Management Concept

Management is a life giving activity to an organization. All organizations feed management irrespective of
size and activity for growth and survival. Management bring together human and nonhuman input to
produce valuable output by utilizing the input efficiently. Management is universal, goal oriented, group
activity, the process of management includes planning, organizing, staffing, directing and controlling. The
management helps in achieving organizational goals. Managers are required to posses technical, human,
conceptual and diagnostic skills. The technical skills are required by first level of management as they are in
direct contact with workers and are responsible for day to day operations. Conceptual skills are required by
top management as they have to make long term strategies for the organizations after scanning the internal
and external environment of the organization and understanding the relationship of variables present in
environment. Human skills are required at every level. The managers have to play interpersonal roles,
informational roles and decisional roles in their day to day functioning. The scope of the management is very
wide. The functional areas of management are human resource management, financial management,
production management and marketing management.
Organizational behaviour is a systematic study of individual behaviour, working in group and in organization.
It helps in predicting behaviour of individuals. OB Model depicts the relationship between independent
variable at individual group and organizational level and dependent variables that are productivity, job
satisfaction turnover and absenteeism.
Key Terms
Management: It is the coordination of all resources through the process of planning, organizing, directing
and controlling in order to attain stated objectives.
Management roles: A role is an organized set of behaviour that is expected from an individual. Roles throw
light on how managers perform their work.
Interpersonal roles: This role is concerned with interpersonal relationships and interaction of managers with
the people inside and outside the organizations.
Informational role: Informational roles involve receiving, collecting and disseminating information so that
manager can serve as nerve centres of their organizational units.
Decisional roles: The manager has to make important decisions that have a significant impact i the
organization.
Top level management: It consists of board of directors, presidents and CEOs. They are responsible for
overseeing the entire organization.
Middle level management: It consists of general managers, branch managers and departmental managers.
They control and oversee the departmental activities.
First level management: It consists of supervisors, foreman etc. who are in direct contact with workers.
Technical skills It is the ability to perform a job by the use of tools, procedures or techniques of a specialized
field.
Human skills: It is the ability to work with people, understand their feeds and motivate them. Conceptual
skills: It is the ability of manager to analyze the cause and effect relationship. It is the ability to visualize the
organization as a whole and see the big picture and understand the interrelationship among different
organizational parts.
Diagnostic skill: It is the ability to visualize most appropriate response to the given situation. Organization
behaviour: It is a field of study that in the impact that individuals, groups and structure have an behaviour
within the organization for the purpose of applying such knowledge towards improving organization
effectiveness.

EVOLUTION OF MANAGEMENT THOUGHTS

Many Academician and practicing manager have contributed to the discipline of management with
different approaches towards it. Industrial revolution triggered the search of one best method of doing work.
Scientific management aimed at introducing systematic study of work methods in order to improve
efficiency. Bureaucracy advocated mechanistic structure comprising of legal authority rules, regulation and
procedure for formalizing organization's behaviour. Administrative management proposed process and
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principles of management. Neoclassical approach focused on human behaviour and group behaviour.
They emphasized that a motivated and satisfied work force contribute more to the organizations objectives.
Quantitative approach argued that decision making can be highly improved through the use of operations
research, mathematics and statistics
Systems approach emphasized that manager should have an eagle view of the situation. Proper balance
should be sought between requirements of various interrelated parts of the enterprise and the goal of the
enterprise as a whole. According to contingency approach appropriate management action depends
upon the situation. Every situation has unique characteristics and hence there cannot be a universal
management practice. Modem management picks up important valuable concepts from all the previous
approaches and combines them to make it relevant to the present business scenario.
Key Terms
Scientific Management: It is an approach that aims to find out one best" way to perform a task through time
and motion studies.
Administrative Theory: It provides a more general framework of management that emphasis of the activities
process and principles of management.
Bureaucracy: It is an organization that reduces variability through highly formalized structure leading to
formalization of behaviour so as to make the activities predictable and easy to control.
Behavioural Approach: This approach to management argued that human beings are not only economic
beings; they can also be motivated if they are treated well.
Quantitative Approach: It aims to improve the effectiveness of decision making through the use of statistical
and mathematical model.
System Approach: A system is a set of interrelated separate parts that are unified to work towards a
common goal. The organization should be looked as 'whole' and as a part of the larger external
environment.
Contingency Approach: According to this, management entirely depends upon the situation as there is no
single best way of managing organization

PLANNING
Planning is a primary and crucial function of management which is followed by other functions such as
staffing, directing, organizing and controlling. To plan is to forecast about what is to be done, how it is to be
done, when it is to be done and who will do it.
Altering is goal oriented, continuous, forward looking and intellectual process. It provides direction, facilitates
control, reduces risk, improves morale and aids in coordination. A sound plan should be realistic, flexible and
should contribute towards organizational objectives. Planning starts with determination of objectives and
development of planning premises. Alterative courses of actions are identified and evaluated. The best
course of action is chosen and implemented. Planning is costly and time consuming. Its strength depends
upon the accuracy of data and manager's acumen. Planning may sometimes become redundant because
of changing environmental conditions. The plans can be either standing plans or single use plan. The
standing plans include strategy, policies, rule and procedures. The single use plans are programs and
budget. The planning can be done at the operational level or strategic level. Planning can be classified
according to time frame also, they can be short term or long term.
Management by objective is a management tool in which measurable goals are set jointly by superior and
subordinate and the contribution of the subordinate is measured in terms of his accomplishment of the
goals. The goals set in MBO are not thrust on the subordinate by supervisor. The superior subordinate then
develop actions plan followed by periodic performance review.MBO is tesult ariented it helps in minimurizing
of wastage and motivates subordinates. It is very time consuming and requires managerial skills of part of the
supervisor.
Key Terms
Planning: It is deciding in advance what to do, how to do it, when to do it, and who will do it.
Planning Premises: They are the basic assumptions regarding the business that provide broad framework
within which plans have to be formulated.
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Mission: mission is a statement describing about the organization's purpose and the reason of its existence.
Objective: The predetermined specific purpose to be achieved by the organization is called objective.
Policies: Policies are basic pre-defined guidelines and directions for decision-making
Procedure: It is a startling plan detailing about the succession of associated acts that are required to perform
the task.
Kule: It is a rigid, distinct, clear statement regarding what one needs to do and what one should refrain from
inaceitain situation, therefore the infringement of rules carries a penalty Strategic planning: It is a careful,
deliberate taking of decisions which affect are intended to affect the organization as a whole, as opposed
to only parts of it, over long periods of time.
Programs: An action based, result-oriented and unique plan to Ileet a specific business condition is termed
as programs.
Budget: An estimated or forecasted quantifiable statement discussing the expectation is termed as budget.
Management by Objective. It is a technique in which measurable goals are set by joint effort of senior are
subordinate and the contribution of each individual is miscalled in terms of their accomplishment of the
goals.

COORDINATING AND ORGANISING

Coordination aims at synchronizing the work performed by organisational member to ensure that the
organisation goals are achieved with efficiency. Coordination is a deliberate effort as compared to
cooperation which is voluntary. Coordinates promote team work, efficiency and interdepartmental
harmony. Coordination should start at early stage and should be a continuous process. Effective
communication, integration of plans, appointment of special coordinator, sound leadership and direct
personal contact is essential for achieving effective coordination.
Organising lay down the formal relationship among employees and resources to achieve organisational
goals. Steps in organising include identification of activities, grouping of activities, and assignment of duties
and delegation of authority. Span of control refers to the number of subordinates that work under the
supervisor. It can be marrow of wide depending upon nature of work, type of technology, ability of
managers and subordinates, degree of decentralisation, clarity in planning and effective communication
technique. Authority is the right to make decisions and give instructions. The authority can be line, staff or
functional. Power is the ability to influence. The five sources of power are expert power, referent power and
reward power, coercive power and legitimate power. Authority can be delegated, while delegating certain
principles should be kept in mind such as parity of authority and responsibility, unity of command, exception
principles etc. Problems of delegation are due to reluctance on the part of delegator and subordinate. In
centralisation, power remains concentrated at top level and in decentralization authority is delegated to
lower levels The appropriate mix of centralization and decentralization depends upon size and complexity of
organization, speed of decision making, degree of diversification, dispersal of operations attitude of top
management etc.
Key Terms
Co-ordination: It is an orderly arrangement of group efforts to provide unity of action in the pursuit of
common goals.
Organizing: The process of determining authority and relationship structure in an organization is termed as
organizing. Authority: It is the right to make decisions and issue orders and determine the use of resources to
achieve goals.
Responsibility: It is the obligation of subordinate to perform duties assigned by their superior.
Span of Control: The maximum number of subordinates or employees that a manager directs, controls and
supervises.
Power: It refers to the ability and capacity of influencing the behavior and attitude of others so that they do
those things that they would not do otherwise.
Delegation: It implies allocation of authority among subordinate to do a task.

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Centralization: All the significant decision and actions are taken by top management and even the lower
management depend on the approval of top management.
Decentralization: It is a systematic effort to delegate to the lowest level of authority, only the authority for
taking vital decisions and policies is retained by the top management.

DEPARTMENTATION AND STRUCTURAL FORMATS

Organization structure describes the relationship between work and people and among people indicating
the flow of work, authority and responsibility. The designing of organization structure involves: activities
analysis, decision analysis and relational analysis. Organizational structure can be mechanistic or organic
depending upon goals, strategy, technology, size, employees and external environment of the organization.
A good organization structure should have unity of direction and command, parity of authority and
responsibility, balance between centralization and decentralization, division of work, flexibility etc.
Organization is divided into small administrative units known as departmentation. The departmentation can
be done on the basis of certain key factors like function, process, product, territory, customer etc. The
traditional organization structure were line and line and staff structure. The disadvantage of the line and staff
structure is that it gives rise to line and staff conflict. The three modem alternatives of organization structure
are project, matrix and network structure.
Key Terms
Organization structure: It provides a framework for hierarchical arrangement and draws work of relationships
among duties, responsibilities and authority and lines of communication.
Organic structure: This organization structure has a dynamic structure characterised by decentralized
decision making, free flow of communication and high integration among various departments that is
achieved through task force and team building.
Mechanistic structure: This organization structure has a rigid structure characterized by centralized decision
making and high degree of standardization and formalization.
Departmentation : It is the process of dividing the large enterprise into smaller flexible administrative units
over which a manager has authority for the performance of specified activities.

DIRECTINGAND CONTROLLING
The directing function includes leadership, supervision, motivation and communication Directing initiates
action motivates people and facilitates coordination. In order to make directing effective there should be
unity of command, harmony of objectives, effective leadership, appropriate motivation techniques and
direct supervision wherever possible. Control is a crucial, continuous and forward looking process. It focuses
on the achievement of planned goals of the organization. It helps in coordination and put psychological
pressure on employees to work hard and brings operand discipline. Control is a process of establishing
standards and measuring the actual performance. The standards can be quantitative of qualitative. The
quantitative standards are measurable and include time standard, cost standard, productivity standard and
revenue standard. Then the actual performance is compared to standards if order to identify deviations. If
the deviations are unfavourable corrective actions are taken. Controlling is expensive and time consuming.
The techniques of controlling are supervision, analysis and interpretation of financial statements, budgetary
control, breakeven analysis, return on investment, management by objectives, PERT /CPM, management it
information system, management audit, human resource accounting, responsibility accounting. in order to
make control effective they should be made simple, flexible, and objective. The main focus of controls
should be on achievement of organizational objectives. They should be forward looking and acceptable to
the employees. The standards should be reasonably set. Resistance to control can be overcome through
participation and positive reinforcement
Key Terms
Directing: It is a function which aims to instruct, guide, supervise and inspire people working in the
organisation so that the objectives can be achieved.
Controlling: It is a systematic effort by managers to compare actual performance to predetermined
standards to find out deviations if any and address deficiencies.

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Supervising: It means overseeing the progress of work performed by subordinate and ensuring compliance
with standards and plans laid for them.
Standards: They are the benchmark against which the actual performances are compared Quantitative
standards: These standards are measurable like time standard, cost standard, income standard, output
standard, quality standards, profit, etc.
Qualitative standards: These standards are non-measurable or intangible like managers' decision making skill
and human skills, attitude of workers etc.

MOTIVATION
Motivation is the process of inspiring people to exert high level of efforts by satisfying their needs. All
employees can not be motivated in the same way. The need set is different for different people and hence
their motivations.
The various feed theories of motivation are Maslow's need hierarchy theory motivation-hygiene theory, ERG
theory and McClelland's need theory. They suggested that before motivating any one it is important to know
that which need is dominating his or her behaviour. Manager should introduce suitable motivators that
satisfy his or her need. The chapter also discussed goal setting theory that suggests clean, difficult goals
backed by regular feedback lead to higher performance. Equity theory stated that individuals may feel over
rewarded or under rewarded after comparing their input output ratio with others. Equity theory emphasized
fairness of the reward system. Expectancy theory stated that if there is a direct link between employee effort
and reward that the employee value the employee will be motivated. In general depending upon the need
and expectation of the individual the managers can employ combination of motivators to motivate
employee. The motivators can be job security, working condition, pay, promotion, challenging job,
participative decision making etc.
Key Terms
Motivation: It is the willingness to exert high levels of effort towards organizational goals conditioned by the
effort's ability to satisfy some individual's need.
Positive motivation: It is said to occur when an employee expects a certain reward when some performance
or behaviour standards are met.
Negative motivation: It takes place when an individual feels a fear of failure or other negative
consequences if the goal is not attained.
Extrinsic motivation: It refers to the influence of external factors like reward of punishment on the degree of
individual's effort.
Intrinsic motivation: The individual derives pleasure and enjoyment from the work due to his interest in task
itself rather than being influenced by external factors.
Physyogical need: This need includes basic requirement of nutrition, temperature, shelter and clothing that
are essential for survival.
Safety need: It refers to individual's feed of protection from physical and emotional abuse. Social need: It
includes the feed for affection, love, care and friendship.
Esteem need: It is the human desire to be respected and valued by others.
Self actualization need: It includes the need for growth, believing in one's potential and self fulfilment.
Hygiene factors they are those job factors that prevent employees from becoming dissatisfied like
supervision, salary working conditions, company policy and administration etc.
Equity: When the ratio of input(effort) to output(reward) is same for individual as it is for others with whom he
compares himself then equity is said to exists. Inequity exists if the ratios are not equal.

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GROUPS AND DECISION MAKING
Manager should understand the group dynamics because group forms the basic unit of the organization. A
group consists of two or more individual interdependent and interacting with each other for common
objective. The groups can be formal or informal. People join groups because it gives them support, power
and a sense of belongingness. Group members help each other in discharging their duties. The stages in
group development process include: forming, storming, forming performing and adjourning. Group
properties include group norms, group size, group cohesiveness, status and role. Group properties affect
group productivity. Teams are different from groups in terms of purpose, accountability, synergy and
composition of skill. Effective team can be created through clarifying goals, right thrix of skills, appropriate
size and reward system, trust, commitment, leadership and structure. Decision making involves choosing the
best alternatives from the available alternatives to achieve desired goals. The decision making models are
rational/scientific and administrative model. The various techniques of group decision making are
brainstorming, nominal and Delphi techniques. Group decision making offers better decisions as compared
to individual decision making. It suffers from group think and group shift. Speed of decision and
accountability pose a problem for group decision making.
Key Terms
Group: It is defined as two or more individuals interacting and interdependent who have come together to
achieve a particular goal.
Formal Group: This type of group is purposefully formed to achieve organizational objectives and has a
formal structure having hierarchy and structure that defines duties, responsibilities, authority of the individuals
in the group.
Informal Groups: They do not have any formal structure and are made by the members voluntarily. Group
norms. They are the acceptable standard of behaviour that are established and shared by group members.
Koles: They are the expectation of behaviour from group member occupying a given position in the group.
Group cohesiveness: It is the measure of bond among group member that holds the group together.
Team: À work team is a group of individuals that generates positive synergy through co-ordinate efforts and
complementary skills.
Decision making: It is a process that aims at choosing the best alternative among various alternative to
achieve desired objective
Group think: It is an extreme form of consensus in which group pressure for conformity overrides the realistic
appraisal of alternative courses of action.
Group shift: The shifting the position of the members towards an extreme position that can be either
conservation of risky, depending on the dominant view the members hold during pre discussion.

LEADERSHIP
Leadership determines the quality of organization by providing vision and direction motivation to the
employee of the organization. According to Trait theory of Leadership leaders are born and not made.
Successful leaders have certain qualities in them that make them different from non leaders or unsuccessful
leaders. Behavioral approach to leadership focuses on the manner and the behavior exhibited by the
leader during supervising their employees. The various leadership style proposed by researcher of behavior
theory are autocratic, democratic, participative, lazes fair.
Contingency theory of leadership emphasize the fact that situation also plays a very vital role in determining
which leadership style will be effective in a given situation. It calls for a proper match between leader and
situation. Path goal theory proposed that the effective leadership is a function of leadership style, situational
factors and follower's characteristics. The modem approaches have included more heroic and visionary
approach to leadership like charismatic leadership and transformational leadership.
Key Terms
Leadership: It is the ability to exert interpersonal influence on people to work willingly for group objectives.
Trait theory: This theory emphasis that traits that are specific to personality, physical, or intellectual
characteristics in a leader differentiate leaders from non leaders.

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Behavioural Theory: It focuses on the manner, approach and style of providing direction and motivation to
the people by the leader.
Employee Oriented Leader: He is described as one who emphasizes good interpersonal relationship with the
subordinates. Production Oriented Leader: The leader tends to emphasize on the task aspect of the job and
structures his role or her role as well as the roles of the subordinates towards achieving the goals.
Autocratic Leader: Leaders have complete control over their people. They make decisions without seeking
advice from their followers.
Participative Leader : Leader involves his group member in decision making process before making a final
decision.
Delegating Leader: Leaders follow the policy of non interference and allow their group members to make
decision and work on their own.
Contingency Approach to leadership: According to this approach situational factors also play a very
important role in predicting effectiveness of a leader. Different situation my call for a different leadership
style.
Supportive leader: The leader reduces the efforts of emotional obstacles or stress on the path to the goal by
being friendly and helpful.
Achievement Oriented Leader: The leader sets challenging goals for subordinates and shows confidence in
them.
Charismatic leader: Charismatic leaders are perceived by followers as agents of change that possess extra
ordinary leadership qualities like wisdom, heroism, sense of purpose etc.
Transformational Leader: They motivate their followers to focus on higher order intrinsic need and instil in their
followers the ability to question not only established views but eventually those established by the leader.

ORGANISATIONAL CULTUREAND CHANGE MANAGEMENT

Organizational culture refers to common values and beliefs shared by members of the organization. They are
relatively stable characteristics that describe an organization. These characteristics give a unique identity to
the organization. Innovation and risk taking, attention to details, outcome orientation, team orientation,
customer orientation, employee orientation, basis of motivation, aggressiveness, external orientation and
power distance are some of the characteristics that gives the organization its distinctive personality.
Economic conditions, organization structure and policies, managerial values, leadership and characteristics
of members play a very important role in determining the organization culture. Organization culture can
become a liability as it acts as a barrier to diversity, merger and acquisition and change.
if order to survive and grow organizations should have a proactive approach to change. The forces of
change can be either internal of external. External forces come from outside the organization like
technology, social and political environment, market situation etc. Internal forces emanates within the
organization like growth opportunities, performance gap and change in chief executive. Employees resist
change due to their adjustments with job demands, habits, fear of unknown economic loss, peer pressure
and social displacement. Organizational dynamics can also make change difficult. This may be because of
rigid organization structure, resource constraints and surkoost. According to Kurt Lewin change process
involve three steps (1) Unfreezing the old system (2) Moving towards the new system (3) Refreezing the new
system to make it relatively permanent. The resistance to change can be overcome through effective
communication, providing support to the employee so that they can cope up with change. Various
strategies like manipulation, cooptation, coercion and negotiations can be used to reduce resistance to
change.
Key Terms
Organization culture: It is a set of shared values, understanding, assumptions that controls the behaviour of
organizational members.
Power distance: The degree of difference to authority, the rigidity of chain of command.
Organizational Change: It means modifying the existing system by adopting new ideas methods or
behaviour by an organization for example organizational structure, change in level of technology, change
in strategy etc. Lewin's Three Step Model: It proposes three steps that the organization should follow in order
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to bring about change successfully. They are unfreezing, moving and refreezing. Social displacement: It
means dislodging people from their work groups and teams thereby disrupting the personal bonding which
they may have developed over a period of time.
Manipulation: It involves consciously structuring of events by twisting and distorting facts for example
withholding undesirable information and presenting rosy picture of the change. Cooptation: It includes
buying off the leader of the resistance group and giving him desirable role in the design and implementation
of change.

INTRODUCTION TO HUMAN RESOURCE MANAGEMENT

Human Resource management aims at attracting, managing and maintaining human resources in an
effective and efficient manner.
It is present in all the functions and all the levels of the organization and is continuous and future oriented
process.
It aims at aligning human resource strategies with business strategies to be able to survive and grow in
today’s competitive world
To achieve all of the above it performs various functions like recruitment and selection, training and
development, job designing, performance appraisals etc.
The HR managers should be skillful and intelligent as managing the most complex factor of production i.e.
people is a very challenging job.
HRM is defined as the art of procuring, developing and maintaining competent workforce to achieve the
goals of an organisation in an effective and efficient manner.
HRM is responsible for the people dimension of the organisation. It is a pervasive force, action-oriented,
individually-oriented, development-oriented, future-focused, and integrative in nature and is a
comprehensive function.
HRM policies are guides to actions. They serve as roadmaps for managers on a number of issues such as
recruitment, selection and promotion. They cover almost all functions of personnel management. HRM
policies have relation with other fields also.

Key Terms
Human Resource management: It refers to managing the organization's workforce in an effective and
efficient manner.
Performance appraisal : It is the assessment of how well an employee has performed his assigned duties and
responsibilities.
Remuneration : It is payment or compensation received in exchange of the services or employment.
Motivation : It is a driving force that arouses the individual to work towards a desired goal with intensity, sense
of direction and constant efforts.
Industrial Relations : It refers to the relationship between the management and the Labur.
Strategic Human Resource Management: It refers to integrating business plans with HR plans.
Competitive Advantage: It is an ability of an organization to perform activities exceptionally well (availing
profitable opportunities and thereby maximizing return Human Resource Planning is a process that identifiers
on investment) and gaining an edge over rivals when competing.
HRM: A process of bringing people and organisations together so that the goals of each one are met,
effectively and efficiently.
HRM Policies: A set of proposals and actions that act as a reference point for managers in their dealings with
employees.
Line Managers: They are authorized to direct the work of subordinates-they're always someone's boss.

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Management: The process of efficiently achieving the objectives of the organisation with and through
people.
Personnel Management: It is that part of management which is concerned with people at work and with the
relationships within an enterprise. It applies not only to industry and commerce but to all fields of
employment.
Principles: The word principle means, the fundamental truth or law as basis of reasoning or actions.
Productivity: The ratio of an organization's outputs to its inputs.
Staff Managers: They are authorized to assist and advise line managers in accomplishing these basic goals.
Strategic Human Resource Management: The linking of HRM with strategic goals and objectives in order to
improve business performance and develop organizational cultures that foster innovation and flexibility

HUMAN RESORCE PLANNING

Human Resource Planning is a process that identifies current and future human resource needs for an
organization to achieve its goals. The objective of Human Resource Planning is to determine its future HR
requirements and to plan as to how the existing HR can be utilized optimally.
The process of human resource planning starts with forecasting manpower needs, assessing the current
manpower supply, identifying the gap between the two and then formulating and implementing the plans
to fill the gap.
There are different techniques used while forecasting the future manpower requirements, some of them are
managerial judgment, ratio-trend analysis, regression analysis, work-study technique and Delphi technique
etc.
Job Analysis is the determination of the precise characteristics of a job through in depth and detailed
examination of the activities to be performed. It does a detailed analysis of the tasks, activities, duties and
responsibilities that are required to do a job.
Human resource information system (HRIS) refers to the systems and processes at the intersection between
human resource management(HRM) and Information technology (IT) It refers to the electronic tools used to
access the HR related information and perform HR related functions. It is very beneficial and present in all
the organizations in today’s world.

Key Terms
Human Resource Planning : It is a process that forecasts the company’s future manpower demand by
analyzing the current supply and the gaps if any.
Human Resource Information System : It refers to maintaining computerized human resource information
regarding the employee’s demographics, career progression, appraisals, skills, qualifications , experience,
performance and promotion ratings etc.
Manpower Inventory : It refers to the quantity and quality of employees available within the organization.
Managerial Judgment : In this forecasting method the experience and judgment of the managers is used to
forecast the demand for labour. It can be a bottom-up approach or up-down approach.
Ratio-trend analysis : Under this forecasting technique the demand for human resources/manpower is
estimated on the basis of ratio of production level achieved and number of employee in the past.
Regression Analysis : It is a statistical technique that is used to estimate future demand of human resources
by determining the relationship between dependent variable (sales volume) and independent variable
(employee size).
Work-study technique: The demand of human resources is forecasted on the basis of estimated total
production and contribution of each employee in producing each unit items.
Delphi Technique: It aims at estimating demand for human resources by taking into consideration the
estimation of human resources requirements given by a group of experts.

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Turnover : Employee or staff turnover is the ratio of the number of employees that leave the company in a
specific period of time.
Attrition-: It refers to the employees leaving the organization due to resignations, retirements, sickness or
death.
Downsizing: It refers to reducing the number of employees in the organization through termination, early
retirement etc.
Job Analysis : It is the determination of the precise characteristics of a job through in depth and detailed
examination of the activities to be performed. It includes job description and job specification.
Job Description: It is a factual statement that describes the content of the job of an employee. It states the
duties, tasks and responsibilities to be undertaken to do that job.
Job Specification: It is the translation of the contents of a job into human qualities and qualifications.

TALENT ACQUISITION

Recruitment is the process of identifying and attracting a pool of qualified applicants for a job. It involves
encouraging the candidates to apply for a job followed by receiving and screening the applications.
Recruitment process is a step by step approach and starts from planning the number of candidates to be
recruited followed by deciding sourcing strategy, searching and selling , screening, evaluation and control.
Sources from where the candidates are identified, attracted and selected can be either internal like
transfers, promotions, employee referrals, job postings etc or external through campus recruitments,
management consultants, a advertisements, trade associations etc.
Companies might resort to alternatives to recruitment like overtime, sub- contracting, employee leasing etc,
in case they want to hire people for a short period.
Selection is choosing the best possible candidate with requisite qualification and competence to meet the
specific requirements of the role.
Selection process consists of a series of interviews and tests, medical examination and employee referrals
before the job offers are issued to the selected candidates.
Orientation and Induction is carried out after a candidate is offered a job. It is a process in which the new
employees are made familiar to their jobs, complex processes , co-workers and organizations.

Key Terms
Recruitment: It is the process of hiring the right number of people of the right type at the right time.
Internal Sources : This approach includes recruiting, developing and promoting the employees from within
the organization.
External Sources: New candidates are recruited from outside the organization by different means and
methods.
Promotions: As recognition of their efficiency and experience the employees are moved from a position to a
higher position.
Retrenchment: It refers to the forced lay off of the organization’s employees in order to cut down on the
expenditure.
Referral: It is a recruitment method in which the current employees are encouraged and rewarded for
introducing to their current organization appropriate recruits from among the people they know.
Walk in interview: In such interviews an advertisement regarding the time and location of the interview is
given in the newspaper. The candidates are required to carry their CVs and directly appear for the
interview.
Job Fairs: In such fairs there are HR hiring managers of various companies under one roof , who get in touch
with the potential employees and candidates who attend such fairs.

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Screening: It is refers to that part of the selection process which is done to determine which candidate will
be selected for interview from a larger pool.
Overtime: It is the amount of time that an employee works beyond the working hours.
Outsourcing : It is a term used when a business process is contracted out to a third party.
Graphology: It is the study of handwriting. It is used during the selection process to evaluate the candidate’s
personality and emotional quotient.
Polygraph: It is an instrument that is used to measure physiological responses in the candidate when they are
questioned in order to determine if their answers are truthful.

HUMAN RESOURCETRAINING AND DEVELOPMENT

Training refers to the programs and procedures undertaken to improve skills and competencies of the
employees. Development is a process in which executives acquire skills and competencies not only in their
present job but also for future managerial roles. Training and Development aim towards achieving the same
goal but are different in their approach, initiative, time period and purpose.
A step by step procedure is followed for an effective training that includes assessing the need for training,
defining a training objective, selecting a suitable method to achieve that objective. Once the objective is
set the training program is developed and implemented and its effectiveness is measured through
evaluation and follows up.
The various types of training includes Orientation training, Promotional training, Refresher training, Skills
training, Internship training, Cross functional training etc. A suitable type of training is carefully selected while
deciding upon a training method to be implemented. It can be used to settle down new recruits, teach new
skills to existing employees, enhance employee’s knowledge for promotion and higher roles etc.

Training Methods include

(i) On the job training where employees get trained during their day-to-day jobs through coaching, job
rotation, understudy, projects etc
(ii) Off the job training is imparted through planned programs that generally take place away from the
immediate work place e.g lectures, conferences, business games, case studies, role playing sensitivity
training etc.
Key Terms
Training: It generally refers to programs and procedures undertaken with an attempt to improve current or
future employee performance.
Induction: It is the HRM function where a new employee is formally and systematically introduced to the
organization, job and relevant personnel.
Orientation: It is the process of imparting in-depth knowledge about the company background, organization
structure, products and policies to the new employee. He is also made familiar to his superiors and
subordinates leading to less nervousness and more comfort.
Internship Under internship training, professional colleges like management schools or engineering institutes
approach organizations, companies and corporate set ups and place their students under them.
Training evaluation: It assesses the effectiveness of the training undertaken by doing cost benefit analysis.
Executive Development: It is an ongoing process that helps managers gain knowledge, skills and abilities to
handle current situations in a more efficient manner and get matured to handle future challenges
successfully.
On the Job training: Training that happens in the organizations when employees get trained during their day-
to-day jobs.
Off the Job training: Training that is imparted through planned programs that generally take place away
from the immediate work place.

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Conference: Conference is a meeting of people conducted to discuss a common topic of interest.
Business Games: Under this method the trainees are generally divided into teams and are asked to take
certain decision for a given hypothetical situation that is very close to a real time situation.
Role playing: Under the role playing method a complex or conflicting situations presented to the trainees.
Each trainee then plays a role given to him.
Sensitivity Training- Sensitivity training aims at developing behavioral flexibility by improving the tolerance
power of the participants to each other’s behavior without the help of trainer.
In basket technique- In this approach the trainees are presented with a number of tasks and problems in
form of report, files messages etc that they might find in their “basket” while performing the role of a
manager for decision making.
Coaching: It is the process where trainee is placed under a much experienced employee or a supervisor
who instructs and guides him in his day-to-day work.
Job Rotation: It refers to shifting an employee between two or more roles or departments which help them
gain knowledge and experience in varied fields.
Understudy : The senior employee who is expected to leave in the near future trains the junior employee
known as understudy closely and makes him capable to handle the role efficiently by including him in all
day to day processes and decision making.

MOTIVATION IN ACTION

Motivation is a driving force that arouses an individual to work towards a desired goal with intensity, sense of
direction and constant efforts.
Motivation is very beneficial to the organization as it helps in optimum utilization of all the factors of
production, infuses a since of belongingness and loyally in the minds of the employees, gives them a sense
of direction and encourages them to fight the internal and external changes affecting the organization.
There are different motivation tools that organizations use to boost the morale of its employees. These can
be physical or monetary rewards, or internal and intrinsic that uses psychological measures to enhance the
self-esteem of the employees.
Some of the motivational tools are job redesigning that aims at changing or enhancing the job activities and
tasks of an employee’s job to keep him interested and excited to perform better, It provides alternatives
work arrangements that suits the convenience of the employees. It empowers them by giving them a sense
of authority, involves them in decision making.
Encourage mentoring programs to give them a sense of direction and provides counseling in times of distress
to its employees.

Key Terms
Motivation: It is a driving force that arouses an employee to work towards a desired goal with intensity, sense
of direction and constant efforts.
Job Redesigning: It refers to restructuring of tasks, duties and responsibilities of an employee.
Job Enlargement: It refers to widening of the range of tasks performed by an employee.
Job Enrichment: It aims at enhancing the job satisfaction of the employees by increasing their level of
responsibility and scope.
Empowerment: It means delegating more power to employees to make their own decisions.
Participative Management: It means involving workers in the decision making process, it involves employees
or employee representatives at all levels of decision making.
Quality of Work Life: It measures the larger personal satisfaction that the employees are deriving from
working in an organization. It is determined by the environment at the work place.

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Employee Stock Option Plans (ESOPS): Under ESOPs company awards the performance of its employees by
giving them shares generally at below the market price.
Bonus: It is paid to employees in terms of money up and above the regular salary. It is a motivational tool
used to enhance productivity of an individual or team.
Staff Retention: It refers to the ability of an organization to retain its employees. A number of efforts are made
by organizations to retain employees.
Mentoring: It is a formal or informal, supporting and nurturing relationship between the two employees, a
senior mentor and a junior mentee.

PERFORMANCE APPRAISAL
Job evaluation is the process of determining the relative worth of a job based on the job content whereas
performance appraisal works towards measuring the performance quality of the job holder.
Performance appraisal solves many purposes and can be used for deciding compensation, pay rise, training
and development needs, results in better supervision and career planning of the employees etc. It is based
on the factors like the quantum and quality of work by the employee and his personal traits like reliability,
dependability, loyalty etc.
A step by step process of performance appraisal is undertaken in which the objectives of performance
appraisal are defined, performance standards are set and communicated to the employees. The actual
performance standards are measured against the standards set and corrective measures are undertaken
whenever necessary.
There are different methods that are adopted for performance appraisal which can be broadly classified
into trait based method and result oriented method. Trait based method is a qualitative approach for e.g
straight ranking method, paired comparison method, critical incident method and weighted checklist
method etc. Result oriented method focuses more on the quantitative output by an employee e.g
management by objectives.
360 Degree performance appraisal is very prevalent in today’s scenario and corporations where
performance appraisals are used to guide the behavioral aspects of performance of the managers.
Key Terms
Job Evaluation: It refers to the process of determining the relative worth of a job in relation to other jobs in an
organization.
Performance Appraisal : It works towards measuring the performance quality of the job holder.
Promotion : It refers to giving a higher position to the employees which gives them more responsibility with
higher status.
Halo Effect :A judgment error in which the rater aptly rates the employee as excellent in one quality tends to
further give him higher than deserved rating in other qualities
Horn Effect: This is the reverse of Halo effect. A low rank in a certain quality of the employee might influence
the rater to give him lower than deserved rating in other qualities.
Central Tendency: A form of judgment error during performance appraisal in which managers might end up
rating all the employees as average in order to play safe and in the fear of being disliked by his
subordinates.
Regency Effect : Refers to the error in judgment during performance appraisal where the most recent
behavior of the employee is so fresh in the mind of the appraiser that it influences his rating for the entire
evaluation period.
Trait Based Method: It adopts a qualitative approach towards performance appraisal that involves
measurement of different traits and qualities of the employee, the behavior they adopt while performing a
job is evaluated.
Result Oriented Method: Under the result oriented method of appraisal, employee’s performance is studied
and examined both in terms of quality and quantity.

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Management by Objectives: It is a technique in which measurable goals are set by joint effort of senior and
subordinate and the contribution of each individual is measured in terms of their accomplishment of the
goals.

COMPENSATION MANAGEMENT

Compensation can be defined as the monetary worth given to the employee by the employer in return of
their service to the organization. It plays a very significant role in human resource management because it
helps in attracting, retaining and motivating the employees.
The main objective of compensation management is to maintain Internal and External equity, be able to
attract quality candidates and help retain employees, comply with the legal rules etc.
Factors that influence the compensation planning of an organization are its ability to pay, job levels and
needs, labor supply in the market, cost of living, trade union bargaining power etc.
Compensation can be broadly divided into Base Pay, Variables and Benefits.
There are two methods of wage payment i) Time wage system and ii) Piece Wage system. Under Time wage
system payment is made on the basis of time spent on the job. Under Piece wage system payment is made
on the basis of the output of the work.
The wage policy in India is based on the principles of equal pay for equal work, living wages for all workers,
payment of statutory bonus as per the statutory standards etc.
Incentives are given to the workers both in monetary and non-monetary terms over and above their wages.
These are provided to them for their exceptional performance over a period of time. There are various
individual based incentive plans, group or team based incentive plans or organization wide incentive plans
that are applied as per the need of the situation.
Bonus is the extra payment or incentives made to the workers over and above their standard wages after a
specific time period.
Fringe benefits refers to various extra benefits such as gratuity, medical care, accident relief, health and
group insurance, canteen facilities, recreational facilities etc that are provided up and above the
compensation paid in terms of salaries.
Key Terms
Compensation : It is one way or the other reward given to the employees by the employer in return to their
services or contribution to the organization.
Variable Pay : It is the direct compensation given to the employee which is not fixed but variable in nature. It
is given as per the individual, team or organizational performance.
Benefits : Benefits are indirect in nature and are not given in the form of cash. These are given to the
employees or group of employees regardless of their performance.
Wage: It is a fixed regular payment to workers earned for work or services, paid on a daily or weekly basis.
Minimum Wage : These wages are fixed by the government. Minimum wages provide the workers the basic
amenities of life that are sufficient to sustain and preserve the efficiency of workers.
Fair Wage : These wages are more than the minimum wages but less than the living wages that are fixed by
the employers.
Living Wage : The amount of living wages is the highest of all wages and aims at maintaining the wellbeing
of the workers in a particular society by providing him certain amenities up and above the necessities of life.
Time Wage System : Is a wage payment system in which the wages are calculated on the basis of time spent
on the job.
Piece Wage System : Under this system wage payment is made on the basis of the output of the work. Wage
payment is made on the basis of amount of work completed or the numbers of units produced.
Dearness Allowance : It is paid as a percentage of an employee’s basic salary to enable the employees to
face the increasing price of the essential commodities.

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Bonus : It is the extra payment or incentives made to the workers over and above their standard wages after
a specific time period.
Fringe benefits : It refers to various extra benefits such as gratuity, medical care, accident relief, health and
group insurance, canteen facilities, recreational facilities etc that are provided up and above the
compensation paid in terms of salaries.
Gratuity : It is the lump sum amount of money that a company pays to its employee after a certain period of
time as an acknowledgement of the employee’s loyalty to the company.

EMPLOYEE DISCIPLINE
Discipline is a tool that is used to maintain the performance of the employees by changing their behavior
whenever required.
Discipline can be both positive and negative. Positive discipline is a constructive form of discipline that
promotes self-discipline. Negative discipline is a form of punitive discipline where corrective actions are
taken to force the employees to abide by the rules and regulations of the organization
There are various factors that lead to indiscipline such as ineffective leadership and supervision, lack of
communication, favoritism, lack of clear policy, divide and rule policy, victimization , personal problem of
the employees etc.
The disciplinary actions taken should be seen primarily as a corrective measure, aimed at preventing further
misconduct or poor performance. The various disciplinary actions are warning, written notice, suspension,
demotion, pay cuts, holding increments , termination of services etc.
A step by step approach should be taken while enforcing a disciplinary action. It should start with preliminary
investigation followed by issue of a charge sheet, the accused should be given an opportunity of
explanation, in case he admits misconduct a full-fledged inquiry is undertaken and final punishment is
decided.
An effective disciplinary system should be corrective rather than punitive, should be progressive in its
approach, should follow the red hot stove rule, should be undertaken by trained supervisors and it should be
fair and prompt.
Key Terms
Discipline : It means an orderly behavior to be followed by the individual, team members and groups within
an organization to achieve the ultimate objectives.
Divide and Rule Policy: The management do not want all employees to make a group and work together,
they always divide the employees in small groups, get information from a group about others and
encourage spying activities.
Suspension: It is a temporary disciplinary action wherein an employee is prohibited from performing the
duties assigned to him for a certain period of time as a punishment for misconduct.
Demotion: It is an action taken by the management where the employee is posted one rank below his
present rank in the organization.
Fines: It is another kind of punishment where the amount of fine is deducted from the remuneration of
employee for his misconduct.
Red Hot Stove Rule: According to the hot stove rule a disciplinary action should have the same features and
effects that are attained by touching a hot stove i.e. it should be taken immediately.

EMPLOYEE GRIEVANCE ANDCOLLECTIVE BARGAINING

Grievance means any type of disappointment or unhappiness arising out of factors related to an
employee’s job which he thinks is unfair.
There are various factors that leaves an employee unhappy and dissatisfied at the work place. It can be
inadequate wages and bonus, unachievable and irrational targets, bad working conditions, strained
relationship amongst the employees, layoffs and retrenchment, lack of career planning of the employees
etc.
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Employee Grievance leaves a negative impact on the productivity and efficiency of an organization as it
leads to demotivated staff, high rate of absenteeism, high attrition rate, labor unrest, increase in wastage
and cost etc.
For grievance handling to be effective the grievance should be acknowledged promptly, quick action to
be taken in adherence with the law, it should be clear and there should be follow up undertaken after quick
action is taken.
The steps in grievance handling cover acknowledging the grievance, gathering facts and data, analyzing a
grievance, deriving a solution, redressal of the grievance and its execution and follow up.
Industrial dispute has been defined as “any dispute or difference arising between employers and workmen
or between workmen and workmen or between employer and employer which is connected with the
employment or non-employment, or the terms of employment or the conditions of labor, of any person.
Collective bargaining involves discussions and negotiations between two groups as to the terms and
conditions of employment. It is a group action, represented d by union leaders, it is flexible in nature and a
continuous process.
The objectives of collective bargaining are to promote industrial democracy, improve employer-employee
relationship, settle disputes, avoid third party intervention.
There are various bargaining issues like wages and incentives, working conditions, health and safety, rules
and regulations, employee benefits etc.
Key Terms
Employee Grievance : It refers to any type of disappointment or unhappiness arising out of factors related to
an employee’s job which he thinks is unfair.
Retrenchment : It refers to the forced lay off of the organization’s employees in order to cut down on the
expenditure.
Gripe Boxes : It is a box in which employees can drop their complaints. Employees do not have to disclose
their identity while expressing their feelings of injustice or discontent.
Exit Interviews : It refers to an interview that is conducted at the time when the employee is leaving the
organization so that it provides information regarding employee dissatisfaction and grievances.
Open Door Policy : It refers to a general invitation by the organization to their employees to talk over their
grievances in manager’s room.
Redressal : Grievance redressal refers to putting into action the best solution possible so that the employee is
relieved of the stress and discontent as soon as possible.
Industrial Disputes : It refers to any dispute or difference arising between employers and workmen or
between workmen and workmen or between employer and employer which is connected with the
employment or non- employment, or the terms of employment or the conditions of labor, of any person.
Collective Bargaining : Collective bargaining refers to discussions and negotiations between two groups as
to the terms and conditions of employment. It is called ‘collective’ because both the employer and the
employee act as a group rather than as individuals.
Bipartite Process : It is a process in which only two parties are involved.

HUMAN RESOURCEACCOUNTING, AUDIT AND HUMAN RESOURCE INFORMATION SYSTEM

HRA is about identifying and measuring data of human resources. It is used to develop financial assessment
of people in the organization during a particular time period. It is also about evaluating the economic result
of investment in people. In other words, HRA means measuring the cost and value of people working in the
organization.
HRA helps in studying the strength and weakness of the Human Resources in the organization and help take
proper decision regarding the use of human assets in the organization.
Historic cost, replacement cost, present value method, economic value method and asset multiplier method
are the principle monetary methods of measuring the value of human resources.

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HRD Audit is a comprehensive evaluation of existing HRD strategies, systems, styles, skills and culture and their
appropriateness to achieve the short term and long term goals of the organization.
Human Resource Information System is an organized computerized procedure for collecting, storing,
maintaining, retrieving and validating data needed by an organization about its human resources. It is
usually a part of the organization’s Management Information System (MIS).

Key Terms
Human Resource Accounting : It involves measuring the data of human resources, the cost involved in
recruiting and maintaining them and the returns achieved from them.
Appreciation and Depreciation of Human Resources: If an employee keeps on improving his quality of work
then from the organization’s point of view it is treated as appreciation of asset and on other hand if the
quality of work or performance is decreasing over time then it is treated as depreciation of asset.
Return on Investment: ROI in human resource accounting refers to the returns in terms of productivity and
quality of work achieved by the employees on the investment made on them in forms of recruitment,
training and development.
Acquisition Cost : It means that cost which is incurred on acquiring the human resource in the organization
i.e. cost incurred at the time of recruitment, selection and placement etc.
Learning Cost : It means that cost which is incurred at the time of providing training and development to the
employees and managers.
Human Resource Audit : It is a comprehensive evaluation of existing HRD strategies, systems, styles, skills and
culture and their appropriateness to achieve the short term and long term goals of the organization.
Human Resource Information System : It is an organized procedure for collecting, storing, maintaining,
retrieving and validating data needed by an organization about its human resources.

INTERNATIONAL HUMANRESOURCE MANAGEMENT

Globalization or international business refers to economic integration among the countries across the world.
It is a process of internationalization of products, markets, technologies, capital, human resource, information
and culture.
There has been a high growth in globalization in the 21st century because of rising competition, technology
advancement, liberalization of government policy, growth in entrepreneurship etc
Globalization leads to various opportunities like increased market size, economies of scale, favorable
government policies etc, it helps in exploiting local advantage and achieving economic growth.
Globalization can be threatening to a country in many ways. It can lead to failure in competing with global
markets, failure in studying foreign customer’s demands and preferences, political risks etc.
International Human Resource Management is the process of procuring, allocating and effectively utilizing
human resource at international level. In IHRM activities of human resources of an organization are
managed at international level.
There are various differences between global HR and domestic HR. Global HR has a broader perspective
and more functions. It is more heterogeneous and has a higher exposure to risk. Has more external influences
and is more involved in the employee’s personal life.
Cultural Factors, Economic systems and political legal environments are the major areas that have a major
impact on IHRM.
IHRM activities of HR planning, recruitment, training and development, compensation and performance
appraisal is difficult and much complex than the domestic HRM and needs to be designed carefully.
Management can follow any of the four approaches to staffing; ethnocentric, polycentric, geocentric and
regiocentric . The training also includes cultural training and language training.
Key Terms

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International Human Resource Management : It is the process of procuring, allocating and effectively utilizing
human resource at international level.
Ethnocentric: Under this approach the parent company fills all the key management positions by parent
country nationals.
Polycentric: Under this approach important position of subsidiary company are held by host country
nationals while key positions at head quarters are usually occupied by parent country nationals.
Geocentric Approach: Under this approach best people are hired for all the important positions regardless of
their nationality.
Regiocentric Approach: The managers of the subsidiary are hired from countries within the geographic
region that closely resembles host country.
Expatriate: An employee who is sent to live abroad often temporarily and for work reasons.
Tax Equalization Payment :The main aim of tax equalization payment is that the foreign country makes sure
that the expatriate will pay the same amount of tax in the foreign land that he would have paid had he
been in his home country so that the assignment is ‘tax neutral” for the expatriate employee.
Repatriation: The repatriation is the process of taking back the expatriate from the host country.

AN OVERVIEW AND INTRODUCTION TO ORGANISATIONAL DEVELOPMENT

Organisation development (OD) is a contractual relationship between a change agent and a sponsoring
organisation. This relationship was entered into for the purpose of using applied behavioral science in a
systems context to improve organisational performance and the capacity of the organisation to improve
itself. In recent years organisation development is one of the most significant developments in the field of
organisational behavior. In the 1940s,OD began to evolve as a distinct field of study when behavioral
scientists in the US and Britain made efforts to resolve problems facing modern organisations.
Different behavioral scientists defined OD in different ways and apply the knowledge and practice of
behavioral science to improve the effectiveness of organisations.
In organisational set up, OD has four prominent approaches: laboratory training, survey research and
feedback, action research, and sociological and socio technical approaches. The field of OD rests on
foundation of values and assumptions about people and organisations. The OD values were considered
revolutionary and are widely accepted today.
Key Terms
Assumptions: A thing that is accepted as true or as certain to happen, without proof.
Belief: An acceptance that something exists or is true, especially one with- out proof.
Change Agent: A behavioral scientist who knows how to get people in an organisation involved in solving
their own problems.
Congruence: It is a state of agreement or harmony; compatibility.
Organization Development (OD): A planned approach to improve employee and organizational
effectiveness.
Teleology: the explanation of phenomena by the purpose they serve rather than by postulated causes.
Value: It’s major influence on a person’s behavior and attitude and serves as broad guidelines in all
situations.

AN INTRODUCTION TO PLANNEDCHANGE
Change is pervasive in our society and the question is where does the impetus for change come from? The
simple answer is that the impetus to change comes from the environment by which we can mean the
internal organizational environment, but more often, we are talking about the external environment. The
organisational change means the alteration of status quo or making things different which may refer to any
alteration which occurs in the overall work environment of an organisation. Change is about survival and is

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especially necessary in organisations that wish to prosper in a volatile, uncertain, complex, and ambiguous
environment.
Globalization is one example of pressure or force to change. With globalization comes greater competition,
especially for workforce quality and wider differences in the skills, attitudes, and needs of the workforce are
coupled to increases in communications problems.
Change requires individuals to make new adjustments. Hence the fear of adjustment gives rise to the
problem of change and resistance to change and due to the same the individual comes in to danger. On
the other hand, the individuals and groups resist change where their existence is in danger or a total change
in overall work environment is contemplated.
Change is absolutely necessary for the survival of individuals and organisations and the question isn’t
whether or not to implement change. A planned change does not happen by itself, is a change planned by
the organisation. Through planned change, an organisation can achieve its goals rapidly. In introducing
planned change in organisation, the basic problem before management is to handle it in such a way that
there would be necessary adjustment in various forces. For this purpose, the manager who has to act as the
change agent has to go through a particular process which may comprise basically the following three
steps of planning, assessing and implementing the change. Once the plan has been implemented there
should be evaluation of the plan which comprises of comparing actual results against the standards.
Key Terms
Change Agent: Person who attempts to alter some aspects of an organisation or an environment.
Evolutionary change: Change that is gradual, incremental and specially focused.
External change agents: People who are outside consultants who are expert in managing change.
Internal change agents: Managers from within the organisation who are knowledgeable about the situation
to be changed.
Magnitude of Change: Minute alterations in the operation, to quantum change.
Unfreezing: The forces, used for maintaining the status quo in the organisational behavior, are reduced by
refuting the present attitude.
Revolutionary change: Change that is sudden, drastic and organisation wide.

MODELS OF CHANGE

According to Lewin’s force-field theory of change, organizations are balanced between forces pushing for
change and forces resistant to change i.e. restraining and driving forces. To set an organization to change,
managers must find a way to increase the forces for change, reduce resistance to change, or do both
simultaneously. Action research is a strategy that managers can use to plan the change process. The main
steps in action research are- (i) diagnosis and analysis of the organization, (ii) determining the desired future
state, (iii) implementing action, (iv) evaluating the action, and (v) institutionalizing action research.
An effective planned change effort is characterized by some common characteristics, which distinguish it
from unplanned changes. There are some prerequisite site conditions for successfully carrying out effective
change programmed.
An organization-wide change usually requires a ‘System Model Frame- work’ that describes the organization
as six interacting variables that serve as focus of planned change: people, culture, task, technology, design
and strategy. These variables are interdependent. After this the complex interplay of forces of change as
described and discussed by Kurt Lewin in his
‘Force field Theory’ helps us to understand how the change process works. The change according to this
model is brought out with a three step process, unfreezing, changing and refreezing to reach the desired
outcome. A planned change from the perspective of top management through the ‘Continuous Change
Process Model’ indicates that change is continuous and ongoing. The ‘Transition Management Model’
specifically related to large scale organization change suggests that four interlocking management process
must take place both to implement and sustain major organizational change in which there are four layers
which are: trigger layer, vision layer; Conversion layer and maintenance and renewal layer. A develop-

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mental theory by Larry E. Griener examines the issues of change in a new or emerging organization instead
of existing organizations. This model argues that growing organisations move through five relatively calm
periods of evolution, each of which ends with a period of crisis and revolution. According to Greiner, “each
evolutionary period is characterized by the dominant management style used to achieve growth, while
each revolutionary period is characterized by the dominant manage-rial problem and it varies organization
wide that must be solved before growth will continue.”
Key Terms
Trigger layer: This concerns with identification of needs and openings for major change deliberately
formulated in the form of opportunities rather than threats or crises.
Vision layer: It is establishing the future development of the organization by articulating a vision and
communicating this effectively in terms of where the organization is heading.
Conversion layer: Setting out to mobilize support in the organization for the new vision after transformation as
the most appropriate method for dealing with the triggers of change.
Culture Variable: The culture variable reflects the shared beliefs, values, expectations, and norms of
organizational members.
People Variable: The people variable applies to individuals working for the organization, including their
individual differences – personalities, attitudes, perceptions, attributions, needs and motives.
Refreezing: It makes new behavior relatively permanent and resistant to further change.
System Model of Change: The System Model of change describes the organization as six interacting
variables that could serve as the focus of planned change: people, culture, task, technology, design, and
strategy.

PROCESS OF ORGANISATIONALDEVELOPMENT
In the fast changing world, ‘change’ has become an inevitable part of life. Organization that do not
change when needed, do not survive long. Organizational development can be implemented by different
ways.
The first step in bringing about any change is the recognition that a change is necessary in which the
manager may identify specific performance problems, barriers to performance, or areas of possible
improvement. After this a change agent will be hired for the whole process of OD. He is involved in
collection of data, analysis and giving suggestions about introduction of change in organization.
In some instances, the organization development effort will involve only the feedback of the data gathered
but when another change treatment is to be used, it is at this point, after data feedback, that other OD
methods would be applied. This may involve team building, communication training, leadership training, or
any number of the OD processes in for meeting out the challenges.
A change agent is someone who acts deliberately on the environment in order to facilitate or bring about a
specific change. Once the change is in process it is the agent who takes came of decision-making and is
accountable for results. In other words, a change agent is a leader who implements the various components
of a previously devised action plan for organizational change by acting on the company’s environment in
order to bring the change about. The model leader is a change agent who facilitates the emergence of an
open process in which all the corporate players have a say, so that decisions as to the advisability,
objectives and procedures of the change are reached by consensus. They guide all those involved towards
intelligent and shared decisions, placing their resources as facilitators at the disposal of those they work with
directly, who will in turn use them to encourage the work team to adopt procedures and approaches
enabling the goal to be pursued in an open and lucid manner. Effective team development is a critical
factor in the success of a change process of this kind.
Key Terms
Empathy: Understanding of feelings, emotions and thoughts of others.
Homophily: Degree of closeness and similarity between the change agent and the client.
Linkage: Degree of collaboration between the change agent and the client.

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Process consultation: An OD technique in which a facilitator works closely with a manager on the job to help
the manager improve his or her interactions with other group members.
Sensitivity Training: An OD technique that consists of intense counselling in which group members, aided by
a facilitator, learn how others perceive them and may learn how to deal more sensitivity with others.
Shapers: Companies that try to change the structure of their industries, creating a future competitive
landscape of their own design.
Synergy: It means that whole is more than the sum of its parts e.g. 2 + 2 = 5.
Team building: An OD technique in which a facilitator first observes the interactions of group members and
then helps them become aware of ways to improve their work interactions.
Training: Teaching lower-level employees how to perform their present jobs.

ENTERING, CONTRACTING ANDDIAGNOSING ORGANISATION

In nutshell, OD process involves number of steps which are usually taken in the process of bringing about
change which starts from recognition of need to the final evaluation and improving the organisation to
restructure. This would be only possible with the culture of formal work teams. It also requires the assistance of
change agent and technology of applied behavior science including action research. The philosophical
and pragmatic values underlie action research.
The first is that programs designed to solve real problems should be based on valid public data generated
collaboratively by clients and consultants and this belief calls for actions to be based on diagnostic
research-an action-should-follow- research mode of thinking or, to state it, another way, diagnose the
problem situation and base actions on that diagnosis.
The second value should be accompanied by research on that action in order to build a cumulative body
of knowledge and theory of the effects of various actions directed to solving real-world problems-a
research-should-follow-action mode of thinking. This can be done only if we systematically evaluate actions
to understand the real effects of these actions. We have to systematically build a body of knowledge to
build better social science theories.
Thus actions to solve real-world problems offer a unique opportunity for both the scientist- researcher and the
administrator-layperson. If they approach the problems from the standpoint of the action research model.
The administrator’s problems will be solved, and the scientist’s quest for theory and empirical validation of
theory will be solved.
Thus we can conclude that the applied behavioral science discipline of organisation development is fertile
ground for action research projects.
Key Terms
Contracting: It is about future change activities, the resources that will be used in the process, and the way
the OD practitioners and organisation members will be involved in this.
Diagnosis: The process of collecting information about a client system and working collaboratively with the
client to understand the system’s current functioning.
Entering: It involves gathering initial data to understand the problems which the organisation is facing.
Evaluation: Information about the overall effects of a change programme.
Feedback: Information regarding the actual performance or the results of the activities of a system.

DESIGNING OD INTERVENTIONS
Organisational development is a series of techniques and methods to increase the adaptability of
organisations and it can be used to overcome resistance to change and to help the organisation to change
itself. For dealing with resistance to change, the OD techniques like education and communication,
participation and empowerment, facilitation, bargaining and negotiation, manipulation and coercion. An
OD technique for promoting change include, at the individual level, counseling, sensitivity training, and
process consultation, at the group level, team building and inter-group training; and at the organisational
level, organisational confrontation meetings.
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In this unit, we studies and examines the various components of an OD process i.e., the diagnostic
component, action or intervention component and the process-maintenance component.
The diagnostic component tries to find out about the original state of the system and how the remedial
action plans could affect them. The action or intervention component refers to the various OD interventions
which try to improve the effectiveness of the organisational functioning.
The different classifications of the OD interventions are also discussed in details. And one more thing has
been elaborated that how these interventions are targeted towards individuals, groups and organisation
itself with an objective to improve organisational effectiveness.
Key Terms
Job enrichment: Changing a task to make it inherently more rewarding, motivating, and satisfying.
Process Consultation: An OD technique in which a facilitator works closely with a manager on the job to help
the manager improve his or her inter actions with other group members.
Roles: Different sets of expect actions for how different individuals should be have.
Sensitivity Training: An OD technique that consists of intense counseling in which group members, aided by a
facilitator, learn how other sperceive the and may learn how to deal more sensitivity with others.
Structure: It is systematic arrangement of a system’s parts.
Survey Feedback: A type of data based intervention that flows from surveys of the members of a system on
some subject.
Team Building: The processes of helping a workgroup become more effective in accomplishing its tasks.
Training: It is the way of teaching lower-level employee show to perform the ir present jobs.

TEAM AND GROUP INTERVENTIONS

This unit contains the description of the OD interventions especially team and group interventions and its
classification. In addition to this light has been thrown on the understanding of teams, team-building
interventions. Team building produces powerful positive results and it is an intervention in harmony with the
nature of organisation as a social system.
In teams, members are interrelated to each other and must coordinate and integrate individual efforts in
order to achieve successful task accomplishments.
It is discussed and analysed that team building interventions are at the center of OD activities. Some
emphasis has been laid on the intergroup and third party peace making interventions and to learn how
these interventions actually reduce intergroup and interpersonal conflict and improve relationships.
Key Terms
Groups: Two or more people who interact with and influence each other toward a common purpose.
Group cohesiveness: The extent to which group members are motivated to remain within the group and in
consequence to behave in similar ways.
High Performance Teams: These teams are strong extension of the basic characteristics of the teams.
Organisational change: The process by which organisations move from their present state to some desired
future state to increase their effectiveness.
Social loafing: It is when the group is not cohesive with high output norms, individual members do not
contribute to their fullest extent.
Team building: Team building is a systematic process designed to improve working relationships and team
functioning such as problem solving, decision making and conflict resolution in any organisation.
Team Interventions: It is working with the cross-functional, self-managed and high performance teams.

COMPREHENSIVE INTERVENTIONS

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Comprehensive OD interventions are very much visible in the contemporary OD practice and in the
continuation, some like Be ckhard’s confrontation meeting and strategic management activities involve all
of top management or in case of smaller organisations, the entire management group.
Future search conferences tend to involve a wide spectrum of organisational members. After this, the
Appreciative inquiry focuses on the strengths of the organisation and what is most valued by its members.
Trans-organisational development is aimed at assisting organisations in forming and developing alliances.
At the end, we can say that like all OD interventions these comprehensive interventions must involve a
collaborative effort between client organisations and the consultants in both diagnosis and interventions.

Key Terms
Appreciative enquiry: This is an intervention based on the assertion that the organisation is a miracle to be
embraced rather than a problem to be solved.
Confrontation Meeting: Structured interventions that help two groups re- solve interdepartmental
misunderstandings or conflict.
Stream Analysis: Stream analysis is a method useful in planning behavioral, structural, and technical
changes.
Stream Diagnostic: It is the main engine of Stream Analysis which is a systematic approach for identifying
and separating core drivers from symp- toms.
Stream survey: It empowers the managers to design and conduct organisation wide surveys on a range of
problems and issues, in a manner that they pro- duce most informative results for the executives.
Trans organisational Developmental: An intervention concerned with helping organisations joins into
partnership with other organisations to per- form tasks or solve complex problems.

STRUCTURAL INTERVENTIONS
The unit covers the structural interventions which are those that are aimed at changes in different subsystems
of organisations that may be task, structural and technological. Structural interventions include job designs,
quality circles, Management by objectives bolstered by knowledge of OD experiments. It also covers various
selected structural intervention and shows the differences and similarities as well as the overlap between
Socio Technical Systems (STS), self -managed teams and others as discussed in the unit.
Applications are properly called OD to the extent that the latter is true: it is used by the OD practitioners but
it is expected that OD label would not be applied whenever structural interventions are carried out without
the attention to the social system or to humanistic values.
Key Terms
Business Process Reengineering (BPR): It can be defined as a radical scrutiny, questioning, redefinition and
redesign of business processes with the aim of eliminating all activities not central to the process goals.
Collateral organisations: These are established within organisations to deal with complex, non-routine, future-
oriented problems and/or to co-ordinate large-scale systems change.
Quality of Work Life: A way of thinking about people, work, and organisation.
Reengineering: An intervention that focuses on dramatically redesigning core business processes.
Socio-technical System: Considering both the social system (human) and the technical system
simultaneously, in order to match the technology and the people optimally.

IMPLEMENTATION ANDASSESSMENT OF OD
The unit has discussed in details the implementation and assessment of the OD interventions which are
institutionalized when the change program persist and become part of the organisation’s normal
functioning. Explanation of OD measurement and research design has been described in the previous part.
For assessment of OD interventions, the role of goal setting, performance appraisal and reward system has
been discussed. The latter part of the unit covers the detailed discussion on the prerequisites of OD success
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and briefly covers the various OD interventions limitations and detailed information of the assessment of OD
and change in organisational performance-the factors and the methods are covered. It has been also
explained that how OD impacts the whole organisation.
Key Terms
Action Research: Cyclical process of diagnosis-change-research.
Effectiveness Evaluation: It is the assessment of outcomes from a given set of inputs through process and the
outcome represents the object from which organisational effectiveness is assessed.
Evaluation Feedback: Information about the overall effects of a change program.
Intervention Evaluation: It is concerned with examination of the transformational process.
Feasibility: It is the suitability of an intervention to suit to the client system.
Quasi Experimental Research Design: The design involves choices about what to measure and when to
measure it.

ISSUES AND ETHICS INCONSULTANT – CLIENT RELATIONSHIP

In this unit, numerous issues have been discussed which have various things to do with establishing the initial
contract. It deals with identifying who is the client, establishing trust, clarifying the role of the consultant
determining the appropriate depth of intervention, examining the consequent, is of being absorbed by, the
organisation’s culture. Some other issues such as issues viewing the consultant and consulting teams as
models, applying action research to OD, terminating the relationship, and ethical standards. These issues are
important implications for practitioners, top management, and the organisation.
There are two faces of power; the positive and the negative have been identified along with the requisite
conditions for the use of power and politics in business organisation. In this unit, the different approaches to
understand the sources of power have been highlighted.
With the power, the concept of organisational politics which is associated with decision making, resource
allocation and conflict resolution processes has been discussed. The implication of power and politics for the
practices of OD have also been diagnosed and discussed.
If ethical dilemmas faced by OD practitioners not clarified in the initial stages it may affect the whole
system.Some major categories of ethical dilemmas occurs at the point of choice of intervention, use of
information, withholding of services, client dependency, choice of participation and client manipulation
have been highlighted in order to manage the situation.
Key Terms
Entry: The process that describes how an OD practitioner first encounters and establishes relationship with a
client system.
Ethical dilemma: These are the results of behaviors and inappropriate ac- tions or roles on the part of both
change agents and client systems.
Expert Power: Power based on the power holder possessing expert knowl- edge or expertise that is needed
by the other. Informational power is a form of expert power where the power holder possesses important
facts or infor- mation needed by the other.
Legitimate Power: Power based on the fact that everyone believes that the power holder has a legitimate
right to exert influence and that the power- receiver has a legitimate obligation to accept the influences.
Microcosm Group: A small, representative group selected from the organisation at a large to address
important organisational issues .
Model: A simplification of some phenomena for purposes of study and un- derstanding.
Coercive Power: Power based on the ability of the power holder to punish other, i.e., to give something
negatively valued by the other.
Referent Power: Power based on the power-receiver having an identifica- tion with (attraction to, or feeling
of oneness with) the power holder.

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Reward Power: Power based on the ability of the power holder to reward another, i.e., to give something
valued by the other.

FUTURE TRENDS IN OD Trends in OD Structure

Organisations are focusing more effort on innovating—creating new products, goods, and services—and on
new ways of organizing and relating among organisation members. The critical factor in changing
organisations is the development of trust within and between individuals, teams, and organisational units
and levels. Without trust, there can be no sustainable excellence with an organisation. Organisations are
becoming ever more complex and are affected by competitors and conditions globally. A small machine
ship in Topeka, Kansa, is affected by another machine shop in Bombay, India. Conflict management has
become an important element in today’s complex organisations, and value and goal differences are
continuing problems. Future OD activities should include helping managers to diagnose conflicts and resolve
disputes. There are increasing trends towards greater diversity of the workforce, including multinational
corporations and a need for the integration of values and skills. Organisation development is an expanding
and vital technology. A great deal was accomplished during its past growth, and certainly much more will
be done in the future. Ethical dilemmas, as approached from the perspective that such problems are
caused largely by the nature of the relationships between the change agent and the client system, is a term
that requires fuller elaboration. The intervention chosen must be appropriate not only to the problem, but
also to the context in which it exists. This context is influenced in parts by the political climate within the
organisation, and by the organisation’s perceived readiness for change. Those who need help are
Future dependent on the helpers. Thus, the client can either be counter dependent or over Trends in OD
dependent, especially in the early stages of the relationship.
Key Terms
Core Competencies: It is based on products or markets which give an access to several markets and are
difficult for competitors to imitate.
Organisation Transformation (OT): It is the recent advancement in change strategies is used in situations of
drastic, abrupt change when the organisation’s survival is at stake.

An Overview to Human Resource Planning & Corporate Objectives

Summary
Human resource planning is a managerial function and aimed at coordinating the requirements of the
organisation in terms of availability of different types of employees. It is a forward looking function to identify
skill and competency gaps and subsequently make plans for development of deficient skills and
competencies. HRP may be regarded as the quantitative and qualitative measurement of workforce
required in an organisation. In this regard, planning is required and expressed as a process by which the
management ensures the right number of people and right kind of people, at the right place, at the right
time doing the right things for achievement of organisational goals. Human resource planning is a critical
component of organisational planning that ensures that the right human resources are available at the right
time to achieve organizational goals, vision, and strategy. Human resource plans affect many elements of
including recruitment, selection, training, development, organizational structure, and compensation.
Strategic planning is very much required for HRP and it can be defined as the process of identifying
organisational objectives and the actions needed or required to achieve those objectives. This process
involves analyzing such areas as finance, marketing, and even human sources to determine the capacities
of the organisation to meet its objectives. It is certain that all the human resources of organisations
candifferentiate them from their competitors and for this core competency is necessary. On this philosophy,
many organisations enhance its value in the business and create an edge by focusing on the human
resources. In a nutshell, we can conclude that human resource planning and corporate planning become
effective when there is a reciprocal and interdependent relationship between them.
Key Terms

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Cost leadership: It is a strategy used by businesses to create a low cost of operation within their niche and
the purpose of using this is primarily to gain an advantage over competitors by reducing operation costs
below that of others in the same industry.
Differentiation: Result of efforts to make something stand out as a provider of unique value to customers or
society in comparison with its competitors.
Redeployment: Redeployment is an act where the employees whose jobs are at risk are given the chance
to find a new job in the same organisation.
Redundancy: It is a situation where the position of employment of an employee is or will become surplus to
the requirements of the business.
Core competency: The concept of core competency is identifying and nurturing core competencies to
drive competitive advantages and future growth applies to companies across industries in order to survive
and excel.

Human Resource Planning : Process, Tools & Techniques

An organisation should identify their short-run and long-run employee needs examining their corporate
strategies and by this we can understand that one should always adopt a situational approach to be more
effective. Another most important aspect is that it is the corporate strategies and objectives that set a
planning horizon. The managers must follow a systematic process or a model when planning for HR.
In human resource planning process, both external and internal assessments of HR needs and supply sources
must be done and after this forecasting developed. The key to assessing internal human resources is having
solid and complete information, which is accessible through a human resource information system (HRIS).
Once the assessments are done, forecasts must be developed to identify the mismatch between HR supply
and HR demand. For forecasting, qualitative and quantitative techniques will be used. The HR strategies and
plans to address the imbalance, both short and long term plan, must be developed.
The very crucial component of HRP is forecasting the number and type of people needed to meet
organisational objectives. There are a variety of organisational factors, including competitive strategy,
technology, structure, and productivity can influence the demand for labour. For example, in present
scenario utilization of advanced technology is generally accompanied by less demand for low-skilled
workers and more demand for knowledge workers.
The human resource planning process is suffering from some limitations at the same time as the HR
practitioners are perceived as experts in handling personnel matter i.e. complete planning of human
resources, but are not experts in managing business. The personnel plan conceived and formulated by the
HR practitioners, when involved with organisational plan, might make the overall strategic plan itself
defective.
Therefore, in order to be effective, operating managers have to incorporate withHR practitioners as it is not
the core HR department function. Successful planning needs a co-coordinated effort on the part of
operating managers and HR personnel.

Key Terms
Human resource information system: HRIS is software that provides a centralized repository of employee
master data in any organisation that the human resource management (HRM) group needs for completing
core human resource (HR) processes.
Re deployment: Redeployment is an act where the employees whose jobs are at risk are given the chance
to find a new job in the same organisation.
Redundancy: It is a situation where the position of employment of an employee is or will become surplus to
the requirements of the business.
Markov analysis: It can be used to model the internal flow of human resources in organisations and these
matrices simply show as probabilities the average rate of historical movement from one job to another.

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Golden handshake: It states that the employer will provide a significant severance package if the employee
loses their job and is usually provided to top executives for loss of employment through layoffs, firing or even
retirement.

Relationship Between HRM, HRP &HRD

Summary
In this unit, we have discussed about HRD, HRM, HRP, its nature and importance by considering various
dimensions. The human resource management is an intricate subject either made very simple by zealous
and student friendly writers or rendered too complex. It is done by those caught up in abstruse argument
and ideologically slanted polemic. Since the canvas we chose to paint on was vast but the collage was
intricate. The author needed to simplify the subject without oversimplifying it. They had to enable the reader
to merge with the reality in the world of industry and business without letting him get submerged by the
complex nature of that social reality. The geometry gave us the necessary locus classicus theretofore. When
including this concept as a part of our larger design, geometry also gave us a locus stand. The authors too
have tried to use numbers, charts, and simple formulae to explain our argument further. However, they used
their experience in the field of HR in India to rest our logic and forward our argument. In a manner of
speaking, they are taking a similar position as that taken by two of the greatest thinkers of all time, (Marx and
Engels in The German Ideology). They said: The premises from which we begin are not arbitrary ones, not
dogmas, but real premises from which abstraction can only be made in the imagination. They said to the
human resources that they are the real individuals, their activity and the material conditions of their life, both
those they find already existing and those produced by their activity. The premises can thus be verified in a
purely empirical way.
Key Terms
Competitive Advantage: Competitive advantage refers to the quality of the employees, as a competing
organization’s systems and processes can be copied but not its people. In organisation, all other things
being equal, it is the company with better employees that has the competitive advantage.
Core competency: The particular set of strengths, experience, knowledge and abilities that differentiate a
company from its competitors and provide competitive advantage and employees should possess these
qualities in order to advance business goals.
Human capital: To create economic value in organisations; the collective skills, knowledge and
competencies of an organization’s people that enables them.
Human capital management: The challenge of recruiting and retaining qualified candidates, and helping
new employees fit into an organization and the goal is to keep employees contributing to the organizations
intellectual capital by offering competitive salary, benefits and development opportunities.
Human resource audit: A periodic measurement of human resources effectiveness, conducted by internal
staff or with the use of an HR audit system.
Human resource information system: Business software systems that assist in the management of human
resource data (e.g. payroll, job title, candidate contact information). Some of the larger HRIS platforms
include SAP and People soft.
Industrial relations: A field of study that examines the relationship between employer and employees,
particularly groups of workers in unions.

Human Resource Development-Concept & Nature

In present scenario, an intense increase in global competition has been observed due to which
organisations are under tremendous pressure. This pressure is to improve their performance through
reduction of cost and in quality up gradation. The Indian business organisations too have now realized that
they are now in a more open, highly competitive, and market-oriented environment. It is a convention that
an organisation is only as good as its people. Be it any type and size of organisations, including schools, retail
stores, government agencies, restaurants, and manufacturers, have at least one thing in common: they must
employ competent and motivated workers.

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In the dynamic economy, this need has become even stronger as organisations grapple with the challenges
presented by a fast-paced, highly dynamic, and increasingly global economy. Many public sector
enterprises are being sold to private hands with liberalisation of the Indian economy many changes are
taking place in the corporate sector. It results in increase in work load, ban on new recruitment,
retrenchment of labour, imposition of voluntary retirement schemes and so on.
Key Terms
Autocratic Leadership: The leader determines policy of the organisation, instructs members what to
do/make, subjective in approach, aloof and impersonal.
Competencies: It is‘An underlying characteristic of a person’ ‘motive, trait, skill, aspect of one’s self-image or
social role, or a body of knowledge’.
Competitive advantage: ‘People are the source of competitive advantage’. Other systems in an
organisation can be copied but not the people in the organisation.
Human Capital: They are the collective knowledge, skills and abilities of an organisation’s employees.
Labour Market: A geographical or occupational area in which factors of supply and demand interact.
Training Needs Analysis: A method of analyzing how employee skill deficits can be addressed through
current or future training and professional development programs, as well as determining the types of
training/development programs required, and how to prioritize training/development.

Evolution & Functions of Human Resource development

The 1980s saw even greater changes affecting the training and development field and at several ASTD
national conferences held in the late 1970s and early 1980s, the discussions centered on this rapidly
expanding profession. As a result, the body approved the term human resource development to encompass
this growth and change. The efforts were made to strengthen the strategic role of HRD in the 1990s, that is,
how HRD links to and supports the goals and objectives of the organisation. There was also an emphasis
within ASTD (and elsewhere) on performance improvement. The particular goal of most training and HRD
efforts is on viewing organisations as high performance work systems.
Training & development activities begin when a new employee enters the organisation, usually in the form of
employee orientation and skills training. Employee orientation is the process by which new employees learn
important organisational values’ and norms, establish working relationships, and learn how to function within
their jobs. The HRD staff and the hiring supervisor generally share the responsibility for designing the
orientation process. It is done by conducting general orientation sessions, and beginning the initial skills
training. The skills and technical training programs then narrow in scope to teach the new employee a
particular skill or area of knowledge.
The role of the HRD professionals has become more important and visible. The reason is that organisation’s
make the necessary transition to a global economy. During this period of unparalleled change, the
immediate challenge to HRD executives is to redefine a new role for HRD. Due to this, the HRD executive is in
an excellent position to establish the credibility of HRD programs and processes as tools for managing in
today’s challenging business environment.
Key Terms
Active Learning: It is a process of learning new ideas, skills and attitudes through what we do at work or in
other behavioral situations. Active learning is about learning from doing, performing, and taking action.
Efficiency: It is a measure (as a percentage) of the actual output to the standard output expected. It
measures how well someone is performing relative to expectations.
Human Resource Development (HRD): An organized learning experience, conducted in a definite time
period, to increase the possibility of improving job performance and growth.
Job Enlargement: An increase in the number of tasks that an employee performs. It is associated with the
design of jobs to reduce employee dissatisfaction.
Job Enrichment: An increase in the number of tasks that an employee performs and an increase in the
control over those tasks. It is associated with the design of jobs and is an extension of job enlargement.

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Learning Objective: These are statements of what the learners will be expected to do when they have
completed a specified course of instruction. It prescribes the conditions, behavior (action), and standard of
task performance for the training setting.
Training: The systematic process of developing knowledge, skills, and attitudes for current or future jobs.

Challenges to HRD Professionals

Summary
The HRD professional has to change tools of his compass to influence the knowledge workers very
effectively. As in training it is a firm belief that “learners never get fail, teachers do so” and in such situations
HRD Professional has to equip them- selves with new technology and new philosophy to inspire the
knowledge worker to achieve common goals.
There are many challenges which organisations are facing as a new century unfolds before us. According to
Michael Hitt and his colleagues; they have identified in- creasing globalization and the technological
revolution as two primary factors that make for a new competitive landscape. The organisations have to
take a number of actions to address the uncertainty and turbulence in the external environment was
suggested by them. These actions suggested by them includes, developing employee skills, effectively using
new technology, developing new organisational structures, and building cultures that foster learning and
innovation.
The challenges to HRD professionals are to provide a full range of learning oppor- tunities for all kinds of
employees and one way that some organisations are meeting this challenge is by establishing multimedia
learning centers. These centers offer a variety of instructional technologies that can be matched to each
trainee’s unique learning needs and in this process, individual assessments can determine academic
deficiencies or gaps in employees’ performance capabilities, while also pointing out their preferred learning
styles. The self-motivated employees found to be deficient in arithmetic might be trained in an interactive
video program allowing them to set their own pace.
Key Terms
Achievement: It is a measurement of what a person knows or can do after training.
Case Study: Case study is a printed description of a problem situation that contains enough detail to enable
the learners to recommend a solution. In this, the learners encounter a real-life situation under the guidance
of an instructor or computer in order to achieve an instructional objective.
Computer-Assisted Instruction (CAI): The use of computers to aid in the delivery of instruction in which the
system allows for remediation based on answers but not for a change in the underlying program structure.
E-Learning: Covers a wide set of applications and processes such as web- based learning, computer-based
learning, virtual classrooms, and digital collabo- ration. It includes the delivery of content via Internet,
intranet/extranet, audio and videotape, satellite, and CD-ROM.
Web-Based Instruction (WBI): Web-based Instruction is delivered over public or private computer networks
and displayed by a Web browser. WBI is avail- able in many formats and several terms are linked to it; on-line
courseware, distance education on-line, etc.

JOB ANALYSIS- DESIGN & PROCESS

Jobs are important to individuals as well as organizations. They are subject to change. Job Analysis is a
systematic investigation of the tasks, duties and responsibilities necessary to do a job. Job analysis
information is useful for a variety of organization purposes ranging from human resource planning to career
counseling. The end products of job analysis are (a) Job descriptions, a written statement of what the job
holder does, and (b) job specifications, which list the knowledge, stills and abilities (KSAs) required to perform
a job satisfactorily.
Key Terms
Duty: Several tasks which are related by some sequence of events. For example: pick up, sort out and deliver
incoming mail.

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Human Engineering Activity: It takes into consideration human capabilities, both physical and psychological
and prepares the ground for complex operations of increased efficiency and better productivity.
Human Resource Planning • Industrial Engineering Activity: It is concerned with operational analysis, motion
study, work simplification, reducing unit labor cost, establishing standard performance and communicating it
with the employees.
Job: A group of positions similar in their significant duties such as technical assistant, computer programmers.
Job Analysis: The process of gathering information about a job.
Job Classification: The grouping of jobs on some basis such as the nature of work done or the level of pay.
For example, skilled, semiskilled and unskilled; Grade I, II and III officers in a Bank.
Job Specification: Job specification tells what kind of person to recruit and for what qualitiesthat person
should be tested.
Position: A collection of tasks and duties which are performed by one person. For example, the PA to
Principal receives visitors, takes dictation, operates computer, answers queries, attends to complaints and
helps students.
Task: An identifiable work activity carried out for a specific purpose. For example: typing a letter.

Human Resource Development

Human resource management is the art of procuring, developing and maintaining competent workforce to
achieve the goals of an organization in an effective and efficient way. Human resource Development aims
at helping people to acquire competencies required to perform all their functions effectively and make the
organization do well. HRD improves the capabilities of people; promotes team spirit among employees, and
helps an organization achieve its goals efficiently. HRD has gained importance in recent times, as
companies have realized the benefits of treating their employees as valuable assets. There is an increasing
realization in business circles that HRD (not a Highly Redundant Department) would help people acquire
knowledge, skills, and capabilities needed to survive and flourish in a competitive world.
Human Resource Development 90
Key Terms
Development: Represents activities that prepare an employee for future challenges and responsibilities.
Educational Experiences: Educational experiences benefit those who are employed and who are required
to be gradually equipped for other positions in the organization.
HRD: A planned way of developing individual employees, groups and the total organization to achieve
organizational goals in an atmosphere of mutual trust and cooperation.
HRD Matrix: The HRD Matrix shows the interrelationships between HRD instruments, processes, outcomes and
organizational effectiveness.
Human Resource Management: A process of bringing people and organizations together so that the goals
of each are met.
Human Resources: The sum of knowledge, skills, attitudes, commitment, values and the like of the people of
an organization.
Open Door Policies: Where open door policies exist, employees are free to walk into any manager’s office
with their problems and seek solutions to such problems.
Productivity: The ratio of an organization’s output to its inputs.
Training: Training concerns people already employed with the organization and whose jobs are so defined
that we are able to identify what should be the desired job behaviors.

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Recruitment
Summary
Recruitment is the process of locating and encouraging potential applicants to apply for existing or
anticipated job openings. Certain influences restrain (the freedom of) managers while choosing a recruiting
source such as: image of the company, attractiveness of the job, internal policies, budgetary support,
government policies, etc. Recruitment is influenced by a variety of environmental factors - economic, social,
technological, political, legal, etc. The sources of recruitment may be broadly divided into two categories:
internal sources and external sources. Both have their own merits and demerits
Key Terms
A Competence based Approach: It means that the competencies defined for a role are generally used as
the framework for selection process.
Agency sites: These are run by special recruitment agencies. Candidates register online but may be
expected to discuss their details in person before their details are forwarded to the employer.
Attracting Candidates: This is primarily a matter of identifying, evaluating and using the most appropriate
sources of applicants.
Employee Leasing: Hiring permanent employees of another company who possess certain specialized skills
on lease basis to meet short-term requirements- although not popular in India.
Job Design: The Job Design is about the agreement about the profile of the ideal job candidate and the
agreement about the skills and competencies, which are essential.
Job Sites: These are operated by specialized firms and can contain thousands of vacancies. Companies pay
to have their jobs listed on the sites, which are usually not linked to the agency.
Media Sites: Sites which may simply contain a copy of an advertisement appearing in the press, but may
include an external description of the vacancy and the company and provide a link to the company’s
website.
Person Specification: A person specification also known as recruitment, job or personnel specification is the
essential element on which the selection procedure is based. It is the sum total of education, training,
experience, qualification a person has to perform the job assigned to him.
Recruitment: The discovering of potential applicants for actual or anticipated organizational vacancies.
Recruitment Techniques: Recruitment techniques are the means or media by which management contacts
prospective employees or provide necessary information or exchange ideas or stimulate them to apply for
jobs.
Temporary Employees: Employees are hired for a limited time to perform a specific job. They are useful in
meeting short-term demand of human resource.

Selection

Selection is the process of choosing individuals who have relevant qualifications to Selection: 112fill jobs in an
organization. The primary purpose of selection activities is to predict which job applicant will be successful if
hired. Selection tests include intelligence and aptitude tests, achievement tests, assessment centers and
general psychological or personality tests. The value of tests should not be discounted, since they are
objective and offer a broader sampling of behavior. The interview is an important source of information
about job applicants. Several types of interviews are used, depending on the nature and importance of the
position to be filled within an organization. Interviews can be conducted by a single individual or by a panel
of interviewers who are generally trained for the purpose. The training helps interviewers to be more
objective and not get carried away by biases and errors of various kinds.
Key Terms
Interview: It is the oral examination of candidates for employment.
Panel Interview: An interview during the course of which several interviewers take turns in interviewing the
candidate.
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Reliability: The ability of a selection tool to measure an attribute consistently.
Selection: The process of picking individuals who have relevant qualifications to fill jobs in an organization.
Stereotyping: Attributing characteristics to individuals based on their inclusion or membership in a particular
group.
Structured Interview: Interview that uses a set of standardized questions that are clearly job related, asked of
all job applicants.
Validity: The relationship between scores on a selection tool and a relevant criterion such as job
performance.

Induction and Placement

Summary
The training helps interviewers to be more objective and not get carried away by biases and errors of various
kinds. Placement is the actual posting of an employee to a specific job. It involves assigning a specific rank
and responsibility to an employee. Placement is an important human resource activity. Orientation or
induction is the task of introducing the new employees to the organization and its policies, procedures and
rules. Induction is important as it serves the purpose of removing fears, creating a good impression and acts
as a valuable source of information.
Key Terms
Halo Error: This error occurs when one aspect of the subordinate’s performance affects the rater’s evaluation
of other performance dimensions.
Induction: Introduction of a person to the job and the organization.
Placement: Actual posting of an employee to a specific job - with rank and responsibilities attached to it.
Selection: The process of picking individuals who have relevant qualifications to fill jobs in an organization.
Stereotyping: Attributing characteristics to individuals based on their inclusion or membership in a particular
group.
Test: A test is a standardized, objective measure of a sample of behavior.

Performance Evaluation
Performance management system is a process for setting goals and monitoring progress toward achieving
those goals. It is just like other system where achieved results are continually measured and compared with
the desired goals or outputs. Planning means setting performance expectations and goals for groups and
individuals to channel their efforts toward achieving organizational objectives. Performance appraised
systems are designed to improve performance, they broadly cover three areas: define performance,
facilitate performance and encourage performance. The post appraisal interview is an essential part of the
performance appraisal system. It also gives the opportunity to the employee to explain his views about the
ratings, standards, rating methods, internal and external causes for low level of performance.
Key Terms
Assessment Centre: It is an appraisal technique that relies on multiple types of evaluation and multiple raters.
Behaviorally Anchored Ratios Scale: It is an absolute assessment technique wherein critical incidents are
identified and a range of performance possibilities (from poor to good) are described for each dimension.
Central Tendency: The reluctance to use the extremes of a rating scale and to thereby fail to adequately
differentiate employees being rated.
Checklist: Performance appraisal tool that uses a lot of statements or words that are checked by raters.
Contrast Error: Tendency to rate people relative to other people rather than to performance standards.
Halo Effect: Bias which occurs when the rater’s personal opinion of a specific trait of employee influences the
rater’s overall assessment of performance.

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Performance Appraisal: A systematic and objective way of evaluating both work related behavior and
potential of employees.
Performance Management System: It is a process for setting goals and monitoring progress toward achieving
those goals.
Planning: Planning means setting performance expectations and goals for groups and individuals to channel
their efforts toward achieving organizational objectives.
Rater Bias: Error that occurs when a rater’s values or prejudices distort the rating.
Rating Scale: A method which requires the rater to provide a subjective performance evaluation along a
scale from low to high.

Groups Formation, Development and their impact on organizational processes

In this Unit it has been explained that Groups are so critical for performance in any organisation because
organizations consist of groups. Groups are evolved through 5 stages i.e. forming, storming, norming,
performing and adjourning. There are broadly 2 types of groups Formal and Informal groups. The formal
groups are developed around the structure of organisation with formal definition and boundaries while
informal groups have unwritten norms. Groups are controlled through various Check Your Progress written
and unwritten norms and mechanism. Group’s targets, tasks culture, values exercise control on group
working. 1. What are the main essential components of a group which help in achieving desired outcomes
of the Organisation devote lot of focus on building groups and teams through formal as well as informal
interactions. These interactions align thinking of groups and organization? build right glue and bond.
Engagement exercises of companies in informal setting help in developing teams and their behavioural
competencies. Performance of groups has high impact on the outcome of organisations. The ever
increasing focus on group working in organisations is also due to the fact that teams are becoming diverse.
People bring different outlook hence need to gel well when work in groups in organisation to reduce
conflicts and put their energies towards achieving laid down objectives of the organisation.
Key Terms
Group : A group has two or more individuals, interacting and interdependent, who have come together to
achieve particular common objectives.
Formal Group : The organisation’s structure defines formal groups with designated work assignments
establishing tasks.
Informal Group : Group is neither formally structured nor organisationally determined or defined. Informal
groups are natural formations in the work environment that appears in response to the need for social
contact.
Groupthink : Groupthink occurs when members of a group exert pressure on each other to come to a
consensus in decision making. When group’s beliefs overshadow individual thinking extensively and do not
allow other believes to prevail.

Group Dynamics
Behaviour of individuals is influenced by mutual interactions among the members of the group within the
organisation as well as by the form of organisation, its rules, its directives and culture. Groups determine and
intensify to achieve the desired way of behaviour related to certain role in the group. To consider a group to
be effective and functional, it is necessary to aim for more diversity in the group, have clear communication
among team members, establish mutual trust and commitment have group cohesiveness and have
effective leadership. The groups should also be adaptable to changes and be innovative and creative. It is
essential for managers to create a cohesive group whose members seek for organisation’s goals leading to
higher productivity and performance.

Key Terms
Creative Freedom : It refers to the culture to allow freedom to experiment and even acceptance of failure.
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Groupthink : Occurs when a group makes faulty decisions because group pressures lead to a deterioration
of mental efficiency, reality testing, and moral judgment.

Interpersonal Processes
Communication is a way for those in organisations to make sense of their work environment.
Communication skills are also critical for managerial success. Communication is effective when it results in
the action intended by the sender. This means that the receivers must have access to the message, be
receptive to it, have the ability to comprehend it, and be motivated to react in the desired way. A number
of factors affect the success of communication. These include the form of communication used, individual
differences of receivers, characteristics of the organisation and characteristics of individual message such as
complexity and use of feedback. Perfect communication is unattainable. The effective communication less
to higher worker productivity. Choosing the correct channel, being an effective listener, improves
communication effectiveness. Dealing with such matters before a communication takes place might itself
have a positive impact on communication effectiveness.

Key Terms
Communication: exchange and flow of information and ideas from one person to another
Downward Communication: Communication that flows from one level of a group or organisation to a lower
level
Upward Communication: Communication flows to a higher level in the group or organisation
Lateral Communication: Messages conversed between people on the same hierarchical level
Nonverbal communication: Process of communication through sending andr eceiving wordless (mostly
visual) cues between people
Liaison roles: Liaison roles are performed by those who pass on informationto others.
Opinion leaders: Leaders with high credibility with other members, especiallyin a particular subject area.

Organizational Power and Influence in Organisation

If someone wants to get things done in a group or an organisation he/she uses Power to influence other
person to follow orders or direction or comply with the request to act in a manner. Power and influence are
key components of getting things done as a Manager.
There are various basis of Power in organisations. Power basis exert influence on the followers. The process of
influencing include the influencing tactics which may vary as per the choice of the Manager or Leader and
also the base of power used by the Leaders. There are 9 distinct influencing tactics used in the organisations.
These tactics have different degree of effect in different situations and also the state of mind of the follower.
The context is equally important in the entire process of use of power for applying influence or other person.
People respond differently to the various power bases. Expert and referent power are derived from an
individual’s personal qualities. In contrast, coercion, reward, and legitimate power are essentially
organisationally derived. The right balance of use of different power sources is important to enhance
organisational effectiveness.
Key Terms
Formal Power: Formal power is based on an individual’s position in an organisation.
Coercive Power: The coercive power depends on the fear of the negative results from failing to comply.
Reward Power : The opposite of coercive power is reward power, with which people comply because it
produces positive benefits.
Expert Power: Expert power is the one when influence is exercised as a result of expertise, special skill, or
knowledge.
Referent Power: Referent power is based on identification with a person who has desirable resources or
personal traits.
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Internalization: Internalization is the process of acceptance of a set of norms established by people or
groups which are influential to the individual.

Organisational Culture and its change

The fundamental values in a society are strong forces that affect the behaviour of those in organisations.
Culture is the patterned way of thinking, feeling and reacting that is characteristic of human groups and that
accounts for important differences between them. Values are ideas about what is right or wrong and good
or bad that is the basis of much human action. Culture is transmitted through socialisation.
The organisational culture is significantly affected by the broader society in which the organisation exists.
However, key managers, particularly the CEO, give it a more specific form: it will reflect their dominant
values. National cultural differences also have significant effect on organisational cultures in terms of
differences in organisational working and processes.
The culture of an organisation contributes to what it is and what it will be. There will be an effort to maintain
the culture since it supports the current power structure in the organisation. Therefore, it should be expected
that the organisation design, socialisation strategies and so forth will strengthen the current organisation
value orientations and systems. The believes and Values of Founders have long lasting impact on
organisational culture. Likewise those in organisations do many things to ensure that the sources of culture
do not change in such a way as to require changes in the organisational value systems.
Key Terms
Organisational culture: Sum total of beliefs, customs, traditions & values shared by the members of the
organisation
Values: Represents a sense of ‘what ought to be’ based on convictionsheld by certain key people.
National Culture: Similar to that of an organisation, is comprised of the symbols, values, rituals, and traditions
of the people living in a particular region
Myth: A dramatic narrative of imagined events, usually to explain origins or transformations of something.
Symbols: Objects to which organisational meaning has become attached. In any organisation, the
collection of symbols and signs will be unique and related to the shared perspective of members.
Rituals: Repetitive sequences of activities that express and reinforce the key values of the organisation,
which goals are most important, which people are important, and which are expendable.

Managing Interpersonal and Group Processes for Organisational Change and Development
Organisations are subject to pressures from outside environment and from inside the organisation itself.
External pressures could be pressures to change because of new regulation, new competition, ownership
changes and so forth. Internal pressures could stem from changes in the characteristics of people, changes
in internal systems, personal objectives of managers and so forth. In such a scenario, organisation’s success is
affected by an organisation’s ability to change when it is required. Successful change requires having the
necessary motivation to change, using an effective change method, and reinforcing the change after it
occurs so that it stabilises and endures.
There are several approaches to managing change: Lewin’s classic three step model of the change
process, Kotter’s eight-step plan, action research, and organisational development.
There are many methods focused on group change. Training is used effectively both for individual and
group change. Over the years, a great deal of knowledge has been obtained on how to train effectively. In
group training, the interdependencies among individuals in a group and the importance of any new
behaviour being reinforced and supported by other group members are recognised. Thus, the whole group
is trained together so that the members can support one another in efforts to change.
Many organisation wide change approaches focus on changing a particular system used throughout the
entire organisation, such as the performance appraisal system or an inventory system. One widely used
approach is survey method in which the organisation members collaborate with outside experts in devising a
new program to solve organisation’s problems.

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Change is easier if the organisation has a climate or culture that is generally supportive of change.
Successful changes require effective communication in which concerns and expectations flow easily up
and down the organisation. There should also be a climate of trust in the organisation, especially between
workers and management that will help them cope with the risk, uncertainty, and fear that often
accompanies organisational change.
Key Terms
Change Agents: Persons who act as catalysts and assume the responsibility for managing change activities.
Unfreezing: Changing to overcome the pressures of both individual resistance and group conformity.
Refreezing: Stabilising a change intervention by balancing driving and restraining forces.
Restraining Forces: Forces that hinder movement from the existing equilibrium.
Movement: A change process that transforms the organisation from the status quo to a desired end state.
Driving Forces: Forces that direct behaviour away from the status quo.
Action Research: A change process based on systematic collection of data and then selection of a change
action based on what the analysed data indicate.
Organisational Development (OD): A collection of planned change interventions, built on humanistic–
democratic values that seeks to improve organisational effectiveness and employee well-being.
Team Building: High interaction among team members to increase trust and openness.

Group Decision Making

In this Unit it has been explained how Groups decide in organisations. What are the advantages and
shortcomings of group decision making and how critical it is for performance in any organisation, since
organisations consist of groups. The quality group decision making can be improved by adopting various
techniques like Delphi techniques, Brain storming, didactic technique etc. Group Decisions are better in
many situations as compared to individual decisions. Organisations need to evolve a system for decision
making keeping in view the advantages and disadvantages of individual vis a vis group decision making.
Key Terms
Brainstorming: Brainstorming is a technique for creatively generating alternative solutions to a problem. The
unique feature of brainstorming is the separation of ideas from evaluation.
Dephi Technique: Delphi approach participants give their inputs individual allowing the polling of large
numbers of experts, clients, executives, or constituencies who are removed from the organization by
distance and scheduling.
Didactic Interaction: In this technique response is obtained in Yes or No. The type of problem should be such
that it generates output in the form of yes or no. structure defines formal groups with designated work
assignments establishing tasks.

Inter Group Conflicts and their Resolution

Summary
In this Unit it has been delved that what are the conflicts and why conflicts arise. What are the causes of
conflict. At the basic level conflicts are Intergroup conflict, intra-group conflict as well as intra-personal
conflict. Conflicts are both functional as well as dysfunctional. Thus managing conflict is so important for any
organisation. People bring different outlook hence need to gel well when work in groups in organisation to
reduce conflicts and put their energies towards achieving laid down objectives of the organisation. There
are various styles of management of conflicts. The conflict resolution is also managed through mediation of
third party. The main styles are Accommodating, Avoiding, Collaborating, Competing and Compromising.
These styles are useful in different situations and contexts. The capability of resolving conflicts is so critical for
the success of the organisations.

Key Terms

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Conflict: It can be described as a disagreement amongst groups or individuals. This is usually motivated by
the opposition of another group, in an attempt to reach an objective different from that of the group.
Intra-group Conflict: Intra-group conflict is a conflict which is amongst the members of one group.
Intergroup conflict: Intergroup conflict is a conflict which is amongst different groups.
Accommodating: Accommodation involves having to deal with the problem with an element of self-
sacrifice.
Avoiding: In this approach, there is withdrawal from the conflict. The problem is being dealt with through a
passive attitude.
Collaborating: Collaborating aims to find a solution to the conflict through cooperating with other parties
involved.
Competing: Competition involves authoritative and assertive behaviours. In this style, the aggressive
individual aims to in stil pressure on the other parties to achieve a goal.
Compromising: Compromising is about coming up with a resolution that would be acceptable to the parties
involved.

Managing group processes in organisation with diversities &working in International environment

In this Unit various aspects of Diversity and its challenge has be described. The Diversity has various facets.
The Workforce with diverse background brings in various values, attitudes, beliefs and approaches. This is
great strength of the organisation. But it is also a prime challenge in present day organisations. Managing
Diversity therefore is essential for tapping strengths of diverse workforce and reducing conflicts which may
arise due to different approaches of people from varied cultures and beliefs.
Experts of Management of Diversity have developed a 5 techniques for effective management. The
generation gaps in workplaces is another big challenge. The Baby Boomers, Gen X and Gen Y are classified
with typical thinking and preferences while in organisations. This also has considerable impact on
performance. Organisation can not ignore this factor and needs to manage by understanding these
differences and designing processes which suits to the diverse generations. Gender Diversity is another
important areas which is taking an important dimension in recent past in India. New law has been framed for
protection of women at workplace which requires organisations to comply with various provisions.
Key Terms
Diversity: Diversity can be defined as acknowledging, understanding, accepting, and valuing differences
among people with respect to age, class, race, ethnicity, gender, disabilities, etc
Baby Boomers: Those who were born between 1946 and 1964.
Generation X: Those who were born between 1965 and 1981.
GenerationY: Those who were born between 1982 and 2000.

Introduction to Performance Management

Performance management is the process which deals with improving organizational performance by
improving employee performance. The concept of performance management may be categorized into
two separate types of management in which the first one deals with the performance of an organization as
a whole and evaluates the effectiveness of its managers. The second type deals with the system of
evaluating employees in order to enable them to achieve reasonable goals and thus ensure that the
organization performs better.
It is an important organizational tool used in organizations to clarify performance objectives, standards,
critical dimensions, and competencies to enhance individual performance.
Performance management is a ‘systematic’ and ‘holistic’ approach to identify critical dimensions of
performance. After identification, it is used to carry out activities necessary to ensure that the mission,
objectives, goals, vision, and values of the organization are being met in an effective and efficient manner.

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This process transforms organizational objectives and strategy into a measurable action plan by getting the
right information to and from the right people at the right time and in the right format.
The performance management is used in the best-practice companies are not because it is a better
technique than performance appraisal, but because it can form one of a number of integrated
approaches to the management of performance.

Key Terms
Expectancy: It refers to the extent to which the person believes his efforts will lead to the first level outcome.
Instrumentality: It refers to the probabilities attached by the individual to each possible performance
outcome alternative just as the individual previously assigned probabilities to various levels of effort leading
to different levels of performance.
Performance Management: PM deals with improving organizational performance by improving employee
performance.
Performance: These are behaviors or actions that are relevant to the goals of the organization.
Valence: It means the attraction or an outcome to the individual.

Overviews of Performance Management System

Performance management system is another way of envisioning the totality of a manager’s function and
the use of performance management in the best-practice companies is not because it is a better technique
than performance appraisal, but because it can form one of a number of integrated approaches to the
management of performance.
The rise of HRM also contributed to the emergence of performance management which helps in clarifying
the mission, vision, strategy, and values of the organization to the employees in order to enable them
achieve the same.
The companies are using performance management systems to evaluate employ- inefficiency at work and
ability to perform certain tasks, either by automated or human processes.
Competency development is a carefully crafted process of research and data gathering. The data
gathering isabout firm’s managers and employees as they perform their daily work, with the goal of
determining the specific knowledge, skills and personal attributes required for excellent performance in
these actual jobs, roles or businesses.
The competencies and the need to develop them translate into a personal development plan. And the
whole links into what is being tried to be achieved within the organization.
Electronic performance management (or e-performance management) offers great value for money to the
organizations and addresses its needs aptly and it allows organizations to maintain a record of core skills and
competencies into the employee’s performance management process.
Key Terms
Competencies: Competencies are the knowledge, skills and personal attributes required for excellent
performance in a job, role or specific business.
Competency analysis: It is concerned with the behavioral dimensions of the roles.
E-performance Management: It is IT-enabled performance management that comes as an effective tool to
leverage the full benefits of the system at a comparatively much lesser cost of administration.
Performance Management: It deals with improving organizational performance by improving employee
performance.

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Defining Performance Planning
The performance planning part of the performance management sequence is primarily a joint exploration.
It is about what individuals need to do and know to improve their performance and develop their skills and
competences, and how their managers can provide the support and guidance they need.
The performances aspect of the plan in any organization obtained agreement on what has to be done to
achieve objectives, raise standards and improve performance.
The performance planning is the key essential for an effective performance management system. The
coaches work with performance plans or work plans to keep their employees motivated.
In organization, the key performance area includes the identification of priority area to an employee.
Subsequent working on the specified area, everything will be done. The term key results area may be
defined as general area of outcomes for which a role is responsible and the process of performance
planning should identify clearly what is expected of the employee. This in turn provides the opportunity to
recognize good performance and identify areas that need corrective action or added training.

Key Terms
Goal: Goal is the purpose toward which an endeavor is directed.
Mission: It defines what an organization is, why it exists, and its reason for being.
Objectives: Something that one’s efforts or actions are intended to attain or accomplish.
Performance: It is kind of behavior and should be distinguished from the out- comes because they can be
contaminated by systems factors.
Vision: A statement giving a broad, inspirational image of the future that an organization is aiming to
achieve.

Defining Competency Mapping

Competency Mapping begins with identifying key competencies for an organization and/ or a job. It is done
by incorporating those competencies throughout the various processes (i.e. job evaluation, training,
recruitment) of the organization.
A link between people and competencies in the organization is established through an effective system of
measuring the proficiency of an individual on the desired competencies for the role.
The competencies are a broader term referring to an individual’s demonstrated knowledge, skills, behaviors,
experience, life view and values and constitute observable, behavioral acts that require a combination of
all these attributes to execute.
In organizations, the competency mapping serve as behavior-based standards of performance against
which people and organizations can be measured over time.
Key Terms
Assessment centre: Assessment center is a mechanism to identify the potential for growth and it is a
procedure (not location) that uses a variety of techniques to evaluate employees for manpower purpose
and decisions.
Behavioral Indicators: Behavioral indicators describe the behaviors, thought patterns, abilities and traits that
contribute to superior performance in the organization.
Competency: The skills and abilities, described in behavioral terms that are coach able, observable,
measurable and critical to successful individual or organization’s performance.

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Performance Appraisal and Methods
It is a process of estimating or judging the value, excellent qualities or status of a person or thing and it is a
process of collecting, analyzing, and evaluating data relative to job behavior and results of individuals. The
appraisal system is organized on the principle of goals and management by objectives. The performance
appraisal can be either formal or informal.
The main difference between the performance management and appraisal systems is their respective
emphasis and spirit and the good organizations in the past have used essentially their performance
appraisal systems as performance management systems.
Performance appraisal plans are designed to meet the needs of the organization and the individual which is
increasingly viewed as central to good human resource management.
Generally, the organizations use performance appraisals for three purposes: administrative, employee
development and programme assessment. Performance appraisal commonly serve an administrative
purpose by providing employers with a rational for making many personnel decisions, such as decisions
relating to pay increases, promotions, demotions, terminations and transfers.
There are two types of performance appraisal systems which are normally used in organizations: (i) close
ended appraisal system and, (ii) open ended appraisal system.
Structure and Sayles have classified performance appraisal into three groups: traditional performance
rating, newer-rating method and result-oriented appraisal. The 360-degree feedback is also known as ‘multi-
rater feedback’, as it is the most
Comprehensive appraisal where the feedback about the employees’ performance comes from all the
sources that come in contact with the employee on his job. The quality of an appraiser is much more crucial
than the appraisal methods which are desirable to make the immediate superior a party to the appraisal
program.
Performance is a thing of the past, while potential includes the possible knowledge, skills and attitudes the
employee may possess for better performance.
Key Terms
Close Ended Appraisal System: In this, a confidential report is submitted on the performance of the
employee.
MBO: It involves the setting out clearly define goals of an employee in agreement with his superior.
Open Ended Appraisal System: In this, the performance of the individual is discussed with him, and he is
ranked in a five or ten point rating scale.
Performance Appraisal: It is a systematic evaluation of present potential capabilities of personnel and
employees by their superiors, superior’s or a professional form outside.
Self -Appraisal: It gives a chance to the employee to look at his/her strengths and weaknesses, his
achievements, and judge his own performance.
360-degree Feedback or Appraisal: It is the most comprehensive appraisal where the feedback about the
employees’ performance comes all around i.e. from all the sources that come in contact with the employee
on his job.
The Balance Scorecard: It creates a template of measurement of organizational performance as well as
individual performance and enables organizations to clarify vision and strategy before initiating action.
Traditional Rating: It involves a completion of a form by the immediate supervisor of the individual who is
being evaluated.

Performance Monitoring and Coaching

Performance monitoring provides scope for modification, change and/or alteration of the existing
performance management system and it may be defined as the process of appraising an environment of
continuous learning and development, maintaining the employee’s performance, enhancing individual
competencies to make them more productive for the organization.

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The successful business management requires the ongoing monitoring of performance in order to generate
data by which to judge the success or otherwise of specific strategies.
The progress in implementing the personal development plan can also be monitored during the year and a
performance monitoring plan is a critical tool for planning, managing, and documenting data collection.
Coaching and mentoring seek to bridge the gap between traditional expectations of the organization and
more contemporary approaches.
There are several key features of coaching and mentoring, for individuals and organizations, make them
attractive. The coaching and mentoring frequently run alongside, or are an intrinsic part of, a self-
development process set in place by the organization. In totality, this process can vary; with personal
projects and personal development plans at one end of the continuum, and an organization-wide self-
managed learning programme at the other.
Key Terms
Performance monitoring: Performance monitoring may be defined as the process of appraising an
environment of continuous learning and development, maintaining the employee’s performance,
enhancing individual competencies tommake them more productive for the organization.
KPI: Key Performance Indicators.
Mentor: A mentor is an experienced manager who provides guidance to the junior manager or professional
and the purpose is to facilitate their development.
Mentoring: It is a fundamental form of human development where one person invests time, energy, and
personal know-how assisting the growth and ability of another person.
Performance monitoring: It may be defined as the process of appraising an environment of continuous
learning and development, maintaining the employee’s performance, enhancing individual competencies
to make them more productive for the organization.

Performance Counseling
Performance Counseling is quite often misunderstood as it is wrongly interpreted as a process of correcting
or controlling the employee behaviour by giving him negative feedback in an assertive manner by his boss.
It is advisable to have performance counselling discussions quite frequently. It is depending upon the needs
of each appraise and the time availability of the counse- lor. In fact, the more attention a manager pays to
counselling his subordinates, the more time he is likely to gain in the long run as a result of improved
capabilities of his subordinates.
Counselling is a means and not an end in itself and the development does not occur just because there is
counselling.
In general practice, counselling could be an effective instrument in helping people integrate with their
organization and have a sense of involvement and satisfaction.
Key Terms
Influencing: The word influencing would mean making an impact on the per- son in relationship.
Performance Counselling: In this, the counselor initiates the discussion as a part of an appraisal system or as a
part of some processes that take place in the organization.

Performance Management Implementation

In present scenario, the performance management is a broader concept which includes the performance
planning, performance appraisal, monitoring and performance evaluation.
It would be very difficult to effectively manage the human resource without an instrument that measures its
effectiveness and capability and to balance the situation, it is highly required.
For effective utilisation of human resource the organizations need a system that can identify the capabilities
and performance of its human capital so that they can deal with performance problems and encourage
performance excellence.

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Key Terms
Performance oriented work culture: Performance oriented work culture means launching a variety of
improvement efforts, including designing high- performance work systems.
KPI: Key Performance Indicators
Performance Management Plan: A Performance Management Plan provides a formal, regular, rigorous
process for data collection, analysis and usage.

Organizational Change Through Performance Management

The organizations cannot stay/sustain the pressure of competition unless environ- ment ignites creativity,
conserve/nurture ideas and translate the ideas into action.
The leaders of any large-scale organizational change quickly learn that it’s not enough to develop a new
and improved set of strategies, structures and work processes. In any organization, a high performance
team is a group of individuals working together in harmony to achieve what others might think of as the
impossible. the culture is a term that is used regularly in workplace discussions and if a supportive culture will
be given, increases work performances.
Building a strong performance culture facilitates the organizations in improving the performance and
financial results of the organization as well.
Key Terms
High performance team: A high performance team is a group of individuals working together in harmony to
achieve what others might think of as the impossible.
Organizational culture: Organizational culture may be generally described as a set of norms, beliefs,
principles and ways of behaving that together give each organization a distinctive character.
Performance Culture: It refers to an organizational culture where performance is one of the core values.

Performance Management Linked Reward System

For organizations, performance and results are important but concern for people, their well-being and
fairness of treatment is equally important. If organizations want to attract high performers and retain and
motivate them, they have to be willing to reward excellent performers. Designing performance linked
reward system is conditioned by a variety of factors. These factors are nature of business, type of tech
neology, the attitude of unions, and human resource strategy of organization.
Along with compensation, non-compensation rewards are also important component of reward system that
is critical for improving workplace performance. Organizations have to seek answers to 4 basic questions
while designing a reward sys- tem i.e. who should be rewarded, what rewards should be given, how should
employee assessment be done and how rewards should be given.
The employees who perform well receive larger compensation increase; those who do not perform
satisfactorily see little or no increase in compensation and at the same time a performance orientation
requires a variable pay approach in which pay goes up or down based on a measure of performance. It
also occurs that not every- one in the same job will be paid exactly the same, and not everyone will like the
approach.
The variable performance in the pay is a financially measurable reward paid to an individual based on his
overall performance and this measure includes the cumulative performance of the individual, his strategic
business unit and that of the organization.
Key Terms
Fixed Pay: It is a reward that is fixed, irrespective of the performance of the employees.
Goal sharing: Goal sharing plans pay bonuses when performance is above a standard.
Group Incentive Schemes: They provide for payment of bonus either equally or proportionately to individual
within a group or team.
Profit Sharing: It means paying employees a share of the net profit in addition to their wages or salary.

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Variable Pay: Variable pay is a financially measurable reward paid to an individual based on his overall
performance.

Ethics in Performance Management

The major concern of performance management is performance improvement. This is done in order to
achieve organizational, team & individual effectiveness.
A performance management system should work on principles of ethical considerations. It is leading to
transparency and respect for all.
The ethics is a system or code of moral standards of a particular person, group or profession. An ethical
performance management system is designed to make transparency in its operation and all the parties
involved in performance management system respect each other’s needs, values, and preoccupations.
The HR professionals in organizations are responsible for developing and maintain the code of ethics for
performance management.
The MNCs operate in a number of countries for various business and competitive reasons and the effective
performance management is important as a competitive advantage. Therefore, performance
management system assumes critical importance in the competitive priority of MNCs.
Key Terms
Corporate ethical programme: A corporate ethics programme is made up of values, policies, and activities
which impact the propriety of organization behaviour.’
Ethics: Ethics is a system or code of moral standards of a particular person, group or profession.
MNC: MNC is a company that has business activities beyond its domestic borders.

Role of HR Professional in Performance Management

The HR professionals play an important role in designing a performance management system in the
organizations.
The successful organizations are becoming more adaptive, resilient, quick to change direction and
customer-centered and the objective of the HR function is to provide a favorable and supporting climate
and appropriate systems to align the human performance with business strategies of the organization.
In organizations, performance counseling is a manager initiated strategy for improving an employee’s
performance and the managers with good counselling skills can get that kind of performance from their
employees by using the tools of counselling.
The key differentiator between the successful and unsuccessful organizations is the effectiveness of
knowledge-worker and how he is executing everything.
Key Terms
Competitive advantage: Competitive advantage is an advantage over competitors gained by offering
customers great values, ethics by means of lower price of by providing greater benefits and services.
Performance counselling: Performance counselling is a manager initiated strategy for improving an
employee’s performance.
Performance scorecard: Performance scorecard enables the leadership to determine how effectively HR is
leveraging on human capital, as well as mobilize and galvanize the people within the organization in terms
of four perspectives- qualities, cost, delivery, and responsiveness.
Performance management process checklist: It gives the component of Performance management
process.
Absolute Ratings: In this rating method the rater assigns a specific value on afixed scale to the behavior or
performance of an individual instead of assigning ratings based on comparisons between other individuals.
Balanced Scorecard: It is a popular strategic management concept developed in the early 1990’s by Dr.
Robert Kaplan and David Norton, the balanced scorecard is a management and measurement system
which enables organizations to clarify their vision and strategy and translate them into action. The goal of
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the balanced scorecard is to tie business performance to organizational strategy by measuring results in four
areas: financial performance, customer knowledge, internal business processes, and learning and growth.
Key Result areas: It is used to establish standards and objectives, key result areas are the chief tasks of a job
identified during the job evaluation process.
KPI’s: Key Performance Indicators. The tasks that have been agreed between an employee and line
manager/HR with an expectation that they will be completed satisfactorily in the time agreed or as an
ongoing task.
KSAs: Knowledge, skills and abilities - the personal attributes that a person has to have to perform the job
requirements.

International Business and International Human Resource Management

In this Unit it has been explained that International Businesses through different challenges in dealing by
Human Resource Management issues. Hence Human Resource Management practices followed by a
domestic organisations find limitation in application. Thus it gives rise to International HRM theories and
practices.
This unit explains 3D model of Morgan of International HRM and also explains the concept of Parent Country
Nationals (PCN), Host Country Nationals (HCN) and Third Country Nationals (TCN). These concepts shall be
used in subsequent units.
Key Terms
Ethnocentric Approach: This approach believes that the Parent country practices should be followed in all
countries in managing Human Resources. They are good enough to manage in country.
Poly-centric Approach : This approach of IHRM believes that the host country practices and culture is
relevant and IHRM must give blend host country practices in managing Human Resources to make it
effective.
Regiono- centric : This approach gives importance to commonalities of a region and adopts practices of the
region. Thus practices vary from region to region.
Geo-Centric : This approach is much matured and accepts that practices in different geographies have
different strength. Thus best practices should be adopted in different countries it may be from any
geographies.
PCN : This term means Parent Country National & connotes to those who
belong to the Parent country of the MNC
HCN : This term means Host Country National & connotes to those who are nationals of the host country
where and MNC has establishment or operations or Subsidiary.
TCN : This term mean Third Country National & connotes to those who belong to the country which is neither
the Parent country of that MNC not the host country.

Culture in International Human Resource Management

Culture is one on the most important dimensions for International Businesses. International Human Resource
Management is significantly influenced by the National Cultures in which organisation conduct business.
There are various studies which have tried to understand the National variations of culture and its impact on
performance of firms. One of the mostt quoted study is that of Hofstede. He identified 5 dimensions which
are directly linked with the performance of a company in that country. How these dimensions interplay and
influence performance of company need to be kept in mind whenever a company designs its human
resource management strategy.
In addition to the study of Hofstede, there are other studies which have also developed dimensions and
factors which impact companies. Globe study identified 9 dimensions.

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Another cultural dimension is ethics. The ethics and culture are closely linked. It is critical factor which
organisations have to keep in view while conducting businesses across various countries. The Value system
and ethical aspects vary from country to country.
Key Terms
Culture: Culture is some total of Beliefs, Attitude, Assumptions, Norms, myths and stories which members
commonly share and live. It is the glue witch binds the organisation or society. It is informal control system
Values: Values are anything members of a culture aspire to or hold in high esteem. Values are the things to
be achieve: This approach believes that the Parent country practices should be followed in all countries in
managing Human Resources. They are good enough to manage in country.
Power Distance Index - PDI: PDI refers to the degree of inequality that exists - and is accepted - especially by
the less powerful members of a group, organization, institution or the society-
Individualism - IDV: IDV refers to the strength of the ties people have to others within the community.
Masculinity –MAS: MAS refers to how much a society sticks with, a indvalues, traditional male and female
roles.:
Uncertainty Avoidance Index - UAI: This relates to the degree of anxiety society members feel when in
uncertain or unknown situations.
Long Term Orientation - LTO: This refers to how much society values long-standing –as opposed to short-term
–traditions and values.:

Comparative Human Resource Management in the Global Enterprise

In this Unit your have learnt the impact of Globalisation on Human Resource Management. Globalisation has
completely demolished national boundaries. But, National Cultures, Economic models, Social setup, Political
structure and Legal framework vary from country to country. Therefore when businesses operate in multi
country domain it has significant impact on management of Human Resources. Various aspects which have
direct influence on the management of Human Resources have been identified. Based on these influences
there has been attempt to identify best practices.
Initially 16 Best practices were identified by Pffifer. Subsequently further research has identified 7 Best
practices by the researches and practicing Managers. These practices are initially considered as universally
applicable. But subsequently it was realised that these practices also vary from country to country.
There are external factors as well as Internal Factors which influence practices of managing Human
Resources. Multi National Organisations must take congizance of these factors while framing Strategic
choices regarding Human Resource Management in International context.
Transfer of policies from one country to another is determined by the philosophy of managing International
Human Resource Management. Thus Ethnocentric, Poly centric, Regiono centric and Geocentric have
different approaches while transferring policy and systems of IHRM from one country to another.
Key Terms
Globalisation :Globalisation symbolises the structural changes of the world with free flow of knowledge,
technology and human resources across national boundaries.
External Factors: External factors affecting HR practices are those pressures on firms that cannot be
controlled and changed by the organisation, in a favorable way in the short run.
Internal Factors: Internal environment of the organisation develops such influencers which have impact on
HR practices like culture, diversity, structure, strategy etc. These factors are called internal factors.
Ethnocentric Approach: This approach believes that the Parent country practices should be followed in all
countries in managing Human Resources. They are good enough to manage in country.
Poly-centric Approach: This approach of IHRM believes that the host country practices and culture is
relevant and IHRM must give blend host country practices in managing Human Resources to make it
effective.
Regiono- centric: This approach gives importance to commonalities of a region and adopts practices of the
region. Thus practices vary from region to region.
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Geo-Centric: This approach is much matured and accepts that practices in different geographies have
different strength. Thus best practices should be adopted in different countries it may be from any
geographies.

Recruitment and Selection by Multinationals

In this Unit you have understood that there are multiple factors which need to be taken into account when
recruitment decisions are taken. Firstly what type of assignment would suffice the need. Secondly which type
of person is most suited for the assignment. Companies need to evaluate various aspects to come to the
conclusion to choose amongst PCN, HCN or TCN.
In this unit it has also been explained how the recruitment and selection is done. What are the current
practices in followed by MNCs while recruiting and selecting. The role of headhunters in increasing for
recruitment. Whatever may be the mode of selection, adjustment of incumbent is very critical for
performance. There are certain attributes which are considered important for performance in MNCs for the
nationals who are either PCNs or TCNs. The adjustment model is also evolved which gives various dimensions
need to be addressed while adjusting in new environment. Finally this unit also focuses on the practice of
outsourcing. There is increasing trend of outsourcing HR functions in Multi National Companies. guidelines for
outsourcing are also mentioned for ready reference in this unit. These guidelines may help companies to get
right benefit when they adopt outsourcing in human Resource Management in MNCs.
Key Terms
Recruitment : Recruitment is defined as the process of searching for and obtaining potential job candidates
in sufficient numbers with predefined quality/competencies .
Selection : Selection is the process of gathering information for the purposesof evaluating and deciding who
should be employed in particular jobs.
Headhunter : Headhunter is a corporation or individual that provides
employment recruiting services.
PCN : This term means Parent Country National & connotes to those who
belong to the Parent country of the MNC
HCN : This term means Host Country National & connotes to those who are nationals of the host country
where and MNC has establishment or operations or Subsidiary.
TCN : This term mean Third Country National & connotes to those who belong to the country which is neither
the Parent country of that MNC not the host country.

Expatriate Training & Development

In this Unit various aspects of Training and Development of Expatriates have been explained. How Training
and Development is different for International Organisations as compared to practices of Training &
Development in single country organisation. This unit also explains various types of Assignments used by
MNCs and importance of developing International Mindsets. Various pedagogies are also explained with
their advantages. Importance of Cross Cultural Training and various practices of Cross Cultural Training is
explained in detail.
The emerging trends in this field and their use and logic is discussed to make you understand their rationale
and importance in emerging markets. Companies with different philosophies and approaches follow
different practices in Training and Development. Variations in this regard are also described for appreciation
of alignment of Training and Development and philosophy of the organisation.
Key Terms
Training: Training is a process of altering employee behaviour, attitudes, and knowledge in a way that
increases the probability of individual attaining organisational goals
Development: Development aims to increase capabilities in relation toperformance in future positions or job,
usually managerial.

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Cross Cultural Training(CCT): Cross Cultural Training refers to the Training imparted for the purpose of
adjustment in new Culture.
Ethnocentric Approach: This approach believes that the Parent country practices should be followed in all
countries in managing Human Resources. They are good enough to manage in country.
Poly-centric Approach: This approach of IHRM believes that the host country practices and culture is
relevant and IHRM must give blend host country practices in managing Human Resources to make it
effective.
Regiono- centric: This approach gives importance to commonalities of a region and adopts practices of the
region. Thus practices vary from region to region.
Geo-Centric: This approach is much matured and accepts that practices in different geographies have
different strength. Thus best practices should be adopted in different countries it may be from any
geographies.

International Compensation Management

In this Unit various aspects of Compensation in International Organisations have been explained. You have
been explained why compensation gets different variables when working in many countries with different
level of their devlelopment in terms of Economy, legal framework, expectations and culture. These
dimensions decide labour market forces and hence compensations.
There are 2 broad approach in determining Compensations - The Balance Sheet approach and the and
Going rate approach. The decision about compensations are also dependant on the philosophy of the
Organisation.
The expatriates compensations are more difficult to decide and needs evaluation of their hardship,
adjustment, family situation, motivation to come to the assignment etc.
The performance and compensation are also closely linked. The performance related pay is also becoming
prevalent in MNCs. How can company link performance with compensation is an important component of
Compensation Strategy.
Key Terms
Compensation : Compensation can be considered total rewards systems, containing monetary, non-
monetary, direct and indirect components which are given to an employee in lieu of the work which he/she
performs.
The Balance-Sheet Approach : The balance-sheet method provides a compensation package that
attempts to equate or balance an expatriate’s purchasing power in his or her home country.
Going rate Approach : In this approach, the base salary for international transfer is linked to the salary
structure in the host country.
Performance : Performance is defined as the potential for future successful limplementation of actions in
order to reach the objectives.
Base pay : It is the main element in the compensation structure which decides the status, rank or grade. This
is the basic element upon which all the other components are built.

Global employment law and labor relations

In this Unit various aspects of Industrial Relations and Employee Relations are dealt with. Their implication for
MNCs is manifold as dependance of supply chain or their products gets affected in case of any Industrial
disputes in one country. Thus MNCs follow backup plans and have strategy in place. Though the trend is
there in shifting from Industrial Relations to Employee Relations but some sector like manufacturing large
number of labour force is still unionized in various countries. Companies therefore focus on enhancing
strength of Psychological contracts of their employees and keep a right mix of local employees of host
country as well as Expatriates. This unit also describes various trends of unions in different countries and their
collective bargaining practices.
Key Terms

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Employee Relations: Employee Relations is concerned with maintaining employer-employee relationships
that contribute towards satisfactory productivity, motivation, and morale within the organisation .: Training is
a process of altering employee behaviour, attitudes, and knowledge in a way that increases the probability
of individual attaining organisational goals
Industrial relations: Industrial Relations are the outcome of how power is being shared between employees
and the management in major industrial units and industries across any country
Psychological Contract: The psychological contract represents an implicit contract to executive the
employment contract according to a set of values, beliefs and norms.

IHRM Frontiers and Corporate HR Strategies for Competitive Advantage

In this Unit various new trends of organisations are discussed. The organisations are becoming more flatter
and organic in nature. The relationship is becoming more informal. This is because the structured may of
problem solving and top down approach is not yielding results.
Organisations are becoming learning organisations. More flexible and capable to deal with the changes at
avery fast pace. Able to live in chaos and uncertainty. Thus skill to deal with a issue in a predetermined
manner is no more enough. Thus there is emerging focus on Competency, Agility and quick response.
The HR role is more on acquiring people with right competency, retaining them and building future based
competences which are core to the company. The integration of Global strength and local variations in
MNCs is critical balance they need to strike.
Key Terms
Learning Organisation : Is that organization that where people continuously expand their capacity to create
the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective
aspiration is set free, and where people are continually learning how to learn together.
Horizontal Organisation : Horizontal Organisation is flatter and actually Looks Like and how it Delivers Value to
Customers. There are minimal hierarchies.
Vertical Organisation : Is the traditional organisation. Where power isdistributed in hierarchal manner. There is
top down approach.

INDUSTRIAL RELATIONS :CONCEPT & APPROACHES

Summary
IR refers to the interrelations between the three main actors-employees and their organizations,
management and government. Industrial relations are shaped by socio-economic, psychological and
political factors. These relations are complex and multifaceted, and to understand them from different
perspectives is desirable.

Key Terms
Pluralism: A condition or system in which two or more states, groups, principles, sources of authority, etc.,
coexist.
Employers associations: An employers’ organization or employers’ association is a collective organization of
manufacturers, retailers, or other employers of wage labor
Conflict: An active disagreement between people with opposing opinions or principles.

INDUSTRIAL RELATIONS :EVOLUTION & GROWTH

Summary
There have been significant changes in the economic environment in the last fifty years of development
which has brought significant changes in both the employers and the employees. The First World War was an
opportunity in disguise for local factories in India. Prices of virtually all products went up and profits soared,
however, wages of lower employees were still the same. There were various strikes and disputes between
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management and employees. The Workmen’s Compensation Act (1923),the Trade Union Act (1926), and
the Trade Disputes Act (1917) were established. While the wages of employees remained the same, they
were given a certain share of profits made by their hiring industry. Strikes, however, were sometimes
prohibited under the Emergency Rules. The years following World War II involved the most workers’ upheaval,
ands aw the establishment of Industrial Employment Act (1946) and Industrial Disputes Act (1947).The post-
independence era saw a developing relation between industry and labour. A conference called the
Industrial Truce Resolution took place in 1947, and foresaw the establishment of the Minimum Wages Act,
Factories Act, and Employees State Insurance Act in 1948. This ensured peace between labour and industry.
While industrial relations inIndia have evolved a long way, some features of the early system still exist today.
The time has come, to build a consensus amongst the three actors of IR for developing a new paradigm of
IR.

Key Terms
Productivity: The effectiveness of productive effort, especially in industry, as measured in terms of the rate of
output per unit of input.
Judiciary: The judiciary (also known as the judicial system or courts ystem) is the system of courts that
interprets and applies the law in the name of the state. The judiciary also provides a mechanism for the
resolution of disputes.
Lassize faire: The policy of leaving things to take their own course, without interfering. It is a philosophy or
practice characterized by a usually deliberate abstention from direction or interference especially with
individual freedom of choice and action.

INDUSTRIAL RELATIONS INMAJOR INDUSTRIALIZED ECONOMIES : A COMPARATIVE STUDY

In most of the countries, the initial primary goal of the Industrial relations system was to maintain labour
peace and, more generally, industrial stability. The stated rationale for the need for stability varied from
nation to nation. The IR systems began to be institutionalized only in the post-war period, coinciding with
independence of some of the countries.
Key Terms
Shop stewards: Shop stewards are members who occupy an official position in the union hierarchy and who
are also employees of an organization
Iron rice bowl: The term “iron rice bowl” is used to describe that within this system, industrial relations
consisted of a dualistic structure of co-determination.

TRADE UNIONISMAND TRADE UNIONS

Trade unions are associations of workers or organization formed together by labour, workers or employees to
achieve their demands for better conditions at their work atmosphere. The union negotiates contracts and
conditions with employers, keeping employee satisfaction high and protecting workers from unsafe or unfair
working conditions. Trade union formed in accordance with the law of their country shall have the privileges
given by the law of trade union. Every registered trade union according to the law of trade union shall have
certain functions for achievement of certain objectives which are mentioned in details further. The primary
object you of the trade union is to protect the interests of the workers and exploitation against him by
Management or employer. In addition to this, it is the responsibility and duty of every trade union to support
management for its functioning and contribute to organisation or company by way of encouraging workers
in a positive way for the improvement of overall efficiency of organisation.
Key Terms
Crafts union: A labour organization membership of which is restricted to workers in a specified trade or craft.
Federation: A group of organizations, countries, regions, etc. that have joined together to form a larger
organization.

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TRADE UNION LEGISLATION
Statutory Authority- Statutory authority means any authority or body established, appointed or constituted by
any written law, and includes any local authority
Union shop: A shop, business establishment, or part thereof, in which terms and conditions of employment for
all employees are fixed by agreement between the employer and a labor union.
Bonafide: Bona fide means ”in good faith” in Latin. When applied to business deals and the like, it stresses the
absence of fraud or deception.

LABOUR LEGISLATIONSIN INDIA

Indian labour law : refers to laws regulating Labor in India. Traditionally, Indian governments at federal and
state level have sought to ensure a high degree of protection for workers, but in practice, legislative rights
only cover a minority of workers. India is a federal form of government and because labour is a subject in the
concurrent list of the Indian constitution, labour matters are in the jurisdiction of both central and state
governments; both central and state governments have enacted laws on labour relations and employment
issues.
The Factories Act, 1948 has been enacted to consolidate and amend the law regulating the workers
working in the factories. It extends to whole of India and applies to every factory wherein 20 or more workers
are ordinary employed. Since the aim and object of the Act is to safeguard the interest of workers and
protect them from exploitation, the Act prescribes certain standards with regard to safety, welfare and
working hours of workers, apart from other provisions.
Key Terms
Legislations : Legislation is the act or process of making or enacting laws. The noun legislation refers to the
actual law enacted by a legislative body at the national, state, or local level.
Official Gazette : A government gazette (official gazette, official journal, official newspaper or official diary) is
a periodical publication that records the business and proceedings of a government and has been
authorized to publish public or legal notices.
Exploitation : The action or fact of treating someone unfairly in order to benefit from their work.
Adolescent : Adolescent means a person, who has completed his fifteenth year of age but has not
completed his eighteenth year.
Hazardous process : Hazardous process means any process or activity in relation to an industry specified in
the ‘First Schedule where, unless special care is taken, raw materials used therein or the intermediate or
finished products, bye-products, waste or effluents.
Prime-mover : Prime-mover means any engine, motor or other appliance, which generates or otherwise
provides power.
Transmission machinery: Transmission machinery means any shift, wheel, drum, pulley, system of pulleys,
coupling, clutch, driving belt or other appliance or device by which the motion of a prime-mover is
transmitted to or received by any machinery or appliance.
Manufacturing process: Manufacturing process means any processor- making, altering, repairing,
ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing or otherwise treating or
adopting any article or substance with a view to its use, sale, transport, delivery or disposal.
Inspectors : The State Government may, by notification in the Official Gazette, appoint such persons as
possessing the prescribed qualification to be Inspectors for the purposes of this Act and may assign to them
such local limits as it may think fit.
Certifying Surgeons : The State Government may appoint qualified medical practitioners to be certifying
surgeons for the purposes of this Act within such local limits or for such factory or class or description of
factories as it may assign to them respectively.

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THE FACTORIES Act. 1948

The Welfare provisions under factories Act 1948 ensures that every factory shall provide and maintain
facilities for the welfare of the workers. From readily accessible first-aid boxes or cupboards equipped with
the prescribed contents to the canteen facilities and much more. There are other provisions related to the
working hours, weekly offs and spread over’s for the workers and the employment of Women and Young
persons.
The shop and Establishments Act, 1953 is a state legislation. This act restricts timing of opening and closing
hours of Shops and Commercial Establishment. It keeps control on daily and weekly hours of work of the
employees, interval for rest, Spread over. It provide overtime wages, paid holiday and Leave with wages to
employees.
The Contract Labour (Regulation and Abolition) Act, is an Act to regulate the employment of contract
labour in certain establishments and to provide for its abolition in certain circumstances and for matters
connected there with. It is primarily concerned about the exploitation of workers under the contract labour
system.
Key Terms
“Principal Employer” means-in relation to any office or department of the Government or local authority, the
head of that office or department or such other officer as the Government or the local authority, as the
case maybe, may specify in this behalf in a factory, the owner or occupier of the factory and where a
person has been named as the manager of the factory under the Factories Act, 1948 (63 of 1948) the person
so named in a mine, the owner or agent of the mine and where a person has been named as the manager
of the mine, the person so named in any other establishment, any person responsible for the supervision and
control of the establishment.
“Workman” means any person employed in or in connection with the work of any establishment to do any
skilled, semiskilled or un-skilled manual, supervisory, or clerical work for hire or reward, whether the terms of
employment be express or implied, but does not include any such person-
• who is employed mainly in a managerial or administrative capacity.
• who, being employed in a supervisory capacity draws wages exceeding five hundred rupees per annum,
either by the nature of the duties attached to the office or by reason of the powers vested in him, functions
mainly of a managerial nature.
• who is an out-worker, that is to say, a person to whom any articles or materials are given out by or on
behalf of the Principal employer to be made up, cleaned, washed, altered, ornamented, finished, repaired,
adapted or otherwise processed for sale for the purposes of the trade or business of the principal employer
and the processes to be carried out either in the home of the out-worker or in some other premises, not
being premises under the control and management of the principal employer.

INDUSTRIAL DISPUTES Act. 1947

Summary
Industrial peace and harmony aims at preventing conflict in an organization. The industrial disputes generally
arise due to disagreement in an industrial relation. In India the Industrial Disputes act, 1947 is the main
legislation for the investigation and settlement of industrial disputes. The Act enumerates the contingencies
when a strike or lockout can be lawfully resorted to, when they can be declared illegal or unlawful,
conditions for laying off, retrenchment, discharging or dismissing a workman and other matters related to
industrial employees and employers. The I.D. Act provides elaborate and effective machinery for the
investigation and amicable settlement of industrial disputes by setting up the various authorities. The focus
therefore has to be on the prevention of conflict in the organizations.
Key Terms
Concurrent List: Under the Constitution of India, Labour is a subject in the Concurrent List where both the
Central & State Governments are competent to enact legislation subject to certain matters being reserved
for the Centre.

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Tribunal: An Industrial tribunal constituted under Section 7A and includes an Industrial Tribunal constituted
before 10 March 1957, under this Act.
Trade Union: A trade union registered under the trade union Act, 1926
Labour Court: A court in some countries that deals with cases or disagreements involving employers and
employees.

SOCIAL SECURITYLEGISLATIONS IN INDIA

The proper beginning of social security in India started with the passing of the Workmen’s Compensation
Act. Prior to passing of this Act there was only one enactment to provide compensation to workers and it
was the Indian Fatal Accident Act, 1885. Only in rare cases the dependents of a deceased worker could
claim damages. Then in 1921, government made proposals for the grant of compensation and circulated
them for opinion. The proposals received public support and as a result, the Workmen’s Compensation Act
was passed in the March 1923 and was put into force on July 1st, 1924. This legislation was constituted to
provide monetary compensation to industrial workers at the time of injury, accident or occupational disease.
Industrial workers had to work in dangerous and unsafe working conditions. The main objective of the Act is
to provide feeling of security to industrial workers at the time contingencies come. This Act is a major step in
the direction of social insurance. It provides for the grant of cash benefits to the employees in the
contingencies of sickness, employment injury and maternity. It also provides for medical benefit to the
employees and their families. All the three schemes running under Employees ‘provident fund and
Miscellaneous Provisions act, 1952 provides various benefits i.e. retirement benefits, medical care, housing,
fulfillment of family obligations, education of children, finances of insurance policies etc. The objective of the
Maternity Benefit Act is to protect the dignity of motherhood by providing for the full and healthy
maintenance of women and her child. It regulates employment of women in certain establishments for a
certain period before and after child birth and provide for maternity and other benefits. The payment of
gratuity is a type of retirement benefit which provides financial assistance to an employee to secure his old
age.
Key Terms
Basic wages : Sec.2(b) of the EPF Act defines “basic wages” as follows:“Basic wages” means all emoluments
which are earned by an employee while on duty or (on) leave or on holidays with wages in either case) in
accordance with the terms of the contract of employment and which are paid or payable in cash to him,
but does not include –
(i) The cash value of any food concession.
(ii) Any dearness allowance (that is to say, all cash payments by whatever name called paid to an
employee on account of a rise in the cost of living), house-rent allowance, overtime allowance, bonus,
commission or any other similar allowance payable to the employee in respect of his employment or of work
done in such employment.
(iii) Any presents made by the employer;
Dearness Allowance : Dearness Allowance (DA) is a cost of living adjustment allowance. It Dearness
Allowance is calculated as percentage of an Indian citizen’s basic salary to mitigate the impact of inflation
on people.
Retirement: The act of retiring or of leaving one’s job, career, or occupation permanently, usually because of
age.
Factory: Factory means any premises including the precincts thereof -whereon ten or more persons are
employed or were employed for wage son any day of the preceding twelve months, and in any part of
which manufacturing process is being carried on with the aid of power or is ordinarily so carried on.
Manufacturing process : Manufacturing process means any process for making, altering, repairing,
ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or
adapting any article or substance with a view to its use, sale, transport, delivery or disposal.
Apprentice : Apprentice means a person who is undergoing apprenticeship training in pursuance of a
contract of apprenticeship.

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Employee : Employee means any person (other than an apprentice)employed on wages, in any
establishment, factory, mine, oilfield, plantation, port, railway company or shop, to do any skilled, semi-
skilled, or unskilled, manual, supervisory, technical or clerical work.
Disablement : Disablement is the loss of the earning capacity resulting from injury caused to a workman by
an accident.
Miscarriage : Miscarriage means the expulsion of the contents of a pregnant uterus at any period prior to or
during the twenty-sixth week of pregnancy but does not include any miscarriage, the cause of which is
punishable under the Indian Penal Code, 1860.

WAGE LEGISLATIONIN INDIA

Wages refers to all remuneration (whether by way of salary, allowances, or otherwise) expressed in terms of
money which would (if the terms of employment, express or implied, are fulfilled) be payable to a person
employed in respect of his employment or of work done in such employment. There are three main
legislations governing wages.
The Payment of wages Act, 1936 is a central legislation which has been enacted to regulate the payment of
wages to workers employed in certain specified industries and to ensure a speedy and effective remedy to
them against illegal deductions and/or unjustified delay caused in paying wages
to them. The Minimum Wages Act, 1948 was enacted to safeguard the interests of workers, mostly in the
unorganized sector by providing for the fixation of minimum wages in certain specified employments. It binds
the employers to pay their workers the minimum wages fixed under the Act from time to time. The Payment
of Bonus act, 1965 was enacted to provide for the payment of bonus to persons employed in certain
establishments on the basis of profits or productivity and for the matters connected therewith.
Key Terms
Bonus: A bonus is an additional compensation given to an employee above his/her normal wage. A bonus
can be used as a reward for achieving specific goals set by the company, or for dedication to the
company.
Available Surplus: Bonus payable under the Act is linked with profits. The employer has to calculate “gross
profits” of his establishment in the manner specified in section 4. Then from “gross profits” so calculated he
has to deduct the sums referred to in section 6 as prior charges. The balance is called “available surplus”.
Allocable surplus: A percentage of the available surplus calculated in accordance with the provisions of
sub-section (4) of section 2 is called
“allocable surplus”. Where, in respect of any year the allocable surplus exceeds the amount of minimum
bonus payable to the employees, the employer must pay to every employee in respect of that year bonus in
proportion to the salary or wage earned by the employee during the year subject to a maximum of twenty
percent of such salary or wage.

EMPLOYEE GRIEVANCES &DISCIPLINE

Grievances are some symptoms of conflicts in enterprise. So they should be handled very promptly and
efficiently. Coping with grievances forms an important part of manager’s job. The manner in which he deals
with grievances determines his efficiency in dealing with the subordinates.
A manager is successful if he is able to build a team of satisfied workers by removing their grievances.
Discipline in the workplace is the means by which supervisory personnel correct behavioural deficiencies
and ensure adherence to established company rules. The purpose of discipline is correct behaviour.
It is not designed to punish or embarrass an employee. Both the concepts are very essential for the
conducive work environment at workplace.
Key Terms
Aggravating factors: Any fact or circumstance that increases the severity or culpability of a criminal act.

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Mitigating factors: A mitigating factor, in law, is any information or evidence presented to the court
regarding the defendant or the circumstances of the crime that might result in reduced charges or a lesser
sentence.
Exit Interview: Exit Interview interviews are conducted to know the reasons for leaving the job. Properly
conducted exit interviews can provide significant information about the strengths and weaknesses of the
organization and can pave way for further improvements.
Discipline: Discipline may be considered as a force that prompts individuals or groups to observe the rules,
regulations and procedures which are deemed to be necessary for the effective functioning of an
organization”.
Negative discipline: Negative discipline is also known as punitive or corrective discipline involves imposition
of penalties or punishment to force workers to obey rules and regulations objective is to ensure that
employees do not violate the rules and regulations. Negative disciplinary action involves such techniques as
fines reprimand, demotion, layoff, transfer etc

COLLECTIVE BARGAINING &WORKER’S PARTICIPATION IN MANAGEMENT

Collective Bargaining machinery essentially is a reflection of a particular social and political climate. The
history of the trade union movement shows that union is affiliated to one or the other political parties. As a
result most of the trade unions are controlled by outsiders. Critic says that the presence of outsiders is one of
the important reasons for the failure of collective bargaining in India. Collective bargaining is the ultimate in
negotiations and is possible only when workers’ and employers’ organizations are equally strong, mature
and conscious of their rights and duties.
Similarly “Workers’ participation refers to the mental and emotional involve-ment of a person in a group
situation which encourages him to contribute to group goals and share in responsibility of achieving them. In
ultimate sense, the objective of WPM in India is to achieve organizational effectiveness and the satisfaction
of the employees.
The concept of worker‘s participation in management crystallizes the concept of Industrial Democracy, and
indicates an attempt on the part of an employer to build his employees into a team which work towards the
realization of a common objective.

Key Terms
Absenteeism: It means either habitual evasion of work, or willful absence as in a strike action. It does not
include involuntary or occasional absence due to valid causes, or reasons beyond one’s control, such as
accidents or sickness.
Optimum: The point at which the condition, degree, or amount of something is the most favorable
Housekeeping: This refers to the management of duties and chores involved in the running of a household,
such as cleaning, cooking, home maintenance, shopping, laundry and bill pay.

Understanding the Nature and Scope of Human Resource Management

HRM is defined as the art of procuring, developing and maintaining competent workforce to achieve the
goals of an organization in an effective and efficient manner.
HRM is responsible for the people dimension of the organization. It is a pervasive force, action-oriented,
individually-oriented, development-oriented, future-focused, and integrative in nature and is a
comprehensive function.
HRM policies are guides to actions. They serve as roadmaps for managers on a number of issues such as
recruitment, selection and promotion. They cover almost all functions of personnel management. HRM
policies have relation with other fields also.
Keywords

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Competitive Advantage: It is an ability of an organization to perform activities exceptionally well (availing
profitable opportunities and thereby maximizing returns on investment) and gaining an edge over rivals
when competing.
HRM: A process of bringing people and organisations together so that the goals of each one is met,
effectively and efficiently.
HRM Policies: A set of proposals and actions that act as a reference point for managers in their dealings with
employees.
Line Managers: They are authorized to direct the work of subordinates-they're always someone's boss.
Management: The process of efficiently achieving the objectives of the organisation with and through
people.
Personnel Management: It is that part of management which is concerned with people at work and with the
relationships within an enterprise. It applies not only to industry and commerce but to all fields of
employment.
Principles: The word principle means, the fundamental truth or law as basis of reasoning or actions.
Productivity: The ratio of an organization's outputs to its inputs.
Staff Managers: They are authorized to assist and advise line managers in accomplishing these basic goals.
Strategic Human Resource Management: The linking of HRM with strategic goals and objectives in order to
improve business performance and develop organizational cultures that foster innovation and flexibility

Human Resource Planning

1. Workforce Analysis: The average loss of manpower due to leave, retirement, death, transfer, discharge,
etc., during the last 5 years may be taken into account. The rate of absenteeism and labour turnover should
also be taken into account. The nature of competition say from foreign banks, other non-banking financial
institutions may also be considered here to find out actual requirements in a year.
2. Work load Analysis: The need for manpower is also determined on the basis of workload analysis, wherein
the company tries to calculate the number of persons required for various jobs with reference to a planned
output.
While determining manpower requirements through work load analysis, commercial banks may have to take
the following factors into consideration: (i) the number of transactions to be handled by an employee; (ii)
the amount of deposits and advances per employee; (iii) special requirements in respect of managing
extension counters, currency chests, mobile branches, etc.; (iv) future expansion plans of the bank
concerned.
3. Job Analysis: Job analysis helps in finding out the abilities or skills required to do the jobs efficiently. A
detailed study of jobs is usually made to identify the qualifications and experience required for them. Job
analysis includes two things: Job description and job specification.
Summary
●Human resources planning is defined as the process for identifying an organisation's current and future
human resource requirements, developing and implementing plans to meet these requirements and
monitoring their overall effectiveness.
●HR Planning is essentially the process of getting the right number of qualified people into the right job at the
right time so that an organisation can meet its objectives.
●Organisations use HRP as a means of achieving greater effectiveness.
●The HR Planning process, should be tuned to organizational objectives and strategies.
●It includes forecasting the demand for employees, preparing manpower inventory, determining manpower
gaps and formulating HR plans.
●While developing HR Plans, managers should scan the external environment carefully to identify the effects
of economic, social, competitive and governmental influences.

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●Rightsizing is about reordering the important and changing priorities of complex business. It refers to the
transformation or changing of vast resources, technological, physical, manpower, and complex process,
with the change in the business strategies and polices.
●There are many factors that would affect human resource management. However, the main four are
considered to be: Political Climate, Economic Climate, Company Strategies and Technological
developments.
●HRIS is a computerized system that assists in the processing of HRM information. It supplies up-to-date
information about people and jobs in an organisation at a reasonable cost.
●HRIS offers a wide range of HR uses, the most basic being the automation of payroll and benefit activities.
●HRIS can be set up through a four step process: identifying the needs of a firm, organising flow of
information, implementing the plan and evaluating the whole exercise to find gaps and to rectify things in
time.
Keywords
Audit: The audit looks at what had occurred in the past and at present in terms of labour turnover, age and
sex groupings, training costs and absence.
Benchmarking: Measuring the performance of processes within your organisation, comparing these
performance levels with the best in class companies and where deficiencies exist, using the information on
the best practices too improve your organisation's own business processes (Kehoe).
Diversity: The situation that arises when employees differ from each other in terms of age, gender, ethnicity,
education, etc.
Forecasting: It is the process of identifying expected future conditions based on information from the past
and present.
Globalization: The tendency of organizations to extend their sales, ownership and/or manufacturing to new
markets.
Human Resource Information System: An integrated system designed to provide information used in HR
decision-making.
Human Resource Planning: The process of getting the right number of qualified people into the right job at
the right time, so that an organisation can meet its objectives.
Inventory: Stock taking of the current employees in the organization.
Investigation: It is the primary stage of HRP in any organisation. In this stage, organisations try to develop their
awareness about the detailed manpower scenario with a holistic view, looking at their current manpower.
Reengineering: Radical, quantum change in an organization.
Rightsizing: Rightsizing is about reordering the important and changing priorities of complex Notes business.
SWOT Analysis: It examines the Strengths and Weaknesses of the organization internally and opportunities
and threats externally.
Technology: Refers to how an organization transforms its inputs into outputs.
TQM: A way of creating an organizational culture committed to the continuous improvement of skills,
teamwork, processes, product and service quality and customer satisfaction.
Turnover Rate =Average Number of separations of employees during one the year
Turnover Rate: Turnover is defined as the number of people leaving the organization in a given period of
time, usually one year. The turnover rate can be expressed by a number of different formulas.
Utilization: In this final stage of HRP process, success is measured in terms of achievement trend, both
quantitatively and qualitatively.

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Job Analysis

Jobs are important to individuals as well as organisations. They are subject to change. Job Analysis is a
systematic investigation of the tasks, duties and responsibilities necessary to do a job. Job analysis
information is useful for a variety, of organization purposes ranging from human resource planning to career
counselling.
The end products of job analysis are (a) Job descriptions, a written statement of what the job holder does,
and (b) job specifications, which list the knowledge, stills and abilities (KSAs) required to perform a job
satisfactorily.
Keywords
Duty: Several tasks which are related by some sequence of events. For example: pick up, sort out and deliver
incoming mail.
Human Engineering Activity: It takes into consideration human capabilities, both physical and psychological
and prepares the ground for complex operations of increased efficiency and better productivity.
Industrial Engineering Activity: It is concerned with operational analysis, motion study, work simplification,
reducing unit labour cost, establishing standard performance and communicating it with the employees.
Job: A group of positions similar in their significant duties such as technical assistant, computer programmers.
Job Analysis: The process of gathering information about a job.
Job Classification: The grouping of jobs on some basis such as the nature of work done or the level of pay.
For example, skilled, semiskilled and unskilled; Grade I, II and III officers in a Bank.
Job Reengineering: It is the sum total of Industrial engineering activity and Human engineering activity.
Job Specification: Job specification tells what kind of person to recruit and for what qualities that person
should be tested.
Position: A collection of tasks and duties which are performed by one person. For example, the PA to
Principal receives visitors, takes dictation, operates computer, answers queries, attends to complaints and
helps students.
Reengineering: Rethinking and redesigning work in a radical way to improve cost, service and speed.
Task: An identifiable work activity carried out for a specific purpose. For example: typing a letter.

Job Design

Job design has been a concern for managers for many years. The current trend is to redesign jobs to
improve worker satisfaction and productivity. Some of the approaches to redesign the jobs are: job
enlargement theory, job enrichment theory and job characteristic theory.
Keywords
Autonomy: The extent of individual freedom and discretion in the work and its scheduling.
Intrinsic Motivation: Intrinsic motivation is defined as the self-regulated factors which influence people to
behave in particular ways or to move in certain directions.
Job Design: Job design is defined as the process of deciding on the content of a job in terms of its duties and
responsibilities; on the methods to be used in carrying out the job, in terms of techniques, systems and
procedures and on the relationships that should exist between the job holder and his superiors, subordinates
and colleagues.
Job Design Process: This has to start from what activity needs to be done in order to achieve organizational
goals.
Job Enlargement: It involves expanding the number of task or duties assigned to a given job. It is opposite of
work simplification.

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Job Enrichment: The aim of job enrichment is to maximize the interest and challenge of work by providing
employees with jobs having the following characteristics.
Job Rotation: Implies movement of employees from job to job. Jobs remain unchanged. With job rotation, a
given employee performs different jobs but more or less jobs of the same nature.
Job Satisfaction: Favourableness or unfavourableness with which employees view their work.
Job Simplification: Job simplification is a design method whereby jobs are divided into smaller components
and subsequently assigned to workers as whole jobs.
Motivation: It is a process of stimulating people to action to accomplish desired results.

Recruiting HR
Recruitment is the process of locating and encouraging potential applicants to apply for existing or
anticipated job openings. Certain influences restrain (the freedom of) managers while choosing a recruiting
source such as: image of the company, attractiveness of the job, internal policies, budgetary support,
government policies, etc.
Recruitment is influenced by a variety of environmental factors - economic, social, technological, political,
legal, etc. The sources of recruitment may be broadly divided into two categories: internal sources and
external sources. Both have their own merits and demerits.
Keywords
A Competence based Approach: It means that the competencies defined for a role are generally used as
the framework for selection process.
Agency sites: These are run by special recruitment agencies. Candidates register online but may be
expected to discuss their details in person before their details are forwarded to the employer.
Attracting Candidates: This is primarily a matter of identifying, evaluating and using the most appropriate
sources of applicants.
Employee Leasing: Hiring permanent employees of another company who possess certain specialized skills
on lease basis to meet short-term requirements- although not popular in India.
Job Design: The Job Design is about the agreement about the profile of the ideal job candidate and the
agreement about the skills and competencies, which are essential.
Job Sites: These are operated by specialized firms and can contain thousands of vacancies. Companies pay
to have their jobs listed on the sites, which are usually not linked to the agency.
Media Sites: Sites which may simply contain a copy of an advertisement appearing in the press, but may
include an external description of the vacancy and the company and provide a link to the company's
website.
Person Specification: A person specification also known as recruitment, job or personnel specification is the
essential element on which the selection procedure is based. It is the sum total of education, training,
experience, qualification a person has to perform the job assigned to him.
Recruitment: The discovering of potential applicants for actual or anticipated organisational vacancies.
Recruitment Techniques: Recruitment techniques are the means or media by which management contacts
prospective employees or provide necessary information or exchange ideas or stimulate them to apply for
jobs.
Temporary Employees: Employees are hired for a limited time to perform a specific job. They are useful in
meeting short-term demand of human resource.

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Selection, Induction and Placement
Selection is the process of choosing individuals who have relevant qualifications to fill jobs in an organisation.
The primary purpose of selection activities is to predict which job applicant will be successful if hired.
Selection tests include intelligence and aptitude tests, achievement tests, assessment centers and general
psychological or personality tests. The value of tests should not be discounted, since they are objective and
offer a broader sampling of behaviour.
The interview is an important source of information about job applicants. Several types of interviews are
used, depending on the nature and importance of the position to be filled within an organisation. Interviews
can be conducted by a single individual or by a panel of interviewers who are generally trained for the
purpose. The training helps interviewers to be more objective and not get carried away by biases and errors
of various kinds.
Placement is the actual posting of an employee to a specific job. It involves assigning a specific rank and
responsibility to an employee. Placement is an important human resource activity.
Orientation or induction is the task of introducing the new employees to the organisation and its policies,
procedures and rules.
Induction is important as it serves the purpose of removing fears, creating a good impression and acts as a
valuable source of information.
Keywords
Assessment Centre: It is a standardized form of employee appraisal that uses multiple assessment exercises
such as 'in basket', games, role play, etc., and multiple raters.
Halo Error: This error occurs when one aspect of the subordinate's performance affects the rater's evaluation
of other performance dimensions.
Induction: Introduction of a person to the job and the organisation.
Interview: It is the oral examination of candidates for employment.
Panel Interview: An interview during the course of which several interviewers take turns in interviewing the
candidate.
Placement: Actual posting of an employee to a specific job - with rank and responsibilities attached to it.
Realistic Job Preview: It is a process of providing a job applicant with an accurate picture of the job.
Reliability: The ability of a selection tool to measure an attribute consistently.
Selection: The process of picking individuals who have relevant qualifications to fill jobs in an organisation.
Stereotyping: Attributing characteristics to individuals based on their inclusion or membership in a particular
group.
Structured Interview: Interview that uses a set of standardized questions that are clearly job related, asked of
all job applicants.
Test: A test is a standardised, objective measure of a sample of behaviour.
Validity: The relationship between scores on a selection tool and a relevant criterion such as
jobperformance.

Training, Development and Career Management

Training is a planned programme designed to improve performance and to bring about measurable
changes in knowledge, skills, attitude and social behaviour of employees.
The various types of training include: skills training, refresher training, cross functional training, team training,
creativity training, diversity training, and literacy training.
Formal training methods include (i) on-the-job training covering job instruction training, coaching, mentoring,
job rotation, apprenticeship training, committee assignments and (ii) off-the-job training includes lectures,
conferences, simulation exercises and programmed instruction.

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Training can be evaluated at five levels: reaction, learning, behaviour, organisation and results. Career
planning is the process by which one selects career goals and the path to these goals. Career planning is
not a sure bet, but without it, employees are seldom ready for the career opportunities that arise.
Career development is a lifelong process of understanding your career preferences; identifying, obtaining
and developing appropriate skills and training for that career and continually evaluating your career
preferences and skills over your working life to find whether they continue to meet your needs and those of
the organisation.
Succession planning though a neglected area in the pre-liberalization period, is carried out in a systematic
way in most professionally-managed companies in India now.
Succession planning focuses on creating and stocking pools of candidates with high leadership potential.
Career development could occur at the individual or the organizational level. Individuals can push up their
careers through performance, exposure, networking, leveraging, etc.
Keywords
Career: A sequence of positions held by a person during the course of a lifetime.
Career Development Workshop: A training programme designed to assist employees in managing their
careers.
Career Path: The sequential pattern of jobs that comprises one's career.
Career Planning and Development: A conscious process through which a person becomes aware of
personal career-related attributes and the lifelong series of stages that contribute to his or her career
fulfillment.
Career Stages: An individual's career moves through five stages; exploration, establishment, mid-career, late
career and decline.
Counselling: The discussion of an employee's problem with a view to help the employee cope with it.
Development: Broadening an individual's knowledge, skills and abilities for future responsibilities.
Education: Conceptual learning that improves understanding of a subject/theme.
Job Instruction Training: Training received directly on the job.
Job Rotation: Moving a trainee from job to job so as to provide cross training.
Leveraging: It refers to resigning to further one's career with another employer.
Mentor: A person who is higher up the organisation and who can provide career advice and support to a
less senior employee.
On-the-job Training: Any training technique that involves allowing the person to learn the job by actually
performing it on the job.
Role Playing: A development technique requiring the trainee to assume a role in a given situation and act
out behaviours associated with that role.
Training: A planned programme designed to improve performance and bring about measurable changes in
knowledge, skills, attitude and social behaviour of employees.
Vestibule Training: A training method involving the creation of training facilities separate from the regular
production area but with the same equipment.

Performance Management System

Performance management system is a process for setting goals and monitoring progress toward achieving
those goals. It is just like other system where achieved results are continually measured and compared with
the desired goals or outputs.
Planning means setting performance expectations and goals for groups and individuals to channel their
efforts toward achieving organizational objectives. Performance appraised systems are designed to improve
performance, they broadly cover three areas: define performance, facilitate performance and encourage
performance. The post appraisal interview is an essential part of the performance appraisal system. It also

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gives the opportunity to the employee to explain his views about the ratings, standards, rating methods,
internal and external causes for low level of performance.
Keywords
Assessment Centre: It is an appraisal technique that relies on multiple types of evaluation and multiple raters.
Behaviourally Anchored Ratios Scale: It is an absolute assessment technique wherein critical incidents are
identified and a range of performance possibilities (from poor to good) are described for each dimension.
Central Tendency: The reluctance to use the extremes of a rating scale and to thereby fail to adequately
differentiate employees being rated.
Checklist: Performance appraisal tool that uses a lot of statements or words that are checked by raters.
Contrast Error: Tendency to rate people relative to other people rather than to performance standards.
Halo Effect: Bias which occurs when the rater's personal opinion of a specific trait of employee influences the
rater's overall assessment of performance.
Performance Appraisal: A systematic and objective way of evaluating both work related behaviour and
potential of employees.
Performance Management System: It is a process for setting goals and monitoring progress toward achieving
those goals.
Planning: Planning means setting performance expectations and goals for groups and individuals to channel
their efforts toward achieving organizational objectives.
Rater Bias: Error that occurs when a rater's values or prejudices distort the rating.
Rating Scale: A method which requires the rater to provide a subjective performance evaluation along a
scale from low to high.

Job Evaluation
Job evaluation is the systematic process of determining the relative worth of jobs in order to establish which
jobs should be paid more than others within the organisation. Job evaluation helps to establish internal
equity between various jobs.
The four basic approaches to job evaluation are: the ranking method, the classification method, the factor
comparison method, and the point method.
The job ranking method arranges jobs in numerical order on the basis of the importance of the job's duties
and responsibilities to the organisation.
The job classification system slots jobs into preestablished grades. Higher-rated grades demand more
responsibilities, tougher working conditions and varied job duties.
The point system of job evaluation uses a point scheme based upon the compensable job factors of skill,
effort, responsibility and working conditions. The more compensable factors a job possesses, the more points
are assigned to it. Jobs with higher accumulated points are considered more valuable to the organisation.
The factor comparison system evaluates jobs on a factor-by-factor basis against important jobs within an
organisation.
Keywords
Classification Method: A method of job evaluation that concentrates on creating certain common job
grades based on skills, knowledge and abilities.
Factor Comparison Method: A method of job evaluation where job factors are compared to determine the
worth of a job.
Job Analysis: The systematic collection, evaluation and organisation of information about jobs.
Job Evaluation: A systematic way of assessing the relative worth of a job.
Job Grading Method: Under this method, number of grades is first decided upon, and the factors
corresponding to these grades are then determined. Job grades are arranged in the order of their
importance in the form of schedule.
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Performance Appraisal: A formal process in an organisation whereby each employee is evaluated to find
how he is performing.
Point Method: A method of job evaluation where jobs are classified on identification criteria and the degree
to which these criteria exist on the job.
Ranking Method: A method of job evaluation which ranks employees from highest to lowest.

Compensation and Benefits

Compensation administration intends to develop the lowest-cost pay structure that will not only attract,
inspire and motivate capable employees but also be perceived as fair by these employees. Establishing
strategic pay plans involved four main decisions: pay level decision, pay structure decision, differential pay
decision and administration decision.
Knowledge-based organizations these days follow a performance-based payment plan offering awards to
employees for cost saving suggestions, bonuses for perfect attendance or merit pay based on supervisory
appraisals. The benefits and services offered by various organizations in India may be broadly put into five
compartments. Payment for time not worked, employee security, safety and health, welfare and recreation
facilities and old age and retirement benefits. Organisations face many challenges while deciding on
remuneration of a employee. These may be seen as different options present before them.
Keywords
Benefit: An indirect reward given to an employee or group of employees as a part of organisational
membership.
Compensation: It refers to the financial and non-financial rewards to the employees for their services
rendered to the company.
Earnings: Total amount of remuneration received by an employee during a given period.
Fringe Benefit: The term 'fringe benefits' covers statutory bonus, social security measures, retirement benefits
like provident fund, gratuity, pension, workmen's compensation, housing, medical, canteen, co-operative
credit, consumer stores, educational facilities, recreational facilities, financial advice and so on
Gratuity: It is payable to all the employees who render a minimum continuous service of five years with the
present employer.
Pay Equity: An employee's perception that compensation received is equal to the value of work performed.
Pay Grades: Groups of jobs within a particular class that are paid the same rate.
Provident Fund: Provident Fund Scheme of the act provides for monetary assistance to the employees
and/or their dependants during post retirement life. Employees in all factories under Factories Act, 1948, are
covered by the Act.
Salaries: Remuneration paid to the clerical and management personal employed on a monthly or yearly
basis. However, the distinction between wages and salaries need not be observed in actual usage. Both
may mean remuneration paid to an employee for services rendered.
Variable Pay: Tying pay to some measure of individual, group or organisational performance.

Human Resources and Development

Human resource management is the art of procuring, developing and maintaining competent workforce to
achieve the goals of an organisation in an effective and efficient way.
Human resource Development aims at helping people to acquire competencies required to perform all their
functions effectively and make the organisation do well. HRD improves the capabilities of people; promotes
team spirit among employees, and helps an organization achieve its goals efficiently.
HRD has gained importance in recent times, as companies have realized the benefits of treating their
employees as valuable assets. There is an increasing realization in business circles that HRD (not a Highly
Redundant Department) would help people acquire knowledge, skills, and capabilities needed to survive
and flourish in a competitive world.

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Keywords
Development: Represents activities that prepare an employee for future challenges and responsibilities.
Educational Experiences: Educational experiences benefit those who are employed and who are required
to be gradually equipped for other positions in the organization.
HRD: A planned way of developing individual employees, groups and the total organization to achieve
organizational goals in an atmosphere of mutual trust and cooperation.
HRD Matrix: The HRD Matrix shows the interrelationships between HRD instruments, processes, outcomes and
organizational effectiveness.
Human Resource Management: A process of bringing people and organisations together so that the goals
of each are met.
Human Resources: The sum of knowledge, skills, attitudes, commitment, values and the like of the people of
an organisation.
Open Door Policies: Where open door policies exist, employees are free to walk into any manager's office
with their problems and seek solutions to such problems.
Productivity: The ratio of an organisation's output to its inputs.
Training: Training concerns people already employed with the organisation and whose jobs are so defined
that we are able to identify what should be the desired job behaviours.

Welfare
Labour welfare is an important aspect of factory life: the added incentive that enables the workers to lead a
decent life in the midst of urban congestion, rising inflation and poor living conditions. Labour welfare is a
wise investment that helps a firm attract, motivate and retain people both in times of prosperity and
adversity.
There are several agencies involved in the labor welfare work namely the Central Government, State
Governments, Employers, Trade Unions and other social service organisations.
Welfare services: It may broadly be classified into two categories: intramural and extramural.
Labour welfare may also be looked at from a different angle. Statuary welfare work comprising legally
mandated benefits extended to workers and voluntary welfare work including those activities undertaken by
employers voluntarily. The labour welfare officer supervises the provision of welfare facilities in respect of the
law covering areas such as safety, health, housing, recreation facilities, etc.
Keywords
Educational Facilities: Educational facilities include reimbursement of fee, setting up of schools, colleges,
hostel. Further, the organisations provide rooms and libraries for the benefit of employees.
Employee Welfare: Employee welfare defines as "efforts to make life worth living for workmen". These efforts
have their origin either in some statute formed by the state or in some local custom or in collective
agreement or in the employer's own initiative.
Extramural Activities: Services and facilities provided outside the factory.
Intramural Activities: Welfare activities provided within the factory.
Labour Welfare: Services, facilities and amenities extended for the intellectual, physical, moral and
economic betterment of workers.
Labour Welfare Officer: An officer appointed in every factory having 500 or more workers to take care of
labour welfare work as prescribed in various legislative pieces.
Statutory Welfare Amenities: Those amenities, which have to be offered irrespective of size of establishment,
e.g., drinking water, and those to be provided subject to employment of specified number of persons e.g.,
creche, canteen, first aid boxes.
Welfare: Welfare refers to the betterment for employees It relates to taking care of the well being of workers
by employers, trade unions, governmental and non-governmental organizations.

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Industrial Relations
Summary
Industrial relations or labour relations are the outcome of the employment relationship in an industrial unit. It
underscores the importance of compromise and accommodation in place of conflict and controversy in
resolving disputes between labour and management.
The basic objective of industrial relations is to maintain sound relations between employers and employees.
Collective bargaining is the process by which representatives of management and workers negotiate over
wages, hours and other terms and conditions of employment.
The objective of collective bargaining is to agree upon an acceptable contract, voluntarily through
negotiations. Traditionally, collective bargaining between labour and management has been adversarial.
Presently, negotiations are carried out in non- adversarial way, in an atmosphere of mutual trust and faith.
There are five different approaches to study industrial relations, namely, the psychological approach, the
sociological approach, the human relations approach, Giri's approach and the Gandhian approach.
A trade union is a formal association of workers, acting collectively, who seek to protect and promote their
mutual interests through collective action. The main objective of any trade union is to protect and promote
the interests of its members. Unions perform certain social, political and fraternal functions as well. Industrial
conflicts constitute militant and organised protests against existing terms and conditions of employment.
They occur in several forms such as strikes, lock-outs, gheroas, picketing, boycott, etc.
Industrial disputes arise due to several causes relating to recognition, retrenchment, employment conditions,
indiscipline, wages and allowances, bonus, ill-treatment, etc.
Keywords
Closure: In case of closure the employer not only shuts down the place of business but also suspends all the
transactions of his business.
Collective Bargaining: A procedure by which the terms and conditions of employment of workers are
governed by agreements between their bargaining agents and employers.
Employers' Association: It is a formal group of employers set up to defend, represent and advise affiliated
employers.
Industrial Conflict: Organised protest against prevailing industrial conditions raised by a group or a class of
workers.
Industrial Dispute: Any dispute or difference between employers and employers, or between employers and
workmen or between workmen and workmen which is connected with the employment or non-employment
or the terms of employment or with the conditions of labour of any person.
Industrial Relations: It generally refers to the collective relations between employers and employees as a
group.
Lock-out: Closing down of an undertaking or the suspension of work or the refusal of an employer to
continue to employ any number of persons employed by him.
Negotiation: An interpersonal process used by two or more parties whereby both or all modify their demands
to reach an agreement.
Strike: A collective stoppage of work by a group of workers.
Trade Union: "A voluntary organisation of workers formed to promote and protect their interests by collective
action" (V.V. Giri).

Workplace Safety and Health

Health is a general state of physical mental and emotional well-being. Safety involves protecting the
physical well being of people. The legal provisions governing health cover areas such as cleanliness, waste
disposal, proper ventilation and temperature control, preventing accumulation of dust, avoiding
overcrowding, providing wholesome drinking water, proper lighting, having a requisite number of latrines
and urinals, etc. Health promotion covers areas such as healthy living, physical fitness, smoking cessation,

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stress management etc. Employee assistance programmes offer counselling, medical help and rehabilitation
opportunities to all troubled employees.
The main purpose of effective safety programmes in an organisation is to prevent work- related injuries and
accidents. Safety members in factories cover slipping and falling hazards, collision and obstruction hazards,
equipments hazards, fire hazards, hazards from falling objects, etc. Supervisors play a great role in reducing
unsafe conditions and unsafe acts. Effective safety management includes establishing a safety policy,
ensuring top management support, creating safety committees, promoting safety discipline, and instituting
safety engineering procedures, offering safety training, investigating reasons for accidents thoroughly, and
evaluating safety efforts from time to time.
The legal provisions regarding safety cover areas such as fencing of machinery, not employing young
persons near dangerous machines, using safe devices to cut off power, using good hoists and lifts, giving
enough room for workers to move around safely, quality flooring, providing ventilators for pumping out
fumes, gases; and precautions to be taken to prevent fire accidents, etc.
Keywords
Effective Safety Management: Effective safety management considers the type of safety problems,
accidents, employees and technology in the organisational setting.
Employee Assistance Programmes: Programmes that provide professional counselling, medical help and
rehabilitation opportunities to all troubled employees.
Health: A general state of physical, mental and emotional well-being.
Safety: Protection of a person's physical health.
Safety Engineering: To minimize workplace accidents, proper engineering procedures could be followed.
Fencing of machinery, adequate space between machines, parts and equipment, use of material handling
equipment, safety devices, proper maintenance of machines, etc., are undertaken to prevent accidents
from occurring.
Security: Protection of employer facilities and equipment from unauthorised access and protection of
employees while on work premises or work assignments.
Troubled Employee: An individual who is confronted by unresolved personal or work related problems.
Wellness Programmes: Programmes that focus on prevention to help employees build lifestyles that will help
them to achieve their full physical and mental potential.
Workplace Aggression: Efforts by individuals to harm others with whom they work or have worked.

HRM Effectiveness
Summary
Shortage of critical skills is now a global phenomena. While for the developed countries, this is primarily
because of aging population, for developing countries like India, the problem is absence of proper initiative
at the national level. Another important aspect which deserve attention of HRM is demographic change
process. For developed countries, the problem is aging populations, but for a developing country like India,
the problem is just reverse. Our working population is increasing at the annual rate of 1.09 per cent. By the
year 2015, we will have more population in working age group (15-64 years), which would be 66.7 per cent
of total population against the present rate of 61.2 per cent. Therefore, we need to concentrate on human
resource development in a planned manner, duly identifying the skill requirement. The increase of global job
mobility, recruiting competent people is also increasingly becoming difficult. The problem is more acute in
India. Therefore by creating an enabling culture, organisations are also required to work out a retention
strategy for the existing skilled manpower. Similarly to attract talent, organisations need to focus on
compensation strategy with enabling work culture. Fortunately, multi-skill development, even though
considered globally not very successful in other countries and even at times counter productive to them, for
India it is very successful for its obvious root to our age-old social stratification theory. Role of HRM is now all
the more important. The revised Quality Management Standard ISO 9001 and ISO 9004 of 2000 focused
more on people-centric organisation. We will discuss its features in brief and then delineate how it influences
HR issues in an organisation. Another important emerging HR issue is to build organization in line with
capability profile.
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Competencies are attributes, some professional skills, or a combination of skills and knowledge and
behaviours. Competency models suggest integration of business plan of the company with selecting the
right individual for the job.
To leapfrog ahead of competition in this world of uncertainty, corporate world is experimenting with one
after another processes. From 'Conformance to Standards' to achieve total quality, the focus has now been
shifted to add economic value and practical utility to both the organisation and the customer. Higher Sigma
values indicate better quality products and lower sigma values represent less quality products. At six sigma
level, products are virtually defect free, i.e., only 3.4 Defects Per Million Opportunities (DPMO).
Innovation is a new technique or idea encompassing product/services, process, managerial styles and even
organisational structure. Supply Chain Management (SCM), Business Process Outsourcing (BPO), Flexible
Manufacturing Systems (FMS), Product/Service customization, strategic backward or forward integration,
synergy through merger or acquisition, alliances or collaboration, organisational re-engineering TQM or Six
Sigma Practices, new work culture as facilitator of organisational change or any R&D initiative for value
addition, which broadly encompasses innovation; all stem from customers' explicit or implicit needs.
A creative process is a balance of imagination and analysis. It involves idea generation, analysis and
evaluation.
Innovation is the implementation of creative ideas. Therefore, creativity is the subset ofinnovation. Innovation
being a holistic concept, here we prefer to use the term interchangeably.
Competencies on the other hand are set of behaviours, which encompass skills, knowledge, abilities and
attribute. Learning is a process of acquiring new skills or knowledge, which results to a new behaviour.
Learning can take place through multiple ways. But for organisations best way to promote learning is by
exposure to new experiences. Knowledge is the ability and wisdom to use the learned experiences for
achievement of individual and organisational objectives. Knowledge management, therefore, is the process
of systematically and actively managing and leveraging the store of knowledge in an organisation.
Keywords
Competencies: Competencies are attributes, some professional skills, or a combination of skills and
knowledge and behaviours.
Competency Models: Competency models suggest integration of business plan of the company with
selecting the right individual for the job.
Creative Process: A creative process is a balance of imagination and analysis. It involves idea generation,
analysis and evaluation.
Emotion: Emotion is a positive or negative mental state that combines physiological input with cognitive
appraisal.
Emotional Intelligence: It is the emotional awareness and emotional management skills that provide the
ability to balance emotion and reason, so as to maximize our long-term happiness.
Innovation: Innovation is a new technique or idea encompassing product/services, process, managerial
styles and even organizational structure.
Knowledge Management: Knowledge management is the process of systematically and actively managing
and leveraging the store of knowledge in an organisation.
Learning: Learning is a process of acquiring new skills or knowledge, which results to a new behaviour.

International HRM
International human resource management (IHRM) is about the worldwide management of human
resources. The purpose of international human resources management is toenable the firm, the multinational
corporations (MNCs), to be successful globally. Some Notes of the important objectives of IHRM are: (a)
remaining competitive throughout the world; (b) efficient; (c) locally responsive; (d) flexible and adaptable;
and (e) capable of transferring learning across their globally dispersed units.
For many organisations, IHRM is the most important critical success factor. IHRM requires a much broader
perspective even for the most common HR activities. Even when dealing with one particular HR function

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area such as compensation, the international HR manager is faced with a great variety of national and
international pay issues.
Due to global business alignment, it has now become imperative to develop organisational culture with
some unique characteristics. Culture is country specific belief, values and norms of a social group shared by
its members and distinct from other social groups (Lytle, Brett, and Shapiro 1999). Culture concerns
economic, political, social structure, religion, education, and language. Ruben (1983) defines culture as "...
the extent that members of a social system share particular symbols, meanings, images, rule structures,
habits, values, and information processing and transformational patterns they can be said to share a
common culture." Hofstede (1980) reinforces this image of the group by stating, "the essence of culture is the
collective programming of the mind." This dynamic of sharing as a central element to culture is well
supported by many experts.
Expatriate employees that are unprepared to meet the challenges in a foreign country often fail their mission
and this is costly to any organization. Therefore, it is imperative to adequately train expatriates to perform
well in oversees assignments; not only does this draw benefits to the company, it also helps the morale of the
employees.
Keywords
Cultural Diversity: Cultural diversity is having different cultures respect each other's differences.
Culture: Culture is defined as an extent that members of a social system share particular symbols, meanings,
images, rule structures, habits, values, and information processing.
Domestic HRM: Domestic HRM is involved with employees within only one national boundary.
Expatriate: Person who live in one country and are employed by an organization based in another country,
also called international assignees.
HCNs: Host-country nationals.
IHRM: International human resource management.
International Human Resource Management: It is about the worldwide management of human resources.
IHRM deals with three national or country categories, i.e., the parent country where the firm is actually
originated and headquartered; the host country where the subsidiary is located; and other countries from
where the organisation may source the labour, finance or research and development.
MNCs: Multinational Corporations.
PCNs: Parent Country Nationals
TCNs: Third Country Nationals.

Introduction to Strategic Management

Strategic or institutional management is the conduct of drafting, implementing and evaluating cross-
functional decisions that will enable an organisation to achieve its long- term objectives.
It is a level of managerial activity under setting goals and over tactics.
It is the process of specifying the organisation's mission, vision and objectives, developing policies and plans,
often in terms of projects and programs, which are designed to achieve these objectives, and then
allocating resources to implement the policies and plans, projects and programs.
Strategic management provides overall direction to the enterprise and is closely related to the field of
Organisation Studies.
Although a sense of direction is important, it can also stifle creativity, especially if it is rigidly enforced. In an
uncertain and ambiguous world, fluidity can be more important than a finely tuned strategic compass.
When a strategy becomes internalized into a corporate culture, it can lead to group think. It can also cause
an organisation to define itself too narrowly.
Even the most talented manager would no doubt agree that "comprehensive analysis is impossible" for
complex problems.

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Formulation and implementation of strategy must thus occur side-by-side rather than sequentially, because
strategies are built on assumptions which, in the absence of perfect knowledge, will never be perfectly
correct.
The essence of being "strategic" thus lies in a capacity for "intelligent trial-and error" rather than linear
adherence to finally honed and detailed strategic plans.
Strategic management is a question of interpreting, and continuously reinterpreting, the possibilities
presented by shifting circumstances for advancing an organisation's objectives.
Keywords
Environmental Analysis: Evaluation of the possible or probable effects of external as well as internal forces
and conditions on an organisation's survival and growth strategies.
Financial Benefits: profits associated with strategic management
Multifunctional Consequences: having complex implications on most of the functions of the organisation
Non-financial Benefits: intangible benefits associated with strategic management
Non-Self Generative Decisions: decisions that are taken infrequently but promptly when needed at any
point of time
Plan: A set of intended actions, through which one expects to achieve a goal.
Strategic Choice: choice of course of action given the environment, mission and capabilities
Strategic Management: stream of decisions and actions that lead to development of effective strategy
Strategy: A plan of action designed to achieve a particular goal.
Tactic: A conceptual action taken under a well defined strategy to achieve a specific objective.

Strategy Formulation and Defining Vision

Strategic management is the set of managerial decisions and action that determines the way for the long-
range performance of the company.
It includes environmental scanning, strategy formulation, strategy implementation, evaluation and control.
Strategy formulation is the development of long range plans for the effective management of
environmental opportunities and threats in light of corporate strengths and weaknesses.
It includes defining the corporate mission, specifying achievable objectives, developing strategies and
setting policy guidelines.
Corporate strategy is one, which decides what business the organisation should be in, and how the overall
group of activities should be structured and managed.
Competitive Strategy is concerned with creating and maintaining a competitive advantage in each and
every area of business.
Strategy that is related to each functional area of business such as production, marketing and personnel is
called functional strategy.
Corporate vision is a short, succinct, and inspiring statement of what the organisation intends to become
and to achieve at some point in the future, often stated in competitive terms.
Keywords
Core Ideology: based on the enduring values of the organisation
Corporate Level Strategy: Involves broad decisions about organisation's scope and direction.
Facilitation Approach: A wide range of people participate in the process of developing and articulating a
vision.
Functional Strategy: Involves decisions about each unit of the organisation.
Leader Dominated Approach: The CEO provides the strategic vision for the organisation.

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Pump-priming Approach: The CEO provides visionary ideas and selects people and groups within the
organisation to further develop those ideas.
Strategic Business Area (SBA): SBA is a distinctive segment of the environment in which the firm wants to do
business.
Sustainable Competitive Advantage: getting a substantial edge over the competitors.
Vision: The overall goal of an organisation that all business activities and processes should contribute toward
achieving.

Defining Mission, Goals and Objectives

A mission can be defined as a sentence describing a company's function, markets and competitive
advantages.
Developing your mission statement is the step which moves your strategic planning process from the present
to the future.
The mission should be broad enough to allow for the diversity (new products, new services, new markets)
one requires for one's business.
The mission statement should also be specific enough to provide the focus necessary to the success of your
business.
Once a mission statement has been set, every organisation needs to periodically review and possibly revise it
to make sure it accurately reflects its goals and the business and economic climates evolve.
Keywords
Company philosophy: It is a set of beliefs, principles, or aims, underlying a company's practice or conduct.
Company self concept: how much does the company knows itself
Goals: It is an open ended statement of what one wants to achieve with no quantification of outcomes or
time limit.
Mission: A statement that declares what business a company is in and who its customers are.
Objectives: The results an organisation wants to achieve in pursuing its basic mission.

External Assessment

External assessment is a step where a firm identifies opportunities that could benefit it and threats that it
should avoid.
It involves monitoring, evaluating, and disseminating of information from the external and internal
environments to key people within the corporation.
The nature and degree of competition in an industry hinge on five forces, viz. the threat of new entrants, the
bargaining power of customers, the bargaining power of suppliers, the threat of substitute products or
services and the jockeying among current contestants.
To establish a strategic agenda for dealing with these contending currents and to grow despite them, a
company must understand how they work in its industry and how they affect the company in its particular
situation.
The process of conducting external environment assessment starts with collating information and intelligence
on factors affecting the external environment.
Industry analysis is a tool that facilitates a company's understanding of its position relative to other
companies that produce similar products or services.
Environmental analysis or scanning is the process of monitoring the events and evaluating trends in the
external environment, to identify both present and future opportunities and threats that may influence the
firm's ability to reach its goals.

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Keywords
Competition: Rivalry between two or more parties to achieve a similar goal.
Environment: The totality of surrounding conditions.
Environmental Scanning: Process of gathering, analyzing, and dispensing information for tactical or strategic
purposes.
Fragmented Industries: Consists of a large number of small or medium-sized companies, none of which is in a
position to determine industry price.
Porters Five Forces: Named after Michael E. Porter, this model identifies and analyzes 5 competitive forces
that shape every industry, and helps determine an industry's weaknesses and strengths.
Switching Costs: One-time costs that a customer has to bear to switch from one product to another.

Organisational Appraisal: The Internal Assessment 1

The internal environment of an organisation contains the internal resources and possesses internal
capabilities and core competencies.
SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities,
and Threats involved in a project or in a business venture.
Keywords
Opportunities: A time or place favorable for executing a policy/strategy.
Resource: an asset, skill, process or knowledge controlled by an organisation.
SWOT Analysis: Strengths, Weakness, Opportunities and Threat Analysis.
Threat: A major unfavourable situation in a firm's environment.

Organisational Appraisal: Internal Assessment 2

Summary
Culture is a powerful component of an organisation's success, laying the tracks for strategy to roll out on.
It is the foundation for profit, productivity and progress. While it can accelerate getting to the next level of
performance, it can just as easily act as drag.
Culture-strategy Fit is a leading organisational culture consulting firm conducting ground breaking culture
diagnosis and change projects to help organisations leverage their culture to drive strategy and
performance.
It involves specifying the objective of the business venture or project and identifying the internal and external
factors that are favorable and unfavorable to achieving that objective.
A value chain is a chain of activities.
Products pass through all activities of the chain in order and at each activity the product gains some value.
The chain of activities gives the products more added value than the sum of added values of all activities.
It is important not to mix the concept of the value chain with the costs occurring throughout the activities.
Benchmarking is an improvement tool whereby a company measures its performance or process against
other companies' best practices, determines how those companies achieved their performance levels.
Benchmarking uses the information to improve its own performance.
Keywords
Assimilation: The acquired firm willingly surrenders its culture and adopts the culture of the acquiring
company.
Benchmarking: The concept of discovering what is the best performance being achieved, whether in your
company, by a competitor, or by an entirely different industry.

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Cultural Fit: Compatibility of culture with other arenas.
Deculturation involves imposition of the acquiring firm's culture forcefully on the acquired firm.

Corporate Level Strategies

Strategy is the direction and scope of an organisation over the long-term.
Strategies achieve advantages for the organisation through its configuration of resources within a
challenging environment, to meet the needs of markets and to fulfill stakeholder expectations.
Strategies exist at several levels in any organisation – ranging from the overall business through to individuals
working in it.
Growth strategies are the most widely pursued corporate strategies.
Without moving outside the organisation's current range of products or services, it may be possible to attract
customers by intensive advertising, and by realigning the product and market options available to the
organisation. These strategies are generally referred to as intensification or concentration strategies.
There are three important intensive strategies, viz. Market penetration, Market development and Product
development.
Integration basically means combining activities relating to the present activity of a firm.
Integration is basically of two types, viz. vertical integration and horizontal integration.
Diversification is the process of adding new businesses to the existing businesses of the company.
A company may pursue defense strategies when it has a weak competitive position in some or all of its
product lines resulting in poor performance.
Retrenchment strategies are last resort strategies. Companies can use any of the four retrenchment
strategies- turnaround, divestment, bankruptcy and liquidation.
Firms can take the international route by exporting a part of their produce to other nations or by outsourcing
a small chunk of their work outside.
Cooperative strategies such as strategic alliance and joint ventures are a logical and timely response to
intense and rapid changes in economic activity, technology and globalisation.
Restructuring is another means by which the corporate office can add substantial value to a business.
Restructuring can involve changes in assets, capital structure or management.
Keywords
Backward Integration: Gaining ownership or increased control of a firm's suppliers.
Corporate Strategy: primarily about the choice of direction for the corporation as a whole
Diversification: process of adding new businesses to the existing businesses of the company
Horizontal Integration: The strategy of seeking ownership or increased control over a firm's competitors.
Integration: Integration basically means combining activities relating to the present activity of a firm.
Intensive Strategy: firms intensify their efforts to boost sales and grow market share
Market Development: seeks to increase market share by selling the present products in new markets
Market Penetration: seeks to increase market share for existing products in the existing markets through
greater marketing efforts.
Vertical Integration: Expanding the firm's range of activities backward into the sources of supply and/or
forward into the distribution channels.

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Business Level Strategies
Summary
Business conditions are always changing, so it’s a good practice to periodically step back and take a hard
look at the business strategy and analyze its implementation.
Business Strategy can be defined as a long-term approach to implementing a firm’s business plans to
achieve its business objectives.
A business strategy addresses how the firm competes in a market and how it attains and sustains
competitive advantage.
The term “industry structure” refers to the number and size distribution of firms in an industry.
The competitive position within the segment then needs to be explored, because only this will show how the
organisation will compete within the segment.
Cost Leadership Strategy emphasises efficiency. By producing high volumes of standardised products, the
firm hopes to take advantage of economies of scale and experience curve effects.
The product is often a basic no-frills product that is produced at a relatively low cost and made available to
a very large customer base.
Differentiation is aimed at the broad market that involves the creation of a product or services that is
perceived throughout its industry as unique. The company or business unit may then charge a premium for its
product.
Focus Strategy concentrates on a select few target markets and is also called a segmentation strategy or
niche strategy.
Keywords
Cost Leadership: A strategy whereby a firm aims to deliver its product or service at a price lower than that of
its competitors.
Differentiation: Offering a product or service that is perceived as unique or distinctive by the customer.
Focus Strategy: The strategy in which a firm focuses on a specific niche in the market place and develops its
competitive advantage by offering products especially developed for that niche.
Industry: A collection of firms offering goods or services that are close substitutes of each other.
Positioning: Occupying a distinct position in the minds of consumers.

Strategic Analysis and Choice

Strategic choice is the decision to select from among the alternatives considered, the strategy which will
best meet the enterprise objectives. This decision-making process consists of four distinct steps:
Focusing on a few alternatives.
Considering the selection factors.
Evaluating the alternatives.
Making the actual choice.
Strategic analysis framework consists of three stages: Input stage, Matching stage and Decision stage
The basic purpose of industry analysis is to assess the strengths and weaknesses of a firm relative to its
competitors in the industry.
Portfolio analysis is an analytical tool which views a corporation as a basket or portfolio of products or
business units to be managed for the best possible returns, and help a corporate to build a multi-business
strategy.
Various matrices are used under this approach.
Though the portfolio approaches have limitations, but all these limitations can be overcome through
effective strategy development and meticulous planning.

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While the core competence concept appealed powerfully to companies disillusioned with diversification, it
did not offer any practical guidelines for developing corporate-level strategy.
Contingency plans are organised and coordinated set of steps to be taken if an emergency or disaster (fire,
hurricane, injury, robbery, etc.) strikes.
Keywords
BCG Matrix: Most popular and the simplest matrix to describe a corporation’s portfolio of businesses or
products.
Display Matrices: Frameworks in which products or business units are displayed as a series of investments from
which top management expects a profitable return.
Market Growth Rate: The percentage of market growth, that is, the percentage by which sales of a
particular product or business unit have increased.
Portfolio strategy approach: A method of analysing an organisation’s mix of business in terms of both
individual and collective contributions to strategic goals.
Relative Market Share: The ratio of the market share of the concerned product or business unit in the industry
divided by the share of the market leader.
Strategic Choice: Selection of a strategy that will best meet the firm’s objectives.

Strategy Implementation
Most strategies need resources to be allocated to them if they are to be implemented successfully.
A successful strategy formulation does not guarantee successful strategy implementation. It affects an
organisation from top to bottom; it affects all divisional and functional areas of business.
Implementation of strategy involves a number of interrelated decisions, choices, and a broad range of
activities. It requires an integration of people, structures, processes etc.
Mc Kinsey’s 7-S model is good at capturing the importance of all these elements in the implementation of
strategy.
A company’s ability to acquire sufficient resources needed to support new strategic initiatives and steer
them to the appropriate organisational units has a major impact on the strategy implementation process.
Keywords
Bottom-up Approach: In this approach, resources are distributed through a process of aggregation from the
operating level. The operating levels work out the requirements of each subunit and the resources are
allocated accordingly.
Capital Budgeting: used for long-term commitment of resources, such as capital investments in mergers,
acquisitions, joint ventures etc.
McKinsey 7-S Model: A model of organisational effectiveness that postulates that there are seven internal
factors of an organisation that needs to be aligned and reinforced in order for it to be successful.
Operating Budget: Necessary for more routine resource allocation for conducting operations.
Top-down Approach: In this approach, resources are allocated through a process of segregation down to
the operating levels. The Board of Directors, the Managing Director or members of top management
typically decide the requirements of each subunit and distribute resources accordingly.
Zero Based Budgeting: Budget requests in detail from the scratch, without relying on the previous budget
allocations.

Structural Implementation
Organisations are structured in a variety of ways, dependant on their objectives and culture.
The structure of an organisation will determine the manner in which it operates and it's performance.
Structure allows the responsibilities for different functions and processes to be clearly allocated to different
departments and employees.
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The wrong organisation structure will hinder the success of the business.
Organisational structures should aim to maximize the efficiency and success of the organisation.
An effective organisational structure will facilitate working relationships between various sections of the
organisation.
It will retain order and command whilst promoting flexibility and creativity.
Internal factors such as size, product and skills of the workforce influence the organisational structure.
As a business expands the chain of command will lengthen and the spans of control will widen.
The higher the level of skill each employee has the more the business will make use of the matrix structure to
maximize these skills across the organisation.
Keywords
Agile Organisation: A firm that identifies a set of business capabilities central to high profitability operations
and then build a virtual organisation around those capabilities.
Chain of Command: an unbroken line of authority that links all persons in an organisation and shows who
reports to whom
Formalization: extent to which written documentation is used to direct and control employees
Hierarchy: defines who reports to whom and the span of control
Infrastructure: concerned with issues like delegation of authority, specialization, communication, information
systems and procedures
Modular Organisation: An organisation in which different functional components are separated from one
another.
Outsourcing: subcontracting a service with another company or person to do a particular function.
Span of Control: The number of employees that each manager/supervisor is responsible for.
Superstructure: depicts how people are grouped into different divisions, departments and sections and how
they are related to each other
Virtual Organisations: consist of a network of independent companies - suppliers, customers or even
competitors linked together to share skills, costs, markets and rewards

Behavioural Implementation
A firm’s stakeholders are the individuals, groups, or other organisations that are affected by and also affect
the firm’s decisions and actions.
An organisation needs to have an effective stakeholder management system in place, which provides a
great support in achieving its strategic objectives.
Strategic leadership establishes the firm’s direction by developing and communicating a vision of the future
and inspiring organisation members to move in that direction.
A company’s culture is manifested in the values and business principles that management preaches and
practices. An organisation’s culture can exert a powerful influence on the behaviour of all employees.
Ethics refers to the moral principles and values that govern the behaviour of a person or group. Ethics helps
us in deciding what is good or bad, moral or immoral, fair or unfair in conduct and decision-making.
Corporate social responsibility (CSR) consists of “actions that appear to further some social good, beyond
the interests of the firm” It includes such topics as environmental ‘green’ issues, treatment of employees and
suppliers, charitable work and other matters related to the community.
Corporate Social Responsibility is a company’s duty to operate its business by means that avoid harm to
other stakeholders and the environment, and also to consider overall betterment of society in its decisions
and actions.
Keywords

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Culture: The beliefs and behaviors that determine how a company’s employees and management interact
and handle outside business transactions.
Corporate Social Responsibility: A company’s sense of responsibility towards the community and
environment (both ecological and social) in which it operates.
Deculturation: The removing or abandoning of one’s own culture and replaces it with another.
Ethics: Motivation based on ideas of right and wrong.
Stakeholders: A person, group, or organisation that has direct or indirect stake in an organisation.
Strategic leadership: A manger’s potential to express a strategic vision for the organisation, or a part of the
organisation, and to motivate and persuade others to acquire that vision.

Functional and Operational Implementation

Functional Strategy is concerned with developing and nurturing a distinctive competence to provide a
company or business unit with a competitive advantage.
Functional strategies are essential to implement business strategy.
Functional policies will ensure that the strategies are carried out as intended and that the different functional
areas are working towards the same ends. Companies have plans and policies that cover nearly every
major aspect of the firm.
Operations strategy plays a crucial role in shaping the ultimate success of a firm. It enables an organisation
to make optimal decisions regarding product, production capacity, plant location, choice of machinery
and equipment, maintenance of existing facilities and host of other aspects of production.
Personnel policies are guides to action. Brewster and Ricbell defined HR policies as “a set of proposals and
actions that act as a reference point for managers in their dealings with employees”.
Keywords
Capacity Planning: Process of forecasting demand and deciding what Resources will be required to meet
that demand.
Cash flow: The excess of cash revenues over cash outlays in a given period of time (not including non-cash
expenses)
Functional Strategy: Approach taken by a functional area to achieve corporate and business unit objectives
and strategies by maximising resource productivity.
Human Resource Planning: The ongoing process of systematic planning to achieve optimum use of an
organisation's most valuable asset - its human resources.
Industrial Relations: Interaction between employers, employees, and the government; and the institutions
and associations through which such interactions are mediated.
Inventory Management: Management of inventory consisting of raw materials, work-in-process, goods in
transit, finished goods etc.
Operations Management: Design, execution, and control of a firm's operations that convert its resources into
desired goods and services, and implement its business strategy.

Strategic Evaluation and Control

Strategic evaluation generally operates at two levels – strategic and operational level. At the strategic level,
managers try to examine the consistency of strategy with environment. At the operational level, the focus is
on finding how a given strategy is effectively pursued by the organisation.
Strategic control is a type of “steering control”. We have to track the strategy as it is being implemented,
detect any problems or changes in the predictions made, and make necessary adjustments.
Operational control provides post-action evaluation and control over short periods.
They involve systematic evaluation of performance against predetermined objectives.

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Organisations use many techniques or mechanisms for strategic control. Some of the important mechanisms
are management Information systems, benchchmarking, balanced scorecard, key factor rating,
responsibility centres, network technique, Management by Objectives (MBO), Memorandum of
Understanding.
If the need for evaluation was recognised from the outset, then a strategic evaluation will ideally take place
before the project begins delivering activities.
The purpose of evaluating causal connections between activities, outputs and outcomes, is to explore
whether or not the project’s assumptions about the likely outcomes and effects of its activities and outputs
are well-founded.
There are three fundamental strategy evaluation activities, viz. reviewing external and internal factors that
are the bases for current strategies; measuring performance and taking corrective actions.
Keywords
Balanced Scorecard: Strategic performance management tool - a semi-standard structured report
supported by proven design methods and automation tools.
Benchmarking: Comparative method where a firm finds the best practices in an area and then attempts to
bring its own performance in that area in line with the best practice.
Management by Objectives: Process of agreeing upon objectives within an organisation so that
management and employees agree to the objectives and understand what they are in the organisation.
Operational control: ensures that day-to-day actions are consistent with established plans and objectives.
Responsibility centre: A segment of a business or other organisation, in which costs can be segregated, with
the head of that segment being held accountable for expenses.
Strategic evaluation and control: Process of determining the effectiveness of a given strategy in achieving
the organisational objectives and taking corrective actions wherever required.
Strategic surveillance: Broad-based vigilance activity in all daily operations both inside and outside the
organisation.

Introduction to Management
Management is the main aspect of working involved in a system & its involvement as art, science, profession
leads an effective role.
Management occupies such an important place in the modern world that the welfare of the people and
the destiny of the country are very much influenced by it.
Managers play a very significant role in the business world.
The various roles played by them in this regard are broadly grouped into three categories: inter-personal
roles, informational roles and decisional roles.
According to Fayol, managers perform five basic functions in order to achieve results.
Planning is the process of setting enterprise objectives and deciding the future courses of action.
Organising is concerned with the determination of relationships among functions, jobs and personnel.
Staffing is the function of hiring, training and developing suitable persons for the enterprise.
Directing tells people what to do and ensures that they do it to the best of their ability.
Controlling keeps the enterprise activities on the right path and aligned with plans and goals.

Keywords
Administration: It is a higher-level function concerned with the determination of policies.
Directing: It deals with the steps a manager takes (guiding, supervising, motivating, etc.) to get subordinates
and others to carry out plans.
Leadership: Influencing others to act toward the attainment of a goal.
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Management: The art of getting things done.
Motivation: Any influence that brings out, directs, or maintains goal directed behaviour.
Organization: Two or more persons engaged in a systematic effort to produce goods or services.
Organizing: It is the process of creating a structure of relationships to enable employees to carry out
management's plans and meet its goals.

Development of Management Theories

In this unit, an overview of various management theories was provided.
The key characteristics of classical organisation theory being: (a) Division of Labour (b) Functional Process (c)
Structure and (d) Span of Control.
The neo-classical approach was developed as a reaction to the classical principles, it did not abandon the
classical approach altogether, rather it pointed to the limitation of classical approach.
The major facts discovered by these experiments include the important role of groups in determining the
attitude of workers; need for communication among ranks; increasing satisfaction leads to effective
organisation and that people in an organisation are motivating higher level needs.
It also provided an overview of systems approach and the modern organisational theory.
Keywords
Bureaucracy: Highly specialized organisation structure
Classical Approach: It emphasises organisational efficiency to increase organisational success.
Hawthorne studies: A group of studies conducted at the Hawthorne plant of the Western Electric company
during the late 1920s and early 1930s whose results ultimately led to the human relations view of
management.
Human Relations Theory: A movement in management thinking and practise that emphasised satisfaction of
employees' basic needs as the key to increased worker productivity.
Scientific management: Scientific study of work to improve efficiency.
Systems theory: It tries to solve problems by diagnosing them within a framework of inputs, transformation
processes, outputs and feedback.

Planning and Decision-making

Summary
To make an organisations successful, planning is utmost important.
Objectives have to be set in key areas in every organisation, such as market standing, innovation,
productivity, resources, performance etc.
MBO is one such technique, which has become very popular due to its focus on
participatively set, measurable goals in key areas affecting organisational performance.
The process of MBO involves three steps: (i) setting goals jointly, taking the commitment and support from
subordinates, (ii) developing a concrete action plan, and (iii) appraising performance with a view to
improve results constantly.
Decision-making can be regarded as an outcome of cognitive processes leading to the selection of a
course of action among several alternatives.
Making a decision implies that there are alternative choices to be considered and the best alternative is to
be chosen.
Most decisions are made by moving back and forth between the choice of criteria.
There is a five step decision-making process involved behind every decision.
There are many models available to help the managers take timely and effective decisions.

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Keywords
Intuition: It is the apparent ability to acquire knowledge without inference or the use of reason.
Management by Objectives: Systematic and organised approach that allows management to focus on
achievable goals and to attain the best possible results from available resources.
Optimizing: Making the best possible
Planning: An act of formulating a program for a definite course of action
Rationality: Having complete knowledge about all the details of a given situation.
Strategy: An elaborate and systematic plan of action.

Organizing
Organisation is the foundation upon which the whole structure of management is built.
It is the backbone of management.
Organising is the process of establishing relationship among the members of the enterprise.
The relationships are created in terms of authority and responsibility.
Informal organisation, which does not appear on the organisation chart, supplements the formal
organisation in achieving organisational goals effectively and efficiently.
Organisation requires the creation of structural relationship among different departments and the individuals
working there for the accomplishment of desired goals.
Organisation structure is primarily concerned with the allocation of tasks and delegation of authority.
The establishment of formal relationships among the individuals working in the organisation is very important
to make clear the lines of authority in the organisation and to coordinate the efforts of different individuals in
an efficient manner.
Keywords
Formal Organisation: The formal organisation refers to the formal relationships of authority and subordination
within a company.
Functional Organisation: A functional structure is one that organises employees around skills or other
resources.
Informal Organisation: The informal organisation refers to the network of personal and social relations that
develop spontaneously between people associated with each other.
Organisation Structure: The plan for the systematic arrangement of work is the organisation structure.
Organisation: An organisation is a social arrangement which pursues collective goals, which controls its own
performance, and which has a boundary separating it from its environment.

Coordination, Centralisation and Decentralisation

To achieve results, managers have to combine physical, financial and human resources in an effective and
efficient way.
The process by which a manager brings unity of action in an organisation is coordination.
It is a conscious and deliberate blending of activities to achieve unity of action.
Coordination pulls all the functions and activities together, improves human relations and increases inter-
departmental harmony.
Coordination is easy to achieve through direct interpersonal relationships and communications.
All departments and units must realise the inter-relatedness of their work and thus initiate coordination in the
early stages of planning.
Coordination works through certain distinguished principles.

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The process of coordination involves a series of steps: clear goals, proper allocation of work, sound
organisation structure, clear reporting relationships, proper communication and sound leadership.
System thinking focuses on how a component of a system under study interacts with other constituents of the
same system.
Centralisation and decentralisation, being the two extremes of operations of authority, are relative terms.
We, today, cannot think of an organisation which is completely centralised or decentralised as in between
the operations of the two there is always a continuum of authority.
Their applications in a democratic setup would depend upon the objectives of the organisation, its life and
size, nature of service, etc.
In centralisation, power and discretion remain concentrated at the top levels.
Centralisation works well in the early stages of organisational growth and keeps all parts of the organisation
moving harmoniously towards a common goal.
It also helps in handling resources and information very well, in times of emergency. However, when the
organisation grows beyond a limit, centralisation comes in the way of proper coordination, communication
and control.
In decentralisation, a great deal of authority is delegated and more decisions are made at lower levels.
Decentralisation allows subordinates to grow and reduces the burden of the top executives and allows them
to focus attention on key issues.
Keywords
Centralisation: The process by which the activities of an organisation, particularly those regarding decision-
making, become concentrated within a particular location and/or group.
Conflicts: Actual or perceived opposition of needs, values and interests.
Coordination: The act of coordinating, making different people or things work together for a goal or effect.
Delegation: Assignment of authority and responsibility to another person (normally from a manager to a
subordinate) to carry out specific activities.
Discretion: Ability to make responsible decisions.
Synchronisation: To cause to agree in time and objectives.

Delegation, Authority and Power

Delegation is an essential element of any manager's job.
If used effectively delegation provides real benefits to every one involved.
Major indicator of justified use of power is delegation of authority by the management.
It is the process through which a manager gives authority to their subordinates in order to accomplish certain
assignments.
The work culture, which utilizes the delegation of authority, improves the job satisfaction motivation and
morale of employees.
Further it is helpful in satisfying the employee's need for recognition, responsibility freedom and autonomy.
"Power" is the ability to affect change while "authority" is the right to make any given decision.
Keywords
Delegation: The process by which the manager assigns a portion of his total workload to others.
Expert power: It comes from the knowledge in a specific area through which one influences others.
Legitimate power: It comes from the authority of a manager's rate and position in the chain of command.
Power: The potential ability to influence the behaviour of others

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Controlling
Controlling is an important function of management.
It is the process that measures current performance and guides it towards some predetermined objectives.
Control is fully consistent with freedom. In fact, they are inter-dependent.
Without control, freedom cannot be sustained for long.
The control system should be appropriate to the nature and needs of the activity.
A large firm calls for controls different from those needed for a small firm.
The techniques of control involve the feed forward control, concurrent control and the feed-back process.
There are several techniques to establish the control system in an organisation like CPM, Gantt Chart, PERT,
etc.
Keywords
Budgeting: Making a written account of all the expenses and revenues planned.
Control: Restrain or regulate.
Feed Forward: Reverse of a feedback, it is the 'self-fulfilling prophesy' process that turns logical cause-effect
relationships upside down.
Feedback: The process in which part of the output of a system is returned to its input in order to regulate its
further output.

Foundations of Organisational Behaviour

Organisational behavior is the study and application of knowledge about how people, individuals, and
groups act in organisations.
It does this by taking a system approach, i.e., it interprets people-organisation relationships in terms of the
whole person, whole group, whole organisation, and whole social system.
Its purpose is to build better relationships by achieving human objectives, organisational objectives, and
social objectives.
Organisational behavior encompasses a wide range of topics, such as human behavior, change,
leadership, teams, etc.
There are many theories and models to determine and modify organisational behaviour.
Personality plays the most important role in determining the level of individual effectiveness.
Various determinants and theories have proven that the individual personality can be developed in order to
develop one's effectiveness.
The personality not only develops but also changes according to various situations.

Keywords
Competencies: Through learning and experience, each person has acquired a unique set of skills for dealing
with various situations.
Conscience: The behaviours for which we have been punished and about which we feel guilty.
Ectomorph: According to Sheldon's Physiognomy Theory, he has thin, long and poorly developed body.
Ego: The ego is the logical, rational, realistic part of the personality. The ego evolves from the id and draws its
energy from the id.
Encoding: Each person has a unique way of perceiving and categorizing experience. One person may see
a situation as threatening while another sees it as challenging, and the way it is encoded determines the
response.
Endomorph: According to Sheldon's Physiognomy Theory, endomorph is bulky and beloved type of person.

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Expectancies: Through learning, each person has acquired different expectations of being rewarded or
punished for various kinds of behaviour.
Id: The only part of the personality that is present at birth. It is inherited, primitive, inaccessible and
completely unconscious.
Intuition: It is based on unconscious inner perception of the potentialities of events or things.
Mesomorph: According to Sheldon's Physiognomy Theory, he has a strong, athletic and tough body type.
Super Ego: The moral component of the personality.

Learning, Attitudes and Values

Learning is a term frequently used by a great number of people in a wide variety of contexts.
Learning can be defined as a relatively permanent change in behaviour or potential behaviour as a result of
direct or indirect experience.
Reinforcement has played a central role in learning.
Attitudes and values of an individual determine where he/she wants to go in life in general and career in
particular.
It is these two things again that determine how much job satisfaction one can derive.

Keywords
Attitude: A complex mental state involving beliefs and feelings and values and dispositions to act in certain
ways.
Job Involvement: The degree to which a person identifies with his or her job.
Job Satisfaction: Sense of inner fulfillment and pride achieved when performing a particular job.
Kinesthetic Learners: Learners which deal up in physical action.
Learning: Learning is any relatively permanent change in behaviour that occurs as a result of experience.
Reinforcement: The attempt to develop or strengthen desirable behaviour by either bestowing positive
consequences or withholding negative consequences.
Values: Beliefs of a person or social group in which they have an emotional investment.

Emotions and Perception

An emotion is a mental and physiological state associated with a wide variety of feelings, thoughts, and
behavior. Emotions are subjective experiences, or experienced from an individual point of view.
Emotions are thought to be related to activity in brain areas that direct our attention, motivate our behavior,
and determine the significance of what is going on around us.
Emotional Intelligence (EI), often measured as an Emotional Intelligence Quotient (EQ), is a term that
describes the ability, capacity, skill or (in the case of the trait EI model) a self-perceived ability, to identify,
assess, and manage the emotions of one's self, of others, and of groups.
Practically speaking, we often fail to see reality in this world. We interpret what we see and call it reality.
Perceptions, thus, influence behavioural responses greatly.
Perception is nothing but a person's view of reality. To get a clear picture of what he visualises, a person first
selects what he wants to see organises the obtained information and interprets the same in his own unique
way. In this process he may move closer to reality or go off the track completely due to certain perceptual
errors.
Keywords
Extraversion (E): To focus on the outer world
Feeling (F): To first look at the people and special circumstances

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Introversion (I): To focus on inner world
Intuition (N): To interpret and add meaning
Judging (J): To get things decided
Perceiving (P): To stay open to new information and options
Sensing (S): To focus on the basic information you take in
Thinking (T): To first look at logic and consistency

Work Motivation
Motivation is the internal condition that activates behavior and gives it direction; energizes and directs goal-
oriented behavior.
The challenge at work is to create an environment in which people are motivated about work priorities.
Too often, organisations fail to pay attention to the employee relations, communication, recognition, and
involvement issues that are most important to people.
The first step in creating a motivating work environment is to stop taking actions that are guaranteed to
demotivate people.
The next step is to identify and take the actions that will motivate people.
There are various theories to motivate people at work places.
A few techniques that can motivate people at work are making only the minimum number of rules and
policies needed to protect the organisation legally and create order in the work place; publishing the rules
and policies and educating all employees, developing guidelines for supervisors and educating them about
the fair and consistent application of the few rules and policies, etc.
Keywords
Benevolent: People who are comfortable with an equity ratio less than that of his or her comparison other.
Entitled: People who are comfortable with an equity ratio greater than their comparison to the other.
Instrumentality: The belief that performance is related to the rewards.
Relatedness needs: Deal with our need to be accepted by others, achieve mutual understanding on
matters that are important to us and exercise some influence over those with whom we interact on an
ongoing basis.
Valence: The value or importance one places on a particular reward.

Group Behaviour and Team Work

Thus we see that team skills and group membership form a very important component of the attributes
required for success in work place.
If a group in which the individual is working, is conducive for work, the performance of the individual will be
similarly affected and vice versa.
There are many reasons and methods for group formation but groups are mandatory for one's work.
Similarly, the teams guarantee good productivity.
Keywords
Differentiation: It is the extent to which team members are specialized relative to others in the organisation.
Integration: It is the degree to which the team must coordinate with managers, employees, suppliers and
customers outside the team.

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Communication and Leadership
Communication is the exchange of messages between people for the purpose of reaching common
understandings, and achieving common goals. Unless common meanings are shared, managers find it
extremely difficult to influence others.
Communication is an indispensable activity in all organisations. No organisation can think of its existence
without effective communication.
The organisation relies on communications to learn what its customers want, to foster cooperation among its
employees, and to identify and adapt to changes in the environment.
Barriers to communication are factors that block or significantly distort successful communication. Effective
managerial communication skills helps overcome some, but not all, barriers to communication in
organisations.
Leadership is a process by which an individual influences the thoughts, attitudes, and behaviors of others.
Leaders set a direction for the rest of the group, and help it to see what lies ahead.
They help the team visualize what it might achieve and encourage as well as inspire the entire team to
perform up to its true potential.
Without leadership a group degenerates into non performers.
That is why the practice of leadership is known to be a key business differentiator.
In order to increase individual effectiveness, one must certainly possess good team skills coupled with great
leadership qualities.
Keywords
Authority-Compliance Management: High concern for production and low concern for people. This style of
management tends to result in efficient operations.
Communication: Exchange of messages between people
Country Club Management: Low concern for production and high concern for people. This style of
management creates a working environment where employees feel comfortable.
Improvised Management: This style of management results in employees doing the minimum required.
Kinesics: Study of body movements, including posture
Lateral Communication: Communicating with members at same level of the heirarchy
Middle-of-the Road Management: Moderate levels of concern for both people and production. This style of
management balances needs through compromise, resulting in adequate performance.
Paralanguage: Vocal aspects of communication relating to how something is said rather than to what is said
Proxemics: The influence of proximity and space in communication
Team Management: High levels of concern for people and production. This style of management results in
superior performance from committed employees.

Conflict Management
Conflict management refers to the long-term management of intractable conflicts.
A conflict can be internal or external.
Conflict is inevitable and often good. Getting the most out of diversity means often- contradictory values,
perspectives and opinions.
Conflict helps to raise and address problems, energizes work to be on the most appropriate issues, helps
people "be real learn how to recognize and benefit from their differences.
Conflict is a problem when it hampers productivity, lowers morale, causes more and continued conflicts or
results in inappropriate behaviors.
There are many reasons for conflicts.

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Similarly, there are many reasons to settle a conflict.
One must try to make only the positive use of a conflict and not vice versa.
Keywords
Assertive: An assertive style of behavior is to interact with people while standing up for your rights.
Compromise: A concept of finding agreement through communication, through a mutual acceptance of
terms.
Conflict: Actual or perceived opposition of needs, values and interests.
Negotiation: Negotiation is a dialogue intended to resolve disputes, to produce an agreement upon courses
of action, to bargain for individual or collective advantage, or to craft outcomes to satisfy various interests.

Power and Politics

The toughest of all areas within corporate life is dealing with power and politics.
Some companies are better or worse than others in the amount of political activity taking place.
Usually, the larger the company, the more part the politics plays in one's ability to perform.
In order to be successful in the corporate world, people need power.
There are many types of powers.
All have their advantages and disadvantages.
Power may be used for both the benefits of an organisation or disadvantage for it.
Similarly, politics may be used for both, self benefit without harming others or harm to others.
Keywords
Expert Power: Power that arises from a person's expertise, knowledge or talent.
Reward Power: When the source of power is a person's control over rewarding outcomes, the power is called
reward power.

Organisational Culture
The presence of a strong and appropriate organisational culture has become essential for an organisation
to function effectively and efficiently in the modern era.
Organisational culture is the consciously or subconsciously accepted and followed way of life or manner of
performing day-to-day activities in an organisation.
It plays an important role in determining and controlling employee behavior at workplace.
The core values, assumptions, norms, procedures, etc. that are followed in an organisation constitute its
culture.
These are more often than not, accepted and followed throughout the organisation, without much
deviation.
For organisations to develop, they often must undergo significant change at various points in their
development.
Organisational Change occurs when an organisation evolves through various life cycle.
Significant organisational change occurs, when an organisation changes its overall strategy for success,
adds or removes a major section or practice, and/or wants to change the very nature by which it operates.
Leaders and managers continually make efforts to accomplish successful and significant change.
The changes that bring a complete overhaul are most often than not resisted by the others first.
It is very important that the staff be made to understand the necessity for the change.
There are many approaches to guiding change – some planned, structured and explicit, while others are
more organic, unfolding and implicit.
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Different people often have very different – and strong – opinions about how change should be conducted.
Whatever resistances or objections, if the change is essential and justified, it must be undertaken, as they
say- the only constant factor is change.

Keywords
Adhocracy Culture: This culture is a representative of those organisations which are dynamic entrepreneurial
and creative places to work. People stick their necks out and take risks.
Clan Culture: This type of culture is visible in those organisations which are very friendly place to work where
people share a lot of themselves. It is like an extended family.
Hierarchy Culture: This type of culture is visible in those organisations which are much formalized structured
place to work. Procedures govern what people do.
Market Culture: This type of culture is visible in those organisations which are results oriented organisations
whose major concern is with getting the job done.
Refreezing: Refreezing is the third of Lewin's change transition stages, where people are taken from a state of
being in transition and moved to a stable and productive state.
Unfreezing: Unfreezing is the first of Lewin's change transition stages, where people are taken from a state of
being unready to change to being ready and willing to make the first step.

Introduction to Performance Management

Summary
Performance management deals with improving organizational performance by improving employee
performance.
The concept of performance management may be categorized into two separate types of management.
The first one deals with the performance of an organization as a whole and evaluates the effectiveness of its
managers. The second one deals with the system of evaluating employees in order to enable them to
achieve reasonable goals and thus ensure that the organization performs better.
Performance management is an important organizational tool to clarify performance objectives, standards,
critical dimensions, and competencies to enhance individual performance.
Performance management is a ‘systematic’ and ‘holistic’ approach to identify critical dimensions of
performance and to carry out activities necessary to ensure that the mission, objectives, goals, vision, and
values of the organization are being met in an effective and efficient manner.
Performance management transforms organizational objectives and strategy into a measurable action plan
by getting the right information to and from the right people at the right time and in the right format.
The use of performance management in the best-practice companies is not because it is a better technique
than performance appraisal, but because it can form one of a number of integrated approaches to the
management of performance.
Keywords
Expectancy: It refers to the extent to which the person believes his efforts will lead to the fi rst level outcome.
Instrumentality: It refers to the probabilities attached by the individual to each possible performance
outcome alternative just as the individual previously assigned probabilities to various levels of effort leading
to different levels of performance.
Performance Management: It deals with improving organizational performance by improving employee
performance.
Performance: Behaviors or actions that are relevant to the goals of the organisation.
Valence: It means the attraction or an outcome to the individual.

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Performance Management System

Performance management system is another way of envisioning the totality of a manager’s function.
The use of performance management in the best-practice companies is not because it is a better technique
than performance appraisal, but because it can form one of a number of integrated approaches to the
management of performance.
The rise of HRM also contributed to the emergence of performance management.
PMS helps in clarifying the mission, vision, strategy, and values of the organization to the employees in order
to enable them achieve the same.
Companies use performance management systems to evaluate employees’ effi ciency at work and ability
to perform certain tasks, either by automated or human processes.
Competency development is a carefully crafted process of research and data-gatheringNotes about fi rm’s
managers and employees as they perform their daily work, with the goal of determining the specifi c
knowledge, skills and personal attributes required for excellent performance in these actual jobs, roles or
businesses.
The competencies and the need to develop them translates into a personal development plan and the
whole links into what is being tried to be achieved within the organization.
Electronic performance management (or e-performance management) offers great value for money to the
organizations and addresses its needs aptly.
The e-performance management product allows organizations to maintain a record of core skills and
competencies into the employee’s performance management process.
Keywords
Competencies: Competencies are the knowledge, skills and personal attributes required for excellent
performance in a job, role or specifi c business.
Competency analysis: Competency analysis is concerned with the behavioral dimensions of the roles.
e-performance Management: It is IT-enabled performance management that comes as an effective tool to
leverage the full benefi ts of the system at a comparatively much lesser cost of administration.
Performance Management: It deals with improving organizational performance by improving employee
performance.

Performance Planning
The performance-planning part of the performance-management sequence is primarily a joint exploration
of what individuals need to do and know to improve their performance and develop their skills and
competences, and how their managers can provide the support and guidance they need.
The performances aspect of the plan obtained agreement on what has to be done to achieve objectives,
raise standards and improve performance.
Performance planning is the key essential for an effective performance management system.
Coaches work with performance plans or work plans to keep their employees motivated.
Key performance area includes the identification of priority area to an employee and subsequent working
on the specified area.
The term key results area may be defined as general area of outcomes for which a role is responsible.
The process of performance planning should identify clearly what is expected of the employee, which in turn
provides the opportunity to recognize good performance and identify areas that need corrective action or
added training.
Keywords
Goal: The purpose toward which an endeavor is directed.
Mission: It defines what an organization is, why it exists, and its reason for being.
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Objectives: Something that one’s efforts or actions are intended to attain or accomplish.
Performance: It is behavior and should be distinguished from the outcomes because they can be
contaminated by systems factors.
Vision: A statement giving a broad, inspirational image of the future that an organization is aiming to
achieve.

Competency Mapping
Competency Mapping begins with identifying key competencies for an organization and/ or a job and
incorporating those competencies throughout the various processes (i.e. job evaluation, training,
recruitment) of the organization.
A link between people and competencies is established through an effective system of measuring the
proficiency of an individual on the desired competencies for the role.
Competencies are a broader term referring to an individual’s demonstrated knowledge, skills, behaviors,
experience, life view and values and constitute observable, behavioral acts that require a combination of
all these attributes to execute.
Competency mapping serve as behavior-based standards of performance against which people and
organizations can be measured over time.
Keywords
Assessment centre: Assessment center is a mechanism to identify the potential for growth. It is a procedure
(not location) that uses a variety of techniques to evaluate employees for manpower purpose and
decisions.
Behavioral Indicators: Behavioral indicators describe the behaviors, thought patterns, abilities and traits that
contribute to superior performance.
Competency: Skills and abilities, described in behavioral terms that are coach able, observable, measurable
and critical to successful individual or organization’s performance.

Performance Appraisal
It is a process of estimating or judging the value, excellent qualities or status of a person or thing. It is a
process of collecting, analyzing, and evaluating data relative to job behavior and results of individuals. The
appraisal system is organized on the principle of goals and management by objectives.
Performance appraisal can be either formal or informal. Formal appraisals are usage of former systems
schedule regular sessions in which to discuss an employee’s performance. Informal appraisals are
unplanned, often just chance statements made in passing about an employee’s performance.
The main difference between the performance management and appraisal systems is their respective
emphasis and spirit. Good organizations in the past have used essentially their performance appraisal
systems as performance management systems.
Performance appraisal plans are designed to meet the needs of the organization and the individual. It is
increasingly viewed as central to good human resource management.
Organizations use performance appraisals for three purposes: administrative, employee development and
programme assessment. Programme appraisal commonly serve an administrative purpose by providing
employers with a rational for making many personnel decisions, such as decisions relating to pay increases,
promotions, demotions, terminations and transfers.
There are two types of performance appraisal systems which are normally used in organizations: (i) close
ended appraisal system and, (ii) open ended appraisal system.
Keywords
Close Ended Appraisal System: In this, a confidential report is submitted on the performance of the
employee.
MBO: It involves the setting out clearly define goals of an employee in agreement with his superior.

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Open Ended Appraisal System: In this, the performance of the individual is discussed with him, and he is
ranked in a five or ten point rating scale.
Performance Appraisal: It is a systematic evaluation of present potential capabilities of personnel and
employees by their superiors, superior’s or a professional form outside.
Self Appraisal: It gives a chance to the employee to look at his/her strengths and weaknesses, his
achievements, and judge his own performance.

Methods of Performance Appraisal

Structure and Sayles have classified performance appraisal into three groups: traditional performance
rating, newer-rating method and result-oriented appraisal.
360-degree feedback is also known as ‘multi-rater feedback’, as it is the most comprehensive appraisal
where the feedback about the employees’ performance comes from all the sources that come in contact
with the employee on his job.
The quality of an appraiser is much more crucial than the appraisal methods. It is desirable to make the
immediate superior a party to the appraisal program.
Performance is a thing of the past, while potential includes the possible knowledge, skills and attitudes the
employee may possess for better performance.
Keywords
360-degree Feedback or Appraisal: It is the most comprehensive appraisal where the feedback about the
employees’ performance comes from all the sources that come in contact with the employee on his job.
The Balance Scorecard: It creates a template of measurement of organizational performance as well as
individual performance and enables organizations to clarify vision and strategy before initiating action.
Traditional Rating: It involves a completion of a form by the immediate supervisor of the individual who is
being evaluated.

Performance Monitoring
Performance monitoring provides scope for modification, change and/or alteration of the existing
performance management system.
Performance monitoring may be defined as the process of appraising an environment of continuous
learning and development, maintaining the employee’s performance, enhancing individual competencies
to make them more productive for the organisation.
Successful business management requires the ongoing monitoring of performance in order to generate data
by which to judge the success or otherwise of specific strategies.
Progress in implementing the personal development plan can also be monitored during the year.
A performance monitoring plan is a critical tool for planning, managing, and documenting data collection.
Coaching and mentoring seek to bridge the gap between traditional expectations of the organization and
more contemporary approaches.
Keywords
Performance monitoring: Performance monitoring may be defined as the process of appraising an
environment of continuous learning and development, maintaining the employee’s performance,
enhancing individual competencies to make them more productive for the organisation.
KPI: Key Performance Indicators.

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Mentoring and Coaching
Several key features of coaching and mentoring, for individuals and organizations, make them attractive.
Coaching and mentoring frequently run alongside, or are an intrinsic part of, a self- development process set
in place by the organization.
Unique Initiatives for Institutionalization
To hone and harness the right and positive outlook in the mentors for actualizing the initiative, organizational
workshops are conducted with the help of expert facilitators. This also generates interest and enthusiasm in
the system. In the initial years, this was done every year in all locations to bring about involvement,
appreciation of the initiative’s purpose and clarifi cation of the concept and its value. Refresher courses are
held from time to time to renew and revisit the concept and its implementation. For creating exclusive
identifying and to generating good feeling, Mentors Badges are provided. Besides recognizing the service of
mentors by felicitating them through “Mentor’s Samman (honour):, a lot of other rewards and recognitions
such as appreciation letters, token gifts, dinner with HODs, informal get-togethers, etc. are presented and
organized to encourage and sustain the initiative.
A Reality Check
With a very focused approach, NTPC succeeded in creating and developing a pool of over 305 mentors in
the organization for driving the change initiative. It was further observed that the system greatly helps the
socialization process, assimilating trainees easily into the NTPC culture and systems. It has also helped in
tackling work-related stress and given a lot of personal benefi ts to the mentors, besides providing
opportunities to the mentors to get fresh and creative ideas and perspective on technical and other issues
which the young trainees pass on to them in the course of their interaction.
A perception survey amongst the mentors and the mentees, conducted through structured questionnaires,
brought out the results given above. Besides getting good feedback on the effectiveness of the system and
the implementation status, a few action areas have also emerged from the survey, which were incorporated
for improving the system.
Conclusion
NTPC’s commitment for building talent through a multi-pronged strategy is paying rich dividends.
Mentoring—one of the initiatives launched for guiding, directing and counselling the young recruits—has
contributed in enhancing their commitment level and in this process achieved its intended purpose. Overall,
this HR initiative has been successful in integrating and assimilating the new executives in the culture and
value system of the organization. It has also provided the new entrant a friend, philosopher and guide to
share his pains and pleasures and show him the right way in professional as well as personal life.
This process can vary; with personal projects and personal development plans at one end of the continuum,
and an organization-wide self-managed learning programme at the other.
Keywords
Mentor: A mentor is an experienced manager who provides guidance to the junior manager or professional
and facilitates his/her personal development.
Mentoring: Mentoring is a fundamental form of human development where one person invests time, energy,
and personal know-how assisting the growth and ability of another person.
Performance monitoring: Performance monitoring may be defined as the process of appraising an
environment of continuous learning and development, maintaining the employee’s performance,
enhancing individual competencies to make them more productive for the organisation.

Performance Counselling
Summary
Performance Counselling is quite often misunderstood. It is wrongly interpreted as a process of correcting or
controlling the employee behaviour by giving him negative feedback in an assertive manner by his boss.
It is advisable to have performance counselling discussions quite frequently depending upon the needs of
each appraise and the time availability of the counselor. In fact, the more attention a manager pays to

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counselling his subordinates, the more time he is likely to gain in the long run as a result of improved
capabilities of his subordinates.
Counselling is a means and not an end in itself. Development does not occur just because there is
counselling.
Counselling could be an effective instrument in helping people integrate with their organization and have a
sense of involvement and satisfaction.
Keywords
Influencing: Infl uencing would mean making an impact on the person in relationship.
Performance Counselling: In this, the counselor initiates the discussion as a part of an appraisal system or as a
part of some processes that take place in the organization.

Performance Management Implementation

Performance management is a broader concept which includes the performance planning, performance
appraisal, monitoring and performance evaluation.
It would be very difficult to effectively manage the human resource without an instrument that measures its
effectiveness and capability.
For effective utilization of human resource the organizations need a sys tem that can identify the capabilities
and performance of its human capital so that they can deal with performance problems and encourage
performance excellence.
Keywords
Performance oriented work culture: Performance oriented work culture means launching a variety of
improvement efforts, including designing high-performance work systems.
KPI: Key Performance Indicators

Organisational Change through

Organizations cannot stay/sustain the pressure of competition unless environment ignites creativity,
conserve/nurture ideas and translate the ideas into action.
The leaders of any large-scale organizational change quickly learn that it’s not enough to develop a new
and improved set of strategies, structures and work processes.
A high performance team is a group of individuals working together in harmony to achieve what others
might think of as the impossible.
Culture is a term that is used regularly in workplace discussions
Building a strong performance culture facilitates the organisations in improving the performance and
financial results of the organisation.
Keywords
High performance team: A high performance team is a group of individuals working together in harmony to
achieve what others might think of as the impossible.
Organisational culture: Organisational culture may be generally described as a set of norms, beliefs,
principles and ways of behaving that together give each organisation a distinctive character.
Performance Culture: It refers to an organisational culture where performance is one of the core value.

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Performance Management Linked Reward System
Performance and results are important but concern for people, their well-being and fairness of treatment is
equally important. If organisations want to attract high performers and retain and motivate the high
performer, they have to be willing to reward excellent performer highly.
Designing performance linked reward system is conditioned by a variety of factors; such as, nature of
business, type of technology, the attitude of unions, and human resource strategy of organisation.
Non-compensation rewards are important component of reward system that is critical for improving
workplace performance.
Organisations have to seek answers to 4 basic questions while designing a reward system: who should be
rewarded, what rewards should be given, how should employee assessment be done and how rewards
should be given.
Employees who perform well receive larger compensation increase; those who do not perform satisfactorily
see little or no increase in compensation.
A performance orientation requires a variable pay approach in which pay goes up or down based on a
measure of performance. Not everyone in the same job will be paid exactly the same, and not everyone will
like the approach.
Variable performance in the pay is a fi nancially measurable reward paid to an individual based on his
overall performance. This measure includes the cumulative performance of the individual, his strategic
business unit and that of the organisation.
Keywords
Fixed Pay: It is a reward that is fi xed, irrespective of the performance.
Goalsharing: These plans pay bonuses when performance is above a standard.
Group Incentive Schemes: They provide for payment of bonus either equally or proportionately to individual
within a group or team.
Profit Sharing: It means paying employees a share of the net profi t in addition to their wages or salary.
Variable Pay: It is a financially measurable reward paid to an individual based on his overall performance.

Ethics in Performance Management

The major concern of performance management is performance improvement in order to achieve
organizational, team & individual effectiveness
A performance management system should work on principles of ethical considerations leading to
transparency and respect for all.
Ethics is a system or code of moral standards of a particular person, group or profession.
An ethical performance management system is designed to make transparency in its operation. All the
parties involved in performance management system respect each other’s needs, values, and
preoccupations.
The HR professionals are responsible for developing and maintain the code of ethics for performance
management in the organisation.
MNCs operate in a number of countries for various business and competitive reasons.
Effective performance management is important as a competitive advantage. Therefore, performance
management system assumes critical importance in the competitive priority of MNCs.
Keywords
Corporate ethical programme: A corporate ethics programme is made up of values, policies, and activities
which impact the propriety of organisation behaviour.’
Ethics: Ethics is a system or code of moral standards of a particular person, group or profession.
MNC: MNC is a company that has business activities beyond its domestic borders.

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Role of HR Professional in Performance Management
HR professionals play an important role in designing a performance management system in the
organisations.
Successful organizations are becoming more adaptive, resilient, quick to change direction and customer-
centered.
The objective of the HR function is to provide a favourable and supporting climate and appropriate systems
to align the human performance with business strategies of the organization.
Performance counselling is a manager initiated strategy for improving an employee’s performance.
Managers with good counselling skills can get that kind of performance from their employees by using the
tools of counselling.
The key differentiator between the successful and unsuccessful organisations is the effectiveness of
knowledge-worker.
Keywords
Competitive advantage: Competitive advantage is an advantage over competitors gained by offering
customers great values, ethics by means of lower price of by providing greater benefi t sand services.
Performance counselling: Performance counselling is a manager initiated strategy for improving an
employee’s performance.
Performance scorecard: Performance scorecard enables the leadership to determine how effectively HR is
leveraging on human capital, as well as mobilize and galvanize the people within the organization in terms
of four perspectives-qualities, cost, delivery, and responsiveness.

Introduction to Training and Development Notes CONTENTS

Training is an organised procedure which brings about a semi-permanent change in behaviour, for a definite
purpose.
The three main areas involved are skills, knowledge and attitudes.
The significant objectives of training includes Meeting manpower needs, Reduced learning time, Improved
performance, Reduced wastage, Less absenteeism and Fewer accidents.
The beneficiaries of training are Organization, Employees, Personnel and human relations.
All the industrial organizations realized the importance of training their employees for better production and
for improved productivity.
With the introduction of computers there is a need for training, retraining and redeploying employees in
industrial establishments.
The role of Trainer and the trainee is the most important for the success of any training programme, The
trainee is a major stakeholder in a training programme.
Training is influenced by trends in other disciplines, demographics, politics, technology and a number of
other domains.
Training and development professionals need to consider their beliefs about HRD’s role in a global context,
particularly if their individual focus has been more local or national.
Keywords
Development: The activity that focuses upon the activities that the organization employing the individual, or
that the individual is part of, may partake in the future, and is almost impossible to evaluate.
Education: Education is the process of increasing the general knowledge and understanding of employees.
Knowledge: It is a familiarity with someone or something, which can include information, facts, descriptions,
and/or skills acquired through experience or education.
Skill: A skill is the learned capacity to carry out predetermined results often with the minimum outlay of time,
energy, or both.

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Training: Training is an organised procedure which brings about a semi-permanent change in behaviour, for
a definite purpose and focus upon the job that an individual currently holds.

Strategic Training

The global competition and the country’s ambition to join ranks with the developed countries require that, its
existing approach to development and training undergo fundamental change.
Strategic training is a part of an ongoing process of professional development or simply about learning
specific skill.
The steps in the strategic training and development process are Organizational Objectives, Needs
Assessment, Finding Gap, Training Objectives, Select the Trainees, Select the Training Methods and Mode,
Choose a Means of Evaluating, Administer Training and Evaluate the Training.
The key organizational forces that drive the successful transfer of training are: Peer support, Supervisor
support, Trainer support, Climate, Culture and Rewards systems.
Training needs in different strategies are available for use in employment contexts includes Strategic Context
analysis, Strategic User analysis, Strategic Work analysis, Strategic Content analysis, Training suitability analysis
and Cost-benefit analysis.
An analysis of the business needs or other reasons the training is desired in respect with whole of
organisational strategy.
The three model of organizing training are: System Model, .Instructional System Development Model and
Transitional Model.
Dave Ulrich Model as a strategic framework for managing competitive environment consist of four aspects
which are Change Management, Organisational Diagnose, Personnel Care and Administrative Expert.
Outsourcing in training could be total or in part. In total outsourcing, the company has to do just two things
namely nominating the trainers and paying the training fees.
Partial outsourcing becomes inevitable when the organization has some training resources but doesn’t have
all the required resources.
Keywords
Apprenticeships: This means involvement of several related groups of skills that allow the apprentice/trainee
to practice a particular trade, and it take place over a long period of time.
Internships and Assistantships: These are usually a combination of classroom and on-the-job training used to
train prospective managers or marketing personnel.
Job Rotation: It involves moving an employee through a series of jobs so he or she can get a good feel for
the tasks that are associated with different jobs.
Simulation: These are training techniques that attempt to bring realistic decision-making situations to the
trainee.
Strategic Context Analysis: An analysis of the business needs or other reasons the training is desired in respect
with whole of organisational strategy.

Needs Assessment
A training need is the gap between the knowledge, skills and attitudes required and the knowledge, skills
and attitudes already possessed by the trainee.
Training Needs Assessment provides information on where training is needed, whatcontent of the training is
needed, what the content of the training should be, and who within the organisation needs training in
certain kinds of skills and knowledge.
The methods or techniques of Training Need assessment are Training Need Survey, Competence Analysis,
Performance Analysis, Group Dynamism Analysis, Feed back and Management Decisions

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In micro training need assessment, the individual and group training needs are generally viewed
Macro Training need assessment approach exists in a large group of employees or when new entrants
performance is to be analysed in a large group.
The data needed falls into the following major categories which are: (a) Data to define the need, (b) Data
to identify the solution, (c) Data to specify those needing training and (d) Data to provide the planning
details for delivery of training.
The major steps of the needs assessment model are Determine the Purpose and Objectives, Identify the
Kinds of Information Needed, Design the Data-Gathering Approach, Gather Data, Analyse and Verify Data
and Set Training Priorities.
The training needs exist at the three levels which includes Individual needs, Occupational needs and
Organisational needs.
Organisational analysis is study of entire organisation in terms of objectives, resources, utilisation of resources,
in order to achieve stated objectives and pattern of interaction with environment.
Operational analysis is a detailed examination of a job, its components, its various operations and conditions
under which it has to be performed.
Keywords
Environmental Scanning: The examination of economic, political, socio-cultural and technological
environment of the organisation.
Manpower Analysis: The study in which the focus is on the individual in a given job.
Organisational Analysis: It involves a study of the entire organisation in terms of its objectives, its resources,
the utilisation of these resources, in order to achieve stated objectives.
Task Analysis: This is a detailed examination of a job, its components, its various operations and conditions
under which it has to be performed.
Training Need: It is the gap between the knowledge, skills and attitudes required and the knowledge, skills
and attitudes already possessed by the trainee.

Training Design
Training design is a training plan, which basically involves three activities namely, stating training objectives,
identifying learning activities as well as methodologies, and sequencing.
Finding the balance between too much and too little information is the key to designing the most effective
training system for your company.
The design of the organisational training and development plan should be used as a general guide to
accomplish specific goals.
A properly designed training programme aids the learning, development and improvement of the
performance of individual employees, which ultimately results in organisational development of
performance.
The vital considerations for designing of the effective training programme is suitable Organisational climate
for training.
Depending upon the organisational objectives, future plans and the priorities of the programmes; the
budget are allocated for HRD activities.
The cost can be direct cost or/and indirect cost incurring in training of HRD activities.
The effectiveness of training design depends upon training manager’s education and experience in
general, specific knowledge of organization, work domain, and performance problems.
The outcomes of design include: Operational Design of On-the-job Training, Material design, Types of training
approach and Operational Design of Off-the-job Training.
Keywords

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Apprentice Training: The training programme in which new employees follow the lead of an experienced
employee in order to learn new skills and to learn how to function properly in the job.
Person Analysis: It is the identification of people in the company that need training.
Task Analysis: A task analysis is a process of identifying what skills and activities need to be taught.
Training Climate: A training climate is a combination of ambience, tone, feelings and perception for training
program.
Training Design: It is a detailed sketch for what you will do, why you will be doing it, and the best ways to
reach your training objectives.

Training Implementation
Implementation involves a series of activities, through which training managers bring the course to learners in
accordance with approved design.
Implementation requires scheduling of courses, faculties, equipments and service providers apart from
arranging for ongoing classroom support, and ensuring the smooth flow of activities as per the plan.
A programme can be implemented in three major ways, namely, by buying (i.e. outsourcing) the
programme or making it (i.e. conducting in-house) or by a mixture of outsourcing and making yourself
functions which can be called as blended or hybrid approach.
The entire gamut of implementation activities can be classified into blocking the dates, mobilizing the
resources, managing the contingencies and executing the programme.
The excellence in execution occurs if all the planned activities come live in action on all the training days,
i.e., confirmed trainees and trainers turn up for the programme, the training hall and laboratory facilities are
available, the service providers render the services and the desired learning occurs as per the plan.
The seating arrangement for training should be flexible enough to rearrange them easily for different
activities like individual assignment, group discussion, etc.
Time management is very critical. Never hesitate to inform the trainer in advance the constraints of time.
If any trainer continues the session beyond allotted time, it is necessary to intervene by showing a red flag to
him or by sending message on a piece of paper to stop.
Keywords
Breakout Rooms: These are small rooms for up to 10 people measuring about 200 to 300 square feet located
adjacent to training hall.
Competency Mapping: It refers to studying the behaviours of successful and unsuccessful trainers in similar
industry and context to determine what to look for in the candidates while selecting them for trainer roles.
Job Description: It is the description of duties, responsibilities, reporting relations, level in the organizational
hierarchy and the conditions under which the task has to be performed.
Job Specification: It describes the qualification, experience, personality type and other characteristics
required for the candidate to occupy the post.
Vacancy Identification: It is concerned with identifying the need for hiring trainers.

Learning Theories
Learning occurs within each individual as a continual process throughout life.
Learning theory may be described as a body of principles advocated by psychologists and educators to
explain how people acquire skills, knowledge, and attitudes.
The various learning theories are: Behaviourism theory, Cognitive theory, Combined approach and
Facilitation theory.
A consideration of why people forget may point the way to help them remember. Several theories account
for forgetting, including disuse, interference, and repression.

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Modern work on human learning and memory focuses on the cognitive processes people use in storing and
retrieving information.
Transfer of learning refers to how much or how well the new knowledge, skills, and attitudes acquired during
training actually result in on-the-job behaviour change.
Learning principles are the guidelines to the ways in which people learn must effectively. These principles are
participation, repetition, relevance, transference, and feedback.
Training and Development SystemThere is the teachable moment in adult training. The sequence of the
curriculum must betimed so as to be in step with his development tasks.
According to the behavioural scientists, effective learning takes place through active participation. The
learner has to respond.
Keywords
Behaviourism: The learning theory that stresses the importance of having a particular form of behaviour
reinforced by someone, other than the trainee, to shape or control what is learnt.
E-Learning: It is the use of technology to enable people to learn anytime and anywhere and includes
training and delivery of just-in-time information.
Learning Curve: It is a graphical representation of the changing rate of learning.
Learning Principles: Learning principles are the guidelines to the ways in which people learn must effectively.
Programmed Learning: Learning technique characterized by self paced, self administered instruction
presented in logical sequence and with much repetition of concepts.

Learning in Training
Learning is concerned with bringing about relatively permanent changes as a result of experience.
The types of learning situation are (i) classical conditioning, (ii) operant conditioning, and (iii) cognitive
learning.
Training costs are unjustified if the participant does not, for whatever reason, use his learning in his work, or if
he has failed to understand how the classroom experience relates to his job.
The trainee’s learning from a formal classroom situation depends upon: (i) The trainee’s receptiveness; (ii) The
trainee’s rapport with the trainer and (iii) The climate of training.
The effectiveness of learning can be defined in terms of learning being quick and sustained,effectively used,
leading to creativity, and the development of a capacity for self-learning.
The most complex form of learning takes place when training is concerned with the attitudes and values of
people. This is not only the most complex area, it is also the most difficult and dangerous.
The various elements involved in the process of learning are, (i) the training/teaching organization, (ii) and
the technology of training/learning, (iii) the trainer/teacher and, (iv) the learner.
Factors Affecting the Learning Process are Knowledge of results, Length of learning sessions, Logical
sequence, Repetition, Association of Ideas and Transfer of learning.
The purposes that feedback serves is to support behaviours exhibited by the learner to encourage learner
behaviour and to correct or improve poor performance exhibited by the learner
For feedback to be effective the aspects of sincerity professionalism and correctiveness must be present in
the feedback.
Keywords
Cognitive Learning: Situations where information is stored and processed by mind without explicit
manipulation of reinforcers is called cognitive.
Feedback Balance: Feedback balance refers to the relative amounts of positive and corrective feedback
given to the learners.
Learning: Learning can be defined as any relatively permanent change in behaviour which occurs as a
result of practice or experience.
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Specific Feedback: The feedback in which learner knows exactly what behavior is appropriate or
inappropriate.
Vague Feedback: Feedback that makes people confused about what they did.

Training Methods Notes

The development of operatives calls for specific increase in skill and knowledge to perform a particular job.
There are primarily four basic methods in use: (a) on-the-job training, (b) vestibule school, (c) apprenticeship,
and (d) special courses.
Presentation Methods includes demonstration method, Lecture and Training with Magic.
Buzz session is a technique for involving every member of a large audience directly in the discussion process.
Hands-on training helps console new employees by showing them what their job will be like.
The Hands-on Training Method Prepare, Open, Present, Practice, Evaluate and Review the training programs
in order to attain the best productivity.
The on the job training/hands on training methods include Job instruction training, Job rotation, Syndicate
groups, Mentoring and Apprenticeship.
Group Building Methods of training include Committee assignments, Discussion Method, Debate and Fish
Bowl Exercise.
The main factors to be considered during the selection process of the training methods are the human
factors (trainer, trainees), the programme topic, the available time and facilities.
Keywords
Debate: It is essentially a structured but cordial argument about a particular issue or motion.
Job Rotation: It is a training method that assigns trainees to various jobs and departments over a period of a
few years.
Lecture: It is a traditional, formal method of instruction, and usually consists of verbal explanation or
description of the subject matter, with or without illustration.
Mentoring: It is an ongoing relationship that is developed between a senior and junior employee which
provides guidance and clear understanding to the junior employee.
Panel: It is a group of four to six persons with a special knowledge of a subject holding an orderly
conversation on an assigned topic in full view of the audience.

Trainer’s Style
A trainer is require to possess Technical, Business, Interpersonal and Intellectual competencies.
The trainer’s skills consist of Communication skills, Presentation skills and Questioning skills.
The significant trainer’s styles are Unique style, Appropriate: style and Flexible: style.
Change or learning has to be introduced slowly as rapid leaning does not yield positive results. Thus, trainer’s
style should be flexible enough to give necessary space to individual needs, and training needs.
Trainer Grid is the framework that is typically exhibited during training delivery.
Trainer credibility is extremely important because it reinforces the importance of the training to the learners.
Trainer Grid comprises the components of Personal Conduct:, Social Practices and Content Expertise.
The different roles of trainer are: The Trainer as Planner, The Trainer as Guide The Trainers as a encourager of
objectivity and creativity.
The trainer also encourages objectivity through work procedures, such as tape playback, a process
observer, or post-meeting reaction sheets. The appropriate identification of training needs, designing of the
training programme, effective and appropriate planning and coordination.
Managing the learning environment is an important training delivery competency. It is the competency that
is typically exhibited during training delivery.
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Keywords
Challengers: These are the learners who question the value of the material, the trainer, or the learning
environment
Communication: It can be understood to mean a dynamic, two-way process whereby information is
transmitted and received.
Eager beaver: A participant who thinks he knows all the answers and wants to demonstrate his knowledge to
others in training program.
Hermits: These are the individuals who do not attempt to participate in the training.
Non-verbal communication: Communication that includes visibly observable behaviours between people
that convey meaning without the use of written or spoken words.

Training Evaluation
Evaluation of training is an attempt to obtain information on the effects of training programme and to assess
the value of training in the light of that information for improving further training.
The trainer should be fairly clear of: Why to evaluate, When to evaluate, what to evaluate and How to
evaluate?
The evaluation process is segregated into Pre-training Evaluation, Evaluation during Training and Post-
Training Evaluation.
Post-Training evaluation i.e. determining outcomes comprises of two aspects which are Reaction Evaluation
and Learning Evaluation.
Various techniques for training evaluation are questionnaires, Tests, Interviews, Studies, Human resource
factors and cost benefit analysis.
The various models of evaluation are Hamblin Model of Evaluation, Kirkpatrick’s Design of Evaluation, Warr’s
Framework of Evaluation, Virmani and Premila’s Model, Peter Bramely’s Model of Evaluation and David
Reay’s Approach to Evaluation.
The rationale of training audit is to study the effectiveness of key training programs in terms of their program
contents, pedagogy, duration and effectiveness.
The Methodology of training audit includes the combination of Focused group, Questionnaire & interview
method.
Use of tangible economic indices for evaluating training can definitely strengthen the hands of the trainers
and in turn improve the organisational commitment to its human resource development.
Keywords
Fixed Cost: These include the costs which are reasonably permanent and regular and fixed over a period of
time, say a year.
Rating Scales: These are forms on which, at the end of each training session/programme, trainees are asked
to place on a number of five point scale.
Notes Skills Analysis: Analysis that provides techniques for repetitive manual operations and taskanalysis for
non-repetitive managerial and social jobs.
Work Analysis: studying the workflow activities, context and output of a job.

E-Learning
E-learning means the delivery of a learning programme by electronic means.
E-learning can be classified as synchronous and asynchronous learning—the terminology to describe how
and when learning and teaching takes place.
In the synchronous approach, learning and teaching takes place in real time (same time) even though the
trainer and learners are physically separated from each other (place shift).

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In the asynchronous approach, the learning takes place with time delay (time shift) as well as the trainer and
learner being physically separated from each other (place shift).
Several reasons why e-learning is gaining significance. are, learner friendly technology, networked
environment, geographically distributed workforce and the challenges of work- life balance.
The e-learning programme process involves needs identification, programme design, infrastructure and
programme development, launching and evaluation.
The major advantages of e-learning are that it takes learning to the learners rather than calling them to the
training centre, it can occur at any time at any place depending upon the convenience of the learner.
E-learning will not render the traditional trainers jobless by its revolutionary growth. Rather, it provides new
avenues for the trainers to explore newer possibilities in the profession
Blended learning is an approach that combines e-learning with other traditional methods of training for
delivering a learning solution.
Keywords
Asynchronous Approach: The type of e-learning in which the learning takes place with time delay as well as
the trainer and learner being physically separated from each other.
Blended Learning: It is an approach that combines e-learning with other traditional methods of training for
delivering a learning solution.
E-learning: It means the delivery of a learning programme by electronic means.
E- Trainer: A guide will provide all you need to make your first steps with e-learning as an e-teacher,
Synchronous Approach: The type of e-learning in which learning and teaching takes place in real time even
though the trainer and learners are physically separated from each other.

Technology in Training
Multimedia materials and learning environments can modestly be considered the combination of print and
images, but generally involve streaming video, music, instant messaging, or interactive online features.
Computer Based Training traditionally is divided into Computer Assisted Instruction (CAI) and Computer
Managed Instruction (CMI).
Simulation has been characterised by an attempt to imitate and create plausible dimensions of reality
based on an understanding of the interrelationships governing it.
Simulators are devices that can replicate the conditions and experience of an actual job.
Mobile technology consists of Wireless transmission systems, Mobile devices and Software applications
Intelligent tutoring systems are instructional systems that use artificial intelligence.
The technologies for Training Administration includes Interactive voice technology,Imaging and Training
software applications.
Learning management system are the Systems for Training Delivery, Support, and Administration.
Keywords
Expert Systems: A technology that organizes as well as applies the knowledge of human experts to specific
problems.
Intelligent Tutoring Systems: These are instructional systems that use artificial intelligence.
Learning Management System (LMS): It is a technology platform that can be applied to automate the
administration, development, and delivery of all of a company’s training programs.
Simulators: They are devices that can replicate the conditions and experience of an actual job.
Video: It is a dynamic or moving content which has the advantage of incorporating motion picture as well
as sound.

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Management Development
Management training is not a “one-shot” affair but continues throughout an executive’s whole professional
career.
The skills that a manager requires are of three types which are technical, human and conceptual.
The primary objectives of executive development are to provide adequate leaders; to increase the
efficiency of performance of existing executives and to serve as a means of control in operations.
Managerial obsolescence may be due to redundancy, mergers and takeovers, reorganisations, change in
technology, products and trade and individual causes.
The two types of approaches by which managers can acquire the knowledge, skills and attitudes and make
themselves competent managers are formal training and on-the-job experiences.
Stage in planning a management development programme are Organisational Planning, Programme
targeting, Ascertaining key positions requirements, Managerial appraisal, Replacement of skills inventories,
Planning individual development programmes and Appraising existing programmes ??Management
Development process.
Management development is a systematic process of growth and development by which managers
develop their abilities to manage.
Organisational climate comprises the conditions in which the management guides the development and
growth of the people at all levels by training, counselling, delegation and communication.
The job is performed within an organisational environment, and such required organisational knowledge can
be obtained through position orientation and multiple management.
Keywords
Conceptual Skills: Skills which make it possible for a manager to consider an enterprise as a whole and
evaluate the relationships which exist between various parts or functions of a business.
Human Skills: It refer to the ability to work effectively with others on a person-to-person basis, and to build up
co-operative group relations to accomplish the organisational goals.
Job Rotation: The transferring of executives from job-to-job and from department-to-department in a
systematic manner is called Job Rotation.
Organisational Climate: The conditions in which the management guides the development and growth of
the people at all levels by training, counselling, delegation and communication.
Technical Skills: Skills which enable a manager to use effectively techniques, methods, processes and
equipment in performing specific jobs.

Contemporary Issues in Training and Development

The external environment areas of change, which have major impact on organisations, fall into four main
categories which are economic, political, social and technological.
The various aspects of training issues consequential from internal need of the company are Interpersonal
relationship, Supervision, Communication, Managing problems, Decision-making and Trust.
The six motives for organisational climate are considered important for effective functioning of employees of
an organisation and in determination of training needs are Affiliation, Achievement, Dependency, Extension,
Control and Expertise.
Creating dual career paths involves preparing employees to do well and be rewarded without necessarily
being on a management or vertical organization career path.
A career plateau occurs when an employee is in a position that he does well enough not to be demoted or
fired, but not so well that the person is likely to be promoted.
Career breaks can facilitate employers retain skilled and experienced staff. They can provide a pool of
trained, committed employees to provide cover up during busy periods or staff absence.
Balance in work and life can be achieved by focus on time and attention on things you can control.

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The balance in work and life can be developed through the practices of Developing positive thinking,
Interpersonal effectiveness and Motivation.
Computer Aided Design (CAD) training is the order of the day and training in these new areas must be
adequately developed.
The interactive TV. Computer assisted learning is gaining popularity and for busy executives, as all
information they need is available almost in the form of a training sandwich.
Keywords
Affiliation: Affiliation is a climate in which people strive for friendly, warm and affectionate and personal
relationship.
Career breaks: These are employment breaks or extended periods of leave which are usually unpaid and for
particular purposes.
Career plateau: A situation that occurs when an employee is in a position that he does well enough not to
be demoted or fired, but not so well that the person is likely to be promoted.
External mobility: It refers to movement of an employee from one organisation to another seeking better
placement based on his skills and the requirements and needs of various organisations.
Sabbaticals: A type of career break or extended leave which some companies use to reward employees for
long service.

Introduction to Organisation Development

Organisation development is a contractual relationship between a change agent and a sponsoring
organisation entered into for the purpose of using applied behavioral science in a systems context to
improve organisational performance and the capacity of the organisation to improve itself.
Organisation Development (OD) is one of the most significant developments in the field of organisational
behavior in recent years. OD began to evolve as a distinct field of study in the 1940s when behavioral
scientists in the US and Britain made efforts to resolve problems facing modern organisations.
OD has been defined in different ways by different behavioral scientists and applies the knowledge and
practice of behavioral science to improve the effectiveness of organisations.
OD has four prominent approaches: laboratory training, survey research and feedback, action research,
and sociological and socio technical approaches.
The field of OD rests on foundation of values and assumptions about people and organisations. The beliefs
help to define what OD is and guide its implementations.
The OD values were considered revolutionary and are widely accepted today.
Keywords
Change Agent: A behavioral scientist who knows how to get people in an organisation involved in solving
their own problems.
Organisation Development (OD): A planned approach to improve employee and organisational
effectiveness.

Nature of Planned Change

The OD literature has directed considerable attention to leading and managing change.
The planned change does not come automatically; rather there are many forces in individuals, groups and
organisation which resist such change.
The change process will never be successful unless the cooperation of employees is ensured. Therefore, the
management will have to create an environment in which change will be amicably accepted by people. If
the management can overcome the resistance the change process will succeed.

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In a group process, there are always some forces who favor the change and some forces that are against
the change. Thus, equilibrium is maintained. Kurt Lewin calls in the “field of forces”. Lewin assumes that in
every situation there are both driving and restraining forces which influence any change that may occur.
Driving Forces are those, forces, which affect a situation by pushing in a particular direction. These forces
tend to initiate the change and keep it going. Restraining Forces act to restrain or decrease – the driving
forces. Equilibrium is reached when the sum of the driving forces equals the ‘sum of the restraining forces.
Keywords
Change Agent: Person who attempts to alter some aspects of an organisation or an environment.
Magnitude of Change: Minute alterations in the operation, to quantum change.
Unfreezing: The forces, used for maintaining the status quo in the organisational behavior, are reduced by
refuting the present attitude.

Models of Change
An effective planned change effort is characterized by some common characteristics, which distinguish it
from unplanned changes. There are some prerequisite conditions for successfully carrying out effective
change programme.
An organisation-wide change usually requires a ‘System Model Framework’ that describes the organisation
as six interacting variables that serve as focus of planned change: people, culture, task, technology, design
and strategy. These variables are interdependent.
The complex interplay of forces of change as described and discussed by Kurt Lewin in his ‘Force field
Theory’ helps us to understand how the change process works.
The change according to this model is brought out with a three step process, unfreezing, changing and
refreezing. A planned change from the perspective of top management through the ‘Continuous Change
Process Model’ indicates that change is continuous.
The ‘Transition Management Model’ specifically related to large scale organisation change suggests that
four interlocking management process must take place both to implement and sustain major organisational
change. The layers at which these operate are: trigger layer, vision layer; Conversion layer and maintenance
and renewal layer. A developmental theory by Larry E. Griener examines the issues of change in a new or
emerging organisation.
It argues that growing organisations move through five relatively calm periods of evolution, each of which
ends with a period of crisis and revolution.
According to Greiner, “each evolutionary period is characterized by the dominant management style used
to achieve growth, while each revolutionary period is characterized by the dominant managerial problem
that must be solved before growth will continue.”
Keywords
Culture Variable: The culture variable reflects the shared beliefs, values, expectations, and norms of
organisational members.
People Variable: The people variable applies to individuals working for the organisation, including their
individual differences – personalities, attitudes, perceptions, attributions, needs and motives.
Refreezing: It makes new behavior relatively permanent and resistant to further change.
System Model of Change: The System Model of change describes the organisation as six interacting
variables that could serve as the focus of planned change: people, culture, task, technology, design, and
strategy.

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Power, Politics and Ethics in OD
The present unit discusses the power and control issues in the organisations.
Two faces of power, the positive and the negative have been identified along with the requisite conditions
for the use of power and politics in business organisation.
Different approaches to understand the sources of power have been highlighted.
The concept of organisational politics which is associated with decision making, resource allocation and
conflict resolution processes has been discussed. Implication of power and politics for the practices of OD
have been diagnosed and discussed.
Ethical dilemmas faced by OD practitioners may affect the effectiveness of the OD program if not clarified
in the initial stages.
Some major categories of ethical dilemmas at the point of choice of intervention, use of information,
withholding of services, client dependency, choice of participation and client manipulation have been
highlighted.
Keywords
Coercive Power: Power based on the ability of the power holder to punish other, i.e., to give something
negatively valued by the other.
Expert Power: Power based on the power holder possessing expert knowledge or expertise that is needed by
the other. Informational power is a form of expert power where the power holder possesses important facts
or information needed by the other.
Legitimate Power: Power based on the fact that everyone believes that the power holder has a legitimate
right to exert influence and that the power-receiver has a legitimate obligation to accept the influences.
Referent Power: Power based on the power-receiver having an identification with (attraction to, or feeling of
oneness with) the power holder.
Reward Power: Power based on the ability of the power holder to reward another, i.e., to give something
valued by the other.

Diagnostic, Action and Process

In nutshell, OD process involves number of steps which are usually taken in the process of bringing about
change. It starts from recognition of need to the final evaluation and improving the organisation to renew
and restructure.
This would be only possible with the culture of formal work teams and with the assistance of change agent
and technology of applied behavior science including action research.
The philosophical and pragmatic values underlie action research.
The first is that programs designed to solve real problems should be based on valid public data generated
collaboratively by clients and consultants. This belief calls for actions to be based on diagnostic research-an
action-should-follow-research mode of thinking.Or, to state it, another way, diagnose the problem situation
and base actions on that diagnosis.
The second value is that action in the real world should be accompanied by research on that action in
order to build a cumulative body of knowledge and theory of the effects of various actions directed to
solving real-world problems-a research-should-follow-action mode of thinking. Only if we systematically
evaluate (do research on) actions can we know the real effects of these actions. And only if we
systematically build a body of knowledge can we build better social science theories.
Thus actions to solve real-world problems offer a unique opportunity for both the scientist- researcher and the
administrator-layperson if they approach the problems from the standpoint of the action research model:
the administrator’s problems will be solved, and the scientist’s quest for theory and empirical validation of
theory will be solved.
Thus we conclude that the applied behavioral science discipline of organisation development is fertile
ground for action research projects.
Keywords
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Appreciative Inquiry: A contemporary approach to planned change.
Change Agent: A person who attempts to alter some aspect of an organisation or an environment.
Evaluation Feedback: Information about the overall effects of a change programme.
Intervention: Any action on the part of a change agent.

Components of OD –Operational and Maintenance

The unit discusses the three components – diagnosis, interventions and programme management critical to
all organisations development programme. The more people learned about these three components the
more effective they will become in their organisational improvement efforts. OD is a complex blend of art,
science and craft gained through the study of these three components.
Keywords
Diagnosis: The process of collecting information about a client system and working collaboratively with the
client to understand the system’s current functioning.
Evaluation: Information about the overall effects of a change programme.
Feedback: Information regarding the actual performance or the results of the activities of a system.

OD Intervention
This unit examines the various components of an OD process i.e., the diagnostic component, action or
intervention component and the process-maintenance component.
The diagnostic component tries to find out about the original state of the system and how the remedial
action plans could affect them.
The action or intervention component refers to the various OD interventions which try to improve the
effectiveness of the organisational functioning.
The various OD interventions are discussed
The different classifications of the OD interventions are also discussed in details and how these interventions
are targeted towards individuals, groups and organisation itself with an objective to improve organisational
effectiveness.
Keywords
Process Consultation: A set of activities on the part of the consultant.
Structure: Arrangement of a system’s parts.
Survey Feedback: A type of data based intervention that flows from surveys of the members of a system on
some subject.
Team Building: The processes of helping a workgroup become more effective in accomplishing its tasks.

Team and Group Intervention

This unit contains the description of the OD interventions, its classification.
In addition to this light has been thrown on the understanding of teams, team-building interventions because
team building produces powerful positive results and it is an intervention in harmony with the nature of
organisation as a social system.
In teams members are interrelated to each other and must coordinate and integrate individual efforts in
order to achieve successful task accomplishments.
It is discussed and analysed that team building interventions are at the centre of OD activities some
emphasis has been laid on the intergroup and third party peace making interventions and to learn how
these interventions actually reduce intergroup and interpersonal conflict and improve relationships.
Keywords

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High Performance Teams: Strong extension of the basic characteristics of the teams.
Team Interventions: Working with the cross-functional, self-managed and high performance teams.

Comprehensive Intervention
Comprehensive OD interventions are very much visible in the contemporary OD practice.
Some like Beckhard’s confrontation meeting and strategic management activities involve all of top
management or in case of smaller organisations, the entire management group.
Future search conferences tend to involve a wide spectrum of organisational members.
Appreciative inquiry focuses on the strengths of the organisation and what is most valued by its members.
Transorganisational development is aimed at assisting organisations in forming and developing alliances.
Like all OD interventions these comprehensive interventions must involve a collaborative effort between
client organisations and the consultants in both diagnosis and interventions.
Keywords
Confrontation Meeting: A structured intervention that help two groups resolve interdepartmental
misunderstandings or conflict.

Structural Intervention
The unit covers the various selected structural intervention and shows the differences and similarities as well
as the overlap between Socio Technical Systems (STS), self managed teams and others as discussed in the
unit.
Applications are properly called OD to the extent that the latter is true: it is used by the ODpractitioners but it
is expected that OD label would not be applied whenever structural interventions are carried out without
the attention to the social system or to humanistic values.
Keywords
Quality of Work Life: A way of thinking about people, work, and organisation.
Reengineering: An intervention that focuses on dramatically redesigning core business processes.
Socio-technical System: Considering both the social system (human) and the technical system
simultaneously, in order to match the technology and the people optimally.

Implementation and Assessment of OD

The unit has discussed in details the implementation and assessment of the OD interventions. OD
interventions are institutionalized when the change program persist and become part of theorganisation’s
normal functioning. Explanation of OD measurement and Research design has been described. The latter
part of the unit covers the detailed discussion on the prerequisites of OD success and briefly covers the
various OD interventions limitations and detailed information of the assessment of OD and change in
organisational performance-the factors and the methods are covered.
Keywords
Action Research: Cyclical process of diagnosis-change-research –change-research.
Evaluation Feedback: Information about the overall effects of a change program.
Quasi Experimental Research Design: The design involves choices about what to measure and when to
measure it.

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Issues in Consultant – Client Relationship
Numerous issues have to do with establishing the initial contract, identifying who is the client, establishing
trust, clarifying the role of the consultant determining the appropriate depth of intervention, examining the
consequent, is of being absorbed by, the organisation’s culture,
Issues such as viewing the consultant and consulting teams as models, applying action research to OD,
terminating the relationship, and ethical standards.
These issue important implications for practitioners, top management, and the organisation.
Keywords
Entry: The process that describes how an OD practitioner first encounters and establishes relationship with a
client system.
Microcosm Group: A small, representative group selected from the organisation at a large to address
important organisational issues.
Model: A simplification of some phenomena for purposes of study and understanding.

Mechanistic and Organic Systems

The unit has tried to cover the understanding of the system as an assemblage of things connected or
interrelated so as to form a complex unit.
The unit has also tried to cover the characteristics of the mechanistic and organic system and the
contingency approach in details.
The latter part of the unit discusses the major reasons of the failure of OD.
Thus we conclude that system approach posses the conceptual level of managerial analysis much higher
than any other approach.
Keywords
Differentiation: The extent to which individual organisational units are different from each other along a
variety of dimensions.
Functional: Those parts of the system that promotes the attainment of its goals.
Sub-system: A part of a system.

Future Trends in Organization Development

Organizations are focusing more effort on innovating—creating new products, goods, and services—and on
new ways of organizing and relating among organization members. The critical factor in changing
organizations is the development of trust within and between individuals, teams, and organizational units
and levels. Without trust, there can be no sustainable excellence with an organization. Organizations are
becoming ever more complex and are affected by competitors and conditions globally. A small machine
ship in Topeka, Kansa, is affected by another machine shop in Bombay, India. Conflict management has
become an important element in today’s complex organizations, and value and goal differences are
continuing problems. Future OD activities should include helping managers to diagnose conflicts and resolve
disputes. There are increasing trends towards greater diversity of the workforce, including multinational
corporations and a need for the integration of values and skills. Organization development is an expanding
and vital technology. A great deal was accomplished during its past growth, and certainly much more will
be done in the future. Ethical dilemmas, as approached from the perspective that such problems are
caused largely by the nature of the relationships between the change agent and the client system, is a term
that requires fuller elaboration. The intervention chosen must be appropriate not only to the problem, but
also to the context in which it exists. This context is influenced in parts by the political climate within the
organization, and by the organization’s perceived readiness for change. Those who need help are
dependent on the helpers. Thus, the client can either be counter dependent or over dependent, especially
in the early stages of the relationship.
Keywords

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Organization Transformation (OT): This recent advance in change strategies is used in situations of drastic,
abrupt change when the organization’s survival is at stake.
Reengineering: This fundamental rethinking and radical redesigning of business systems urges an overhaul of
job designs, organizational structures, and management systems.
Shared Vision: This approach to organizational change involves getting all levels of management to identify
the strategic vision of the future and what it takes to make it work.

Introduction to Global HRM Notes CONTENTS

Globalisation is the process of international integration arising from the interchange of world views, products,
ideas, and other aspects of culture.
Advances in transportation and telecommunications infrastructure, including the rise of the Internet, are
major factors in globalisation, generating further interdependence of economic and cultural activities.
HRM refers to those activities undertaken by an organisation to utilise its human resources effectively.
Even those organisations who consider themselves immune to transactions across geographical boundaries
are connected to the wider network globally.
Globalisation is the process of international integration arising from the interchange of world views, products,
ideas, and other aspects of culture.
Advances in transportation and telecommunications infrastructure, including the rise ofthe Internet, are
major factors in globalisation, generating further interdependence of economic and cultural activities.
HRM refers to those activities undertaken by an organisation to utilise its human resources effectively.
Even those organisations who consider themselves immune to transactions across geographical boundaries
are connected to the wider network globally.
Globalisation involves the diffusion of ideas, practices and technologies. It is something more than
internationalisation and universalisation.
Key drivers of globalisation are market drivers, costs drivers, technology drivers, government drivers and
competitive drivers.
Keywords
Economic Globalisation: Economic globalisation is the process of increasing economic integration between
countries, leading to the emergence of a global marketplace or a single world market.
Ethnocentric: Approach in which key positions at the domestic and foreign operations are held by
management personnel of headquarters.
Free Trade Zones (FTZ): A FTZ is an area within which goods may be landed, handled, manufactured or
reconfigured, and re-exported without the intervention of the customs authorities.
Global Information System: A global information system is a data communication network that crosses
national boundaries to access and process data in order to achieve corporate goals and strategic
objectives.
ISO: The International Organisation for Standardisation is an international standard-setting body promulgates
worldwide proprietary, industrial, and commercial standards. It was founded on February 23, 1947, the
organisation.
Online Community: It is a virtual community that exists online and whose members enable its existence
through taking part in membership ritual.
Parent Country Nationals (PCNs): PCNs are managers who are citizens of the country where the MNC is
headquartered.
Third Country Nationals (TCNs): TCNs are managers who are citizens of countries other than the one in which
the MNC is headquartered or the one in which it is assigned to work by the MNC.

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Cultural Aspect of International Assignments
Culture plays a very important role in the success or the failure of the international assignments.
Culture varies across different nations due to varied beliefs of the people.
There are various societies that are being formed based on the cross-cultural beliefs.
In collectivistic societies, people are born into and protected by extended families, to which they give
loyalty.
In individualist societies, people look after themselves and the immediate nuclear family.
In a masculine society, values are based on material success, money and possessions. Men are expected to
be assertive and ambitious, and women tender and concerned with relationships.
The ‘feminine’ society has values of caring for others and preservation rather than progress. People and
good relationships are more important than money and things.

Keywords
Culture: It is a set of the set of shared attitudes, values, goals, and practices that characterises an institution,
organisation or group.
Collectivism: It measures the degree to which social bonds are formed between the individuals.
Notes Individualism: It measures the extent to which the individuals in the country consider themselves as
distant entities.
Intercultural communication: It is the process of communication between the individuals from different
cultures.
Leadership: Ability of an individual to influence the group to achieve the goal.
Motivation: Process of increasing the individuals’ performance to attain his goals.
Particularism: It believes that unique circumstances and relationships re more important considerations in
determining what are good and right.
Universalism: When people believe what is true and good can be discovered, applied and defined.

Global Status and Control Mechanism

IHRM is a very complex process.
To a certain extent, how the internationalizing firm copes with the HR demands of its various foreign
operations determines its ability to execute its chosen expansion strategies.
Apart from the strategic imperatives and staffing approaches, IHRM is affected by the way the
internationalisation process itself is managed.
Most firms pass through several stages of organisational development as the nature and size of their
international activities grow.
Exporting is initial stage for the firms entering international operations.
As the firm develops expertise in foreign markets, agents and distributors are replaced by direct sales with
the establishment of branch offices in the foreign market countries and the company creates an export
division or function at the corporate home office and the export division head directly reports to the CEO.
International operations place additional stresses on control mechanisms. There is also additional stress on
the firm’s ability to coordinate resources and activities.
MNCs use different approaches to manage and staff their subsidiaries. While a firm goes through
evolutionary stages, their organisation structure changes.
HRM plays an important role in control and coordination process. As the firm goes international, there is a
need for an integrated framework of strategic international HRM.
Keywords

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Global: The Company that applies the global integration business strategy to manage the staff.
IHRM: It is the art of managing different people with various cultures across countries.
Matrix structure: Structure, that results from the integration of the operations of the MNC in more than one
dimension.
Multinational Corporation (MNC): It is a corporation or enterprise that manages production or delivers
services in more than one country.
Multinational Enterprise (MNE): A firm that takes a global approach to its foreign markets and production.
Polycentric: Each subsidiary is managed on a local basis.
Regiocentric: It reflects the geographic strategy and structure of the MNC.
Strategic alliance: A collaborative arrangement of critical importance to one or more of the alliance
partners.
Vertically integrated: Companies are united through a hierarchy with a common owner.

Globalisation in World Economy

Globalisation is a powerful real aspect of the new world system, and it represents one of the most influential
forces in determining the future course of the planet.
“Globalisation” is understood here to mean major increases in worldwide trade and exchanges in an
increasingly open, integrated, and borderless international economy.
There has been remarkable growth in such trade and exchanges, not only in traditional international trade in
goods and services, but also in exchanges of currencies, in capital movements, in technology transfer, in
people moving through international travel and migration, and in international flows of information and
ideas.
There are several sources of globalisation over the last several decades.
Another source of globalisation is trade liberalisation and other forms of economic liberalisation that have
led to reductions in trade protection and to a more liberal world trading system.
A third source of globalisation is comprised of changes in institutions, where organisations have a wider
reach, due, in part, to technological changes and to the more wide-ranging horizons of their managers,
empowered by advances in communications.
Virtually every major national or international enterprise has such a structure or relies on subsidiaries or
strategic alliances to obtain a comparable degree of influence and flexibility.
Globalisation has clearly changed the world system and that it poses both opportunities and challenges. It is
also clear that the technological, policy, institutional, ideological, and cultural developments that have led
to globalisation are still very active.
Globalisation has had significant impacts on all economies of the world, with manifoldeffects.
The globalisation of markets refers to the merging of historically distinct and separate national markets into
one huge global marketplace.
In many markets today, the tastes and preferences of consumers in different nations are converging upon
some global norm.
Keywords
Emerging Economies: Emerging economies are nations with social or business activity in the process of rapid
growth and industrialisation.
Foreign Direct Investment (FDI): An investment made by a company or entity based in one country, into a
company or entity based in another country.
Human Capital: The skills, knowledge, and experience possessed by an individual or population, viewed in
terms of their value or cost to an organisation.
Infrastructure: The stock of fixed capital equipment in a country, including factories, roads, schools, etc.,
considered as a determinant of economic growth.
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Intellectual Capital: Collective knowledge of the individuals in an organisation or society. This knowledge
can be used to produce wealth, gain competitive advantage, and enhance value of other types of capital.
International Trade: International trade is exchange of capital, goods, and services across international
borders or territories.
Market: A market is any place where the sellers of a particular good or service can meet with the buyers of
that goods and service where there is a potential for a transaction to take place.
Multinational Enterprise: A multinational enterprise is any business that has productive activities in two or
more countries.

Recruitment and Selection for International

The four approaches to multinational staffing decisions—ethnocentric, polycentric, geocentric, and
regiocentric—tend to reflect the managerial philosophy towards international operations held by top
management at headquarters.
In the human resource cycle, recruitment and selection process are the main variables influencing directly
the ‘performance’ as also the ‘employee development processes’.
Recruitment is defined as the process of identifying and attracting the potential candidate from within and
outside an organisation to begin evaluating them for future employment.
The four generic processes: selection, performance appraisal, rewards management and human resource
development reflect sequential managerial tasks.
Human Resource Management is crucial to organisational competitiveness and productivity due to the
growing diversity of the world’s workforce and its increasing importance. The need to manage this diversity
better has become a major challenge to the international manager.
There are various issues which have to be taken care before selecting the expatriates for an international
assignment.
Indian women have a track record holding important political positions too few have achieved similar
success in ranks of business management like Indira Nooyi, Kiran Majhumdar, Chanda Kocchar, etc.
For companies developing a geocentric staffing policy, transferring subsidiary staff to other subsidiaries, as
well as to headquarters, is an important part of creating an international team.
Selection is the process by which the organisation chooses from among the applicants, those people who
are perceived the best meet the job requirements.
Keywords
Culture: It is a set of the set of shared attitudes, values, goals, and practices that characterises an institution,
organisation or group.
Ethnocentric Approach: An ethnocentric approach to staffing results in all key positions in a multinational
being filled by Parent-country Nationals (PCNs).
Expatriate: An employee who lives and works in a foreign country.
External recruitment: Applicants are from outside the organisation.
Internal Recruitment: Candidates are from the organisation itself. Source of internal recruitment is promotion
from within, job posting and employee referrals.
Recruitment: It is a process of identifying and attracting the potential talented candidates to apply for a
vacancy in the organisation for the future employment.

Re-entry and Career Issues

Expatriation and repatriation are interrelated.
After the completion of the international assignment, company brings the expatriates back to the home-
country.
Repartition process has four identified phases.
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The job-related and social factors make the re-entry process more complex.
MNCs should be responsible enough to manage the repatriation process.
HR should design the proper repatriation programme for the expatriates to avoid complexity after re-entry.
Keywords
Knowledge Transfer: It is the cross-fertilisation of the ideas and practices by expatriates in one country with
the employees in other country.
Motivation: It is the activation or energisation of goal-oriented behaviour.
Physical Relocation: It refers to removing personal effects, breaking ties with colleagues and friends, and
travelling to the next posting.
Preparation: It is the process of developing the plans for the future and gathering the information about the
new positions.
Readjustment: It is coping with reverse culture shock and career demands.
Re-entry Shock: Returnees often are surprised to experience a re-entry cycle similar in form, but often more
intense, to the one they encountered during their experience abroad.
Repatriation: It is the process of coming back of the expatriate after the completion of the international
assignments.
Self-efficacy: It is the degree to which an individual believes that he can execute a set of behaviours.
Transition: It means settling into temporary accommodation where necessary, making arrangements for
housing and schooling.

Training and Development

Training refers to the acquisition of knowledge, skills, and competencies as a result of the teaching of
vocational or practical skills and knowledge that relate to specific useful competencies.
Today, more and more companies are spending substantial amounts of money on training and
development of their employees to attain long-term organisational goals.
MNCs take great pains to select the right persons and provide them with appropriate training before their
departure as well as on arrival in a particular country.
Effective cultural training enables individuals to adjust more rapidly to the new culture.
Expatriate manger has to work in a different cultural if he is handling the international assignment.
Cross-cultural requirements and training has to be provided to the expatriates.
A better understanding of the cultural diversity is needed to be understood by expatriate.
Expatriate managers can match their attitude, managerial style with the host country culture, more effective
they are in international assignments.
Proper training has to be provided so as to reduce the cultural dissonance feeling among the expatriates.
Foreign assignments are an important mechanism for developing international expertise –for both
management and organisational development.
Keywords
Analytical Style Manager: He is systematic and logical and makes decision rationally.
Cultural Assimilators: It is a programmed learning technique that is designed to expose members of one
culture to some of the basic concepts, attitudes, role perceptions, customs and values of another culture.
Culture: It is an integrated pattern of human knowledge, belief, and behaviour that depends upon the
capacity for symbolic thought and social learning.
Development: It is the framework for helping employees develops their personal and organisational skills,
knowledge, and abilities.

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Expatriate: An international manager who got a foreign posting, leaving his homeland to work and live in
other country to handle an international assignment.
Factual Style Manager: He looks for the available information for making decision.
Preliminary Visits: The technique of sending the employee on a preliminary trip to the host country helps in
orienting international employees to international assignments.
Training: It is the acquisition of knowledge, skills, and competencies as a result of the teaching of vocational
or practical skills and knowledge that relate to specific useful competencies.

International Compensation
Compensation tends to vary widely around the business world due to the economic differences, differences
in development levels, political factors, traditions and culture.
Compensation is the financial remuneration the employees receive in exchange for their labour.
HR executives in global firms spend a great deal of time and effort in designing and managing
compensation programmes because of their high costs and impact on corporate performance,
commitment of employees and their retention.
Whenever the employee is send abroad for the assignment, it is preceded by the fresh negotiations
between the employer and the employee for its compensation.
The area of international compensation is complex primarily because multinationals must cater for three
categories of employees: PCNs, TCNs, and HCNs.
The key components of international compensation include base salary, Foreign Service
inducement/hardship programme, allowances, benefits and taxation.
Compensation decisions are very strategic decisions and are important for achieving organisation goals and
objectives.
Executive compensation structure varies from organisation to organisation.
Keywords
A Say on Pay: A non-binding vote of the general meeting to approve director pay packages.
Balance Sheet Approach: The base salary for PCNs and TCNs to the salary structure of the relevant home
country.
Benefit: An indirect reward given to the employees as a part of the organisational membership.
Compensation: It is the financial remuneration the employees receive in exchange for their labour.
Going Rate Approach: The base salary for international transfer is linked to the salary structure in the host
county.
Job Evaluation: The process of assessing the values of the jobs within the organisation.
Stock Options: It is the contract which gives the recipient the right to buy the shares of the stock at a pre-
specified exercise price for a pre-specified term.
Vesting: The period of time before the recipient has the right to transfer shares and realise value. Vesting can
be based on time, performance or both.

Global HR Issues in the Host Context

Standardisation of work practices involves behaviour modification through corporate training programmes,
staff rotation, rewards and promotion, most of which fall into ambit of the human resource function.
Ownership and control are factors that need to be taken into consideration while MNCs opts for the
standardisation of work practices.
Mode of operation is a consideration for HCN employment.
English is automatically the chosen corporate language.
Language skills become an important aspect to do business internationally.
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The ability to speak the local language different from their home country was as important as cultural
awareness in their ability to adapt and perform on assignment.
Language carries with it cultural coding.
Due to difference in the culture, there is variation in HR practices across globe.
Keywords
Brownfield: When the multinational acquires an existing local firm as part of the establishment of a local
operation, but the multinational effectively replaces many of the resources and capabilities.
Culture: It is the set of shared attitudes, values, goals, and practices that characterises an institution,
organisation or group.
Expatriate: It is a person temporarily or permanently residing in a country and culture other than that of the
person’s upbringing or legal residence.
Franchising: It is the method of practicing and using another persons business philosophy.
Instrumentalism: It is defined as a regard for people as a means to an ends of the organisation.
Intercultural Pragmatics: It is the contrastive or comparative study of such communicative norms aiming to
reach a better understanding of the cultural value.
Retrenchment: It is a corporate-level strategy that seeks to reduce the size or diversity of an organisation’s
operations.
Subsidiary: A company for which a majority of the voting stock is owned by a holding company.

International Industrial Relations

International operations of MNCs create considerable implements in effectively segmenting labour groups
by national boundaries and stratifying groups within and between nations.
MNCs headquarters involved in IR is influenced by various factors.
Trade unions opt for less ambitious strategies in dealing with multinationals.
Trade unions and the ILO will pursue these strategies and continue to lobby where possible for the regulation
of multinationals via the European Commission and the United Nations.
Healthy IR can enhance employment and further the goal of upgrading employment quality and skills in
foreign subsidiaries.
The EU aims to established minimal standards for social conditions that will safeguard the fundamental rights
of workers.
Keywords
Industrial Relations: Employer–employee relationships that are covered specifically under collective
bargaining and industrial relation laws.
MNC: It is a corporation or enterprise that manages production or delivers services in more than one country.
NAFTA: It is a regional integration agreement between US, Canada and Mexico.
Regional Integration: A process in which states enter into a regional agreement in order to enhance regional
cooperation through regional institutions and rules.
Social Dumping: It is a temporary movement of labour from one country to other country where the labour
cost is very high.
Subsidiary: It is an entity that is controlled by a separate entity.
Trade Union: It is an organisation of workers who have banded together to achieve common goals in key
areas, such as working conditions.
Trading Bloc: It is a set of countries which engage in international trade together, and are usually related
through a free trade agreement or other association.
Wage: It is compensation, usually financial, received by a worker in exchange for their labour.

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Multinational Performance Management
Performance management refers to the ongoing process of setting goals, self-assessment, manager
assessment, peer-assessment, coaching, development planning, and evaluation.
It provides a convenient starting point of the link between the multinational’s internationalisation strategies,
its goals for individuals international operations in terms of contribution to global profitability, and individual
performance management, whether PCN, TCN or HCN.
The multinational has specific expectations for each of its foreign affiliates in terms of market performance
and contribution to total profits and competitiveness.
Individual performance management involves job analysis, job goals and standards, and performance
appraisal. It comprises a formal process of goal setting, performance appraisal, and feedback.
Performance management is a process that enables the multinational to evaluate and continuously
improve individual, subsidiary unit, and corporate performance, against clearly defined, pre-set goals and
targets.
By adopting a performance management approach, multinationals are building on the goal-setting
strengths of management-by-objectives and more traditional methods of performance appraisal.
Data from performance management appraisal process is often used to determine pay and promotion, and
training and development requirements.
Performance appraisal in different nations can be interpreted as a signal of distrust or even an insult.
One way to overcome the dilemma of cultural adaptation is to use host-country nationals to assist in
devising a suitable system for appraising the local staff in the subsidiary and to advice on the conduct of the
appraisal.
Keywords
Competitive Assessment: It is the process where employees are rigorously compared against each other.
Cultural Adjustment: Process of adjusting to the culture of the other country.
Development: It is the framework for helping employees develops their personal and organisational skills,
knowledge, and abilities.
Expatriate: It is a person temporarily or permanently residing in a country and culture other than that of the
person’s upbringing or legal residence.
Off-line Performance Planning: It is done on the basis of certain predictions with regards to the business goals
and activities.
Online Performance Planning: It is done in terms of clear business strategy and allocated funds.
Performance Appraisal: It is a tool which is used to appraise the performance.
Performance Management: It is a process for managing both behaviour and results of the performance.

HRM in Cross-border Mergers and Acquisitions

Mergers and acquisitions are the market strategies adopted by the companies to enter the foreign markets.
M&A deals help the companies to develop a global foothold.
Acquisitions also give size and a readymade platform to scale up the operations for the firms.
Tata is the best example among the Indian companies to perform a large number of cross- border deals and
establish a global footing.
In the cross border deals, HR plays a major role in making the success of such deals.
Cultural differences add to the difficulty in M&A deals.
M&A’s are the intensive activities that require the involvement of HR since the beginning.
The key areas for the HR involvement are effective communication, cultural alignment, and change
management plan, developing the staff model and developing the reward strategy for the new
organisation.
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Keywords
Acquisition: It is the buying of one company (the ‘target’) by another.
Co-generic: It is the merger taking place in the same industry and at the same economic level.
Concentric Mergers: It is a where two merging firms are in the same general industry, but they have no
mutual buyer/customer or supplier relationship.
Conglomerate: It is the merger between the unrelated business or two companies that have no common
business areas.
Consolidation Mergers: With this merger, a brand new company is formed and both companies are bought
and combined under the new entity. The tax terms are the same as those of a purchase merger.

GHRM Trends and Future Challenges

When the business is conducted across national and cultural borders, the operationalisation of the
enterprises ethics programme adds complexity.
Challenge in the international business lies in incorporating the core business values and aligning the staff to
these values.
Challenges for the managers operating in diverse cultural environments is that different cultures will prioritise
core ethical values differently and will translate values into specific behaviors differently.
Culture shock develops as a result of a person working within a different and unknown cultural or social
environment.
Bribery and corruption are the most frequent ethical problems encountered by international managers.
Ethics and corporate social responsibility are important factors but complex issues.
International managers must expect managers from other cultures to apply different criteria in making
ethical decisions and that such choices are heavily influenced by each one’s culture.
The scarcity of qualified managers has become a major constraint on the speed with which multinational
companies can expand their international sales.
Good HR management in a multinational company comes down to getting the right people in the right jobs
in the right places at the right times and at the right cost. These international managers must then be
meshed into a cohesive network in which they quickly identify and leverge good ideas worldwide.
The consequent lack of world-wide multi-cultural managerial talent bites into companies’ bottom lines
through high staff turnover, high training costs, stagnant market shares, failed joint ventures and mergers and
the high opportunity costs that inevitably follow bad management selections around the globe.
Based on the company’s business strategy, activities should be identified that are essential to achieving
success around the world and specify the positions that hold responsibility for performing them.
Overseas assignments and cross-border task forces are excellent ways to challenge, develop and retain
good managers.
Keywords
Corporate Ethics: It refers to the formulation of the internal policies pertaining to the ethical conduct of
employees.
CSR: It a built-in, self-regulating mechanism whereby business would monitor and ensure its adherence to
law, ethical standards, and international norms.
Culture: It is the organisation’s personality revealing the shared values, beliefs and habits of its members.
Culture Shock: It is the anxiety and feelings of surprise, disorientation, uncertainty; confusion, etc. felt when
people have to operate within a different and unknown cultural or social environment.
Ethical Absolutists: They believe in the primacy of one’s own culture values.
: It is the intentional purchase of products and services that the customer considers to be Ethical
Consumerism made ethically with a minimal harm to or exploitation of humans, animals and/or the natural
environment.
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Ethical Relativists: They believe that there are no universal or international rights and wrongs.
Glass Ceiling: It is an unofficially acknowledged barrier to advancement in a profession, especially affecting
women and members of minorities.
Strategy: It is a plan of action designed to achieve a particular goal.
Talent Management: Finding and retaining quality talent continues to be essential to business sustainability.

Indian HRM
Global leadership is a complex process for the organisation. The success and failure of the global leaders
depends on the extent to which they adapt themselves to the cultural orientation of the foreign countries.
Leadership quality is highly dynamic concept which varies nationally due to perceived differences in the
values and beliefs of the people internationally.
The leadership orientation of the managers varies across nations. These are due to the vast differences in the
values between the national groups.
Leader plays an important role in the organisation. The extent to which they carry their status into the wider
context outside the workplace through their professional activity is significant.
International projects are successful only when emphasis is given to those factors that are particularly
vulnerable in cross-cultural settings and on building the team capable of dealing with the challenge
presented.
The secret is to transform the way people do things at the beginning of the project into more effective
behaviour as the project moves along.
Experience in managing bi-national projects indicate that for cultural convergence to take place,
managers of both sides need to understand the culture of the other, analysing the different patterns that
make up that culture.
The success of a project depends as much on the project leader as on the dynamics of the project team. A
dynamic team is a high-performance team, one that utilises its energy to meet cost and time schedules and
solves uncertainties that arise in project implementation by joint problem-solving and combined effort.
Human Resource is the most important asset for any organisation and it is the source of achieving
competitive advantage.
Japanese employees were discovered to have a higher work centrality than those in the USA, who had a
higher work centrality than those in the former West German.
Global companies should consider these differences across cultures for their success in managing the
people internationally.
Keywords
Egalitarianism: The doctrine of the equality of mankind and the desirability of political and economic and
social equality.
HRM Practices: HRM practices refer to organisational activities directed at managing the pool of human
resources and ensuring that the resources are employed towards the fulfilment of organisational goals.
Human Resource Management (HRM): Human Resource Management is the process of managing people in
organisations in a structured and thorough manner.
Individualism: A cultural dimension that focuses on the degree to which a society reinforces individual or
collective achievement and interpersonal relationships.
Masculinity: This dimension pertains to the degree societies reinforce, or do not reinforce, the traditional
masculine work role model of male achievement, control, and power.
Perception: The representation of what is perceived; a way of conceiving something.
Power Distance: Power distance is the extent to which less powerful members of institutions and organisations
within a country expect and accept that power is distributed unequally.

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Uncertainty Avoidance: This dimension concerns the level of acceptance for uncertainty and ambiguity
within a society.

Labour Welfare and Concept

ILO standards have influenced Indian Labour Legislation, directly and indirectly.
The blueprint of our labour policy is based on ILO's Standards.
The Indian Labour Conference and Standing Labour Committee – resemble the two main structures of ILO.
Influence of ILO has been perceptible in Labour Legislations in India.
Labour welfare is an important aspect of the factory life.
Role and responsibility of welfare officers are clearly defined in Acts.
Keywords
Collective bargaining: It is the process of negotiation between representatives of a union and employers
(represented by management, in some countries by employers' organization) in respect of the terms and
conditions of employment of employees.
Fundamental Rights: They acts as a guarantee that all the Indian citizens can & will lead their life's in peace
as long as they live in Indian democracy.
ILO: International Labour Organisation
Labour welfare: Services, facilities and amenities extended for the intellectual, physical, moral and economic
betterment of the workers.
Laissez Faire System: Lets not interfere system
Law: It is an instrument for the control, restrain and guide the behaviour & course of action of the individuals.
Security: Protection of the employer facilities and employees protection while on work premises.
Trade Union: Any combination whether temporary or permanent formed primarily for the purpose of
regulating the relations between workmen and employers.

ILO and its Contribution in Labour Welfar and Social Security

The Peace Conference convened at the end of the World War I led to the creation of the International
Labour Organisation in 1919.
The ILO is a tripartite organisation, consisting of representatives of the governments, employers and workers
of member-countries in the ratio of 2:1:1.
The first national trade union organisation - the AITUC - in our country was formed within one year of the
setting up of the ILO.
Principal function of International Labour Organisation is to secure international minimum social & labour
standards.
Labour standards are embodied in the form of conventions & recommendations.
There is a basic difference in the nature of obligations created by Convention and Recommendations.
The main purpose behind the development of social institutions is "to identify and advance solutions to the
problems connected with the framing and implementation of policies of economic and social development
Keywords
Conventions: obligation creating instruments
Governing body: It is the chief executive body of ILO.
Health: It is the general state of physical, mental & social well-being.
ILO: International Labour Organisation
Recommendations: guidance providing instruments

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Social security: It is the social insurance program providing social protection, or protection against socially
recognized conditions, including poverty, old age, disability, unemployment and others.
Wages: The remunerations received by the workers in lieu of its labour.
Welfare: Services & facilities provided by ILO to raise the labour standards.
Safety: Protection of a persons health physically.

The Factories Act, 1948

The Factories Act, 1948 protects human beings from being subject to manual laborer and long hours of
bodily strain.
This Act is applicable to whole of India.
Occupier has the control over the affairs of the factory.
Responsibility for getting the premises approved when the factory is to be established lies on the
responsibility on the occupier.
There are health, safety and welfare measures included in this Act.
Second national commission on labor provided recommendation on welfare measures of the workers.
Keywords
DGFSALI: Director-General of Factory Advice Services & Labour Institutes.
Health: It is a general state of physical, mental and emotional well-being.
Industrial hygiene: The promotion and maintenance of highest degree of physical, mental and social well-
being of workers.
Occupier: It is the person who has ultimate control over the affairs of the factory.
Precincts: It is the space enclosed by the wall.
Premises: It is the open land or land with building or building alone.
Safety: It is the protection of a person's physical health.
Welfare officer: The person who is appointed to look after the welfare of the workers in the factory.
Worker: Any person employed directly or indirectly in any manufacturing process.

Contract Labour (Regulation and Abolition) Act, 1970

Outsourcing and contracting has become a business necessity in order to be competitive. At the same time,
contract labour is one of the most exploited sections of human labour. A good number of contract labourers
are employed in selected industries
During the post-Independence period, several statutory and non-statutory measures have been adopted to
regulate and improve the conditions of contract labour.
The objective of the Act is to regulate the employment of contract labour in certain establishments and to
provide for its abolition in certain circumstances.
Under the Act, the appropriate Government is empowered to extend the application of the Act to any
establishment or contractor employing less than 20 workmen after giving two month’s notice. Where the
registration of any establishment has been obtained by misrepresentation or suppression of any material
fact, or that for any other reason, the registration has become useless or ineffective and, therefore, requires
to be revoked, the registering officer may, after giving an opportunity to the principal employer of the
establishment to be heard and with the previous approval of the appropriate Government, revoke the
registration.
The registering officer may entertain any such application for registration after the expiry of the period fixed
in this behalf, if he is satisfied that the applicant was prevented by sufficient cause from making the
application in time

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Under Section 13, every application for the grant of a licence shall be made in the prescribed form and shall
contain particulars regarding the location of the establishment, the nature of process, operation or work for
which contract labour is to be employed and such other particulars as may be prescribed.
Sections 16, 17, 18 and 19 of the Act and the Rules made there under, impose an obligation on an employer
to provide certain amenities for ensuring the health and welfare of the contract labour.
In case, any contractor fails to provide the above amenities within the stipulated time, then the same are to
“be provided by the principal employer. However, the principal employer is authorized to recover such
expenses from the contractor.”
Ever principal employer shall nominate a representative, duly authorized by him to be present at the time of
disbursement of wages by the contractor and it shall be the duty of such representative to certify the
amounts paid as wages in such manner as may be prescribed. The employees engaged through the
contractor will be liable to be covered under the Employees’ Provident Fund and Miscellaneous Provisions
Act - DCM Ltd. vs. Regional Provident Fund Commissioner, 1998 LLR 532 (Raj HC).
Sub-rule IV of Rule 25 of the Contract Labour (Regulation and Abolition) Act provides that the principal
employer will ensure that the workers as engaged through the contactor will not be paid wages less than
the minimum rate of wages as fi xed under the Minimum Wages Act
Keywords
Central advisory: The Central Government under Section 3 is required to set up the Central Advisory
Contract Labour Board on matters relating to administration of the Act as may be referred to it.
Committee: The Committee constituted under sub-section (1) shall meet at such times and places and shall
observe such rules or procedures regarding the transaction of business at its meetings as may be prescribed.
The Employees’ State Insurance Act, 1948: A workman under the Contract Labour (Regulation and Abolition)
Act is also a ‘workman’ under the Industrial Disputes Act.
The Minimum Wages Act, 1948: Sub-rule IV of Rule 25 of the Contract Labour (Regulation and Abolition) Act
provides that the principal employer will ensure that the workers as engaged through the contactor will not
be paid wages less than the minimum rate of wages as fi xed under the Minimum Wages Act.
The Mines Act, 1952: As per section 2 (1) of the Act, any contractor working in a mine or part thereof, shall
also be liable for compliance of various provisions of the Act and Rules.

The Contract of Employment

The terms and conditions of an employment contract signify the working style and culture of an
organization.
While employing a person in your organization or commercial set up, you need to define the relationship in a
fair and unambiguous manner.
Employment contract helps you protect the interests of the organization while being fair to the employee.
Industrial Employment (Standing Orders) Act, 1946 extends to the whole of India It applies to every industrial
establishment wherein one hundred or more workmen are employed, or were employed on any day of the
preceding twelve months.
Contract Labour (Regulation and Abolition) Act, 1970 is an Act to regulate the employment of contract
labour in certain establishments and to provide for its abolition in certain circumstances and for matters
connected therewith.
Keywords
Contract of Employment: It is a category of contract used in labour law to attribute right and responsibilities
between parties to a bargain.
Certifying Officer: It means a Labour Commissioner or a Regional Labour Commissioner, and includes any
other officer appointed by the appropriate Government.

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Trade Union Act
A trade union is a continuous association of wage-earners for the purpose of maintaining and improving the
conditions of their working lives.
Under the Trade Union Act of 1926, the term is defined as any combination, whether temporary or
permanent, formed primarily for the purpose of regulating the relations between workers and employers or
for imposing restrictive conditions on the condition of any trade or business and includes any federation of
two or more unions.
Trade unions in India, as in most other countries, have been the natural outcome institutionally, the trade
union movement is an unconscious effort to harness the drift of our time and reorganize it around the
cohesive identity that men working together always achieve of the modern factory system. The
development of trade unionism in India has a chequered history and a stormy career.
In 1920 All India Trade Union Congress (AITUC) was formed. The first meeting of the AITUC was held in
October, 1920 at Bombay (now Mumbai) under the presidentship of Lala Lajpat Rai. The formation of AITUC
led to the establishment of All India Railwaymen’s Federation (AIRF) in 1922. Many Company Railway Unions
were affiliated to it.
There are over 9,000 trade unions in the country, including unregistered unions and more than 70 federations
and confederations registered under the Trade Unions Act, 1926.
Outside leadership has been playing a pivotal role in the Indian Trade Union Movement due to the inability
of insiders to lead their movement. The Royal Commission of Labour (RCL) 1931 recommended for the
reduction of the statutory limit of outsiders from 1/2 to 1/3 but no efforts were taken in this direction. Outside
leadership has been responsible for the slow growth of Trade Unions.
In view of the evil effects of inter-union rivalry the recommendations of the National Commission on Labour,
1969. To minimise union rivalry are: Elimination of party politics and outsiders through building up of internal
leaders, Promotion of collective bargaining through recognition of sole bargaining agents, and Empowering
labour courts to settle inter-union disputes if they are not settled within the organisation.
To minimise trade union problems and to strengthen the Trade Union Movement. Unions must present a joint
front. Trade unions should form a sort of labour party and all the trade unions in the country should be affi
liated to it.
Trade unions should extend welfare measures to the members and actively pursue social responsibilities.
The Trade Union Act, 1956 should be amended and the number of members required to form a trade union
should be increased from 7 to 50% of the employees of an organisation.
The Government of India drew up a Bill which was introduced in the Legislative Assembly on 31st August
1925. The Bill was passed the next year as the Indian Trade Unions Act, 1926. The Act with subsequent
amendments is still in force in the country.
The federation of trade unions also requires registration. It was held in National Organisation of Bank Workers’
Federation of Trade Unions vs. Union of India and others (Bombay -1993) that where a federation of Trade
Unions is not registered, it is not a trade union under the Act.
The Supreme Court upheld the writ petition, brought as a class action by certain social activists and NGOs,
concerning the fundamental rights of working women with particular reference to the evil of sexual
harassment of women at workplaces.
Keywords
AIRF: All India Railwaymen’s Federation
AITUC: All India Trade Union Congress
BMS: Bhartiya Mazdoor Sangh
Reformist or Welfare Unions: Work for changes and reforms within existing socio-political framework of society
- European Model.
Revolutionary Unions: Believe in destruction of existing social/economic order and creation of a new one.
They want shift in power and Authority and use of force - Left Unions.

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Trade Union: A trade union is an association of wage earners for the purpose of maintaining and improving
the conditions of their working lives.
Uplift Unions: They advocate extensive reforms well beyond the area of working condition, i.e., change in
taxation system, elimination of poverty, etc.

Dispute Resolution and Industrial Harmony

The co-operation between capital and labour world obviously lead to more production and that naturally
helps boost national economy and progress.
The Industrial Dispute Bill was introduced in Central Legislative Assembly in October, 1946. The Bill was passed
in March, 1947 and implemented w.e.f. 1st April, 1947. Since then, it has as many as 34 to 35 major
amendments. It has 9 Chapters and 40 sections.
Smart organisations invariably go for smart grievance-redressal system. If the culture of grievance-redressal is
not developed, the employee becomes discontented, dissatisfied and disgruntled. That may not be visible
but it does affect performance. Such hidden grievances do more harm than the manifested ones.
There must be a mechanism to identify grievances, systematically, and reduce the possibility of such
grievances emerging again in future.
Improved types of grievance redressal devices must be explored based on researches in behavioural
sciences.
Keywords
Adjudication: It is compulsory method of resolving conflict/dispute.
Conciliation: A process by which representatives of management and employees and their unions are
brought together before a third person with a view to persuade them to arrive at some agreement.
ID Act, 1947: A law for investigation and settlement of industrial disputes and other related matters. ID Bill was
introduced in Central Legislative Assembly in October, 1946; passed in March 1947; and implemented w.e.f.
1st April 1947. Since the 35 Amendments done to it. It has 9 chapters and 40 sections.
Industrial Disputes: Any dispute or difference between employees and employees, or between employers
and employers, which is connected with the employment, or non-employment, or the terms of employment
or with the conditions of work of any person.
Voluntary Arbitration: When conciliation officer or Board of conciliation fails to resolve conflict/ dispute,
parties can be advised to agree to voluntary arbitration for settling their dispute.

Collective Bargaining
Collective bargaining may take place at various levels, for instance, plant, locality, employer, area or region,
company, industry and national levels.
Even at a particular level, a number of situations may be envisaged. For example, at the plant or
establishment level, collective bargaining may take place between the employer, on the one side and one
or more industrial unions or one or more craft unions or one or more general unions separately or in
combination, on the other.
At the industry level there may be various units of bargaining, for example, one or more employers or a
company corporation or one or more employers' associations on the one side, and one or more trade
unions established at the industry, region, plant or national level, on the other.
The term 'bargaining unit' refers to the parties, that is, employers and workers/trade unions represented in
negotiations, and to whom the resulting collective agreement applies.
The 'level of bargaining' is a broad term denoting the nature of ownership of undertakings, the geographical
area, the industry, the jurisdictions of employers and trade union, or the layer where collective bargaining
takes place.
Negotiation is the deliberate interactions of two or more complex social units which are attempting to define
or redefine the terms of their interdependence.

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Negotiation is a process for resolving conflict between employee and employer where in their demands are
modified to arrive at an acceptable agreement.
Keywords
Bilateral Approach: In it the employer and worker negotiate with each other.
Collective Bargaining: It is a process of discussion and negotiation between two parties, one or both of
whom is a group of persons acting in concert. The resulting bargain is an understanding as to the terms and
conditions under which a continuing service has to be performed.
Government Concept: It regards institution as a constitutional system or rule making process, which
determines relation between management and trade union representatives.
Notes Managerial Concept: It views the institution as a participative decision-making between employees
and employers, on matters in which both parties have vital interest.
Marketing Concept: It views Collective Bargaining as the means by which labour is bought and sold in the
market place.
Negotiation: Negotiation is the deliberate interactions of two or more complex social units which are
attempting to define or redefine the terms of their interdependence.
Pre-negotiation Phase: Pre-negotiation phase is vital to Collective Bargaining. Basically, this stage involves
three elements, viz. (a) establishing bargaining relationships, (b) laying down a labour policy, and (c)
preparing for negotiations.
Tripartite Approach: In it besides the two main parties, third party also intervenes.
Unilateral Approach: In it the employer alone decides the terms and conditions of employment.

Social Security Legislations

Social security measures seek to relieve the tension and stress of the workers in case of unemployment or
accidents.
The Workers Compensation Act aims at providing the workers with the compensation in case of injuries or
accidents suffered by them during the course of employment.
The Employee's State Insurance Act offers medical help and unemployment coverage to industrial workers
during their illness.
The Maternity Benefit Act provides for the payment of maternity benefits to women workers in the form of
leaves on certain benefits.
Keywords
Disablement: It is the reduction in the earning capacity of the workmen.
Employee: It refers to any person employed on wages to work in factory or establishment.
ESIC: Employees State Insurance Corporation.
Occupational disease: Diseases or illness resulting from exposure to certain aspects of the working
environment.
Principle of added peril: It comes into play only when the workman is at the time of meeting the accident
performing his duty.
Self-inflicted Injury: An injury caused by accident which could have been anticipated or foreseen or
negligently by the workman himself does not make the master liable.
Social security: The protection given by the societal laws to its members against contingencies of life like
sickness, accidents, etc.
Wages: All the remunerations paid in cash on the fulfillment of the terms of the contract.

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Provident Fund and Gratuity Payment Acts
The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 is a social welfare legislation enacted
for the purpose of institution of provident fund for employees in factories and other establishments.
This Act provides for the institution of compulsory provident fund, family pension fund and deposit linked
insurance fund for the benefit of the employees.
Gratuity as an additional retirement benefit has been secured by labour in numerous instances, either by
agreement or by awards.
The employee and the employer or any other person raising the dispute regarding the amount of gratuity,
may make an application to the controlling authority to decide the dispute.
Nomination once made can be modified, after giving due notice to the employer. If a nominee
predeceases the employee, a fresh nomination is required to be made.
The purpose of avoiding any payment makes any false statement or false representation is punishable with
imprisonment up to 6 months and/or fined up to 1000.
Keywords
Disablement: It is the permanent inability or reduction in the earning capacity of the workmen.
Employee: Any person who is employed for wages in any kind of work, manual or in connection with the
work of an establishment and who gets wages directly or indirectly from the employer and includes any
person employed by or through a contractor in or in connection with the work of the establishment.
Employer: The owner or occupier of the establishment.
EPFO: Employees Provident Fund Organisation
Gratuity: It is a sort of an award which an employer pays out of his gratitude, to an employee for his long and
meritorious service, at the time of his retirement or termination.
Retirement: It is defined as the termination of the service of an employee other than on superannuation.
Superannuation: It is the attainment of such age by the employee as is fixed in the contract or conditions of
service as the age on the attainment of which he has to leave the employment.
Wages: The compensation received by the worker for his services.

Minimum Wages Act, 1948

The need for regulating minimum wages has been gaining increasing attention, not only of the governments
of developing and developed countries, but also of the International Labour Organisation at Geneva (ILO),
which is formulating International Labour Standards for its member countries since its very inception after the
First World War.
India has ratified the ILO convention on Minimum Wage Fixing Machinery and has enacted a central
minimum wage legislation, known as Minimum Wages Act, 1948. As in other countries, here also the need for
fixing minimum wages arose from the conditions created by the payment of low and sweated wages in the
unorganised and organised sectors of industries, and consequent need for protecting workers against
exploitation.
The object of the Act is to promote the welfare of workers by fixing minimum rates of wages in certain
industries where labour is not organised and sweated labour is most prevalent. The Act seeks to prevent
exploitation of workers by ensuring that they are paid the minimum wages, which would provide for their
subsistence and preserve their efficiency.
The appropriate Government is empowered to extend this Act to any other employment in respect of which
it is of the opinion that minimum rates of wages should be fixed under the Act.
Employment in agriculture, that is to say, in any form of farming, including the cultivation and tillage of the
soil, dairy farming, the production, cultivation, growing and harvesting of any agricultural or horticultural
commodity, raising of livestock, bees and poultry, and any practice performed by farmer or on a farm as
incidental to or in conjunction with farm operation (including any forestry or timbering operation, and the
preparation for market and delivery, to storage or to market or to carriage for transportation to market of
farm product.
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The appropriate government may fix the minimum rates of wages payable to the employees of scheduled
employment, either for the whole State or a part of the State or for any specified class or classes of such
employment.
In fixing or revising minimum rates of wages, different rates may be fixed for (i) different scheduled
employments; (ii) different classes of work in the same scheduled employment; (iii) adults, adolescents,
children and apprentices; (iv) and different localities. Different rates of minimum wages may also be fixed by
anyone or more of the following wage periods; by the hour, by the day, by the week, by the month or by a
larger wage period as may be prescribed.
For the purpose for co-ordinating the work of committees and sub-committees appointed under Sec. 5 of
the Act, and advising the appropriate Government generally in the matter of fixing and revising minimum
rates of wages, the appropriate Government shall appoint an Advisory Board to function. It can devise its
own procedure.
Where an employee is employed on piece work for which minimum time rate and not a minimum piece rate
has been fixed under the Act, the employer shall pay to such an employee, wages at not less than the
minimum time rate.
The appropriate government may, by rules made under the Act, provide for the issue of wage books or
wage slips to employees employed in any scheduled employment in respect of which minimum rates of
wages have been fixed. It may prescribe the manner in which entries shall be made and authenticated in
such wage books or wage slips by the employer or his agent.
Any amount deposited with the appropriate government by an employer to secure the due performance of
a contract with that Government and any other amount due to such employer from that Government in
respect of such contract shall not be liable to attachment under any decree or order of any court in respect
of any debt or liability incurred by the employer other than any debt or liability incurred by the employer
toward any employee employed in connection with the contract aforesaid.
Any contract or agreement whether made before or after the commencement of this Act, whereby an
employee either relinquishes or reduces his right to a minimum rate of wages or any privilege or concession
accruing to him under this Act, shall be null and void in so far as it purports to reduce the minimum rate of
wages fixed under this Act.
Keywords
Amount of compensation: When an application is entertained, the authority shall hear the applicant and the
employer, or give them opportunity to be heard.
Employee: Employee means any person who is employed for hire or reward to do any work, skilled and
unskilled, manual and clerical, in a scheduled employment in respect of which minimum rates of wages
have been fixed.
Inspector: Any person required to produce any document or thing or to give any information by an Inspector
under Sec. 19 (2) shall be deemed to be legally bound to do so within the meaning of Sec. 175 of the Indian
Penal Code (Sec. 19 (4)).
Wages: “Wages” means all remuneration, capable of being expressed in terms of money, which would, if
the terms of contract of employment, expressed or implied were fulfilled, be payable to a person employed,

Payment of Wages Act, 1936

The Act is a protective piece of legislation. It seeks to regulate the payment of wages of certain class of
workers employed in industry. The main object of the Act is to ensure to workers, payment of their earned
wages on due date without unauthorised deduction. In order to ensure timely payment of wages, the Act
regulates the manner of payment of wages at regular intervals. It lays down permissible deductions to
protect the employed persons against arbitrary or unauthorised deductions being made from their wages.
Any gratuity payable on the termination of employment;
Whether house rent are wages depends on the terms of the contract. It is so, if its payment is compulsory,
otherwise it is not;
The term “wages” means wages earned and not potential wages;

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No other meaning can be assigned to the term “wages” than is mentioned in the definition.
If the number of persons employed in a factory, an industrial establishment, or railways, including daily rated
workers, is less than 1000, wages must be paid before the expiry of the seventh day after the last day of the
wage period.
In other cases, wages must be paid before the expiry of the tenth day after the expiry of the wage period.
Every fine shall be deemed to have been imposed on the day of the act or omission.
All fines and realisations thereof shall be recorded in a register to be kept by the person responsible for the
payment of wages in such form as may be prescribed. All realisation of fines shall be applied only to such
purposes as are beneficial to the persons employed in the factory.
Deduction for recovery of loans made from any fund constituted for the welfare of labour and the interest
due in respect thereof can be made, provided the fund is constituted in accordance with the rules
approved by the State Government.
Deductions can be made for recovery of loans granted for house building or other purposes approved by
the State Government and the interest due in respect thereof.
The total amount of deductions, which may be made under Section 7 in a wage period from the wages of
any employed person shall not exceed 75 per cent of such wages in cases where such deductions are
wholly or partly made for payments to co-operative societies. In any other case, the deductions shall not
exceed 50 per cent of such wages. Any agreement or contract by which an employee agrees to any
deductions other than those authorised under the act would be null and void under Section 23 of the Act.
There is, however, no provision in the Act limiting the period within which the employer should make the
deduction for adjustment of overpayment of wages.
When any application for claims under this Act is entertained, the Authority shall bear the applicant and the
employer or other person responsible for payment of wages or give them an opportunity of being heard.
If the authority hearing an application is satisfied that the application was malicious or vexatious, it may
direct a penalty not exceeding fifty rupees to be paid to the employer or other person responsible for
payment of wages, by the person presenting the application. The authority may further direct that a penalty
not exceeding fifty rupees be paid to the State Government by the employer or other person responsible for
the payment of wages in case where the application ought not to have been compelled to seek redress
under the Act (Sec. 15 (4)).
Every rule made by the Central Government under this Act shall be laid as soon as may be after it is made,
before each House of the Parliament. If both Houses agree in making any modification in the rule, the rule
shall thereafter have effect only in such modified form. If both Houses agree that the rule should not be
made, it shall have no effect. But any such modification or annulment of the rule shall be without prejudice
to the validity of anything previously done under that rule. (Section 26).
Keywords
Appeals: An order dismissing, either wholly or in part, an application made on the ground that deductions
are made contrary to the Act or payment of wages has been delayed.
Application of Act (Sec. 24): In relation to railways, air transport services, mines and oil fields, the powers
conferred upon the State Government by the Act shall be powers of the Central Government.
Contracting Out (Sec. 23): Any contract or agreement whereby an employed person relinquishes any right
conferred by the Act shall be null and void in so far as it purports to deprive him of such right.
Display of Notice (Sec. 25): The person responsible for the payment of wages to persons employed in a
factory or an industrial or other establishment shall cause to be displayed a notice containing such abstracts
of the Act and of the rules made thereunder in English and in the language of the majority of the persons
employed in the factory or an industrial or other establishment, as may be prescribed.
Employed Person: Employed person includes the legal representative of a deceased employed person.
Employer: Employer includes the legal representative of deceased employer.
Fixation of wage-period: Every person responsible for the payment of wages under Sec. 3 shall fix periods,
known as Wages Periods in respect of which such wages shall be payable. A wage period shall not exceed
one month. (Section 4)

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Illegal Deductions: Any deductions other than those authorised under Section 7 of the Act would constitute
illegal deductions.
Inspector: make such examination and inquiry as he thinks fit in order to ascertain if the provisions of the Act
are being observed;
Protection (Sec. 22-A): No suit, prosecution or other legal proceeding shall be against the Government or
any officer or the Government for anything which is in good faith done or intended to be done under the
Act.
Wages: "Wages" means all remuneration (whether by way of salary, allowances, otherwise) expressed in
terms of money or capable of being expressed which would, if the terms of employment, expressed or
implied are fulfilled, be payable to persons employed in his employment or of work done in such
employment.

Wage Legislation
The act extends to the whole of India. The act came into force on dates notified, from time to time, by the
Central Government in respect of different establishments or employments, so that the total coverage was
completed within 3 years from the passing of the Act, which was February 1976.
Basic wages: When an award gives revised pay scales, the employees become entitled to the revised
emoluments and where the said revision is, with retrospective effect, the arrears paid to the employee, as a
consequence, are the emoluments earned by the them while on duty.
In tendering its advice, the Advisory Committee shall have regard to the number of women employed in the
concerned establishment or employment, the nature of work, hours of work, suitability of women for
employment, as the case may be, the need for providing increasing employment opportunities for women,
including part-time employment and such other relevant factors as the Committee may think fit.
The Advisory Committee shall regulate its own procedure.
The appropriate Government may after considering the advice tendered to it by the Advisory Committee
and after giving to the persons concerned in the establishment or employment an opportunity to make
representations, issue such directions in respect of employment of women workers, as the appropriate
Government may think fit. (Section 6).
If any difficulty arises in giving effect to the provision of this Act, the Central Government may, by
notification make any order, not inconsistent with the provisions of this Act, which appears to be necessary
for the purpose of removing the difficulty: Provided that every such order shall, as soon as may be, after it is
made be laid before each House of Parliament. (Section 17).
Explanation: Where an employee is given in lieu of the whole or part of the salary or wage payable to him,
free food allowance or free food by his employer, such food allowance or the value of such food shall, for
the purpose of this clause, be deemed to form part of the salary or wage of such employee.
Where an establishment consists of different departments or undertakings or has branches, whether situated
in the same place or in different places, all such departments or undertakings or branches shall be treated
as parts of the same establishment for the purpose of computation of bonus under this Act.
Keywords
Company: "company" means any corporate body and includes a firm or other association of individuals; or
Director: "director", in relation to a firm, means a partner in the firm. (Section 11).
available surplus: "available surplus" means the available surplus computed under section 5;
Direct Tax: "direct tax" means-any tax chargeable under- the Income-tax Act; the Super Profits Tax Act, 1963
(14 of 1963); the Companies (Profits) Surtax Act, 1964 (7 of 1964); the agricultural income-tax law; and
Employee: "employee" means any person (other than an apprentice) employed on a salary or wage not
exceeding three thousand and five hundred rupees per mensem in any industry to do any skilled or unskilled,
manual, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the
terms of employment be express or implied;

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Employer: where the employer is an individual or a Hindu individual family, the tax payable by such
employer under the Income-tax Act shall be calculated on the basis that the income derived by him from
the establishment is his only income;
Income of employer: where the income of any employer includes any profits and gains derived from the
export of any goods or merchandise out of India and any rebate on such income is allowed under any law
for the time being in force relating to direct taxes, then, no account shall be taken of such rebate;

The Child Labour (Prohibition and Regulation) Act, 1986

The Child Labour Act bans the employment of children, below 14 years of age in specifi ed occupations and
processes which are considered unsafe and harmful to child workers and regulates the conditions of work of
children in employment’s where they are not prohibited from working.
The provisions of this Act, other than Part III, shall come into force at once, and Part III shall come into force
on such date as the Central Government may, by notifi cation in the Offi cial Gazette, appoint, and different
dates may be appointed for different States and for different classes of establishments.
Under the Act, Child? Means a person who has not completed his fourteenth year of age. Any such person
engaged for wages, whether in cash or kind, is a child worker.
Keywords
Child Labour: It refers to the employment of children at regular and sustained labour.
Establishment: It includes a shop, commercial establishment, workshop, farm, residential hotel, and
restaurant, eating house, theatre or other place of public amusement or entertainment.

The Factories Act -1948

The Factories Act has been enacted primarily with the object of protecting workers employed in factories
against industrial and occupational hazards. For that purpose, it seeks to impose upon the owner or the
occupier certain obligations to protect the workers and to secure for them employment in conditions
conductive to their health and safety.

The main object of the Factories Act, 1948 is to ensure adequate safety measures and to promote the health
and welfare of the workers employed in factories. The Act also makes provisions regarding employment of
women and young persons (including children and adolescents), annual leave with wages etc.

Conflict

Conflict is inevitable and universal phenomenon of our individual, team & organizational life.
Conflict can be defined in many ways and can be considered as an expression of hostility, negative
attitudes, antagonism, aggression, rivalry and misunderstanding
Newtonian paradigm holds for most practical purposes. Jay Lemke describes how our analytic approach
developed within the human community
Some conflicts require confrontation and negotiation between the parties.
System theory is an approach to social life that stresses functional parts working together for a specific end.
A manager can prevent the occurrence of many conflicts by reorganising the groups.
A systems theory of conflict locates oppression not in the personal behavior of those who are forced to
operate within the system
Conflict is an expression of hostility, negative attitude, rivalry, disagreement, incompatibility, incongruence
etc.

Keywords

Bridging: building partnerships and alliances that cross the borders that divide an organization or a
community.

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Changing Personnel: Sometimes a conflict is prolonged and severe efforts at resolution fail. In such cases, it
may be appropriate to change concerned personnel. Transferring or firing an individual may be the best
solution, but is recommended only after due process.

Conscious Conversation: Becoming aware of our full range of choices about how we speak and
listen.

Dialogue: Communicating in order to catalyze the human capacity for bridging and innovation.

Expanding Resources: This conflict resolution technique is so simple that it may be overlooked. If the conflict's
source is common or scarce resources, providing more resources may be a solution. Of course, managers
working with tight budgets may not have the luxury of obtaining additional resources. Nevertheless, it is a
technique to be considered.

Innovation: fostering social or entrepreneurial breakthroughs that create new options for moving through
conflicts.

Inquiry: Asking questions that elicit essential information about the conflict that is necessary for its
transformation.

Integral Vision: Committing ourselves to hold all sides of the conflict, in all their complexity, in our minds - and
in our hearts.

Presence: Applying all our mental, emotional, and spiritual resources to witnessing the conflict of which we
are now a part.

System Thinking: Identifying all (or as many as possible) of the significant elements related to the conflict
situation and understanding the relationships between these elements.

Nature of Conflict

Summary
Conflict is inescapable in interdependent relationship where the actions of one party have consequences
for the other, and vice-versa.
Conflict occurs when individuals are not able to choose among the available alternative courses of action.
Conflict carries a negative connotation and those engaging in conflict experience a sense of guilt. There is
no cause for guilt where the conflict is functional and legitimate.
The human relations view dominated the conflict theory from late 1940s through mid- 1970s.
Conflict is not necessarily a cost for the individuals. But the conflicts may weaken the organization as a whole
Conflict often creates a climate of distrust and suspicion among the members of the group well as the
organization.
Sometimes conflict can cause high level of tensions among the individuals and groups and a stage may
come when it becomes difficult for the management to resolve the conflict.

Keywords

Challenge: Conflict tests the abilities and capacities of the individuals and groups. It creates challenges for
them for which they have to be dynamic and creative. If they are able to overcome the challenge, it will
lead to search for alternatives to existing patterns which leads to organizational change and development.

Climate of Distrust: Conflict often creates a climate of distrust and suspicion among the members of the
group as well as the organization. The degree of cohesiveness will be less as the discords will be more. The
concerned people will have negative feelings towards each other and try to avoid interaction with each
other.

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Competition: Conflicts promote competition and hence it results in increased efforts. Some persons are
highly motivated by conflict and sever competition. Such conflict and competition, thus, lead to high level
of effort and output.

Dissatisfaction: Conflict will result in discontentment to the losing party, who will wait for an opportunity to
settle the score with the winning party. All this tussle will result in less concentration on the job and as a result,
the productivity will suffer.

Group Cohesiveness: Inter-group conflict brings about closeness and solidarity among the group members. It
develops group loyalty and greater sense of group identity in order to compete with the outsiders. This
increases the degree of group cohesiveness which can be utilized by the management for the attainment
of organizational goals in an effective manner. As cohesiveness increases, differences are forgotten.

Stimulation for Change: Sometimes conflict stimulates change among the people. When they are faced with
a conflict, they might change their attitudes and be ready to change themselves to meet the requirements
of the situation.

Release of Tension: Conflict when expressed can clear the air and reduce the tension which might otherwise
remain suppressed. Suppression of tension can lead to imaginative distortion of truth, sense of frustration and
tension, high mental exaggerations and biased opinions resulting in fear and distrust. When members express
themselves, they get some psychological satisfaction. This also leads to reduction of stress among the
members.

Personality

Summary
An impressive personality goes hand in hand with good communication for an effective negotiation
Everyone possesses each of the facets and traits to some degree.
It has been observed that impatient individuals are poor negotiators.
Sincerity is one of the most important personality traits required in negotiation.
Dr. Bishop displayed typical Type A personality characteristics
In the past, researchers have debated exactly how many personality traits exist.
Cognition may not be the only factor responsible for aggressive tendencies in Type A personalities
Once your deal is closed, do sign a contract in presence of both the parties.
The Keirsey Temperament Theory was developed by an educational psychologist named David Keirsey.

Keywords
Artisans: They are fun-loving and creative individuals who enjoy cultivating their talents and are likely to have
a natural inclination for the arts. These individuals may enjoy hobbies within the visual arts, such as drawing,
painting, sculpting or fashion design.

Choleric (yellow bile): Extroverted and task-oriented. Exhibits leadership, dominance, ambition, charisma,
passion. But also shows narrow-mindedness, obsession, and a Hair-Trigger Temper. Likes to be independent
and have control over others. Corresponds to the element of fire. If female, will be a Lady of War or
Tsundere.

Guardians: Guardians are practical and hardworking individuals who take their responsibilities seriously. They
sincerely enjoy working to make things run smoothly, and may be found volunteering in their spare time.

Melancholic (black bile): Introverted and task-oriented. Independent, courteous, organized, hardworking,
analytical; but also a brooding, high-strung perfectionist whose insanely high standards lead to depression.
Corresponds to the element of earth. If female, will be The Woman Wearing The Queenly Mask, Kuudere, or
an Emotionless Girl with a job to do.

Sanguine (blood): Extroverted and people-oriented. Exhibits optimism, good cheer, a love of fun,
enthusiasm. On the flip side, they may be impulsive, arrogant, self-indulgent, easily angered or upset, wear

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their hearts on their sleeves, or even be a space case. Corresponds to the element of air. If female, will be a
Genki Girl, The Pollyanna, or a more plucky/outgoing Yamato Nadeshiko.

Negotiation

Negotiation is an interpersonal decision-making process necessary whenever we cannot achieve our

objectives single-handedly.
Labor disputes are far more visible and get extensive news coverage than commercial disputes which are as
frequently but public and visible.
The right to differ is regarded in democracies as a fundamental right.
Dictatorship is one of the alternatives to negotiations, which is even preferable in certain circumstances.
The right to differ and have one’s own viewpoint is an integral part of a democracy.
One of the major causes of conflict is differing perceptions
The conflict of rights occurs where a difference of interpretation arises about the existing agreement
between the two parties.
Mobility and flexibility are the dictates of the new world of work.
Negotiation is a process of give and take
Negotiation is an art of creating agreement on specific issue between two (or more) parties with differing
views.
Bargaining session is the most important and crucial stage of negotiation processes.
Wage negotiation was once described by a trade union leader as it was a movement
wherein “both the sides are walking towards each other” to reach a mutually acceptable position

Keywords

Agenda/procedures: Perhaps one of the most important factors in pre-negotiation planning has to do with
agenda, site selection, physical arrangement, and time availability. These are the issues/items on which
negotiation has to take place.

Bluffing: It refers to the making of a false statement of position, a promise, or threat which the
individual/party has no intention to carry out. The negotiators use "linguistic behaviour" such as disclaimer,
hedging, omissions, and vague language to project an image of strength

Even split: Even splits, like compromises, refer to how the bargaining zone is divided among the negotiators.
For example, two sisters who quarrel over an orange and ultimately decide to cut it in half have reached an
even split.

Implementation Plan: Agreeing on an issue in negotiation leads to putting the agreement into an action
plan. The exact nature of the plan must be sorted out during the negotiation to reduce any future
misunderstanding.

Negotiation Dance: This is based on two elements - frequency of proposals and size of proposals. Frequency
refers to the number of times proposals are made and size refers to the quantity/value of the proposals.

Nibble: This basically refers to wearing down the adversary to reach an agreement on an issue after hard
and prolonged bargaining.

Opening Move: If the parties in negotiation are meeting for the first time, the opening move becomes very
important. It decides the nature of rapport that would be established and subsequently influence the
pattern of negotiation

Snow Job: It refers to putting pressure on the other individual/party by presenting a long list of issues to be
discussed, most of which may not have any significance for the individual/party presenting them. This is more
true in union-management negotiations where the union charter of demands runs into several pages

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Wage Negotiation: Wage negotiation was once described by a trade union leader as it was a movement
wherein "both the sides are walking towards each other" to reach a mutually acceptable position. He said
he aimed to get the employer's to walk faster and with bigger steps.

Role of Power in Negotiation

Most negotiators believe that power is important in negotiation because it gives one negotiator an
advantage over the other party.
Negotiators who have this advantage usually want to use it to secure a greater share of the outcomes or
achieve their preferred solution.
The most desirable source power is of the person whose morality, ethics and sincerity are transparent and
obvious
The motivation here is that of personal gain and aggrandizement.
The exercise of power entails costs and risks.
Negotiators use power tactics to give an impression of having many alternatives.
Expert power is the power of knowledge that comes through control over information.
A sensible use of power is to choose to fight on your own ground, and not to fight at the same time on many
fronts.
Early deals can be done to build relationships, strengthen the relationship with the high power party.
Seek out information that strengthens your negotiating position and case.

Keywords

Coercive power: derived by being able to punish others for not doing what needs to be done.

Expert power: derived from having unique, in-depth information about a subject.

Legitimate power: derived from holding an office or formal title in some organization and using the powers
that are associated with that office (e.g. a vice-president or director).

Personalized Power: The motivation here is that of personal gain and aggrandizement.

Referent power: derived from the respect or admiration one commands because of attributes like
personality, integrity, interpersonal style, and the like. A is said to have referent power over B to the extent
that B identifies with or wants to be closely associated with A.

Reward power: derived by being able to reward others for doing what needs to be done.

Socialised Power: Here the power is used as an instrument for the common good, on behalf of the whole
organization, many times for almost altruistic purpose.

Unit 6: Negotiation Style

True collaboration means identifying the underlying concerns and interests of both parties, and finding
solutions that satisfy these concerns.
The goal of competitive negotiation is to win without regard for the impact on the other party.
Effective negotiation helps you to resolve situations where what you want conflicts with what someone else
wants.
The aim of win-win negotiation is to find a solution that is acceptable to both parties, and leaves both parties
feeling that they’ve won, in some way, after the event.
The art of negotiation can be a tricky skill to master
One of the most important strategies when entering negotiations is to show respect both during the course
of discussion and through ample and thorough preparation work.
Before entering any negotiation, whether it’s to close a deal, discuss salary or purchase a car, as part of your
preparation.

Keywords
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Administrative Orbiting: This happens when people delay the conflict and tell others not to worry because it's
being worked on.

Changing Personnel: This happens when the conflict is pinpointed to an individual commonly with a low level
emotional intelligence.

Changing Structure: This is when the organization restructures and creates an integrator role, which becomes
a moderator between the two conflicting parties.

Character Assassination: This action is to diminish an individuals/groups reputation and often leads to
slander.

Confronting and Negotiating: This is when the parties confront and engage in an open discussion. There are
negotiations in hopes of a mutually agreed upon compromise.

Perception and Communication

Perception is used everyday. Perception is how we, as individuals, asses situations.

Cultural Diversity can be a barrier of communication because other cultures have different morals and ways
of life.
Perception of internal and external forces has resulted in the fundamental attribution error
Eye contact can also play a part by letting the other person know you can focused, listening, and want to
communicate with them
When an employee needs to be corrected, it is important the supervisor does so while taking into
consideration the feelings and esteem of the employee.
Physical Separation differs with technology but works best face-to-face
Non-defensive communication is an assertive, direct, and powerful form of communication
Status Differences can vary if you are a low-income person talking to someone that looks wealthy, which
occurs in a manager-employee situation
In order to attain goals, successful supervisors must be persuasive leaders.
Non-verbal communication includes all the elements of communication that do not involve words or speech
Non-verbal communication includes all the elements of communication that do not involve words or
speech.

Keywords Notes

Defensive Tactics: To act out the defensive communication, defensive tactics are used. Examples are
labeling, put downs, deception, or hostile jokes. Not only are these defensive tactics but they will receive
defensive responses.

Dominant Defensiveness: Dominant defensiveness is an offensive behavior pattern with aggression and
attacking attitudes. For example, people who are higher up on the ladder often want to get their point
across but fail to do it accurately. Instead, they resort to telling people how to accomplish something with no
room for support or advice. The attitude of the individual is commonly, "I am right and you are wrong."

Interpersonal Communication: Interpersonal Communication contains four key elements: the communicator,
the receiver, perceptual screens, and the message. The communicator is the person speaking or sending
the message. The receiver is the person listening or receiving the message.

Non-defensive Communication: Non-defensive communication is an assertive, direct, and powerful form of

communication. It can open communication lines and help achieve goals quickly and appropriately. This
kind of communication shows self-control, helps others to understand you in working situations, and helps to
reduce negative responses. Assertiveness is a key aspect in non-defensive communication because it is an
accurate and informative statement. Additionally, it is self-affirming and gets your point across without
seeming demanding.

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Non-verbal Communication: Non-verbal communication includes all the elements of communication that
do not involve words or speech. It involves how you move your body, eyes, mouth, the expressions that you
make, and all other ways of communicating without speaking. Non-verbal communication varies greatly
with culture.

Proxemics: Proxemics deals with our territory, and the space around us. We form barriers and need a certain
amount of space between us and other people in order to feel comfortable. We will be very close with our
loved ones- with whom we have an intimate or personal relationship.

Subordinate Defensiveness: Subordinate defensiveness is withdrawing behavior and the attitude of the
individual is commonly "you are right, and I am wrong." These individuals do not accurately show their
thoughts and feelings and can have a low self-esteem. This kind of behavior can seem passive on the
outside; however, the behavior fuels with hostility on the inside. Passive aggressive behavior for example is a
form of defensiveness that begins as subordinate defensiveness and ends up as dominant defensive.

Role of Attitude and Persuasion

Summary
First impressions can be slowly swayed over time.
Paralanguage are the variations that we put into our speech.
Humans are programmed to reciprocate when we are given something.
The most powerful third party role is that of an arbitrator.
A real-life example of this is when bloggers will review a product by first mentioning its faults.
Person-role conflict-ethics are involved: challenging personal beliefs or principles.
Cognitive Richard Lazarus emphasized that stress was caused by the environment that the person is in rather
than the body itself. He found that people differ greatly in that respect.
Individual distress manifests in three basic forms known as Psychological disorders, Medical illnesses, and
Behavioral problems.
It is important that both managers and supervisors are open communicators.
Mediators not only facilitate discussions, but they usually impose a structure and process
on the discussions that is designed to move the parties toward mutual understanding and win-win
agreements.

Keywords

Empowerment: Empowerment is a positive aspect within an organization that promotes shared power. In
order to grasp the complete essence of empowerment, there are four separate necessities that must be
met.

Gender Differences: Life expectancy for American women is approximately seven years longer than men,
which suggests that women may be more resilient to stress than men. Research (House, Landis, and
Umberson 1988) has led to the suggestion that women not only respond to stress in a completely different
way than men, they also encounter more stress - and are able to deal with it better.

Home Demands: Marriage children and other family relationships can add stress and overload making it a
role overload according to the Academy of Management Journal they state that when this happens this is,"
an individual's lack of personal resources needed to fulfill commitments obligations or requirements."

Individual Differences in the Stress-Strain Relationships: Individual differences play an important role in the
stress-strain relationships. Different individuals respond differently to types of stress, there are both eustress
(good stress) and distress (bad stress).

Non-Work Demands: Creates stress for work and the other way around creating stress outside of work.
Personal Demands: They are demand brought on by the person themselves. When the person takes on too
much outside of work or just brings on too much work.

Personality Hardiness: Personality Hardiness is a personality trait that is hesitant to distress and characterized
by commitment, control, and challenge. They are more capable to resist stressful events as opposed to
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those who are not hardy. Transformational Coping is an act used by hardy people that helps to change
unhealthy stressful events, into ones that are less harmful to their life.

Self-Reliance: Self-reliance is a personality attribute that is an interdependent pattern of behavior related to

how people form and maintain attachments with others. Two insecure patterns of attachment are counter
dependence, and overdependence. Both of these patterns of attachment are unhealthy, and impair
creating healthy relationships with others. Through self-reliance, individuals are able to gain understanding
with themselves, which helps them in their relation to their coworkers.

Type A Behavior Pattern: Type A behavior are characteristics of personalities who are more affected by the
stress-strain relationships than other personality types. Type A behavior includes; sense of urgency, quest for
numbers, status insecurity, and aggression and hostility.

Distributive Bargaining

Summary

For sellers, the BATNA or s is the price at which they will simply continue to seek another buyer, and for buyers
the BATNA or b is the price at which they will look for another car to buy.
One critical piece of information that can provide a distinct advantage is the reservation price of the other
side, or how eager the other party is to reach an agreement.
A third important factor is the skill of the negotiator.
Negotiators who prepare in advance and successfully utilize commonly practiced negotiation tactics will
reach agreements that are more favorable to them.
Facts, beliefs, and feelings about the relationships between the parties.
Open discussion of the negotiation process that helps understand and manage the process.
The single-issue negotiation situation is the most common, and the one issue to be negotiated is usually price
Once the opening offers are made the real haggling process, often called bracketing, occurs.
In a negotiation situation the parties may be involved in a strictly win-lose relationship
The reciprocity norm, or the human tendency to respond to the actions of others with equal or similar
actions, is a third major type of norm.
Good faith bargaining is a fourth major type of norm, and in a negotiation situation generally means that
people expect certain behaviors from the other negotiators
At some point in the negotiation process, the parties involved believe they are close to a settlement.

Keywords

Contingency Contract: A contingency contract is an agreement that specifies how a future event will
change specific issues contained in the contract. If such a future issue cannot be foreseen, a contingency
contract can allow the parties to reach agreement on all other issues, and then provide for exactly how the
terms will be finalized once the future event is known.

Fairness Norm: According to Richard Shell, professor of legal studies and management and academic
director of the Wharton Executive Negotiation Workshop, the negotiation process involves one of human
nature's most basic psychological drives: the need to maintain an appearance of consistency and fairness
in both words and deeds.

Good faith bargaining: It is a fourth major type of norm, and in a negotiation situation generally means that
people expect certain behaviors from the other negotiators.

Reciprocity Norm: The reciprocity norm, or the human tendency to respond to the actions of others with
equal or similar actions, is a third major type of norm. Someone who believes that "an eye for an eye" is the
most reasonable response to another party is applying the reciprocity norm.

Reframing Personal Attacks: Making personal attacks has, unfortunately, become a common tactic in
negotiations. The other party may simply get caught up in the "heat of battle," or may actually plan on using
personal attacks as a means of getting the other party emotionally involved and thus possibly less focused
on their objectives.
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Integrative Bargaining

The integrative bargaining technique, like the distributive technique, was largely developed within the field
of collective bargaining and labor negotiations in the 1970s. The integrative bargaining process is different
from the distributive process in many aspects.
Complex negotiations such as collective bargaining between management and union representatives.
Integrative negotiation, according to negotiation researcher Leigh Thompson of Northwestern University.
A critical negotiation skill that can be utilized in many situations.
The fourth step involves the trade-off of issues—the heart of the integrative process.
Negotiation practitioners and researchers have discovered several keys to the successful utilization of
integrative bargaining.
The negotiation process may then resort to one of strictly distributive bargaining, with both sides concealing
their interests and striving to maximize their gain on each issue.
Integrative bargaining can be more easily utilized if the parties involved value a long term positive
relationship.
A third way to foster collaborative atmosphere is not to assume you know the “real” needs of the other
party.
The practice of Interest-based Bargaining (IBB) has emerged in recent years as one of the most visible
innovations in negotiations.
Interest-based bargaining has a different philosophy from that of distributive or traditional integrative
methods of negotiation.

Keywords

Collaborative Atmosphere: A third key to integrative bargaining is to start with a collaborative atmosphere,
which, according to negotiation consultants Peter Stark and Jane Flaherty, requires several things of each
party.

Compatible Issues: Those with identical or very similar goals, and thus where agreement can be reached
quickly and the issue settled.

Exchange Issues: Those of generally equal value that can be traded one for the other, and thus with one
party achieving its goal on one issue and the other party achieving its goal on another issue.

Packaging: It generally refers to the process of combining two or more issues into one proposal that provides
something of value to each party. When several issues are identified in the first steps of integrative
bargaining, the process may appear to be unwieldy.

Recognition of the Relationship: Integrative bargaining can be more easily utilized if the parties involved
value a long-term positive relationship. Negotiations between parties who place value on their relationship
will be substantially different from negotiations between parties that do not value their relationship.

Thompsons Pyramid Model: Integrative negotiation, according to negotiation researcher Leigh Thompson of
Northwestern University, can be described as both a process and an outcome of negotiation. The parties
involved seek to integrate their interests and therefore produce negotiated outcomes that exceed those
normally achieved through distributive bargaining.

Gaining Leverage through Power and Persuasion

Leverage is situational advantage—the ability to HELP or HARM the other party.

One of the most powerful tools successful people use on a regular basis is leverage.
The importance of mastering the art of persuasion is vital to the ability of a manger to efficiently address the
many vexing challenges faced in the ever evolving marketplace
Leverage means utilizing the strengths of other things, processes, and people to do a lot more than you
could do alone.
Many teachers of communication, speech, and rhetoric consider Aristotle’s On Rhetoric to be a seminal
work in the field.
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Reward power is based on the individual’s ability to reward desirable behavior. Getting the person to think
for themselves is highly motivating and can therefore b extremely persuasive.
Nonverbal communication: can add emphasis through body language, facial expressions, actions

Keywords

Coercive Power: It is the opposite of reward power, and is based on the ability of the individual to sanction
(punish) or prevent someone from obtaining desirable rewards. Rewards and punishment are powerful
motivational tools, and leaders are generally better served by the Nexercise of reward power than by the
exercise of coercive power. But only if reward power is used effectively. Look at these three types of power
as POSITIONAL power and conferred on one from the ORGANIZATION, e.g., they come with the position of
manager, and each manager has at least some of each of the three "powers of office." The remaining four,
however, are in a different domain entirely.

Connection Power: It is more commonly referred to as "networking" these days. It is who you know, vertically
and horizontally, both within and outside the organization. This may be referred to in some circles as the "Old
Boys Club" and represents many of the political dynamics that make up organizations.

Information Power: It is a power that can be either personal or positional. A manager should have more
information power than his or her direct reports but it isn't always the case. As a result, an individual that is
actively involved in the "grapevine" often has more accurate information than the manager. The "grapevine"
is thought to be primarily rumor but, when studied, the "grapevine" has proven to be about 80% correct.
Therefore, the person in the organization with the most reliable information is thought to have quite a bit of
power.

Legitimate Power: It is that which is derived from the person's position in the organization. It exists because
organizations find it advantageous to assign certain powers to individuals so that they can do their jobs
effectively. All managers have some degree of legitimate power.

Personal Power: Expert power derives from having knowledge that is valued by the organization or
individuals with whom the person interacts. Expertise in a particular field or at problem solving or at
performing critical tasks are types of expert power. Expert power is personal to the individual who has the
expertise, hence it is different from the other three sources of power previously mentioned. However, the
possession of expert power may be the basis for rising to a management position in the area of the expertise,
now providing the incumbent with expert power as well that legitimate, reward and coercive power.

Referent Power: It results when the individual engenders admiration, loyalty and emulation to the extent that
the person gains the power to influence other. Charismatic leaders have referent power. They have a vision
for the organization that they lead, strong convictions about the correctness of the vision, and great
confidence in their ability to realize the vision, and are perceived by their followers as agents of change.

Reward Power: It is based on the individual's ability to reward desirable behavior. It stems partly from
legitimate power. Managers because of their positions have control over certain rewards, such as pay
increases, promotions, work schedules, status symbols and recognition awards, which they can use to
reward desirable behavior.

Ethics in Negotiation

Ethics are broadly applied social standards for what is right or wrong in a particular situation, or a process for
setting those standards.
Ethics are moral standards, not governed by law, that focus on the human consequences of actions.
Ethics are a product of a society’s culture that includes its traditions, customs, values and norms.
Individual character ethics maintains that the identification and responsible development of the human
traits of nobility.
Work character ethics maintain that the identification and responsible development of noble, reflective,
practitioner traits at work.
Four perspectives for understanding ethics are the descriptive, conceptual, normative, and practical.

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Ethical conflicts develop as a result of variations in ethical codes, moral standards, social values, and laws in
different cultures.
Many societies give preference to members of certain groups. Race, ethnicity, age, gender, geographic
region, and religion are variables used to discriminate.
Workers’ wages vary considerably around the world. In many countries, a worker’s annual salary may be
what a person with a similar job in another country earns in a week.
Trust can be defined as “an expression of confidence in another person.
Trust can also serve as strategic means to ends other than relationship-building.
Identification-based trust is grounded in empathy with another person’s desires and intentions and leads one
to “take on the other’s value because of the emotional connection between them.

Keywords Notes

Accommodation: One party adapts to the ethics of the other.

Avoiding: One party simply chooses to ignore or not deal with the conflict.

Compensation: Workers' wages vary considerably around the world. In many countries, a worker's annual
salary may be what a person with a similar job in another country earns in a week. From the Western
perspective, many developing nations pay incredibly low wages.

Discrimination: Many societies give preference to members of certain groups. Race, ethnicity, age, gender,
geographic region, and religion are variables used to discriminate. In some cultures, not being a native of
the society is a basis for employment discrimination.

Education-persuasion: One party attempts to convert others to its position through providing information,
reasoning or appeals to emotion.

Forcing: One party forces its will upon the other. Forcing is often used when one party is stronger than the
other.

Infiltration: One party introduces its cultural values to another society hoping that an appealing idea will
spread.

Negotiation-compromise: Both parties give up something to negotiate a settlement.

Trust Negotiation: It is an approach to gradually establishing trust between strangers online through the
iterative exchange of digital credentials.

Fairness and Trust in Negotiation

Negotiations are integral to marketing transactions, whether they concern price, or product or channel
attributes.
The areas of procedural and substantive fairness most often exist in the minds of employers,
H.R. personnel and even disciplinary or appeal hearing Chairpersons as no more than a swirling, gray thick
fog.
The process of arriving at an agreement when there is multiple potential and conflicting choices; it is the
process by which multi-cultural teams reach an agreement
Deterrence-based trust, on the other hand, is “based on consistency of behavior, meaning that people will
follow through on what they promise they are going to do.”
Trust can be defined as “an expression of confidence in another person…that you will not be put at risk
Coalitions can have very significant effects on the negotiation process and outcome.
Negotiators are often in the position to collectively define what is right or fair as a part of the negotiation
process

Keywords

Deal-making Negotiations: They are negotiations to buy and sell.

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Decision-making Negotiations: The process of arriving at an agreement when there is multiple potential and
conflicting choices; it is the process by which multi-cultural teams reach an agreement. Dispute-resolution
negotiations are negotiations to resolve conflict resulting from a claim being made and rejected.

Trust Negotiation: Trust Negotiation is an approach to gradually establishing trust between strangers online
through the iterative exchange of digital credentials. In contrast to a closed system, where the interacting
entities have a preexisting relationship (often proved by typing a username and password), trust negotiation
is an open system, and complete strangers can build trust in one another.

Value-claiming Negotiation: It is a negotiation to reach a distributive agreement. It is about claiming value.

Value-creating Negotiation: It is a negotiation to reach a integrative agreement. It is about creating value.

Closing the Deal and Post Negotiation Evaluation

Negotiators who are better prepared have numerous advantages, including the ability to analyze the other
party’s offers more effectively and efficiently.
Negotiators should make a conscious decision about whether they are facing a fundamentally distributive
negotiation
Negotiators also need to remember that many negotiations will consist of a blend of integrative and
distributive elements and that there will be distributive and integrative phases to these negotiations.
One of the most important sources of power in a negotiation is the alternatives available to a negotiator.
Negotiators also need to be aware of the other negotiator’s BATNA and to identify how it compares to what
you are offering.
The goal of most negotiations is achieving a valued outcome, not reaching an agreement per se.
Excellent negotiators understand that negotiation embodies a set of paradoxes – seemingly contradictory
elements that actually occur together.
The pace and flow of negotiations can move from an intense haggle over financial issues to an intense
debate over deeply held principles about what is right or fair or just.
The intention of most negotiations is to close the deal. Whether you are looking to purchase something or
get a pay raise.
Negotiation theorists make several overlapping distinctions about approaches to negotiation.

Keywords

Agreement Template: Document that includes critical issues, Memorizes important aspects of deal and
"what-ifs" and Includes: parties, intent, roles, consequences, exit strategy

Closing the Deal: The intention of most negotiations is to close the deal. Whether you are looking to
purchase something or get a pay raise, you want the deal signed and formalized. How do you move a
negotiation to close?

Negotiation: It is an integral part of daily life and the opportunities to negotiate surround us. While some
people may look like born negotiators, negotiation is fundamentally a skill involving analysis and
communication that everyone can learn.

Negotiators: They should make a conscious decision about whether they are facing a fundamentally
distributive negotiation, an integrative negotiation, or a blend of the two, and choose their strategies and
tactics accordingly.

INTRODUCTION TO TRAINING & DEVELOPMENT IN ORGANISATIONS

In this unit you have learnt about training & development and how they are being different from learning
and education. Basically, all these are interrelated but how teaches you how a training program should be
conducted to yield maximum learning which leads to development of the organization as whole.

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Further, it tells you about basis of learning and focusing on adult learning principles as training are to be
provided to adults. The purpose of training & development in the organisation and it’s objectives which will
not only increase the productivity but will surely focus on the ever growing needs/ demands of the
organisation in this competitive world.

It will help you to give you the overview of the systematic approach of training as per company’s need.

Key Terms

1. Globalisation : Globalisation symbolises the structural changes of the world with free flow of knowledge,
technology and human resources across national boundaries.

2. External Factors : External factors affecting HR practices are those pressures on firms that cannot be
controlled and changed by the organisation, in a favorable way in the short run.

3. Internal Factors : Internal environment of the organisation develops such influencers which have impact
on HR practices like culture, diversity, structure, strategy etc. These factors are called internal factors.

4. Strategy: Strategy : is a long term plan of action designed to achieve a particular goal or set of goals or
objectives.

5. Validation : Validation is the action of checking or proving the validity oraccuracy of something.

THE PROCESS OF TRAINING & DEVELOPMENT

This unit has developed greater understanding of various steps involved in designing system of Training and
Development in any organisation and its management. The various roles and responsibilities involved in the
entire process across the organisation

It gives you an overall function of training in an organisation. Giving you an insight of which approach is
better for training whether reactive or proactive Blend of both the approaches in appropriate amount is the
need of the hour.
The various steps involved in training process are explained in detail beginning from Needs assessment,
Deriving Instructional Objectives, Designing Training Programme, and Implementation of the Training
Programme. It gives you a brief description to Competence based approach for Training & Development.

Key Terms

1. Assessments are systematic methods of gathering data under standardized conditions and reaching a
conclusion regarding the knowledge, qualification and potential of an employee.

2. Competency: The combination of observable and measurable knowledge, skills, abilities and personal
attributes that contribute to enhanced employee performance and ultimately result in organizational
success. To understand competencies, it is important to define the various components of competencies.

3. Implementation: The activity performed according to a plan in order to achieve an overall goal.
4. Designing: Acting in a calculating, deceitful way.
5. Evaluation: The systematic analysis to demonstrate whether it has met its objectives in an effective and
efficient manner.

ORGANISATIONAL SETUP FOR MANAGEMENT OF TRAINING

This unit has developed greater understanding of organisational setup for management of training.
It gives an overview of Principles of organising training Programs giving an insight of the needs of organising
training functions. Understanding organisational setup will help one to integrate training goal with
organisational goals. Various roles involved in management of Training function in the organization are being
discussed in details so as to give an overview of the roles that has to be understood for better management
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of Training functions. Further, it explains the importance of budget and what it’s need is .What all should be
included while preparing a budget. It gives us the role and competencies that a trainer should inculcate in
one to be a successful trainer.

Key Terms

Organisational Structure : Organizational structure is a system that consistsof explicit and implicit institutional
rules and policies designed to outline how various work roles and responsibilities are delegated, controlled
and coordinated.

Functions : An action performed by a device, department, or person that produces a result. Function
remains more or less fixed whereas the purpose (which indicates intention or objective) generally changes

Budget : An estimate of costs, revenues, and resources over a specified period, reflecting a reading of
future financial conditions and goals.

EVOLVING TRAINING AND DEVELOPMENT PLAN

The formulation of training strategy in alignment with the corporate strategy and HR strategy makes the
entire efforts of the organisation more professional and effective. This is an important component of the
effective role of L&D department. The Policy is implemented smoothly if consensus is evolved between HR,
L&D and Executive departments before Calendar is formed and the need of particular training is accepted
beforehand. The efforts made in making evolving Training Strategy, Training Policy, Training Calendar go
longways in establishing the role of Training and Development in a proper way in any organisation.

Key Terms

1. Individual Development Plan (IDP): Individual Development Plan is a plan for particular individual in any
organisation for her/his development keeping in view the future roles and also the strength and
development areas in view.

2. Training Policy: Training policy is designed for a company to align Training and Development activities to
the Corporate needs of manpower and in consonance with the HR Strategy. The policy becomes the
framework to create Training and Development Calendar and activities.

TRAINING NEED ASSESSMENT

In this unit you have learnt the purpose and process of assessment of training. It helps to learn various
approaches for assessing the training concentrating mainly on the organisational and learner centric
approach for assessment. It gives you an overview of various steps involved in conducting assessment for
training. In today’s competent world there is necessity to understand the role of competency in TNA and the
approach to it.

Key Terms

1. Systematic Approach: Methodical approach repeatable and learnable through a step by step procedure

2. Technique: A systematic procedure, formula, or routine by which a task is accomplished

3. Consumer Centric: Creating a positive consumer experience at the point of sale and post-sale. A
customer-centric approach can add value to a company by enabling it to differentiate itself from
competitors who do not offer the same experience

4. Assessments are systematic methods of gathering data under standardized conditions and reaching a
conclusion regarding the knowledge, qualification and potential of an employee.

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5. Competency: The combination of observable and measurable knowledge, skills, abilities and personal
attributes that contribute to enhanced employee performance and ultimately result in organizational
success. To understand competencies, it is important to define the various components of competencies.

TRAINING METHODS, PEDAGOGY & TYPES OF TRAINING

In this unit a brief overview of training development framework is explained that explains the actual
framework to be followed while designing a training program Learning which is to derived through training
should be cleared and according to that a training program is to be designed. With this the training will be
putting in the maximum output. Various methods for delivering training are being discussed so that the
trainer can use various methods according to the need of the participant. Development through alternative
ways like Job rotation , Mentoring are being discussed.

Key Terms

1. Training Methods: An established, habitual, logical, or prescribed practice or systematic process of

achieving certain ends with accuracy and efficiency, usually in an ordered sequence of fixed steps.

2. Job rotation: It is a well-planned practice to reduce the boredom of doing same type of job everyday
and explore the hidden potential of an employee.

3. Learning: Measurable and relatively permanent change in behavior through experience, instruction, or
study

4. Pedagogy: Measurable and relatively permanent change in behavior through experience, instruction, or
study.

TRAINING FOR ORGANISATIONAL DEVELOPMENT

Organisational Development in ever chaining times has become a necessity. During the entire process of
organisational development communication to employees, customers and upgrading skills and changing
paradigm is highly important. Training and competent trainers play this role. The effectiveness of the role of
Training in OD depends upon the planning, preparation and execution of Training and Development
programs in alignment to the needs of Organisational Development. In case of Mergers and Acquisitions
(M&A), role of Training in all the tree stages of M&A exercise is paramount. The smooth transition, the
amalgamation of cultures is critical in any M&A of companies. Training plays the vital role. Thus planning and
designing right training and its execution makes M&A successful.

Key Terms

1. Merger : The combination of one or more corporations, LLCs, or other business entities into a single business
entity; the joining of two or more companies to achieve greater efficiencies of scale and productivity

2. Training : The process of increasing the knowledge and skills of the workforce to enable them to perform
their jobs effectively.

3. Organisational culture : the ways the organization conducts its business, treats its employees, customers,
and the wider community

4. Organisational development : Theory and practice of planned, systematic change in the attitudes, beliefs,
and values of the employees through creation and reinforcement of long-term training programs.

USE OF LATEST TECHNOLOGY IN TRAINING & DEVELOPMENT

Technology is playing a very important role in Training and Development. IT has completely changed the
concepts of T&D. The impact is both interns of contents as well as in delivery methods. With the application
of latest technology now training is available as per the choice of the learner. It has reduced the cost of
learning. The open universities based on ICT have become boon for the continuous learning. Latest methods
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of blended learning or 3D simulated learning makes learning a fun. ICT is great boon to Training and
Development functions.

Key Terms

1. Technology : The purposeful application of information in the design, production, and utilization of goods
and services, and in the organization of human activities

2. Synchronous : Sequential events occurring together, or at fixed intervals, timed by a clock.

3. Assessments are systematic methods of gathering data under standardized conditions and reaching a
conclusion regarding the knowledge, qualification and potential of an employee.

4. Competency : The combination of observable and measurable knowledge, skills, abilities and personal
attributes that contribute to enhanced employee performance and ultimately result in organizational
success. To understand competencies, it is important to define the various components of competencies.

EVALUATION OF EFFECTIVENESS OF TRAINING

In this unit you have learnt about the need for evaluating the effectiveness of training functions. It will give an
overview of how to assess the effectiveness of training function. It will teach various approaches adopted for
assessing the effectiveness of training. A training effectiveness cant be fully assessed without auditing the
training program. So, it gives the overview of training auditing and it’s functions.

Key Terms
1.Organisational Structure: Organizational structure is a system that consists of explicit and implicit institutional
rules and policies designed to outline how various work roles and responsibilities are delegated, controlled
and coordinated.

2. Evaluation: The systematic analysis to demonstrate whether it has met its objectives in an effective and
efficient manner.

3. Assessments are systematic methods of gathering data under standardized conditions and reaching a
conclusion regarding the knowledge, qualification and potential of an employee.

4. Effectiveness: The degree to which objectives are achieved and the extent to which targeted problems
are solved. Effectiveness is determined without reference to costs and,it further means "doing the right thing."

5. Auditing: Periodic onsite-verification (by a certification authority) to ascertain whether or not a

documented quality system is being implemented

COMPETENCY BASED APPROACH TO TRAINING

In this unit you have learnt about the competency based training which is the need of the hour in today’s
world. It gives you a brief description about Competency based training giving it’s basic characteristics ,
advantages as well as limitations. The details to design a competency based training is explained along with
it’s delivery methods . The evaluation and assessment of the training is explained to evaluate the outcomes
of the training. Further, it explains the implication of the training.

Key Terms

1. Assessment : Assessments are systematic methods of gathering data under standardized conditions and
reaching a conclusion regarding the knowledge, qualification and potential of an employee.

2. Competency : The combination of observable and measurable knowledge, skills, abilities and personal
attributes that contribute to enhanced employee performance and ultimately result in organizational
success. To understand competencies, it is important to define the various components of competencies.

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3. Implementation : The activity performed according to a plan in order to achieve an overall goal.

4. Designing : Acting in a calculating, deceitful way.

5. Evaluation : The systematic analysis to demonstrate whether it has met its objectives in an effective and
efficient manner.

6. Delivery : Formal and voluntary transfer of possession by actual (physical) delivery, constructive delivery
(by an agreement or understanding), or symbolic delivery (by documents).

STRATEGY BASED TRAINING

Organizational development requires a good training strategy. The training strategy can take on all kinds of
characteristics, but ultimately, it must service the development needs of the organization, such as increased
competency in critical areas, direct work experience for new personnel or simply an all-around well-trained
staff. So in developing an organizational training strategy, it’s important to pay attention to the bigger
picture and to implement the necessary practices to meet long term strategic goals.

Key Terms
1. Assessments are systematic methods of gathering data under standardized conditions and reaching a
conclusion regarding the knowledge, qualification and potential of an employee.

2. Competency: The combination of observable and measurable knowledge, skills, abilities and personal
attributes that contribute to enhanced employee performance and ultimately result in organizational
success. To understand competencies, it is important to define the various components of competencies.

3. Evaluation: The systematic analysis to demonstrate whether it has met its objectives in an effective and
efficient manner.

4. Validation: Validation is the action of checking or proving the validity or accuracy of something.

HUMAN RESOURCE DEVELOPMENT : AN INTRODUCTION

This unit broadly describes human resource development. The initial chapter describes about the role and
purpose of human resource management in an organization, followed by the key elements of HRM. HR
Management Information System is also described with its key functions like recruitment, placement,
evaluation, compensation and development of the employees of an organization. The other topics covered
in the chapter are HRD System and function, methods of human resource development which involves
performance appraisal, potential appraisal, feedback counseling, training, role analysis, career planning,
job rotation, reward system, organization development, quality of work life. The next part of the chapter
deals with roles and functions of HRD professionals after which HRD and its connection with generic strategy
of the firm is described. The last phase of the unit briefs about the four phases of HRD process eg needs
assessment phase, design phase, implementation phase, evaluation phase.

Key Terms

Human Resource Development Human Resource Development (HRD) is the framework for helping
employees develop their personal and organizational skills, knowledge and abilities.

Human Resource Management Human Resource may be defined as the total knowledge, skills, meatier
abilities, talents and beliefs of the individual involved in the affairs of the organization.
Generic business strategy Generic business strategy : Is the one which can be adopted by any firm,
regardless of the product as industry involved to achieve the competitive advantage.

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HRD: FOUNDATIONAL CONCEPTS

This unit deals with the fundamental concepts of the human resource management. In the initial part of the
chapter, one of the significant internal factors that influence employee behavior, motivation, is discussed.
The theories of motivation includes ( Maslow’s need hierarchy, Alderfer’s ERG theory, and Herzberg’s two
factor theory is discussed. On the other hand the Cognitive process theories of motivation which include
(expectancy theory, goal- setting theory, social learning theory, and equity theory) and the consequences
of behavior (reinforcement theory) is also described These theories have consequences for evolving and
conducting HRD Programs. Towards the end of the Unit learning theory applied at work is
discussed with the three approaches to learning (Behaviourism, Humanism, and Cognitivism). The chapter
concludes with description of learning organization and five elements of learning organization popularized
by Peter Senge’s.

Key Terms

System approach : System approach is an approach that entails analysis of problems and come up with a
blend of solutions. It is agereially approach that univolves tockling problems in an advanced disciplined
manner keeping priorities in mind.

Open system : An open System is the one where the elements of the system can interact with environment.

Closed system : A closed system is the one wheere the elements of system does not interact with the
environment at all.

Motivation : The act or process of giving someone a reason for doing something, the act or process of
motivating some one.

Equity theory : The equity theory is a theory that attempts to explain relational satisfaction in terms of
perceptions of fair/unfair distributions of resources with inter personal relationships.

Expectancy theory : Proposes that an individual will decide to behave as act in a certain way because they
are motivated to reflect a specific behaviour over other behaviours.

Goal- setting theory : Goal netting involves establishing specific, me as unable, achierable, realistic and time
targeted goals.

Social learning theory : Social learning theory is where people learn by observing HRD : Foundational
Concepts others. It explains how people learn new behavious values, attitudes.

Reinforcement theory : Implies that if a person has a need, them he/she will be motivated to work hard to
achieve the need desired

NEED ASSESSMENT

In this unit, the initial part focuses on the needs assessment phase of the HRD process, the purpose and the
levels of needs analysis (Strategic/Organizational, Task, and Person). The HRD process model deals with
design which covers the objectives, develop lesson plan, develop/acquire materials/select
trainer/leader/select methods and techniques/schedule the program/intervention.

Key Terms

Strategic/organizational analysis : "The process of reviewing the development, work, environment, personnel
and operation of a business or another type of association."

Task Analysis : The process of breaking down a complex task into its smaller steps or components.

Task identification : The act of identifying and provide a clear framework for assigning to individuals.

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Time sampling : It is an observation technique that determines the degree to which a behavior occurs by
observing.

Job inventory questionnaire : It includes preparing a questionnaire by people who are familiar with a
particular job and who can identify all the tasks involved in the job.

Job duty task method : This method involves dividing the jobs into several subparts.

Person analysis : It is a phase of training needs analysis directed at identifying which individuals within an
organization should receive training. Train- the- trainer programs: Train- the- trainer programs seek to help co-
operate trainers continue to improve upon the design, delivery and management of the programs that they
deliver.

Lesson plan : A lesson plan is a tool of writing used as a guide of a lesson. It contains the key goals and time-
lines to be used to achieve and effective delivery of the lesson content.

Training manuals : A training manual is a book of instructions, designed to improve the quality of a
performed task.

IMPLEMENTING HRD PROGRAM

This unit describes numerous vital activities related to the implementation or delivery of training and
development programs. The three training methods (on-the job training, classroom, self-paced) are
discussed in this unit where each method has a number of techniques suitable for particular situations. The
need for skilled Implementing HRD Program and technical workers continues to rise. The major category of
skilled and technical training has being discussed (basic-skills, technical, inter-personal). In the last phase
the HRD process evaluation is defined with its purpose and Kirkpatrick's work evaluation which have four
levels (reaction, learning, job-behavior, results).

Key Terms

On-the-job training : It refers to the training when the employees are actually working. It means that the skills
can be gained while trainers are carrying out their jobs.
Discussion method : The discussion method involves that a trainee is two way communication with trainers
and the trainees in communication with each other.

Audiovisual method : The audiovisual method is the third primary category of classroom training, which takes
advantage of various media to demonstrate the training material.

Static media : It refers to the material that uses words and images. Example of static media includes printed
materials such as hand outs, reference books, text books.

Dynamic media : Dynamic media includes methods that present dynamic sequences of events. Dynamic
media are compact disc (CD's), DVD's, video tapes and audio cassettes.

Business games : This is also known as simulation game which refers to simulation games that are used as an
educational tool for teaching business.

Role playing : The role playing is a simulation of a single event or situation. The objective of this role playing is
to develop insight into one's own behavior and its impact on others.

Computer based training : Computer based training is an interactive method of learning that provides a
series of self-placed-hands-on web-based courses.

Computer aided instructions : This is the use of computer software to enhance teaching experience. The
interactive nature of computer aided instruction gives it a significant edge over traditional training methods.

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HRD evaluation : The systematic collection of descriptive and judgmental information is necessary to make
effective training decisions related to the selection, adoption, value and modification of various instructional
activities.

EMPLOYEE DEVELOPMENT THROUGH ORIENTATION AND SOCIALIZATION

The initial unit describes about the employee orientation program, its purpose and the problems with
orientation programs. The topic employee socialization covers the fundamental concepts of the
Socialization and Edgar Schein three dimensions of organizational roles. The stage models of socialization
have been described for example (anticipatory socialization, encounter, change and acquisition.)

Key Terms
Employee orientation : The activity that introduces new employees to the organization.
Employee socialization : The process by which an individual acquires the social knowledge and skills
necessary to assume an organisational role.

EMPLOYEE DEVELOPMENT THROUGH PERFORMANCE MANAGEMENT

The topic mentioned in this unit is performance management system, evaluation of performance
management in India with all the four phases. The components, objectives and steps of performance
management systems have also been described in this unit. The other topics discussed are 360 degree
assessment, its importance, pros and cons as well as its use in the organization. Employee counselling and
wellness services are mentioned towards the end of the unit. The Werner and De Simone six components of
employee counselling and wellness program is discussed (problem identification, education, referral,
counselling, treatment/ interventional/follow up).

Key Terms

Performance Management System : It is a process used to communicate organizational goals and

objectives, reinforce, individual accountability this goals, and track and evaluate individual and
organizational performance results.

360 Degree Assessment : It is a performance appraisal basically on evaluation of an employee's job

performance by all those around him/her.

Employee Counselling : Its aim is to assist both the employer and the employee by intervening with an active
problem solving approach to tackling the problems at hand.

EMPLOYEE DEVELOPMENT THROUGH EMPLOYEE ASSISTANCE PROGRAM

In this unit the details about employee assistance program are being discussed such as Substance abuse,
mental health, employee wellness and health promotion programs, exercise and fitness interventions,
Smoking cessation, nutrition and weight control interventions and ethical issues in employee counselling
programs.

Key Terms

Employee assistance program : An employee assistance program is a voluntary, work-based program that
offers free and confidential assessments, short-term counselling, referrals and follow-up services to
employees who have personal and/
or work related problems.

Employee wellness program : Employee wellness program is also known as health promotion program is a
type of employee benefit that encompasses the various efforts companies make to promote and maintain
their employer's health.

Hypertension : It means "high blood pressure; transitory or sustained elevation of systemic arterial blood
pressure to a level likely to induce cardio vascular damaged or other adverse consequences".
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COACHING AND MENTORING

This unit broadly deals with developmental supervision. In the initial part of this unit, the various aspects
associated with coaching for performance enhancement is discussed. The need for the coaching and the
role that HRD professionals play is also described. The differences between an external coach and an
internal coach and the associated skills necessary for coaching are also mentioned. The next part of this unit
deals with mentoring at work. The various modes or types of mentoring (group mentoring, one-on-one-
mentoring, resource based mentoring, training-based mentoring, reverse mentoring, virtual mentoring) are
discussed in detail in this unit.

Key Terms
Coaching : A method of directing, instructing and training a person or group of people with the aim to
achieve some goal or develop specific skills.

External coach : A consultant from outside a company broad into troubleshoot particular problems and
remove workplace obstacles by working intimately with individuals or groups.

Internal coach : Managing as a coach on an everyday basis within a company. This role is in contrast to
external coaching.

Mentoring : Is basically a system of semi-structured guidance where by one person shares their knowledge,
skills and experience to assist others to progress in their own lives and careers.

Group mentoring : Group mentoring involves group of individuals who engaged in a mentoring relationships
to achieve specific learning goals.

One-on-one mentoring : This is the most common mentoring model. This is preferred by most of people as it
allows both mentor and mentee to develop a personal relationship and provide individual support to the
mentor.

Training based mentoring : It is a training g program where a mentor is assigned to a mainly to help. To help
him/ her develop the specific skills being taught in the program.

Reverse based mentoring : Is loosely define as a process of mentoring a senior person by a junior offering
guidance to a more experienced one.

CAREER MANAGEMENT AND DEVELOPMENT

Career management and development including career oriented HRD, various stages in career
management are explained. The last phase of the unit deals with Ericson's model of adult development and
Models of career development are explored. The role that HRD professionals can play in career
development is also discussed.

Key Terms
Career management : Career management is a lifelong, self monitored process of career planning that
involves choosing and setting personal goals and formulating strategies for achieving them.

Career development: Career development is the series of activities or the on-going/ lifelong process of
developing one's career.

LEADERSHIP DEVELOPMENT

This unit begins with the introduction along with the importance, objectives and challenges of leadership.
The other topics covered in this unit are levels of leadership development, leadership passage, leadership
development mechanisms

Key Terms

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Leadership development : Leadership development is the process implemented
to impart knowledge, skills, attitudes and visions to managerial personnel discharging roles of leaders to
support them and manage the work successfully and professionally. Experiential learning : Experiential
learning is the process of learning from direct Leadership Development experience.

Mentoring : Is a partnership between two people (mentor and mentee) who are working in a similar field or
sharing similar experiences.

MANAGEMENT DEVELOPMENT

This unit explains Management Development, its methods and Evaluation of Leadership and Management
development. Towards the end of the unit it describes evaluation and Kirkpatrick's four levels of training
evaluation model.

Key Terms

Evaluation : evaluation refers to the worth of learning and development for employees, managers and
leaders.

Management development : Management development process consists of assessing the company's

strategic needs appraising the managers' current performance, and developing the managers.

ORGANIZATION DEVELOPMENT

This unit begins with the introduction to Organization Development along with how it is different from change
management and consulting. Importance of Organization Development is described with its four important
areas like Organizational Change, Growth, Work Processes and Product Innovation. The three major change
in Organization Development has been described example Lewin'sChange Model, Action Research Model,
the Positive Model. The other topics covered in this unit are General Model of Planned Change which
consists of the four activities. T She General Model of planned change include: entering and contracting,
diagnosing, planning and implementing, evaluating and institutionalizing change. Subsequently, diagnosing
organization is described as the need for diagnostic models.

Key Terms

Organizational Development : Organizational Development is the process through which an organization

develops the internal capacity to most effectively to realize its mission and vision and to sustain itself over the
long term.

Action research model : It is an organizational change process that is based on a research model
specifically one that contributes towards the betterment of the sponsoring organization and contributes to
the advancement of the knowledge of organization in general.

Diagnosis : Diagnosis is a cyclical process that involves data, gathering, interpretation and identification of
problem areas and possible action plan.

ORGANIZATION DEVELOPMENT

This unit explains designing interventions, effective interventions and how effective intervention is designed.
The last phase of this unit explains the interpersonal and behavioural intervention which involves four types of
interventions e.g. T-group, process consultation, third party interventions, team building. Organization-wide
human process interventions, techno-structural interventions, strategic interventions, human resource
management interventions are also briefly described towards the end of this unit.

Key Terms

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Human process interventions : A change theory that focuses on changing behaviours by modifying
individual's attitudes, values, problem solving approaches and interpersonal styles.

Techno-structural interventions : A type of change intervention that is designed to improve work content,
work method, and the relationships among workers and lower costs by replacing inefficient materials,
methods, equipment.

Human resource management interventions : These interventions are change programs that relates to
individual, interpersonal relations, and group dynamics. They attempt to improve individual or group
performance as well as people's working relationships with one another in organizational settings.

Strategic interventions : A strategic intervention provides simple understanding and solutions that really
deliver more benefit to people with less effort in a short space of time.

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