Ethiopian Aviation Group Training & Development Program

Human Capital
Management
Outline
• The meaning, Objectives & role of Human
PMS
• Understanding essentials of PMS
• Performance management: BSC
 Performance Management &
BSC
• Performance Management is a process
by which managers and employees work
together to plan, monitor and review an
employee’s work objectives and overall
contribution to the organization.
• Balanced Score Card (BSC): is a
performance management system and
tool for executing Ethiopian’s strategy,
goals and objectives.
Performance Management Process
• It is continuous process of setting
objectives, assessing progress and providing
ongoing coaching and feedback to ensure
that employees are meeting their objectives
and career goals.
1. Develop a work plan
2. Setting performance standards
3. Defining behaviors
4. Evaluates against the standard
5. Feedback and coaching
 Strategic Performance Management
System?
It is a system that:
• Clarifies and communicates an organization's
vision, mission, and strategy to employees and
stakeholders
• Aligns day-to-day work to mission and strategy
• Prioritizes programs and projects
• Uses strategic performance measures and targets
to measure results
• Provides strategic guidance for budget formulation,
program planning, and operational planning
• Integrates strategic planning and management
(strategy execution) into a holistic system
 BSC as a Performance Management Tool
Balanced Score Card (BSC)
• It is a conceptual framework for translating
the strategic plan into a set of
performance indicators distributed among
four perspectives:
1. Financial,
2. Customer
3. Internal Business Process and
4. Learning and Growth
Continued…
• The balanced scorecard is more than an
operational measurement system. It can be
used as a strategic management to manage
long-term success
• Some innovative companies’ use, to accomplish
critical management processes such as the
following:
– Clarify and translate the strategic plan
– Communicate and link strategic objectives and
measures
– Plan, set targets and align strategic initiatives
– Enhance strategic feedback and learning
Major Components of BSC
It is made up of four components:
A. Mission: the mission is the highest, guiding
level of the scorecard
B. Perspectives: represent the various areas
that influence performance and overall
achievement of the mission. Mission-level
Perspective; Customer Perspective; Internal
Process Perspective and Learning & Growth
Perspective
C. Objectives: identify what needs to be done
in order to achieve the overall mission.
D. Measures: provide a way to determine how
Differentiation Rule
• The BSC/ISC shall in general reflect the
20/70/10 employees’ differentiation rule
which classifies employees as
• SUPERSTAR: Employees who score 4.00
and above shall be classified under this
category.
• CORE EMPLOYEES: the core employee
base (ET shall invest in training and
development to push them up to the super
star group
•
 Common errors in
•Performance Appraisal
Strictness or Leniency
• The strict rater gives ratings lower than the
subordinate deserves.
• The lenient rater tends to giver higher ratings than
the subordinate deserves
• Central Tendency: everyone is rated around
average
• Halo Effect :a single positive or negative dimension
of a subordinate’s performance is allowed to influence
• Recency of Events :the supervisor is likely to
consider recent performance more strongly than
performance behaviors that occurred earlier
 Reducing Errors in Performance Appraisals

• Ensuring each dimension or factor on a

performance appraisal form represents a
single job activity
• Avoiding terms such as “average,”
• Ensuring that raters observe subordinates
on a regular basis throughout the evaluation
period.
• Keeping the number of persons evaluated
by one rater to a reasonable number.
• Ensuring that the dimension used are clearly
 Performance Management
Practices in Ethiopian
• Balanced Score Card shall apply to all
management position
• In principle, Individual Score Card (ISC) shall
apply to all non management positions
• An employee who is hired after January 1 of
the current fiscal year will not be rated
• An employee who assumes new positions
within the fiscal year shall be jointly assessed
by the previous and current immediate
supervisors.
Continued…
• ISC shall be set by ensuring that the average or
collective results of the employees’ performance
is equal or greater than the BSC of the
management staff leading the unit/department.
• An employee who has not been on work duty at
least for one quarter (three months) in a given
semi-annual period due to maternity leave, long
sick leave and long vacation, unassigned or any
other reason shall not be evaluated.
• An employee, who is terminated, resigned or
retired, yet eligible for evaluation shall be
evaluated and rated.
Factors and Measures in Rating
• The Balanced Score Card process
comprises of
– goal setting,
– performance review,
– feedback and
– rewarding of employees
• Relative weight for each perspective shall
be attached both at corporate and
cascaded level.
Processes
The Corporate BSC at the Group CEO level shall be
completed by May of each fiscal year and coincide
with the establishment of the annual budget.
– The BSC will be initiated by the immediate
supervisor at all level for review and discussion
– The BSC is both a top down and bottom up
approach
– The BSC of all management employees at all levels
shall also be cascaded down
– All management staff shall continuously record
performance diary in the EPDMS platform on daily
and monthly basis and give feedback to the
employee.
 Industrial Relations and Human
Resource Policies
Definition of Industrial Relations
‘Industrial Relations’ (IR) comprises of two terms:
‘Industry’ and 'Relations. “Industry” refers to “any
productive activity in which an individual (or a group of
individuals) is (are) engaged”
In more broad terms, industrial relations are the
relationships and interactions between;
– Employers and employees: individual as well as
collective relations
– Employers: this could be between different
management levels,
– Employees: among employees them selves
– The government, employers and employees
Continued…
• ET’s work setting, IR comprises the
relationships arise at and out of the
workplace
– the relationships between individual
workers,
– the relationships between workers and
their employer,
– the relationships between employers,
– the relationships employers and workers
have with the organizations formed to
promote their respective interests, and
 Major Actors In Industrial
Relations System
• Major actors are those parties who have
roles in industrial relations:
– Employers
– Employees
– Employers Association
– Employees Association
– Government
– Specialized organs
Nature Of Industrial Relations

• Industrial relations is built at various levels

(structures) either on individual or
collective basis
• Industrial relations is dynamic
• Built on competing interests and hence,
conflict is inevitable.
• Needs proper and careful management of
issues
 Various Interests Building the Relationship

• Employer
maintain maximum control over
employees,
secure optimum productivity,
maximize profit, and
secure better return on investment (ROI)
and
demand cooperation and
 team work at the workplace.
Continued…
Employees’ natural interest to quest for
maximum compensation,
job protection,
job satisfaction,
safety,
freedom,
participation,
 engagement,
 motivation and
recognition and career development.
Continued…
• Employees Association has inherent interest
of
 maximizing its participation and
 representation in all management actions and
 influence decisions affecting members.
• Government is normally interested in
 industrial peace and harmony,
 social welfare and stability,
 economic growth,
 maximization of work place safety and health,
 amicable settlement of disputes ..etc.
 Areas Of Industrial Relations
Industrial relation covers all aspects of
management labour relations both in the context of
individual management labour relations and
collective labour relations
Laws and regulation governing employment
relations and their compliance
Management-trade union relations
Collective bargaining and collective
agreement
Work place conflict management and
resolutions
Employee grievance management
Employee discipline
 Role Of First Line Supervisors In
Industrial Relations
• One of the keys to any successful business
is the ability to build strong and productive
work place relationships.
– Supervisors serve as strong link
between Management and Labour.
– Supervisors are the key management-
labour relationship builders.
Continued…
• In order to play your role of building effective
management-labour relations, developing
yourself is very critical on the below areas.
 Knowing and thoroughly understanding the
basic laws, regulation and rules governing
management–labour relations
 lead, communicate and influence work place
relations .
 Understanding the power of praise and
recognition
 Understanding how attitude and behavior
effects productivity
 Knowing and applying informal and formal
Approaches To Industrial Relations
• The three main theories/approaches are
1. Marxist,
2. Unitary and
3. Pluralist theories
 Legal Frameworks that Govern
Industrial Relations In Ethiopian
• National Laws
• Ethiopian Labour Proclamation
• The Civil Code (Civil Code Proclamation, No.
165/1960),
• Organization Specific Laws
 The Collective Agreement
 Management Policy And HRM
Procedures
Significance Of Smooth Industrial
Relations
• Maximizing labour productivity
• Cooperation and collaboration
• Fairness, consistency and justice – good
governance
• Industrial peace: less labour disputes and
amicable settlement
• Reduce legal and associated cost due to disputes
• Ownership of rules and willful compliance
• Good will and image
• Disciplined work culture
• High job security and etc…
 Ethiopian Discipline System
What Is Discipline?
• “Discipline" refers to a condition in the organization
when employees conduct themselves in accordance
with the organization’s rules and standards of
acceptable behavior
• Managerial action encouraging employees to
comply with standards of the organization.
• A form of training to enforce organizational rules
• To make employees obey rules of behavior.
• To punish employees when they do not obey rules
of behavior.
 Importance Of Disciplinary Measure

It is important for the required

– Industrial peace and order,
– Productivity of the undertaking,
– Safety of employees and
– Best customer service
Purposes Of Disciplinary Measure
• Major purposes of disciplinary measure in
Ethiopian are:
– Correcting the employee from his/her offence
– Preventing other employees from committing
a similar offence
– Controlling the working environment not to
abused by some
– Maintaining good working culture
– Manage organizational activities with
appropriate discipline
 Ethiopian Disciplinary System Framework

 Clear objectives of disciplinary measures

 Established standards of behavior and
conduct
 Prescribed sanctions/penalties for offences
 Through investigation before action in case of
serious offences and preliminary
investigation for less-serious offences
 Progressive disciplinary measures
 Implementation of the measures
 Trend analysis and proactive actions
Types Of Disciplinary
Measures
 Oral/Verbal Warning
 Written Warning
 Salary Fine
 Suspension from Work as Penalty
 Suspension for Investigation
 Suspension of privileges, licenses…etc
 Involuntary transfer/placement
 Demotion
 Termination of employment contract
Period Of Limitation
• Except for offences entailing termination,
any disciplinary measure shall be taken
within 10 working days or 5 working days
from the date when the offense is known.
 Employee Grievance Management
• A grievance is any discontent or
dissatisfaction whether valid or not, arising
out of anything connected with the
company which an employee thinks,
believes or even feels to be unfair, unjust
or inequitable.
• Effects of Grievances
– Low quantity and quality of service
– Increase in wastage
– Increase in production/service cost
 Common Mistakes in handling
grievances
By Employees:

 Not using appropriate grievance submission

format
 Writing statements irrelevant to the issue
 Not following the appropriate channel of
grievance
 Argue a grievance by taking personal issues
 write statements that offend, belittle or
defame supervisors or other employees on
the grievance form.
Continued…
• By Supervisors
– Fear of receiving grievances
– Failure to reply the grievances within the
specified period of limitation or not reply at all.
– Failure to make the proper investigation to
identify the root cause of the grievance.
– Personalization of grievances
– Not controlling ones emotions, remarks and
behavior
– Not maintaining proper & clear records of
grievances
Thank You!!