Wednesday, September 28, 2011

HUMAN RESOURCE MANAGEMENT

The HR staff typically performs the following activities:
  • Develop plans to meet the company’s staffing needs
  • Recruit potential employees
  • Help dept. managers select employees for open positions.
  • Assist with employee training.
  • Administer a system for evaluating employee performance.
  • Develop & administer a compensation system
  • Handle the process associated with employee departures from the company.

HR Planning

Many insurers conduct human resource planning which is the process of [1] projecting a company’s need for qualified employees and [2] determining the number of qualified people who are now or may soon be available for employment.


Projecting Staffing Needs

Staffing needs are affected by

  • The employee turnover rate or attrition rate.
  • The performance of the company’s current employees.
  • New products marketed by the company that may require the support of specially trained employees.
  • IT developments that might change the nature & size of the company’s workforce.
  • The company’s current & projected financial condition

Estimating Labor Supply


Internal Labor Supply The HR department often maintains a skills inventory, which is a manual or computerized database that contains information about the education, training, and experience of each person working for an organization.

External Labor Supply Estimating the number of people outside the company who have appropriate qualifications for specific jobs is difficult. However estimates can be made on the following factors:
  • National economic conditions and the expected unemployment rate.
  • Local economic developments such as the opening or closing of large businesses in the company’s geographic area of operations.
  • The international, national, and local supplies of potential employees with certain job skills.
In HR, a core competency is ability, a skill, or a characteristic that has been shown to cause or predict outstanding performance in a given job.

Employee Selection

An insurance company’s procedure for selecting employees usually includes the following steps:
  • The applicant completes an employment application form and undergoes a screening interview.
  • The applicant completes pre-employment testing.
  • An employment interview is conducted.
  • The company performs a background check and in some cases a drug test on the applicant.

A screening interview is a series of questions that is intended to eliminate those applicants who are obviously not qualified for the job.

Pre-Employment Testing

For a pre-employment test to be of value to an employer, the test should be valid & reliable. Validity refers to the degree to which a test is correlated with job-related criteria. Reliability of a pre-employment test refers to the likelihood that an applicant will achieve similar results on repeated administrations of the same or an equivalent test. An aptitude test, also known as a cognitive abilities test, attempts to determine a job candidate’s general level of intelligence and reasoning ability.

A performance test, also known as a job skills test, attempts to evaluate how well a job applicant has mastered specific skills needed to perform well in the position.

In a situation management test, a job applicant is asked to respond to a particular work-related situation.

A behavioral tendencies test, also known as a personality test, attempts to discover a job candidate’s typical job behaviors such as whether he is a team player, follows rules & procedures.

Employment Interviews

An employment interview, which is often a series of interviews, provides the manager with the opportunity to decide whether the candidate is qualified for and suited to the job.

Following the employment interview, the manager generally either [1] informs HR that the candidate has been eliminated from consideration for the position or [2] continues the selection process for the candidate by asking HR for a background check on the person.

Background Checks & Drug Tests

The final step in the selection process involves conducting a background check which can include investigate the applicant’s
  • Business & Personal references
  • Previous Employment
  • Education & Training
  • Criminal record
  • Credit record
Some companies have a policy of not hiring applicants who use illegal drugs. These companies often require that applicants undergo blood & urine tests.

Training
In the on-the-job training, an employee learns by performing real work in the actual environment. There are two methods of on-the-job training mentoring & job rotation. In mentoring, a less experienced employee is assigned to work with a more experienced employee, or mentor. In job rotation, an employee moves periodically from one job to another, staying in each job just long enough to learn how the job is done and how it relates to other jobs in the company.

Performance Evaluation

Is a formal process of reviewing and documenting an employee’s job performance with the primary goals of [1] continually improving performance and [2] determining the employee’s qualifications for an increase in compensation or promotion?

Graphic Rating Scale Appraisal
A supervisor rates an employee’s work during the evaluation period based on a number of job-related factors such as “completes work on time” identified at the beginning of the period. Many graphic rating scales require the supervisor to assign a numerical value for each performance factor say on a scale of 1 to 5.

Behaviorally Anchored Rating Scales (BARS)
Is similar in structure and format to a graphic rating scale. A BARS, however, contains job-related characteristics that are more specific to the job and more fully described. In addition, the scale for rating the employee on each characteristic is related to specific behavioral descriptions.

Essay Appraisal
Gives supervisors’ great freedom in evaluating their subordinates’ strengths, weaknesses, accomplishments, and potential for promotion.

Critical Incident Evaluation
A supervisor records examples of an employee’s accomplishments as well as any errors or problems that occurred during the evaluation period and uses these examples, or critical incidents, to evaluate the employee’s performance. Recorded examples of employee performance might include “developed more efficient procedure for administering group life insurance claims” or “misjudged movement in the stock market and sold stocks at a loss”. The advantage is that the documentation provides the evaluator with specific examples of employee’s work experience.

Ranking
Ranking methods require the supervisor to compare employees with one another and place them in order, from best to worst, based on specific characteristics of their work behavior or on overall performance.

Management by Objectives
Is a performance evaluation method in which the employee and his supervisor work together to [1] set clear and attainable goals that the employee should achieve in the upcoming evaluation period and [2] develop a plan for achieving the goals. One important advantage is that assuming the goals are stated in specific, measurable terms- the employee’s progress can be measured objectively.

360-Degree Feedback
is a performance evaluation method in which opinions about an employee’s performance are solicited from many sources, including the employee and her superiors, peers, subordinates, and customers. Each evaluator completes a questionnaire that asks for feedback about specific areas of the employee’s performance. The main advantage is that gathering information from several sources helps avoid the bias that can occur when a single person evaluates an employee’s performance.

Compensation
Job evaluation is the process of determining the relative worth of the various jobs in a company. Some common methods of job evaluation analyze jobs based on
  • Education & training required
  • Duties & responsibilities of the job
  • Complexity of the job
  • Accountability of the position
  • Authority of the position

Benefits & Services
Most insurers also provide employees with a number of benefits and services in addition to normal salaries which include
            Payment for time not worked such as sick days, vacations.
            Life insurance.
            Health insurance
Retirement income, such as private pension plans, profit-sharing plans.
Employee services, such as subsidized day-care and elder-care facilities; subsidies to help pay for employees’ further education; company sponsored cafeterias; counseling; legal, and certain on-site medical services;
Government-required benefits, such as unemployment compensation, workers’ compensation, and government-sponsored retirement programs.

Employee retention

Employee loyalty is an employee’s inclination to commit energy and efforts to an organization and to remain employed by the company.

Separation of Employees

Exit Interview
Outplacement counseling usually involves providing career counseling, vocational testing and skills evaluation, and information about job searches to laid-off employees.

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