Unit 3

Induction, Training and

Compensation
INDUCTION
MEANIN
G
Induction(Orientation) is a process
through which a new employee is
introduced to the job and the
organization. It is a technique by which a
new employee is rehabilitated into his
surroundings and introduced to the
practices, policies and the purposes of
the organization.
DEFINITION
 EdwinB. Flippo-“Induction is the
welcoming process to make the new
employee feel at home and generate in
him a feeling of belongingness to the
organization.”
 OBJECTIVE
S fears
 Remove
 Improve staff morale, work standards &
revenue-profits
 Assist in understanding the culture &
values
 Acts as a valuable source of
information
 Develop a realistic job expectation,
positive attitude & job satisfaction
 Create favorable impression of the firm
& its works
 PURPOSE
 Accommodating employees
 Becoming Insider
 Overcoming employee anxiety
 Overcoming reality shock
 Reducing employee turnover
TYPES OF INDUCTION
FORMAL Vs. INFORMAL
INDUCTION
 Formal Induction  Informal Induction
 It has a  In this, employees
structured are directly put on
programme. job.
 Formal programme  Informal programme
helps a new hire in promotes
acquiring a known innovative ideas.
set of standards  Choice depends on
management’s goals.
INDIVIDUAL Vs. COLLECTIVE
INDUCTION
 Individual  Collective
Induction
 It preserves Induction
individual  It is likely to
differences. develop
 expensive and time homogenous views.
consuming.  less time
 smaller firms go consuming.
for individual  Large firms
programmes. normally have
collective
orientation.
SERIAL Vs. DISJUNCTIVE
INDUCTION
 Serial induction  Disjunctive
 An experienced Induction
employee inducts  new hire do not
a new hire in case have predecessors
of serial to guide them.
Induction.  produces more
 maintains traditions inventive
and customs. employees.
 PROBLEMS OF INDUCTION
 1. Busy or Untrained supervisor

2. Too much information

3. Overloaded with paperwork

4. Given menial tasks

5. Employee thrown into action soon

TRAINING
&

DEVELOPMENT
WHAT IS TRAINING?

According to Edwin Flippo, ‘training is

the act of increasing the skills of an
employee for doing a particular job’.
Dale S. Beach defines training as ‘the
organized procedure by which people learn
knowledge and/or skill for a definite purpose’.
 NEED OF
TRAINING
• Environmental change
• Organization complexity
• Human relations
• Change in job assignment
• To match employee specification with
job requirements and organizational
needs
 Essentials of good
training programme

1. Allowances for individual differences

2. Relevance of job requirement
3. Determination of training needs
4. Result oriented
5. Suitable incentives
6. Management support
 Reasons for failure

1. Benefits of the programmes are not clear to

the top management
2. Lack of rewards to supervisors carrying out
programs
3. Lack of budgeting to systematic training
4. Behavioural objectives are imprecise
5. Trainers providing limited counselling and
consultancy
 Training vs Development

Basis for Training Development

comparison
Meaning Learning as per Educational
job requirement process for
overall growth
Term Short Long
Focus on Present Future
Orientation Job oriented Career oriented
Motivation Trainer Self
Objective Improving work Prepare for
performances future challenges
No. of individuals Many One
 Essentials of good
training programme

1. Allowances for individual differences

2. Relevance of job requirement
3. Determination of training needs
4. Result oriented
5. Suitable incentives
6. Management support
 Reasons for failure

1. Benefits of the programmes are not clear to

the top management
2. Lack of rewards to supervisors carrying out
programs
3. Lack of budgeting to systematic training
4. Behavioural objectives are imprecise
5. Trainers providing limited counselling and
consultancy
 Training vs Development

Basis for Training Development

comparison
Meaning Learning as per Educational
job requirement process for
overall growth
Term Short Long
Focus on Present Future
Orientation Job oriented Career oriented
Motivation Trainer Self
Objective Improving work Prepare for
performances future challenges
No. of individuals Many One
 METHODS OF
TRAINING
ON THE JOB OFF THE JOB
TRAINING TRAINING
1. JOB ROTATION 1. CASE STUDY
2. COACHING METHODS
3. JOB INSTRUCTIONS 2. INCIDENT METHOD
4. COMMITTEE 3. ROLE PLAY
ASSIGNMENT 4. IN-BASKET METHOD
S 5. LECTURES
5. INTERNSHIP 6. BUSINESS GAMES
TRAINING 7. SIMULATION
8. MANAGEMEN
T EDUCATION
9. CONFERENCES
 ON THE JOB
•
TRAINING
This is the most common method of
training in which a trainee is placed on a
specific job and taught the skills and
knowledge necessary to perform it.
• The advantages of OJT are as follows:
1.On the job method is a flexible method.
2. It is a less expensive method.
3.The trainee is highly motivated and encouraged
to learn.
4.Much arrangement for the training is not
required.
 JOB ROTATION

• This training method involves movement of

trainee from one job to another to gain
knowledge and experience from different job
assignments. This method helps the trainee
understand the problems of other
employees.
 JOB
ROTATION
ADVANTAGES DISADVANTAGES
• Allow managers to see • Wastage of time & efforts
your hidden talents • Employees take time
• Helps in exploring interest
• Leads a whole lot of
& ideas
stress & anxiety
• Motivates all employees &
help them to deal with • It doesn’t check the
new challenges time wasted
• Keeps away
fraudulent practices
• Boosts satisfaction
 COACHING

• Under this method, the trainee is placed

under a particular supervisor who
functions as a coach in training and
provides feedback to the trainee.
Sometimes the trainee may not get an
opportunity to express his ideas.
 COACHING
ADVANTAGES DISADVANTAGES
• Proper guidance on how • Ideas given by trainee
to conduct an activity are not considered
• Cost effective • Trainee wouldn’t get a
• No loss of productivity chance to explore
more
JOB INSTRUCTION

• Also known as step-by-step training in which

the trainer explains the way of doing the
jobs to the trainee and in case of mistakes,
corrects the trainee.
 JOB INSTRUCTION
ADVANTAGES DISADVANTAGES
• Employee safety • Trainee feels reserved
• Increased about the work
productivity • Restricted area of work
• Cost effective
• Meeting standards
COMMITTEE ASSIGNMENTS

• A group of trainees are asked to solve a

given organizational problem by discussing
the problem. This helps to improve team
work.
 COMMITTEE
ASSIGNMENTS
ADVANTAGES DISADVANTAGES
• Improves • Can’t always reach to
employees a conclusion
interrelationship. • Creates hassle
• Builds team spirit among employees.
• Deals with real
organization problem
 INTERNSHIP TRAINING

• Under this method, instructions through

theoretical and practical aspects are
provided to the trainees. Usually, students
from the engineering and commerce colleges
receive this type of training for a small
stipend.
 INTERNSHIP
TRAINING
ADVANTAGES DISADVANTAGES
• Proper guidance • Trainee’s work
• Practical exposure importance is ignored
• Productivity of • Work under
organization improves stressed
environment
 OFF THE JOB
•
TRAINING
The methods of training which are adopted
for the development of employees away
from the field of the job are known as off-
the-job methods.
• Some advantages of off the job
training methods are:-
1. Stress free environment to learn
2. Same as classroom learning
3.Full focus on teaching of employees
 CASESTUDY METHOD

• Usually case study deals with any problem

confronted by a business which can be
solved by an employee. The trainee is given
an opportunity to analyse the case and
come out with all possible solutions. This
method can enhance analytic and critical
thinking of an employee.
 CASE STUDY
METHOD
ADVANTAGES DISADVANTAGES
1.Good source of ideas about 1. Hard to draw definite
behavior cause-effect
2. Good opportunity for conclusions
innovation
3.Good method to study rare 2.Hard to generalize from a
phenomena single case
4.Good method to challenge 3.Possible biases in data
theoretical assumption collection and
interpretation
 INCIDENT METHOD

• Incidents are prepared on the basis of actual

situations which happened in different
organizations and each employee in the
training group is asked to make decisions as
if it is a real-life situation. Later on, the
entire group discusses the incident and takes
decisions related to the incident on the basis
of individual and group decisions.
 INCIDENT METHOD
ADVANTAGES DISADVANTAGES
•Can be applied using • Since critical incidents often
questionnaires or rely on memory, incidents may
interviews. be imprecise or may even go
unreported.
• incidents that happened
•Identifies even rare events that recently, since these are easier
might be missed by other to recall.
methods • It will emphasize only rare
• Useful when problems occur events; more common events
will be missed.
but the cause and severity • Respondents may not be
are not known. accustomed to or willing to take
•Inexpensive and provides rich the time to tell (or write) a
information. complete story when describing
a critical incident.
 ROLE PLAY

• In this case also a problem situation is

simulated asking the employee to assume
the role of a particular person in the
situation. The participant interacts with
other participants assuming different roles.
The whole play will be recorded and trainee
gets an opportunity to examine their own
performance.
 ROLE PLAY
ADVANTAGES DISADVANTAGES
• Indicates skill level • Time consuming
• Prepares for real life • May not be taken
• It’s social & seriously
communal • Some feel uncomfortable
 IN-BASKET METHOD

• The employees are given information about

an imaginary company, its activities and
products, HR employed and all data related
to the firm. The trainee has to make notes,
delegate tasks and prepare schedules within
a specified time. This can develop
situational judgments and quick decision
making skills of employees.
 IN-BASKET
METHOD
ADVANTAGES DISADVANTAGES
• Easy to conduct • Time consuming
• Flexible instrument • Not effective for
• Solution achieved can small
be applied later on organization
• Judges the skill set of
a trainee
 LECTURES

• This will be a suitable method when the

numbers of trainees are quite large.
Lectures can be very much helpful in
explaining the concepts and principles very
clearly, and face to face interaction is very
much possible.
 LECTUR
ES
ADVANTAGES DISADVANTAGES
• Covers large number • Lectures are
of people not retained
simultaneously for longer time
• Face to face interaction period
with experts
• Less attention
• Queries can be asked
level
• Same lecture is
delivered to all
person
unknowingly their
 BUSINESS GAMES

• According to this method the trainees are

divided into groups and each group has to
discuss about various activities and functions
of an imaginary organization. They will
discuss and decide about various subjects
like production, promotion, pricing etc. This
gives result in co-operative decision making
process.
 BUSINESS GAMES
ADVANTAGES DISADVANTAGES
• Training the brain to act • Can cause people not to
without to much assess risks thoroughly
consideration • Time difference
• Team uniform between how business
approaches games are delivered
• High knowledge and how the events
retention unfold in the real world.
• Quick learning
• Fun & entertaining
• Builds teams
cohesiveness
SIMULATION

• Under this method an imaginary situation

is created and trainees are asked to act on
it. For e.g., assuming the role of a
marketing manager solving the marketing
problems or creating a new strategy etc.
 SIMULATION
ADVANTAGES DISADVANTAGES
• Gain • Expensive
understanding • Real life situation cant be
about the completely re-created
consequences of • Not every situation can
their action and not be included
take corrective
action
• Feedback to
learners can be
given immediately
• don’t wait for real
life
MANAGEMENT EDUCATION

• At present universities and management

institutes gives great emphasis on
management education. For e.g., Mumbai
University has started bachelors and
postgraduate degree in Management. Many
management Institutes provide not only
degrees but also hands on experience
having collaboration with business
concerns.
 MANAGEMENT
EDUCATION
ADVANTAGES DISADVANTAGES
• Provide in-depth • Can’t be afforded by
knowledge to a person all people
• Trains from scratch • Providing theoritical
• Theoritical as well as knowledge is the
practical knowledge is main concern
being to a person.
 CONFERENCES

• A meeting of several people to discuss any

subject is called conference. Each
participant contributes by analyzing and
discussing various issues related to the
topic. Everyone can express their own view
point.
 CONFERENCE
S
ADVANTAGES DISADVANTAGES
• Chance to learn • Expensive
from other’s • Effects productivity for
experience concern period
• Worthy knowledge can • Time consuming
be shared by a speaker
• Learn in stress
free environment
Kirkpatrick Model

The Kirkpatrick Model is a globally

recognized method of evaluating the results of
training and learning programs. It assesses
both formal and informal training methods and
rates them against four levels of criteria:
reaction, learning, behavior, and results.
Level 1: Reaction
The first level of criteria is “reaction,” which
measures whether learners find the training
engaging, favorable, and relevant to their jobs.
This level is most commonly assessed by an
after-training survey (often referred to as a
“smile sheet”) that asks students to rate their
experience.
Level 2: Learning
Level 2 gauges the learning of each participant
based on whether learners acquire the intended
knowledge, skills, attitude, confidence and
commitment to the training. Learning can be
evaluated through both formal and informal
methods, and should be evaluated through pre-
learning and post-learning assessments to
identify accuracy and comprehension.
Level 3: Behavior
One of the most crucial steps in the
Kirkpatrick Model, Level 3 measures whether
participants were truly impacted by the
learning and if they’re applying what they
learn. Assessing behavioral changes makes it
possible to know not only whether the skills
were understood, but if it's logistically
possible to use the skills in the workplace.
Level 4: Results
The final level, Level 4, is dedicated to
measuring direct results. Level Four measures
the learning against an organization's business
outcomes— the Key Performance Indicators
that were established before learning was
initiated. Common KPI’s include higher return
on investments, less workplace accidents, and
larger quantity of sales.
Assessing training needs
“Training Needs Assessment” (TNA) is the method of determining if a
training need exists and, if it does, what training is required to fill the gap.
TNA seeks to identify accurately the levels of the present situation in the
target surveys, interview, observation, secondary data and/or workshop. The
gap between the present status and desired status may indicate problems
that in turn can be translated into a training need.
 
Steps in Training need assessment
Five Steps: The processes of Training
Needs Assessment can be divided into five
steps:
i) identify problem and needs;
ii)determine design of needs assessment;
iii) collect data;
iv)analyze data; and
v) provide feedback.
Career Development
Career development refers to a set of programmes designed to match an
individual’s needs, abilities, and career goals with current and future
opportunities in the organization. Since career development focuses on
future opportunities, it has essentially a long-term orientation.
Career development is essential for
implementation of career plan. While
career plan sets career path for an
employee, career development ensures
that the employee is well developed before
he moves up the next higher ladder in the
hierarchy.
Objective and importance

The focus of career development is

on the following:
(i) Obtaining relevant information about
individual employees’ interests and
preferences;
(ii) Matching individuals’ career interests
and aptitudes to job requirements;
(iii) Providing career path information to
employees to enable them to make their
career plans;
(iv) Providing financial inducements and
facilities to employees for acquisition of
new skills and capabilities;
(v) Developing a suitable T&D programme
both within the organisation and outside
to help employees improve their career.
Compensation

Compensation is a systematic approach

to providing monetary & non monetary
value to employees in exchange for work
performed.
Compensation may be defined as money
received in performance of work and
many kinds of benefits that an
organization provides to their employees.
Objectives

To recruit & retain qualified employees.

To increase or maintain morale.
To determine basic wage & salary.
To reward for job performance.
To identify levels of responsibility and
accountability
To maintain satisfaction of human
resources
To eliminate favouritism
Components of Compensation
system
Job description
Job analysis
Job evaluation
Pay structure
Salary surveys
Features of job description

Helps hire the right person

Lays out employee expectation
Discourages innovation and expansion
Becomes outdated quickly
Job analysis features

Analyzes resources
Helps in preparing job description and job
specification
Helps to develop training content
Avoids overlap of authority
Helps in developing performance
standards
Pay structure
Pay structures, also known as salary structures, set
out the different levels of pay for jobs, or groups of
jobs, by reference to:
their relative internal value, as established by job
evaluation
external relativities, via market rate surveys
Effective pay structures offer employees a
framework for progression and can help to encourage
appropriate behaviours and high performance. As part
of a reward strategy, an effective pay structure will be
transparent, fair and flexible, and most effective when it
aligns with the organisation’s strategy and its values.
Salary surveys

Salary Surveys are tools used to determine the

median or average compensation paid to
employees in one or more jobs. Compensation
data, collected from several employers, is
analyzed to develop an understanding of the
amount of compensation paid. Surveys may
focus on one or more job titles, geographic
regions, employer size, and or industries.
Salary surveys may be conducted by employer
associations, survey vendors, or by individual
employers. 
Principles of good compensation
strategy
Appointing persons
Helping for compensation decision
Collection of data
Reviewing from time to time
Equality
Consistency
Flexibility
Simplicity
Problem solving
Components of compensation

compensation

Non
monetary
monetary

direct indirect
Monetary (Direct compensation)

Base Pay

Bonus

Long term incentives

Perks or perquisites
Monetary (Indirect compensation)

Insurance (health, eye).

Leaves (sick, holiday/personal)
Clothes
Company parties
Phones/laptop
Retirement programs
Non monetary compensation

Enhance dignity & satisfaction from work

performed.
Promote social relationship with co-
workers.
Allocate sufficient resources to perform
work assignments.
Offer supportive leadership &
management.
Enhance physiological health, intellectual
growth.
Different types of compensation
include:
Base Pay
Commissions
Overtime Pay
Bonuses, Profit Sharing, Merit Pay
Stock Options
Travel/Meal/Housing Allowance
Benefits including: dental, insurance,
medical, vacation, leaves, retirement,
taxes...
Incentives

An incentive is an object, item of value or

desired action or event that spurs an
employee to do more of whatever was
encouraged by the employer through the
chosen incentive.
“Incentive is a plan or program to motivate
individuals for good performance. An
incentive is most frequently built on
monetary rewards, but also may include
non monetary rewards or prizes”
Objectives

Ensures profitability
Increases production
Reduces cost
Ensures morale
Recognizing good performance
To improve utilization of resources
Reduces labor turnover and absenteeism
Improves industrial relations
Importance

An employee does his best

Hard work and ambitiousness is
encouraged
Improves man machine relationship
Bring out employee involvement
Supervision is reduced
Obtains desired result
Essentials of incentive plan

Mutual trust
Consultation with workers
Free from bias
Minimum wages must be first guaranteed
Simple
Equal opportunity to earn incentive
Flexibility
Frequent
Forms of incentives

Bonuses :- is an incentive payment that is

given to an employee beyond his normal
standard wages. It is generally given at the end
of the year & does not become part of the basic
pay.
The payment of bonus Act 1965 is applicable
to every factory or establishment in which 20
or more person are employed in an accounting
year.
Merit pay :- is a reward based pay on
how well an employee done the
assigned job. Higher the
performance Greater will be the
reward.
The payment is depend on
performance of the individuals
Commission for sales people :- is paid on the
basis of sales made by the employee, through
different plan. Such as
Salary plan :- where new salesman is appointed, is unable to generate
new.
Commission plan :- where organization is totally based on sales of their
product.
Combination of both :- is the most frequently used method.
Components of Salary Structure

1. Basic Salary
2. Allowances
i. DA
ii. HRA
iii. Convenyance allowance
iv. Leave travel allowance
v. Medical allowance
vi. Books and periodicals allowance.
3. Gratuity
4. Employee Provident fund
5. Professional tax
6. Perquisites
7. ESIC