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Human Resource Management Definitions

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ESOP’s are Employee Stock Option Plans under which employees receive the right to purchase a certain number of shares in the company at a predetermined price, as a reward for their performance and also as motivation for employees to keep increasing their performance. Employees typically have to wait for a certain duration known as vesting period before they can exercise the right to purchase the shares.
The main aim of giving such a plan to its employees is to give shares of the company to its employees at a discounted price to the market price at the time of exercise. Many companies (especially in the startup phase) have now started giving Employee Stock Options as this is beneficial to both the employer as well as the employee.
Piece Rate System
This system was devised by F.W. Taylor, the father of scientific management and was the first systematic attempt in rationalizing incentive.
It is based on the assumption that the degree of efficiency varies from worker to worker and hence the workers must be paid according to their degree of efficiency. The main features of the system are:
(i) The system is based on piece rates.
(ii) The standard output for unit of time is pre-determined on the basis of time and motion study.
(iii) There are two piece rates, one lower and another higher. Those who reach the standard or exceed it, get wages at higher piece rate (e.g. 120% of piece rate) and those who fail to reach it, get wages at a lower piece rate (e.g. 80% of piece rate).
(iv) Minimum wages for the workers are not guaranteed.
Time Rate or Time Wage System is the most popular method of wage payment. Known by various other names such as time work, day work, day wages and day rate, the payment is made on the basis of attendance. Wages are paid to the workers on time basis irrespective of the quantum of production, at a specified wage rate. The wage rate may be fixed on hourly, daily, weekly, fortnightly, or monthly basis. Calculation of wages under this1 method of wage payment takes into account: (i) the time spent by the worker and, (ii) the wage rate per unit of time fixed. The formula is:
Wages = Time spent x Wage rate per unit of time
For example, if a worker gets Rs.10 per hour, he works for 8 hours per day and has been present for duty on 25 days during the month, his wages for the month on the basis of time rate system will be:
(25 x 8) hours x Rs.10 = Rs. 2,000
Thus the worker is paid on the basis of time and not on his performance or quantity of output.

Fringe Benefits
A collection of various benefits provided by an employer, which are exempt from taxation as long as certain conditions are met. Any employee who receives taxable fringe benefits will have to include the fair market value of the benefit in their taxable income for the year, which will be subject to tax withholdings, and social security benefits payments.

A fringe benefit is generally defined as a benefit not being salary, wage or other cash remuneration, derived from employment.
Such benefits usually apply more frequently to salaried employees not covered directly by awards or certified agreements and may include superannuation, low interest loans, provision of cars or car allowances, subsidized meals, etc.

Recruitment refers to the process of attracting, screening, selecting, and onboarding a qualified person for a job. At the strategic level it may involve the development of an employer brand which includes an 'employee offering'.
The stages of the recruitment process include: job analysis and developing a person specification; the sourcing of candidates by networking, advertising, or other search methods; matching candidates to job requirements and screening individuals using testing (skills or personality assessment); assessment of candidates' motivations and their fit with organisational requirements by interviewing and other assessment techniques. The recruitment process also includes the making and finalising of job offers and the induction and onboarding of new employees. Depending on the size and culture of the organisation recruitment may be undertaken in-house by managers, human resource generalists and / or recruitment specialists. Alternatively parts of all of the process might be undertaken by either public sector employment agencies, or commercial recruitment agencies, or specialist search consultancies.

Variable pay programs are an increasingly popular mode of compensation in today's business world. These programs, which are also sometimes referred to as "pay-for-performance" or "at-risk" pay plans, provide some or all of a workforce's compensation based on employee performance or on the performance of a team. Variable pay proponents contend that providing tangible rewards for superior performance encourages hard work and efficiency and serves as an effective deterrent to mediocre or otherwise uninspired work performance.
Variable pay programs are made up of a variety of different compensation methods. In the broadest sense, variable pay programs include annual incentives or bonus payments; individual incentive plans; lump-sum payments; technical achievement awards; cash profit-sharing plans; small group incentives; gainsharing; and payments for newly acquired skill and knowledge. Some analysts argue that variable pay programs should be defined far more restrictively, but most agree that all of the above share a common emphasis on recognizing achievement, which is the ultimate goal of variable pay plans. living wage or subsistence wage is the minimum income necessary for a worker to meet basic needs (for an extended period of time or for a lifetime). These needs include shelter (housing) and other incidentals such as clothing and nutrition. In some nations such as the United Kingdom and Switzerland, this standard generally means that a person working forty hours a week, with no additional income, should be able to afford a specified quality or quantity of housing, food, utilities, transport, health care, and recreation, although in many cases child care,education, saving for retirement, and less commonly legal fees and insurance may cost a family more than food, utilities, transport, or health care. In addition to this definition, living wage activists further define "living wage" as the wage equivalent to the poverty line for a family of four.
The living wage differs from the minimum wage in that the latter is set by law and can fail to meet the requirements of a living wage - or is so low that borrowing or application for top-up benefits is necessary. It differs somewhat from basic needs in that the basic needs model usually measures a minimum level of consumption, without regard for the source of the income.
A minimum wage is the lowest hourly, daily or monthly remuneration that employers may legally pay to workers. Equivalently, it is the lowest wage at which workers may sell their labor. Although minimum wage laws are in effect in many jurisdictions, differences of opinion exist about the benefits and drawbacks of a minimum wage.
Supporters of the minimum wage say that it increases the standard of living of workers, reduces poverty, reduces inequality, boosts morale and forces businesses to be more efficient.[1] Opponents say that if it is high enough to be effective, it increases unemployment, particularly among workers with very low productivity due to inexperience or handicap, thereby harming less skilled workers and possibly excluding some groups from the labor market; additionally it may be less effective and more damaging to businesses than other methods of reducing poverty. The Fair Wage Self-assessment tool enables a manager to assess the way their company handles wage issues. It covers many different aspects of wages, ranging from wagefixing to pay systems to the wage trends compared to changes in productivity and the cost of living. This self-assessment is not a pass-fail test. It is a way of assessing the company's strengths and weaknesses in the management of a key element in the employment relationship, namely wages. It will show where improvements can be made, including in areas like wage policy and procedure, training, communication and documentation. It also shows you how wages can be used as a human resource management tool to attract, retain and reward the best people. It can therefore be used as an annual reference tool by manager’s to build on their strengths and improve on their weaknesses in the area of wages.

The Dearness Allowance (DA) is a cost of living adjustment allowance paid to Government employees and pensioners in India.
As of June 2012, the Dearness Allowance is calculated as a percentage of an Indian citizen's basic salary to mitigate the impact of inflation on people belonging to the low income group.[1] Indian citizens may receive a basic salary or pension that is then supplemented by a housing or a dearness allowance, or both. The guidelines that govern the DA vary according to where one lives (for example, whether rural or urban).
Graphic Rating is the term used to define the oldest and most widely used performance appraisal method. The evaluators are given a graph and asked to rate the employees on each of the characteristics. The number of characteristics can vary from one to one hundred. The rating can be a matrix of boxes for the evaluator to check off or a bar graph where the evaluator checked off a location relative to the evaluators rating.
Management by objectives (MBO), also known as management by results (MBR), is a process of defining objectives within an organization so that management and employees agree to the objectives and understand what they need to do in the organization in order to achieve them. The term "management by objectives" was first popularized by Peter Drucker in his 1954 book The Practice of Management.[1]
The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employee’s actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities.

Behaviorally anchored rating scales (BARS) are scales used to rate performance. BARS are normally presented vertically with scale points ranging from five to nine. It is an appraisal method that aims to combine the benefits of narratives, critical incidents, and quantified ratings by anchoring a quantified scale with specific narrative examples of good, moderate, and poor performance
BARS are rating scales that add behavioral scale anchors to traditional rating scales (e.g., graphic rating scales). In comparison to other rating scales, BARS are intended to facilitate more accurate ratings of the target person's behavior or performance. However, whereas the BARS is often regarded as a superior performance appraisal method, BARS may still suffer from unreliability,leniency bias and lack of discriminant validity between performance dimensions.
The Critical Incident Technique (or CIT) is a set of procedures used for collecting direct observations of human behavior that have critical significance and meet methodically defined criteria. These observations are then kept track of as incidents, which are then used to solve practical problems and develop broad psychological principles. A critical incident can be described as one that makes a significant contribution—either positively or negatively—to an activity or phenomenon. Critical incidents can be gathered in various ways, but typically respondents are asked to tell a story about an experience they have had.
CIT is a flexible method that usually relies on five major areas. The first is determining and reviewing the incident, then fact-finding, which involves collecting the details of the incident from the participants. When all of the facts are collected, the next step is to identify the issues. Afterwards a decision can be made on how to resolve the issues based on various possible solutions. The final and most important aspect is the evaluation, which will determine if the solution that was selected will solve the root cause of the situation and will cause no further problems.
Application Blank
This is a highly structured form in which the questions are standardised and determined in advance. This main items of information requested in application blanks vary considerably from one organisation to another and from job to job.
Special requirements, if any for a job, are asked in a specific form of the blank. These application blanks serve the dual purpose of providing preliminary information about the candidate and aids the interviewer in the interview by opening up areas of interest and discussion.
In practice the use of the application blank usually falls short of its promise; Firstly because the applicants exaggerate their capabilities and secondly, wrong or useless questions are asked. The personnel men, therefore, fail to evaluate correctly the information given in the blanks.
The majority of items contained in the application blank can be answered by a short one or two-word statement or a simple yes or no, but due to structural defects it becomes difficult for the candidates to understand them properly.
An achievement test is a test of developed skill or knowledge. The most common type of achievement test is a standardized test developed to measure skills and knowledge learned in a given grade level, usually through planned instruction, such as training or classroom instruction.[1][2] Achievement tests are often contrasted with tests that measure aptitude, a more general and stablecognitive trait.
Achievement test scores are often used in an educational system to determine what level of instruction for which a student is prepared. High achievement scores usually indicate a mastery of grade-level material, and the readiness for advanced instruction. Low achievement scores can indicate the need for remediation or repeating a course grade.
Under No Child Left Behind, achievement tests have taken on an additional role of assessing proficiency of students. Proficiency is defined as the amount of grade-appropriate knowledge and skills a student has acquired up to the point of testing. Better teaching practices are expected to increase the amount learned in a school year, and therefore to increase achievement scores, and yield more "proficient" students than before.
A personality test is a questionnaire or other standardized instrument designed to reveal aspects of an individual's character or psychological makeup. The first personality tests were developed in 1920s[1] and were intended to ease the process of personnel selection, particularly in the armed forces. Since these early efforts of these test, a wide variety of personality tests have been developed, notably the Myers Briggs Type Indicator (MBTI), the MMPI, and a number of tests based on the Five Factor Model of personality. Today, personality tests have become a $400 million-a-year industry[2] and are used in a range of contexts, including individual and relationship counseling, career planning, and employee selection and development.
Job Posting is a channel through which the human resource management of an organization posts all its available vacancies internally in the organization to give an opportunity for its existing employees who wish to change their fields and work in different departments.
The job posting is done through an open forum in the organization listing the job description and specifications just as it is done in the recruitment process. The existing employees can apply for these jobs through the same forum.
Uses of Job Analysis Information
1. Recruitment and Selection – Job descriptions and job specifications are formed from the information gathered from a job analysis, which help management decide what sort of people to recruit and hire.
2. Compensation – The estimated value and the appropriate compensation for each job is determined from the information gathered from a job analysis.
3. Performance Appraisal – Managers use job analysis to determine a job’s specific activities and performance standards.
4. Training – Based on the job analysis, the job description should show the job’s required activities and skills.
5. Discovering Unassigned Duties – Job analysis can help reveal unassigned duties.
6. EEO Compliance – The Uniform Guidelines on Employee Selection stipulate that job analysis is a crucial step in validating all major personnel activities.

A job description is a list that a person might use for general tasks, or functions, and responsibilities of a position. It may often include to whom the position reports, specifications such as thequalifications or skills needed by the person in the job, or a salary range. Job descriptions are usually narrative,[1] but some may instead comprise a simple list of competencies; for instance,strategic human resource planning methodologies may be used to develop a competency architecture for an organization, from which job descriptions are built as a shortlist of competencies.
A job specification is an official document which describes the duties, required knowledge, skills and abilities, and minimum qualifications of State jobs. (A specification is not a job announcement and the existence of a specification does not imply that the State of Vermont is recruiting for that class).
Human resources planning is a process that identifies current and future human resources needs for an organization to achieve it goals. Human resources planning should serve as a link between human resources management and the overall strategic plan of an organization. Aging worker populations in most western countries and growing demands for qualified workers in developing economies have underscored the importance of effective Human Resources Planning.
As defined by Bulla and Scott (1994), human resource planning is ‘the process for ensuring that the human resource requirements of an organization are identified and plans are made for satisfying those requirements’. Reilly (2003) defined workforce planning as: ‘A process in which an organization attempts to estimate the demand for labour and evaluate the size, nature and sources of supply which will be required to meet the demand.’ Human resource planning includes creating an employer brand, retention strategy, absence management strategy, flexibility strategy, talent management strategy, recruitment and selection strategy.

Job analysis is the formal process of identifying the content of a job in terms activities involved and attributes needed to perform the work and identifies major job requirements. Job analysis was conceptualized by two of the founders of industrial/organizational psychology, Frederick Taylor and Lillian Moller Gilbrethin the early 20th century.[1] Job analyses provide information to organizations which helps to determine which employees are best fit for specific jobs. Through job analysis, the analyst needs to understand what the important tasks of the job are, how they are carried out, and the necessary human qualities needed to complete the job successfully. Essentially, job analyses provide information to organizations which helps to determine which employees are best fit for specific jobs. The process of job analysis involves the analyst describing the duties of the incumbent, then the nature and conditions of work, and finally some basic qualifications. After this, the job analyst has completed a form called a job psychograph, which displays the mental requirements of the job

Definition of Position Analysis Questionnaire (PAQ model)?
PAQ model developed by McCormick, Jeanneret, and Mecham (1972), is a structured instrument of job analysis to measure job characteristics and relate them to human characteristics.
It consists of 195 job elements that describe generic human work behaviors.
2. Contents of PAQ method / technique:
195 items of job elements includes six categories:
• Interpersonal activities (36 elements),
• Work situation and job context (19 elements), and
• Miscellaneous aspects (41 elements).
• Information input (35 elements),
• Mental processes (14 elements),
• Work output (49 elements),

Background checks are searches through databases, registries and other public and private sources. � While they aren't always 100% accurate or complete, they can be very helpful when making a hiring decision, because they can uncover potential warning signs about candidates. Whether you're looking for a babysitter, senior care provider or a dog walker, a background check can help reveal things like criminal conduct or driving infractions. For more, see "Preliminary background checks" and "Preferred background checks" below.
The importance of background checks
Requesting background checks is a key step in finding quality care. In fact, almost 50% of our Premium Members request a background check because it can reveal information that wouldn't come up during in-depth interviews or reference checking. When you're close to making a hiring decision - or even before you invite someone to your home for an interview - you should request a background check.

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