of rewards to motivate the employees. Not always is it possible for organization to increase the salary component of its reward system. Therefore, organizations are finding innovative ways to reward and recognize the contributions of its employees. A part from recognition, they also serve the purpose of keeping the work force motivated and building a culture of togetherness at the work place. The following are some of these non-monetary ways of recognition.

1. Flex working hours: If there's one free reward that rises above the rest, it's flexible work
schedules. By giving a little latitude in determining work schedules and to give time for family or personal issues (such as doctors appointment and banking errands) can go a long way to build trust and mature relationships with key workers.

2. Send a handwritten note: Supervisors should ask top brass to write a personal note to
employees who deserve recognition.

3. Make work fun: A weekly / monthly event can boost employee morale. 4. Help them connect: Introducing employees to key suppliers, customers or someone in
senior management can help make an employee's career and it won't cost you a thing.

5. Lose the shoes: No-shoes policy can make employees feel right at home with each
other, which translates into increased productivity. It's great to be in an office where employees are more concerned about doing quality work than what shoes or jewelry they have on.

6. Reward effort as well as success: Even if employee ideas sometimes fail, they can be
rewarded. This will encourage them to give their ideas to the organization.

7. Give them a free pass: Giving out a certain number of free days off to employees to use
as they see fit. So, they don't have to pretend to be sick. They can go to the beach, read a book, play with their kids ... it doesn't matter.

8. Dole out cream and sugar: During the busiest times of the year, executives can push
coffee carts around the office, serving drinks and refreshments to their colleagues. In this way executives can coach and encourage colleagues and hear about real consumer issues.

9. Blow out the candles: Cisco Systems Inc.'s CEO John Chambers hosts a monthly hourlong birthday breakfast for any employee with a birthday that month. Employees are invited to ask him anything. They feel recognized, and he gains loyal employees who share their ideas.

10. Spread the love: Ask co-workers to write something they truly like or admire about an
employee on a scrap of paper, then frame them along with a photograph of the employee,

suggested David Russell, author of "Success With People A Complete System for Effectively Managing People in Any Organization."

11. Offer a swap: Giving best employees a chance to pick their own projects or trade tasks
with a colleague empowers and rewards them at the same time.

12. Applaud their efforts: If someone has done something really worthwhile, have entire
staffs give them a standing ovation at the next meeting.

13. Say it with flowers: Reward top employees by flowers. 14. Elect them to the Wall of Fame: Setting aside a public space inside the firm and placing
photos of employees who've accomplished something truly special, along with the details of what they did to earn their place on the wall.

15. Stoke their passion: Encourage employess to make their own decisions. It will make
them feel valued and inspire their passion.

16. Give them a place to park it: Reserve the best parking spot for employees who've done
something truly worthwhile. And if it's next to the CEO's Lexus so the employee can chat him or her up on the way into work.

17. Publicize their successes: Publicly recognize employees so the whole company can share
in their accomplishments.

18. Let them phone it in: Telecommuting programs can relieve stress and make workers
feel more appreciated, as well as more productive. Reward the employee by starting with one day of telecommuting, and then add additional days as performance heightens.

19. Remember the secret words: The two most underused words that can the highest ROI (return on investment) and ROT (return on your time) are the simple words thank you.
Why do people work for charities and NGOs when the salary levels are generally lower than those in the private sector and working conditions sometimes difficult? It is not a hard question to answer because for many money is not the main motivator. Those people working in the not-forprofit sector have found compelling meaning in the work that they do and for them this more than makes up for any other drawbacks.

Answer to the Question no 7 (e) Concept and objectives for succession planning
Succession planning is a systematic process of identifying and developing talent in the organization with the explicit purpose of filling vacancies arising in the leadership positions in the organization. A succession planning system would enable the organization to create a pool of talent, which will be groomed to take leadership positions in the company. It aims to build an inventory of key managerial candidates in terms of their leadership styles, skills, gaps and ultimate potential and design and advancement plan for each candidate and incorporate it into his/ her performance management process. Succession planning address executive development, contingency planning and career development needs throughout the organization. For any organization to implement an effective succession plan there are a number of key issues that need to be considered:

The succession planning program must have the support and backing of the company's senior level management Succession planning must be part of an integrated HR process that includes training, development and performance appraisal Identify what skills the organization will need in 5, 10 or 15 years

Critical positions must be identified and included in the Company's succession planning program Identify high-performers that are almost ready to step into those critical positions

Analyze the workforce and identify who will be eligible for retirement within the next five years Managers need to identify the responsibilities, skills and competencies that will be needed by their replacements A system for communicating succession planning information to managers must be established

A systematic approach for identifying, nominating and selecting potential successors must be established Background information on potential successors, such as education, experience, skills, appraisals and potential should be reviewed The training and development requirements of potential successors needs to be determined The skills of potential successors must be developed through work experiences, job rotation, projects and other challenging assignments A system for monitoring candidate's development plan progress by senior management should be established Succession planning must include a system for providing feedback and encouragement to potential successors Succession planning is basically a "numbers game" that requires good organizational skills and the ability to pay attention to details Finally, the succession plan must belong "to the organization" and not to the HR department in order to make sure it has the attention it deserves Succession planning helps to 1. 2. Ensure the sucess of business. Ensure leadership continuity and quality. Define leadership requirements and skills at all levels of the organization. Build a leadership pipeline with a selection process to choose the best talent for

3. 4.

vacancies. 5. Communicating commitment to high potential. 6. Provide a clear vision of a career for employees. 7. Identify talent early and develop accordingly. The succession planning process needs to be considered as part of the company's strategic planning process because it deals with projecting future changes by anticipating management vacancies and then determining how to meet these challenges.

Answer to the Question no 7 (f) Concept of HR Audit and purpose

An audit is a means by which an organization can measure where it currently stands and determine what it has to accomplish to improve its human resources function. It involves systematically reviewing all aspects of human resources, usually in a checklist fashion, ensuring that government regulations and company policies are being adhered to. The key to an audit is to remember it is a learning or discovery tool, not a test. There will always be room for improvement in every organization. An HR audit provides a quick way to take stock of a companys human resources and practices with an eye toward improving them. While there are different ways to conduct an HR audit, depending on the companys goals, audits usually involve interviewing senior and mid-level management, reviewing the companys HR policies and forms, and sometimes even surveying employees. The advantage of HR audits is that they bring a level of expertise to bear on issues that, while important, most companies simply do not have the time or capacity to undertake themselves. A basic audit will address compliance issues such as, the hiring process or personnel policies. We recommend a fuller assessment to address possible organization design issues and to identify opportunities for making better use of the companys human resources. Once the audit is completed, the findings are presented to management. What happens after that depends on management. The company owns the findings and can choose whether, when, and to what degree to act on them. The HR Audit helps by:

providing feedback on the value of the contribution of the HR function to the organization's strategic business objectives assessing the quality of HR practices, policies and delivery reporting on extent of statutory HR compliance and remedial action required assessing HR and line management relationships and ways these can be improved setting guidelines for establishing HR performance standards and identifying areas for change and improvement with specific recommendations The HR Audit focuses on the following elements of People Management: Organizational Data Strategic HRM overview Staff Communication and Change Management HRM Operational Delivery Staff Performance and Morale and

HR Performance Measures

Answer to the question no 7 (g) Theory X and Theory Y

In response to the two sides of the debate around employee motivation and the best ways to boost productivity, Douglas McGregor argued that managers would tend to pursue the approach which was most in line with their view of their employees. He claimed that managers who viewed their employees as lazy would be more likely to follow an approach based on control, whilst managers who believed the workers could be motivated and wanted to develop themselves would be more likely to attempt to create positive working environments and opportunities for advancement. McGregor referred to these theories as theory X and theory Y Four assumptions held by managers under Theory X are 1. it. Employees inherently dislike work and whenever possible will attempt to avoid

2.

Since employees dislike work, they must be coerced, controlled or threatened with punishment to achieve goal. 3. possible. Employees will avoid responsibilities and seek formal direction whenever

4.

Most workers place security above all factors associated with work and will display little ambition. As a result, managers who follow a theory X approach can try to take a hard, controlling approach or a soft persuasive approach. The hard approach depends on tight managerial controls and close supervision, such as proposed by scientific management, whilst also using coercion and implicit threats to prevent any soldiering. In contrast, the soft approach looks to manipulate employees with money and low levels of supervision, in an attempt to acquire employee cooperation and reasonable levels of productivity. Unfortunately, the hard approach will tend to generate hostility and resistance, whilst the soft approach will lead to workers requesting greater levels of rewards whilst working as little as possible. McGregor felt that most firms tried to use some aspect of both of these approaches, but neither were very successful.

The reason for this is that McGregor claimed that theory X would only ever focus on low level needs such as security. As such, whilst the threat of removing security, in the form of pay cuts or potential sackings, would only motivate an employee to a certain level. As such, whilst following a Theory X approach would be better than following no approach, it will never satisfy high level needs, and employees will not be motivated by their work. Instead, they will look for more money and rewards to compensate, thus allowing them to fulfil their social and esteem needs outside of work. Therefore, employees will never satisfy their high level needs through work, and thus will never work to their maximum productivity. In addition, McGregor argued that modern developed societies, with their abundant and cheap food, high tax rates and social safety nets, already satisfied most of the physiological and security needs of people. This meant that providing monetary rewards and punishments would not motivate staff as their discomfort at being controlled would outweigh the monetary benefits. As such, employees under theory X will tend to dislike their work and take no interest in the goals of the organization, thus fulfilling the assumptions made under the theory. As such, McGregor argued that theory X was a self fulfilling prophecy, and that managers who followed it would end up demotivating even the most intrinsically motivated workforce. In contrast to theory X, theory Y assumes that working can be made as natural to people as play and rest. As such, people will motivate themselves to fulfil their work objectives, provided they commit to them, and they feel they will fulfil higher needs by achieving them. In addition, if these conditions can be fulfilled, people will seek additional challenges and responsibility, and will handle them well because humans are naturally creative and innovative: their talents just need to be encouraged in their work. The most important aspect of theory Y is that it focused on the cycle of managers providing interesting work, which motivates employees to achieve, which allows managers to provide them with more interesting and challenging work, thus fulfilling the higher level esteem needs, and allowing people to approach self actualisation in their work. As self actualization is a continually evolving need, it will thus continue to motivate employees throughout their working lives. This allows managers to align employees personal goals with the goals of the organization, by allowing the employee to fulfill their needs as the organization succeeds. For example, a firm can decentralize its control structure, providing employees with more responsibility and harnessing more of their skills to drive success. Companies can also consult employees as part of the planning and decision making processes, giving the employees input into the organizations success whilst benefitting from the employees creativity. Participative performance appraisals are also often used in theory Y, as when employees participate in setting and monitoring their objectives, they are more likely to strive to reach them. If such a system can be properly implemented, it would result in very high levels of motivation, with employees working ever harder as their personal needs develop and their job develops to satisfy them. However, Theory Y management cannot be seen as a soft approach as it is easy for employees to manipulate the system by pretending to be demotivated and hiding their true motivations. Indeed, McGregor argued that some employees may not have developed sufficient emotional maturity to embrace a Theory Y style of management, and may believe the managers are trying to manipulate them or are being weak. As such, managers may need to develop an initial system of control for employees, and relax that system as the employee matures and develops.