HRM – Topic 3.2 – Leadership


  1. Teams. 
    • Types of teams
    • Types of teamwork
  2. Leadership
    • Leadership theories 
    • Leadership styles
    • Differences between the “boss” and the “leader”
  3. Entrepreneurship vs. Intrapreneurship

1. Teams

Managing Cooperative Efforts. A job of a manager is to assess, develop, and support cooperative efforts among the individuals he/she manages. 

By holding a leadership position, the manager is assumed to have all of the authority, influence, and power to make it happen.




TeamsA team is a collection of two or more people who interact with one another for a common, positive purpose

  • Teams are made of individuals whose collective competence and experience is greater than anyone individual can offer.



*Absenteeism is a habitual pattern of absence from a duty or obligation without good reason. 

  • Teams must be planned, supported, and led.



Types of teams: 

  • Informal
    • Social in nature
    • Leaders may differ from those appointed by the organization
  • Traditional
    • Departments/functional areas
    • Supervisors/managers appointed by the organization
    • Problem-Solving
  • Temporary teams
    • Frequently cross-functional
    • Focused on a particular project
  • Leadership teams
    • Steering committees
    • Advisory councils
  • Self-Directed 
    • Small teams
    • Little or no status differences among team members
    • Have the authority to decide how to get the work done
  • Virtual
    • Geographically spread apart
    • Meetings and functions rely on available technology


  • Forming
    • Assess the ground rules
    • Gather information about group goals
  • Storming
    • Initiate conflict with other team members
    • Find mutually acceptable resolutions
  • Norming
    • Build cohesion
    • Develop a consensus about norms
  • Performing
    • Channel energy toward the task
    • Apply problem-solving solutions generated in the previous stages
  • Adjournment
      • Disengagement after successful completion of goals
      • Regrets at team break-up

Types of teamwork

  • Solowork is a valid and useful activity in teams – in certain situations, it is simply the most efficient way to get things done.
  • Group Work lends itself well to asynchronous communication methods.
  • Crowd work may point to poor team role definition which wastes team members time.
  • Teamwork (in the classes definition) seems to be relatively rare in organisational teams. It requires more coordination between team members because different individuals need to do different things at the same time.

Types of Teamwork

2. Basics of leadership

LeadershipLeadership is an interpersonal influence directed toward the achievement of a goal or goals.

Leaders carry out this process by applying their leadership attributes, such as beliefs, values, ethics, characters, knowledge, and skills. 

Leadership theories

  • Great Man Theory
  • Trait Theory
  • Skills Leadership Theory
  • The style theory of Leadership
  • Managerial Grid
  • Situational Leadership
  • Contingency Theory
  • Transactional leadership 
  • Transformational Leadership
  • Leader-Member Exchange Leadership
  • Servant leadership

Great man theoryTrait Theory

  • Skills Leadership Theory

Skills Leadership Theory

Managerial Grid

Situational Leadership Theory

According to Hersey and Blanchard, leadership style varies from person to person. A successful leader is one who can apply varying leadership styles depending on the maturity of a follower.*

*Follower maturity – the attitude towards various tasks.

Contingency Leadership

Transactional Leadership

Transformational Leadership

Leader-Member Exchange

Servant Leadership

The leadership theories aim to explain the origin of the leaders, their behaviour and leadership styles.

Leadership styles: 

Leadership styles

Each leadership style has its advantages and disadvantages. The best in the current fast-changing world is the ability of the leader to adapt to the situation. Leadership plays an important role in the company’s management system and overall performance. That is why companies develop leadership programs. 

For example, the leadership program in McDonald’s:

Leadership developmenta

Boss vs. Leader

3. Entrepreneurship vs. “intrapreneurship”

Rather than working as an employee, an entrepreneur runs a small business and assumes all the risk and reward of a given business venture, idea, or good or service offered for sale.

Intrapreneurship is the act of behaving like an entrepreneur while working within a large organization.


Bases of Difference Entrepreneur Intrapreneur
1. Dependency independent in his operations dependent on the entrepreneur, i.e., the owner
2. Raising of Funds himself raises funds required for the enterprise Funds are not raised by the intrapreneur
3. Risk bears the risk involved in the business. does not fully bear the risk involved in the enterprise.
4. Operation operates from out-side. operates from within the organisation itself.

Make the test and check what are your main strength and weaknesses in the working space (try to make it in different languages and see if the results will be the same!!!) . 

Personality test

Topic 2.6 – Supporting functions

Similar to the organizational structure, supporting functions do not play the initial role in HRM but are important for the correct functioning of all the main functions. 

There are some specific HR roles or HRM supporting functions:
1. Labor Relationships
3. Health and Safety
4. Diversity

1. Labor Relationships

Having good employee relationships means providing fair and consistent treatment to all employees so that they will be committed to the organization.

Labour Relationships

Psychological contract —Employees expect to be treated fairly and ethically in return for providing their employer with a fair and reasonable amount of work.

  • What is the role of the manager in employee relationships?
  • What is the role of the HR manager?

Managers and supervisor in employee relationships:

  • evaluate, reward, and discipline employees 
  • in line with the company’s Employee Relations Philosophy (Policy) 
    • Develop trust
    • Act consistently 
    • Be truthful and avoid white lies 
    • Demonstrate integrity 
    • Meet with employees 
    • Ensure that employees are treated equitably
    • Control to clear standards 
    • Demonstrate respect and recognition toward employees

Employee relations representatives from the HR department:

  • ensure that employment policies are being fairly and consistently administered within the company. 
  • consult on specific employee relations problems with both supervisors and employees.

Effective communications <=> Feedback

  • downward communication – allows managers to implement their decisions and to influence lower employees (in the organizational hierarchy).
  • upward communication – allows employees at lower levels to communicate their ideas and feelings to higher-level decision-makers.


informal communicationsInformal communications also called “the grapevine.” Information exchanges without a planned agenda that occur informally among employees.



Employee programs:

  • employee feedback program. A program designed to improve employee communications by giving employees a voice in policy formulation and making sure that they receive due process on any complaints they lodge against managers.
  • employee assistance program. (EAP). A company-sponsored program that helps employees cope with personal problems that are interfering with their job performance.
  • employee recognition program. A program that rewards employees for their ideas and contributions.

IT communications

multimedia technology
A form of electronic communication that integrates voice, video, and text, all of which can be encoded digitally and transported on fiber-optic networks.

Telecommuting is also called “remote work”, “telework”, or “teleworking”. A person who telecommutes is known as a “telecommuter,” “teleworker,” and sometimes as a “home-sourced,” or “work-at-home” employee. (Wikipedia)

Challenges of telecommuting: feeling out of the team, need a high level of self-control, difficulties in on-line communications, technological problems.

Internal Marketing is used to build enthusiastic commitment among the organisation’s middle managers, front-line managers and employees. Note! Employees are possible customers. Employees have direct contact with customers. 

Internal marketing strategy:

  • Hiring and training
  • Standards
  • Communication
  • Participation
  • Monitoring and rewards

Example, Intel Commercials 

Another good example is Starbucks, all employees are called partners, and the waiters at Starbucks are called baristas to make them feel exceptional and proud about their workplace, not to feel just simple service worker. 

Starbucks HRM

Watch the interview “How Starbucks Trains Customers to Behave”>>>, Anne Morriss, managing director of the Concire Leadership Institute, explains how the coffee giant increased efficiency and satisfaction by treating customers like employees. Like not-payed employees. (source 

  1. HRIS

HRISA HRIS (human resource information system) or human resource management system (HRMS), is basically an intersection of human resources and information technology through HR software.
This allows HR activities and processes to occur electronically. HRIS is
not only useful as a database of current workers, but also for contingent (or seasonal workers). 

contingent workers

HRIS also rise up some ethical issues related with the treatment of personal information.

personnel file – A file maintained for each employeecontaining the documentation of critical HR-related information, such as:

    • performance appraisals, 
    • salary history, 
    • disciplinary actions, and 
    • career milestones.

The company should guarantee the safety and secrecy of this information.

3. Workplace Safety and Health


Dust from sugar is highly combustible,  an explosion caused by sugar dust killed 14 workers at the Imperial Sugar refinery in 2008. Source: Maksud/Shutterstock


It is difficult to be definitive in terms of identifying the number of people who may be HIV positive or have AIDS within the workplace.

Workplace Safety and the Law
There are two sets of workplace safety laws:
(1) workers’ compensation, an employer-funded insurance system that operates at the state level
(2) the law that mandates safety standards in the workplace.

work and healthyComprehensive Safety Programs are well-planned efforts in which management 

  • (1) involves employees and carefully considers their suggestions, 
  • (2) communicates safety rules to employees and enforces them, 
  • (3) invests in training supervisors to demonstrate and communicate safety on the job, 
  • (4) uses incentives to encourage safe behaviors and discipline to penalize unsafe behaviors, and 
  • (5) engages in regular self-inspection and accident research to identify and correct potentially dangerous situations.

The health program is the range of activities with the focus on employee health improvement provided from the organization.

Benefits for EMPLOYEES:

  • improving physical health
  • improving focus at work
  • increasing job satisfaction 
  • bettering relations with co-workers and supervisors

Benefits for EMPLOYERS:

  • attract and retain good employees, reduce turnover
  • improve productivity
  • reduced absenteeism*
  • job satisfaction, employee morale brings a stronger organizational commitment
  • enhance corporate image
  1. Managing Diversity

Diversity –  Human characteristics that make people different from one another. 

Example, Intel Diversity website 

Example, Diversity in Hospitality 

Why Manage Employee Diversity?
Management of Diversity – the set of activities involved in integrating nontraditional employees (for ex. minorities) into the workforce and using their diversity to the firm’s competitive advantage.

  • diversity management = inclusiveness
  • Greater creativity
  • Better problem solving
  • Greater system flexibility
  • Better information

Diversity training programs – programs that provide diversity awareness training and educate employees on specific cultural and sex differences and how to respond to these in the workplace.

Topic 2.5 – Compensation


  • 1. Managing Compensation 

  • 2. Designing a Compensation System 

  • 3. Pay-per-performance 

  • 4. Designing and Administering Benefits 

  • 5. Legal Environment 

1. Managing Compensation

What is Total compensation? Total compensation is the package of quantifiable monetary rewards an employee receives for his or her labour.

The Elements of Total Compensation:
●  Base Compensation,
●  Pay Incentives,
●  Indirect Compensation/Benefits

Base compensation
 or Fixed Pay is the payment an employee receives on a regular basis, either in the form of a salary or as an hourly wage (for example, a weekly or monthly paycheck).
Pay-Per-Performance or Variable Pay
 is a program designed to reward employees for good performance (including bonuses and profit-sharing).
Indirect Compensation or Benefits
 (for example, health insurance, vacations, and unemployment compensation).

Additionally, to Total Compensation (monetary) the company can also apply non-monetary Rewards to motivate employees (such as contacts, recognition programs and career opportunities).

Challenges of Managing Compensation: 

  • How to optimize the company’s costs but get adequate performance? 
  • How to motivate employees for better performance?
  • How to rich the balance between employee dedication and compensation (internal and external equity)?
  • How to increase job satisfaction and reduce turnover?

Thus, developed correctly, the Compensation System includes Monetary Total Compensation and non-monetary Total Rewards. The synergy of monetary and non-monetary compensations help the company to find a balance between expected performance and cost optimization, from one side, and employee work-life balance and motivation, from the other side.

Compensation system

There are several factors which may determine the Compensation Plan for the specific job position, such as level of responsibility, strategic relevance, the ration demand/supply in the market, cost of living for international HR, tenure or the longitude of an employee working in the company, etc. 

Factors Determining Compensation

2. Designing a Compensation System

  • While designing a Compensation System, the company take into consideration the 9 Criteria major criteria:
    1. Internal Vs. External Equity
    Will the compensation plan be perceived as fair within the company, or will it be perceived as fair relative to what other employers are paying for the same type of labour?
    Fair-pay is a payment that employees generally view as equitable based on:
    ● internal equity -the perceived fairness of the pay structure within a firm.
    ● external equity – the perceived fairness in payment relative to what other employers are paying for the same type of labour.fair pay

THE DISTRIBUTIVE JUSTICE MODEL (input/outcome ratio) states that employees exchange to the firm :

  • ○  their contributions or input (skills, effort, time, etc.)
  • ○ for a set of outcomes 
or outputs (compensations from the firm)
    • (1) analysing their own input/outcome ratio
    • (2) comparing this input/outcome ratio with that of other employees within the firm whose job demands are similar to their own.

fairly paid is 
when –> employee’s input/outcome ratio = other employees input/outcome ratio

the labour market modelTHE LABOR MARKET MODEL states that:
●  the wage rate for any given occupation
●  is set at the point where
●  the labour supply = the labour demand
●  in the marketplace.

This means that in the majority of situations:

  • Low demand for labour → fewer employers is willing to pay to → lower the pay workers are willing to accept for a given job
  • High supply of labour → lower the wage rate for that job.

2. Fixed Vs. Variable Pay

  • Will compensation be paid monthly on a fixed basis
  • Will it fluctuate depending on pre-established criteria?


  • a fixed basis—through base salaries
  • a variable pay – payment depending on performance or company profits

fixed pay as a percentage of total compensation continues to decline, and firms are asking employees to share more risks with them

3. Performance Vs. Membership

  • Will compensation emphasize performance and tie pay to individual or group contributions? – Progress by doing a job better(performance concept)
      • OR 

  • Will it emphasize membership in the organization—logging in a prescribed number of hours each week and progressing up the organizational ladder? – Progress by moving up in the organization (membership concept)

In the majority of the situations, the performance concept is applied in flat organizational structures with expert career passes (is represented as a round).  While the membership concept is more common in hierarchical organizations with management careers (is represented as a triangle).

performance vs. membership

4. Job Vs. Individual Pay

  • Will compensation be based on how the company values a particular job position? – it means that all job positions will the same title will have equal payments (for ex., all cooks in pizzeria get the same per-hour payment) 
    • OR
  • Will it be based on how much skill and knowledge an employee brings to that job? – it means the “more hats an individual worker can wear”, the more pay he or she will receive (for ex., the cook who has studied at Michelin chef school get an extra payment if to compare to other cooks in a pizzeria).

The job-based compensation plan can be applied:
(1) to achieve internal equity – the comparative relative value of jobs throughout the firm,
(2) to achieve external equity  – salary data comparative to a benchmark,
(3) to achieve individual equity –  an individual’s positioning of his/her experience, seniority, and performance established within the pay range.

A job-based policy better when:

  • ●  Technology is stable.
  • ●  Jobs do not change often.
  • ●  Employees do not need to cover for one another frequently.
  • ●  Much training is required to learn a given job.
  • ●  Turnover is relatively low.
  • ●  Employees are expected to move up through the ranks over time.
  • ●  Jobs are fairly standardized within the industry.

Individual  Pay plan rewards employees for acquiring  

  • depth skills (learning more about a specialized area), 
  • horizontal or breadth skills (learning about more areas),
  • vertical skills (self-management ).

Knowledge/skills based-pay plan has the following advantages and disadvantages:

      • (+) Greater motivation
      • (-) higher labour costs
      • (+) Reduces turnover
      • (-) loss of labour specialization
      • (-) difficulties in selection
      • (-) chaotic workplace

Individual-based compensation better when:

  • ●  The firm has a relatively educated workforce with both the ability and the willingness to learn different jobs.
  • ●  The company’s technology and organizational structure change frequently.
  • ●  Employee participation and teamwork are encouraged throughout the organization.
  • ●  Opportunities for upward mobility are limited.
  • ●  Opportunities to learn new skills are present.
  • ●  The costs of employee turnover and absenteeism in terms of lost production are high.
  • ●  Individual-based pay plans are common in manufacturing environments that rely on continuous-process technologies.

5. Egalitarianism Vs. Elitism

  • Egalitarianism vs. Elitism Will the compensation plan place most employees under the same compensation system (egalitarianism)?
      • OR
  • Will it establish different plans by organizational level and/or employee group (elitism)?

An egalitarian pay system is a payment plan in which most employees are part of the same compensation system. Egalitarianism (+) (common for older, well-established firms)
●  more flexibility to deploy employees in different areas without having to change their pay levels.
●  reduce barriers between people who need to work closely together. 

An elitist payment system is a payment plan in which different compensation systems are established for employees or groups at different organizational levels. Elitist pay structures (+) (common and risky and high competition 
environment, high-tech products)
● more stable workforce

6. Below-Market Vs. Above-Market Compensation

Will employees be compensated at below-market levels, at market levels, OR at above-market levels?

To hire the “cream of the crop” – above-market 

Company may apply different policy for different Job positions depending, for example, on the strategic relevance. Also, the decisions can be combined with other criteria, for example, market-median based salary with aggressive incentives to give extra value to the job offer. 

7. Monetary Vs. Nonmonetary Awards

  • Will the compensation plan emphasize motivating employees
 through monetary rewards like pay and stock options?
  • Will it stress non-monetary rewards such as interesting work and job security? for ex., “family-friendly policies” or “work-life balance programs”

The organization should be realistic regarding the costs issues and search for the balance between monetary and non-monetary rewards.

8. Open Vs. Secret Pay

  • Will employees have access to information about other worker’s compensation levels and how compensation decisions are made (open pay)?
        • OR
  • Will this knowledge be withheld from employees (secret pay)?

open pay:

  • (+) force managers to be more fair and effective in managing compensation
  • (+) reduce dissatisfaction as employees tend to overestimate the pay of coworkers and superior

secret pay:

  • (+) help managers to avoid arguments with employees

9. Centralization Vs. Decentralization of Pay Decisions

  • Will compensation decisions are made in a tightly controlled central location?
      • OR
Will they be delegated to managers of the firm’s units/department? – for example, is the pizzeria chain it may be done by the manager of each restaurant individually

Summary. Compensation is a complex topic that has a significant impact on organizational success.
●  None of the options is a simple either/or decision
●  Many possibilities between them are possible.

3. Pay-per-performance 

Pay-per-performance is a system that compensates employees on the assumptions that:

  • Individual employees and work teams differ
  • Overall performance depends on the performance of the individuals
  • To attract, retain and motivate high performers employees should be 
rewarded based on their relative performance

Types of incentives:

  • ● the piece-rate system is a compensation system in which employees are paid per unit produced.
  • ● the merit pay
 is an increase in base pay, normally given once a year.
  • ● the bonus program
 is a financial incentive that is given on a one-time basis and does not raise the employee’s base pay permanently.
  • ● the award 
a one-time reward is usually given in the form of a tangible prize.
  • ● etc.

Pay-for-performance plans can be designed to reward the performance of the individual, team, business unit or plant, an entire organization, or any combination of these.

pay-per-performance plans

Advantages and Disadvantages of Individual- and Team-Based Pay-for-Performance Plans

Pay per performance

Conditions That Favour Various Pay-Per-Performance Plans

Pay per performance

The Challenges of Pay-Per-Performance plans:
● The «Do Only What You Get Paid For» syndrome (employee focus only on the rewarded objectives)
● Unethical Behaviors («white lies» to «meet or exceed» targets)
● Negative effect on the Spirit of Cooperation (internal competition effect on communication)
● Lack of Control (factors beyond an employee’s control, or employee overloaded)
● Difficulties in Measuring Performance (individual contribution of the group work)
● Psychological Contracts (damaging results of changes)
● The Credibility Gap (fairness of the reward)
● Job dissatisfaction and Stress (greater productivity – more work)
● Potential Reduction of Intrinsic Drivers (no motivation to work without reward)

Meeting the Challenges:
Opportunity to align employees ́objectives with the organization
●  Link Pay and Performance Appropriately (piece-rate system*)
●  Use Pay for Performance as Part a Broader HRM System (for example with training)
●  Build Employee Trust (managers need to show that they care about employees)
●  Promote the Belief that Performance Makes Difference
●  Use Multiple Layers of Rewards (variable pay)
●  Increase Employee Involvement (in the design of the pay system)
●  Stress the importance of Acting Ethically (training programs ‘how to meet performance 
●  Use Motivation and Nonfinancial Incentives (balance – public and nonpublic praise, honorary titles, mentoring programs, expanded job responsibilities, etc.)

Pay-for-performance plans in small firms are more likely to be successful if
there is active employee participation in the development of 
the plan, incentives are linked to the achievement of organizational 
goals, and frequent informal feedback is provided to employees.

4. Benefits, or Indirect Compensation

Benefits are group membership rewards that provide security for employees and their family members. Indirect compensation is given to the employee in the form of plan (health insurance) rather than cash).

Types of Benefits
Legally required benefits 
(1) Social Security, (2) workers’ compensation, (3) unemployment insurance, and (4) family and medical leave.
Other benefits types: Health insurance, Retirement, Insurance, Paid time off, Employee services

Challenges in Managing Benefits:

  • (1) give employees meaningful benefit choices that match their needs,
  • (2) keep the costs of these benefits under control,
(3) ensure that employees are fully informed of their benefit options.

The Benefits Strategy
The design of a benefits package should be aligned with the business’s overall compensation strategy. The benefits strategy requires making choices in three areas:
○  (1) benefits mix,
○  (2) benefits amount, and
○  (3) flexibility of benefits.

HR specialist and Manager’s roles in Managing Benefits:
●  HR staff administrate and control benefits programs:
○  the use of flexible benefits mix
○  Communicating benefits to employees
●  The manager should be familiar with benefits:
○  to employees (help to understand and make the best from benefits)
○  a powerful recruiting tool (use benefits advantage to recruit high-quality applicants) 
 ○  retain talented employees (reduce turnover)
○  a part in managerial decisions and organizational processes (effectively manage work schedules)
○  to managers (to be aware of their own benefit)

5. The Legal Environment and Compensation

legal compensationLabor Standards and Legal Issues

  • MINIMUM WAGES: minimum and average wages
  • OVERTIME: payment for overworking
  • CONTRACT: as a written document
  • SALARY TAXES: social insurance, pension and pay tax
  • others specified in Labour Law


Great Place to Work GPTWGPTW

1. When your business is a great place to work, employees give 100% in everything they do.
2. … you become an employer of choice.
3. … employees think like owners.
4. … customers notice and come back again and again.
5. … absenteeism nearly disappears
6. … turnover costs plummet
7. … collaboration and creativity thrive
8. … you’re impacting the lives of people.

Topic 2.4 – Training and Development


  1. Training vs.Development
  2. Training
  3. Development
  4. Careers

1. Training vs. Development    

Training and Development

Training  – The process of providing employees with specific skills or helping them to correct difficulties in their performance.

Development  – An effort to provide employees with the abilities the organization will need in the future.

2. Training

Training not always works. To get positive results the training process should be well organized. 

The challenges of the Training Process:

  • Training ProcessIdentify – Real Business Impact
    • How can training keep pace with a changing organizational environment and companies strategy at the same time?
  • Analyse –  Skill Gap
    • How to develop an adequate evaluation system?
    • How make it the training to be perceived positive?
  • Develop – Layer Training  
    • Should training take place in a classroom setting or on the job?
    • How to save on training costs?
  • Evaluate  – Managing effectiveness 
    • Is training always the solution to the problem?
    • How can training be delivered so that trainees are motivated to learn?

Stages of the training process:

training processThe NEEDS ASSESSMENT PHASE

training objectivesClarifying the Objectives of Training

The levels of needs assessment:

  • Organizational needs
    • Ex. how will training help to improve performance (number of sales)?
  • Task needs
    • Ex., the performance of which task will training help to improve (work with the software)?
  • Person needs
    • Ex. which personal skills will the training help to improve (communication skills)?   


types of trainingTypes of Training:

  •  Skills Training
  •  Retraining
  •  Cross-Functional Training
  •  Team Training
  •  Creativity Training
  •  Diversity Training
  •  Ethics Training
  •   Risk/Crisis Training


presentation options trainingPresentation Options:

  •  Slides and Videotapes
  •  Teletraining
  •  Computers
  •  Simulations
  •  Virtual Reality
  •  Classroom Instruction
  •  Role-Plays

Location options:

  • Off-the-job training
  • On-the-job training (OJT):
    • “pro” relevant to the job
    • “con” trainees cause customer frustration
    • For ex., Job rotation, Apprenticeships, Internships 

training location options



Four Measurement Levels of Training: 

four measurement levels of training


Training should always match with the company’s objective and environmental trends. However, it also should be developed in a way to bring positive perceptions to employees and match their needs. The correctly developed training process can add extra value to the company as an employer and can be perceived as a motivation among workers. Effective training will return on the investments by the positive impact on a company’s performance.

The company can save on training costs in different ways, for example, by using online training. Or, by applying the on-job-training format when the more experienced employees train less experienced ones. Employees should be trained. However, the decision about whether to train employees in the company “make skills” or to hire already trained specialists “buy skills” will depend on the company’s strategy.

Another training challenge for the company is retaining trained employees. In this situation, development programs and career opportunities can be a solution.

3. Development

Talent development is a process of succession planning which follows performance appraisal standards and is based on the competency model.

This process consists of several stages (identification, direction and development) and as the final step consider the growth in a career path in the organization. 

approach of talent development

Development Process:

development process



On this phase, development needs should be identified based on:

  • Self-assessment – when workers are initiators of the long-term development
  • Organizational Assessment – when the company identify future successors

people who develo there talent

development needs identification


On the direction stage, the potential talents are guided by the company by providing:

    • information services
    • individual career counselling

The interest in the development of each candidate starts to be more clear. On this stage, company can segment potential talents and decide the next degrees of further development or not.

performance potential grid


  • is based on the competency model and includes several measures:
    • COACHING – giving training (knowledge)
    • JOB ROTATION – giving responsibilities (experience)
    • MENTORING – giving an example (personality)
    • TUITION ASSISTANCE PROGRAMS – self-responsibility

Every measure in the development stage aims to develop various dimensions from the company’s competency model.

talent development measures

4. Careers

What is a career? Career is an individual’s metaphorical “journey” through learning, work and other aspects development in the workplace.

Career development is an ongoing and formalized effort that focuses on developing enriched and more capable workers and working space.

A career in the company with flat and hierarchical organizational structure. What will be the difference? – For companies with hierarchical structures management-career with the possibility to be promoted in the vertical of organization chart by getting more responsibilities. In flat organizations, very common expert-careers when an employee can develop the knowledge and expertise in the specific field. However, both career paths are possible and needed in any organization. Experts very often advice top-managers.

expert and management career


what matters development

Topic 2.3 – Performance Appraisal


1. Performance Appraisal and its components.
2. Appraisal Formats and Sources
3. The Role of Performance Appraisal

1. Performance Appraisal

Performance Appraisal
Performance Appraisal

Performance appraisal – is the process of identification, measurement, and management of human resources performance in organizations.

Performance Identification is determining which areas of work the manager should be examining when measuring performance. Rational and legally defensible identification requires a measurement system based on job analysis. The appraisal system, then, should focus on performance that affects organizational success rather than performance-irrelevant characteristics such as race, age, or sex.

Performance Measurement entails making managerial judgments of how “good” or “bad” employee performance was.
Performance measurement must be consistent throughout the organization.
That is, all managers in the organization must maintain comparable rating standards.

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.

2. Appraisal Formats and Sources

Competency Model
Competency Model

Competency model – Set of competencies associated with a job (related to experience, knowledge and personality).

●  Competencies – Characteristics associated with successful performance →
●  Dimension – A measurable extent of performance characteristics that determines effective job performance

Appraisal formats can be classified in two ways:


(1) by the type of judgment that is required (relative or
absolute) and
(2) by the focus of the measure (trait, behaviour, or outcome).

Relative judgment
Relative judgment

RELATIVE judgment – supervisors compare an employee’s performance to the performance of other employees doing the same job (compare coworkers).

ABSOLUTE judgment – supervisors make judgments about an employee’s performance based solely on performance standards.

Absolute judgment
Absolute judgment
Trait Appraisal
Trait Appraisal

TRAIT appraisal – supervisor make judgments about worker characteristics that tend to be consistent and enduring.
“-” have been criticized as too ambiguous and create conscious or unconscious bias.


BEHAVIOURAL appraisal – supervisors assess a worker’s behaviours.

Behavioural Appraisal
Behavioural Appraisal

OUTCOME appraisal – supervisors assess the results achieved by workers. Normally based on the objectives: number of total sales, number of products produced, number of tables served, etc.

Sources of the Appraisal
● self-review – A performance appraisal system in which workers rate themselves.
● peer review – A performance appraisal system in which workers at the same level in the organization rate one another.
● subordinate review – A performance appraisal system in which workers review their supervisors.

3. The Role of Performance Appraisal

Manager – Worker Relationships
Performance Management:

  • past-oriented activity – criticizes or praises workers for their performance in the preceding year
  • future-oriented view – what workers can do to achieve their potential in the organization.

This means that managers must provide workers with feedback and coach them to higher levels of performance —> Training and Development and DISCHARGES

Why Performance Appraisal is important? If done effectively Performance Appraisal is: 

  • ●  the key to developing employees and improving their performance.
  • ●  the criteria against which selection systems are validated
  • ●  the typical basis on which personnel decisions, such as terminations, are legally justified.
  • ●  the measure of practical control of the company’s strategy.

And from the employee point of view?

Employee Point of View
Employee Point of View

Challenges to Effective Performance Measurement

Managers confront at least five challenges:
●  Rater errors and bias (halo-error, the tendency to rate similarly across dimensions)
●  The influence of liking (like or dislike for other reasons)
●  Organizational politics (continues evaluations)
●  Whether to focus on the individual or the group
●  Legal issues (clear and written instructions)

360 Feedback
360 Feedback

Performance Appraisal Improvement – 360 degrees Feedback
●  Explore the causes of performance problems.
●  Direct attention to the causes of problems.
●  Develop an action plan and empower workers to reach a solution.
●  Direct communication at performance and provide effective feedback.

Topic 2.2 – Hiring Process


1. Hiring process
2. Recruitment
3. Selection
4. Onboarding and Socialization

1. Hiring Process

  • ●  to hire the best employees
  • ●  to fill the available positions
Hiring process
Hiring process

Recruitment. The process of generating a pool of qualified candidates for a particular job; the first step in the hiring process.
Selection. The process of making a “hire” or “no hire” decision regarding each applicant for a job; the second step in the hiring process.
Socialization. The process of orienting new employees to the organization and the unit in which they will be working; the third step in the hiring process. 

Challenges of the hiring process. The most important of these are:

  • ● Determining which personal characteristics are most important to performance. (fit)
  • ●  Measuring those characteristics. (test)
    •  Evaluating applicants’ motivation levels.
    •  ( Performance =Ability +Motivation )
  • ●  Deciding who should make the selection decision. (roles)

In contemporary HRM theory, Hiring Process is often called Talent Acquisition. Note! That there is competition in the labour market for talented employees. Thus, the company should analyse the market needs, competitor actions and job needs inside the organization. Based on the analysis, the firm develops a unique value proposition for its target employees to get an advantage, and to attract the best talents possible.  A strong Employer Brand with a positive perception amount current and prospective employees can strengthen this advantage. Moreover, the applicant-entered approach can improve the applicant perception about the company, and, as a result positively affect candidate retention.

2. Recruitment

Types of Job Seekers form the employee point of view:

  • ●  Active Seeker
  • ●  Passive Candidate
  • ● Non-Seeker

The role of Job Analysis in the Hiring Process?

Job analysis helps to identify “selection criteria” to address the company’s objectives and “employee value proposition” to address employee needs.

Selection criteria example, Google 

Defining the Employee Value Proposition (EVP) is a source of differentiation for the company in the competitive  Labour market. 

To define successful EVP company should make a list of its strength as an employer (authentic characteristics), define target employee group preferences (relevant characteristics for the differentiation) and identify competitor’s strength (to find out what is the same and identify what may be different). 

In the example,

  • characteristics A and E represent EVP because A is the authentic strength of the employer which is relevant to the preferences of the target employee group needs and a competitor does not have this strength (different). Same for B. 
  • B and C are not the best choices even they represent the company’s strength as an employer and are relevant for the target employee group, they are not different from the competitor. 
  • D is not a good choice, as even being the authentic strength of the company, it is not relevant for the employees, and not different from the competitor’s strength. 

Employer Brand to strengthen the company’s positioning and image as an Employer in the Labour market.

Employer Brand
Employer Brand





Companies may use different sources to generate the “pool of candidates”. 

For example, social networks in order to demonstrate an emphasis on the personalization and closer communications with the potential candidates.  

The recruitment process  may include different stages, such as:

  • Application
  • Pre-selection
  • Telephone-Interview/Test
  • Personal Interview
  • Assessment centre
  • Accepted job-offer

Recruitment funnel is used to prognoses the number of Applicants needed to make a final selection and to fill 1 job position.

For example, to get 2 candidates for the final selection, the company needs 2*3/2*2/1*5/1*2/1*10/1 = 600 applications

Candidates Retention is the employment practice that let the company to safe on the future cost related to the requirement, specifically candidate acquisition. The idea is based on the fact that the company cannot hire all suitable candidate during the selection process. Thus, the HR department keeps in contact with those who were not hired to offer them a job when new job offers will be available. Includes several concepts:

  • ●  Creating Positive Candidate experience through Speed, Transparency, Appreciation
  • ●  Candidate Segmentation – Candidate Potential and Relevance to.
  • ●  Candidate Retention – Building relationships with potential future employees.
Employee Retention
Employee Retention


Candidate segmentation
Candidate segmentation


Retention actions
Retention actions


Applicant-Centred approach

Applicantcentered recruiting is exactly what it sounds like: a way of hiring that puts the candidate first. Their wants, their needs, their questions. When working with people, a good strategy can be to imagine yourself in different roles. As a company, who need to hire, and, as an employee who wants to be hired. 

For example, at the beginning of my managerial career, I was visiting a lot of interviews as a potential candidate to see the other side of the process. This helped me a lot to improve my skills as a hiring manager and improve the candidate impression during the recruitment process.

3. Selection

Candidate Selection tools 


Companies should use – Reliable and Valid techniques for successful candidate selection. Usually, companies apply more than 1 selection technique.

  • Reliability. Consistency of measurement, usually across time but also across judges.
  • Validity. The extent to which the technique measures the intended knowledge, skill, or ability.

Ex. In the selection context, it is the extent to which scores on a test or interview correspond to actual job performance. Once you are hiring an English teacher, there is no need to test he/she on the level of French.

Interview Vs. Assessment Center

The interview may create “Social Judgement Biases”. The aim of the Assessment Centre is to reduce subjectivity during the selection process.


Example, The general ideas of the interview psychology – «How to impress hiring mangers” – 

Selection decisions - Risks
Selection decisions – Risks

Which candidate would you select (candidate 1 or candidate 2)?

The final selection decision is always related to risks. A wrong decision can be costly for the company. 

If the final decision — to hire (‘positive’) or not to hire (‘negative’) —  is correct (‘right’) or incorrect (‘false’)  depends on the ratio predicted/actual performance. 

Personnel economics has been defined as “the application of economic and mathematical approaches and econometric and statistical methods to traditional questions in human resources management».

For example, the calculation of odds – a ratio of probabilities – can be applied.

4. Onboarding

Orientation vs. Socialization

Orientation is a short-time process of informing new employees about what is expected of them in the job and helping them cope with the stresses of transition.
Socialization is a long-term process with several phases that helps employees acclimate themselves to the new organization, understand its culture and the company’s expectations, and settle into the job.

3 Stages of Socialization

(1) anticipatory, (2) encounter, and (3) settling in.

(1) At the anticipatory stage, applicants generally have a variety of expectations about the organization and job based on accounts provided by newspapers and other media, word of mouth, public relations, and so on.

>>>realistic job preview (RJP) Realistic information about the demands of the job, the organization’s expectations of the job holder, and the work environment.

(2) In the encounter phase, the new hire has started work and is facing the reality of the job.

  >>> new hires need additional information about policies and procedures, reporting relationships, rules, and so on.

(3) During the settling-in phase, new workers begin to feel like part of the organization.

>>     An employee mentoring program, in which an established worker serves as an adviser to the new employee, may help ensure that settling in is a success.