Sadaf BBA HRM Notes

Human Resource Management
Faculty Name- Dr. Sadaf Khan

Course- BBA- IInd Year Subject- Human Resource Management
UNIT – 1st
Human Resource Management (HRM)-
Meaning-
Human resource management (HRM or HR) is the strategic approach to the effective management

of people in an organization, so that they help the business gain a competitive advantage. it is
designed to maximize employee performance in service of an employer's strategic objectives. HR is
primarily concerned with the management of people within organizations, focusing on policies and
on systems. HR departments are responsible for overseeing employee-benefits design,
employee recruitment, training and development, performance appraisal, and rewarding). HR also
concerns itself with organizational change and industrial relations, that is, the balancing of
organizational practices with requirements arising from collective bargaining and from governmental
laws. Human resources overall purpose is to ensure that the organization is able to achieve success
through people.
Human resources is used to describe both the people who work for a company or organization and
the department responsible for managing resources related to employees. Human resource
management is a contemporary, used to describe the management and development of employees in
an organization.
Human resource management is therefore focused on a number of major areas, including:
 Recruiting and staffing

 Compensation and benefits
 Training and learning
 Labor and employee relations
 Organization development
Due to the many areas of human resource management, it is typical for professionals in this field to
possess specific expertise in one or more areas. Just a few of the related career titles for HR
professionals include:
 Training development specialist

 HR manager
 Benefits specialist
 Human resource generalist
 Employment services manager
 Compensation and job analysis specialist
 Training and development manager
 Recruiter
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 Benefits counselor
 Personnel analyst
Definition-
 “HRM is concerned with the people dimension in management. Since every organisation is
made up of people, acquiring their services, developing their skills, motivating them to higher
levels of performance and ensuring that they continue to maintain their commitment to the
organisation are essential to achieving organizational objectives. This is true, regardless of the
type of organisation-government, business, education, health, recreation, or social action”.
 “HRM can be defined as a process of procuring, developing and maintaining competent human
resources in the organisation so that the goals of an organisation are achieved in an effective
and efficient manner”.
In short, HRM is an art of managing people at work in such a manner that they give their best to the
organisation for achieving its set goals.
Objectives of HRM-
1. To help the organisation to attain its goals effectively and efficiently by providing competent and
motivated employees.
2. To utilize the available human resources effectively.
3. To increase to the fullest the employee’s job satisfaction and self-actualisation.
4. To develop and maintain the quality of work life (QWL) which makes employment in the
organisation a desirable personal and social situation.
5. To help maintain ethical policies and behaviour inside and outside the organisation.
6. To establish and maintain cordial relations between employees and management.
7. To reconcile individual/group goals with organizational goals.
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Scope of HRM-
HRM
Labour or Personnel Industrial Relations
Aspect Aspect
Welfare Aspect
1. The Labour or Personnel Aspect:
This is concerned with manpower planning, recruitment, selection, placement, transfer, promotion,
training and development, lay-off and retrenchment, remuneration, incentives, productivity, etc.
2. Welfare Aspect:
It deals with working conditions, and amenities such as canteen, rest and lunch rooms, housing,
transport, medical assistance, education, health and safety, recreation facilities, etc.
3. Industrial Relations Aspects:
This covers union-management relations, joint consultation, collective bargaining, grievance and
disciplinary actions, settlement of disputes, etc.
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Functions of HRM:
The functions performed by managers are common to all organizations. For the convenience of
study, the function performed by the resource management can broadly be classified into two
categories-
Functions
Managerial functions Operative functions
Planning Procurement
Organizing Development
Staffing Compensation
Directing Maintenance
Controlling
(1) Managerial Functions:
Planning:
Planning is a predetermined course of actions. It is a process of determining the organisational goals
and formulation of policies and programmes for achieving them. Thus planning is future oriented
concerned with clearly charting out the desired direction of business activities in future. Forecasting is
one of the important elements in the planning process. Other functions of managers depend on
planning function.
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Organizing:
Organizing is a process by which the structure and allocation of jobs are determined. Thus organizing
involves giving each subordinate a specific task establishing departments, delegating authority to
subordinates, establishing channels of authority and communication, coordinating the work of
subordinates, and so on.
Staffing:
It is a process by which managers select, train, promote and retire their subordinates This involves
deciding what type of people should be hired, recruiting prospective employees, selecting employees,
setting performance standard, compensating employees, evaluating performance, counseling
employees, training and developing employees.
Directing/Leading:
Directing is the process of activating group efforts to achieve the desired goals. It includes activities
like getting subordinates to get the job done, maintaining morale motivating subordinates etc. for
achieving the goals of the organisation.
Controlling:
It is the process of setting standards for performance, checking to see how actual performance
compares with these set standards, and taking corrective actions as needed.
(2) Operative Functions:
The operative, also called, service functions are those which are relevant to specific department.
These functions vary from department to department depending on the nature of the department, the
operative functions of HRM relate to ensuring right people for right jobs at right times.
These functions are as follows-
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Procurement:
It involves procuring the right kind of people in appropriate number to be placed in the organisation. It
consists of activities such as manpower planning, recruitment, selection placement and induction or
orientation of new employees.
Development:
This function involves activities meant to improve the knowledge, skills aptitudes and values of
employees so as to enable them to perform their jobs in a better manner in future. These functions
may comprise training to employees, executive training to develop managers, organisation
development to strike a better fit between organisational climate/culture and employees.
Compensation:
Compensation function involves determination of wages and salaries matching with contribution
made by employees to organisational goals. In other words, this function ensures equitable and fair
remuneration for employees in the organisation. It consists of activities such as job evaluation, wage
and salary administration, bonus, incentives, etc.
Maintenance:
It is concerned with protecting and promoting employees while at work. For this purpose virus
benefits such as housing, medical, educational, transport facilities, etc. are provided to the
employees. Several social security measures such as provident fund, pension, gratuity, group
insurance, etc. are also arranged.
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HRM in a Challenging Environment:-
1. Work force Diversity:

Diversity has been defined as any attribute that humans are likely to use to tell them, that person is
different from me and, thus, includes such factors as race, gender, age, values, and cultural norms’.
It is likely to be more diverse as women, minority- group members, and older workers flood the work
force. With the increasing number of women entering the work force due to a combination of factors
like women’s emancipation, economic needs, greater equality of sexes, education and so on,
additional pressures of managing a different set of problems at the work place have arisen. As such,
the number of women is on increase in all walks of life i.e., teachers, lawyers, doctors, engineers,
accountants, pilots, parliamentarians and so on.
2. Economic and Technological Change:
Along with time, several economic and technological changes have occurred that have altered
employment and occupational pattern. In India too, there is a perceptible shift in occupational
structure from agriculture to industry to services.
The New Economic Policy, 1991 has led to liberalization and globalization giving genesis to
multinational organisations with their multicultural dimensions having certain implications for HRM.
Technology has become the hallmark of the modem organisations. As such, modem organisations
have become the technology-driven organisations. So to say, men are replaced by machinery.
Manufacturing technology, for example, has changed to automation and robotisation.
3. Globalization:
The New Economic Policy, 1991 has, among other things, globalised the Indian economy. There has
been a growing tendency among business firms to extend their sales or manufacturing to new
markets aboard.
Globalization increases competition in the international business. Firms that formerly competed only
with local firms, now have to compete with foreign firms/competitors. Thus, the world has become a
global market where competition is a two-way street.
Globalization has given genesis to the multinational corporations (MNCs). The MNCs are
characterised by their cultural diversities, intensified competition, variations in business practices and
so on.
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4. Organisational Restructuring:
Organisational restructuring is used to make the organisation competitive. From this point of view,
mergers and acquisitions of firms have become common forms of restructuring to ensure
organisational competitiveness. The mega-mergers in the banking, telecommunications and
petroleum companies have been very visible in our country. Downsizing is yet another form of
organisational restructuring.
As a part of the organisational changes, many organisations have “right sized” themselves by various
ways like eliminating layers of managers, closing facilities, merging with other organisations, or out
placing workers.
One of the challenges that HRM faces with organisational restructuring is dealing with the human
consequences of change.
5. Changing Nature of Work:
Along with changes in technology and globalization, the nature of jobs and work has also changed.
For example, technological changes like introduction of fax machines, information technology, and
personal computers have allowed companies to relocate operations to locations with lower wages.
There is also a trend toward increased use of temporary or part-time workers in organisations.
One most significant change in the nature of work is that it has changed from manual to mental/
knowledge work.
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UNIT – 2nd
Human Resource Planning:
Meaning:-
Human resource is the most important asset of an organisation. Human resources planning are the
important managerial function. It ensures the right type of people, in the right number, at the right time
and place, who are trained and motivated to do the right kind of work at the right time, there is
generally a shortage of suitable persons.
Human Resource Planning is a systematic process of forecasting both the prospective demand for
and supply of manpower, and employment of skills with the objectives of the organization. It can also
be termed as the method of reviewing the manpower necessities to ensure that right kind of skills is
made available to the organization.
Definition:-
 Human resource planning is “the process by which a management determines how an
organisation should make from its current manpower position to its desired manpower
position.”
 “a process of determining and assuring that the organisation will have an adequate number of
qualified persons available at the proper times, performing jobs which meet the needs of the
enterprise and which provide satisfaction for the individuals involved.”
 Human resource planning is “an integration approach to performing the planning aspects of the
personnel function in order to have a sufficient supply of adequately developed and motivated
people to perform the duties and tasks required to meet organisational objectives and satisfy
the individual’s needs and goals of organisational members.”
Human resource planning may be viewed as foreseeing the human resource requirements of an
organisation and the future supply of human resources and making necessary adjustments between
these two and organisation plans, and foreseeing the possibility of developing the supply of human
resources in order to match it with requirements by introducing necessary changes in the functions of
human resource management.
Here, human resource means skill, knowledge, values, ability, commitment, motivation etc., in
addition to the number of employees. Though accomplishment of organisational objectives and goals
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is the primary concern of the human resource planning, concern for the aspirations of the people and
their well-being has equal importance in it.
Features of Human Resource Planning:
Human Resource Planning
Well Defined Adjusting Demand

Objectives and Supply
Determining Human Creating Proper Work

Resource Needs Environment
Keeping Manpower
Inventory
1. Well Defined Objectives:-
Enterprise’s objectives and goals in its strategic planning and operating planning may form the
objectives of human resource planning. Human resource needs are planned on the basis of
company’s goals. Besides, human resource planning has its own objectives like developing human
resources, updating technical expertise, career planning of individual executives and people, ensuring
better commitment of people and so on.
2. Determining Human Resource Needs:-
Human resource plan must incorporate the human resource needs of the enterprise. The thinking will
have to be done in advance so that the persons are available at a time when they are required. For
this purpose, an enterprise will have to undertake recruiting, selecting and training process also.
3. Keeping Manpower Inventory:-

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It includes the inventory of present manpower in the organisation. The executive should know the
persons who will be available to him for undertaking higher responsibilities in the near future.
4. Adjusting Demand and Supply:-
Manpower needs have to be planned well in advance as suitable persons are available in future. If
sufficient persons will not be available in future then efforts should be .made to start recruitment
process well in advance. The demand and supply of personnel should be planned in advance.
5. Creating Proper Work Environment:-
Besides estimating and employing personnel, human resource planning also ensures that working
conditions are created. Employees should like to work in the organisation and they should get proper
job satisfaction.
Objectives of Human Resource Planning:-
 Guarantee ample supply of resources, whenever there is a need for it.

 Make sure that the current manpower in the company is being used properly.
 To foresee the potential requirements of manpower at various skill levels.
 Evaluate excess or scarcity of resources that are available at a given point of time.
 Predict the impact of technological changes on the resources as well as on the kind of jobs they
do.
 Manage the resources that are already employed in the organization.
 Ensure that there is a lead time available to pick and train any supplementary human resource.
Need for Human Resource Planning:-

1. In India, unemployment is a grave concern. Scarcity of manpower and that too with the required
skill sets and competence, has given rise for need of Human Resource Planning.
2. It comes handy for smooth and continuous supply of workers when a huge number of employees
is retiring, or leaving the company or maybe they are incapable of working due to psychological
or physical ailments.
3. There is a need for Human Resource Planning when there is an increase in employee turnover,
which is obvious. Some examples of this turnover are promotions, marriages, end of contract,
etc.
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4. Technological changes lead to a chain of changes in the organization, right from skill sets product
methods and administration techniques. These changes lead to an overall change in the number
of employees required and with entirely different skill set. It is here that the Human Resource
Planning helps the organization deal with the necessary changes.
5. Human Resource Planning is required to meet the requirements of diversification and growth of a
company.
6. There is a need for Human Resource Planning in downsizing the resources when there is a
shortage of manpower. Similarly, in case of excess resources, it helps in redeploying them in
other projects of the company.
Importance of Human Resource Planning:-

 It gives the company the right kind of workforce at the right time frame and in right
figures.
 In striking a balance between demands-for and supply-of resources, HRP helps in the
optimum usage of resources and also in reducing the labor cost.
 Cautiously forecasting the future helps to supervise manpower in a better way, thus
pitfalls can be avoided.
 It helps the organization to develop a succession plan for all its employees. In this
way, it creates a way for internal promotions.
 It compels the organization to evaluate the weaknesses and strengths of personnel

thereby making the management to take remedial measures.
 The organization as a whole is benefited when it comes to increase in productivity,

profit, skills, etc., thus giving an edge over its competitors.
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Human Resource Planning Process:-
1. Objectives of human resource planning: human resource planning must be matched with

overall organizational plans. It should be concerned with filling future vacancies rather than matching
existing personnel with existing jobs.
2. Current manpower stock: Current manpower stock must be continuously maintained by every

department. Manpower inventory must have the detailed bio data of each individual . this record not
only help in employee development but also in the finding out the surplus/ shortage of manpower.
3. Demand/ supply forecasting: firstly the organization must check the demand of manpower after
every one year, two-year so on. For this purpose employment trends to show the number of
employees on payroll during last say three years to show the trend.
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Replacement needs arise due to the death, retirement or termination of the employees.
Growth and expansion helps in creating a number of positions at work place.
After the demand forecasting it is also important to check the supply of the different type of personnel
for this purpose human resource audit, replacement charts can be prepared.
4. Determining net requirement: human resource manager must check the demand and supply of
the manpower before deriving at any conclusion.
5. Redeployment and redundancy: in redeployment the surplus employees in one department can
be transferred to another department where deficit of employees estimated and in case of
redundancy where surplus employees can not be redeployed they can be offered voluntary retirement
scheme.
6. Employment programme: here it is required to prepare programmes of recruitment, selection,

transfer and promotion to achieve organization goal.
7. Training and development: it is very necessary for the employees to keep them updated in the
job they are doing.
8. Evaluation of Human resource planning: after doing all the above steps it is necessary to
evaluate the effectiveness of human resource planning.
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Job Analysis:-
Job analysis in human resource management (HRM) refers to the process of identifying and
determining the duties, responsibilities, and specifications of a given job. It encompasses the
collection of data required to put together a job description that will attract the right person to fill in the
role. Job analysis in HRM helps establish the level of experience, qualifications, skills and knowledge
needed to perform a job successfully.
Different techniques that facilitate the job analysis process:-
1. Job Analysis Method: Interview:-
With this job analysis method, job analysts conduct interviews with incumbents to collect information
about their tasks and how they are coping with them. Interviews can be structured and unstructured
depending on your corporate culture.
 Structured interviews follow a systematic approach where employees are interviewed

accurately and consistently, following a preset format. In a structured interview, you typically
see that:
 All interviewees are asked the same questions in the same order.
 Interviewers record, compare and evaluate answers against standardized criteria.
 The interview process remains the same even if the interviewer changes.
 Unstructured interviews, on the other hand, unravel without a preset structure. The interview
process is carried out as a conversation with no specific questions predefined. Nevertheless,
the interviewer should make the purpose and focus of the interview clear to the employees.
Namely, that the purpose of the interview is to understand their job role better in order to
improve or modify their role. In an unstructured interview, you typically see that:
 Interviewees may receive different questions or the same questions may be asked in a different
order.
 Interviewers don’t always use standardized criteria for recording, comparing and evaluating answers.
 The interview process varies depending on the interviewer.
2. Job Analysis Method: Questionnaires:-
As the name suggests, the questionnaire job analysis method requires employees, supervisors, and
managers to fill out forms, namely questionnaires. It’s one of the most widely used job analysis
methods because it’s inexpensive to create and easy to distribute to numerous individuals at a faster
rate. Questionnaires can have different question forms, such as open-ended questions, multiple
choice, checklists or a mix of all of them.
Questionnaires used for job analysis collect data about all aspects that influence how a job is
completed, including both internal and external factors. These are the most common areas that
questionnaires focus on:-
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 Knowledge, skills, experience, and qualifications

 Duties performed daily
 Duties performed less frequently
 Equipment and materials used for duties
 Time spent on different job duties
 Physical and emotional input
 Level of job satisfaction
 Salary and compensation
 Work conditions
 Additional comments
3. Job Analysis Method: Observation:-
The observation method enables job analysts to observe employees in their daily routines. The
information collected through observation is extremely useful and reliable since it’s via first-hand
knowledge. Observation is the only job analysis method that allows the job analyst or HR professional
to directly obtain the data, whereas other job analysis methods collect data indirectly and in an
environment.
Some of the disadvantages of using the observation job analysis method include:-
 Distortion of information if an employee is aware of the observation.
 Awareness may affect the work output during the observation.
 Not all job duties and reactions can be observed in the set time frame.
 Higher managerial and executive roles may be difficult to observe fully.
Purpose of Job Analysis:-
Here are some of the main purposes of job analysis in HRM:-
1. Job designing and redesigning – By frequently using these three job analysis methods, HR
managers, and job analysts can work to improve job specifications, increase professional output and
incite company growth.
2. Human resource recruitment and selection – Job analysis defines the type of person that is
needed for a particular position. Job analysis data highlights the level of education, qualifications,
experience, and skills that need to be held by ideal candidates. Additionally, job analysis helps
develop advertisements, salary levels, interview questions, selection tests, evaluation forms, and
orientation materials for new recruits.
3. Determining training needs – Job analysis processes help HR professional develop adequate
training procedures. Job analysis can determine training content, assessment tests, training
equipment and methods of training.
4. Establishing a compensation management policy – A well-defined compensation management
policy helps organizations retain, motivate and guide current talent, while also attracting new talent.
Job analysis processes aid HR professionals to develop an effective compensation management
policy that focuses on elements such as pay scale, bonus and incentive plans, work environment and
restructuring positions as needed.
5. Conducting performance reviews – Using data from the job analysis process is necessary for when
HR professionals carry out performance reviews. Job analysis clearly defines the objectives of a job
and sets scalable goals for employees that reflect their performance.
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Job Description –
Job description includes basic job-related data that is useful to advertise a specific job and attract a
pool of talent. It includes information such as job title, job location, reporting to and of employees, job
summary, nature and objectives of a job, tasks and duties to be performed, working conditions,
machines, tools and equipments to be used by a prospective worker and hazards involved in it.
“A job description is a written statement of what the worker does, how he or she does it, and what the
job’s working conditions are.”
“A job description indicates the tasks, duties, and responsibilities of a job. It identifies what is done,
why it is done, where it is done, and briefly, how it is done.”
Purpose of Job Description
 The main purpose of job description is to collect job-related data in order to advertise for a
particular job. It helps in attracting, targeting, recruiting and selecting the right candidate for the
right job.
 It is done to determine what needs to be delivered in a particular job. It clarifies what
employees are supposed to do if selected for that particular job opening.
 It gives recruiting staff a clear view what kind of candidate is required by a particular
department or division to perform a specific task or job.
 It also clarifies who will report to whom.
Job descriptions improve an organization’s ability to manage people and play roles in the
following ways:
 Clarifies employer expectations for the employee,

 Provides the basis for measuring job performance,
 Provides a clear description of the role of job candidates,
 Provides a structure and discipline for the company to understand and structure all jobs and
ensure necessary activities, duties and responsibilities are covered by one job or another,
 Provides continuity of role parameters irrespective of manager interpretation,
 Enables pay and grading systems to be structured fairly and logically,
 Prevents arbitrary interpretation of role content and limit by employee and employer, and
manager,
 Provides reference tool in issues of employee/employer dispute,
 Provides reference tool for discipline issues,
 Provides important reference points for training and development areas,
 Provides neutral and objective (as opposed to subjective or arbitrary) reference points for
appraisals, performance reviews, and counseling,
 Enables formulation of skill set and behavior set requirements per roll,
 Enables the organization to structure and uniformly manage roles, thus increasing efficiency
and effectiveness of recruitment, training, and development, organizational structure, workflow
and activities, customer service, etc.,
 Enables factual view (as opposed to instinctual) to be taken by employees and managers in
career progression and succession planning.
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Limitations of Job Descriptions
 Job descriptions may not be suitable for some senior managers as they should have the
freedom to take the initiative and find fruitful new directions;
 Job descriptions may be too inflexible in a rapidly-changing organization, for instance, in an
area subject to rapid technological change;
 Other changes to job content may lead to the job description being out of date;
 An organization’s process of creating job descriptions may not be optimum.
Job Specification
A job specification defines the knowledge, skills and abilities that are required to perform a job in an
organization. Job specification covers aspects like education, work-experience, managerial
experience etc. which can help accomplish the goals related to the job. Job specification helps in the
recruitment & selection process, evaluating the performance of employees and in their appraisal &
promotion. Job specification, along with job description, is actually derived from job analysis.
Collectively, job specification and job description help in giving a overview of the job in terms of its
title, position, roles, responsibilities, education, experience, workplace etc.
Purpose of Job Specification
 Described on the basis of job description, job specification helps candidates analyze

whether are eligible to apply for a particular job vacancy or not.
 It helps recruiting team of an organization understand what level of qualifications, qualities and
set of characteristics should be present in a candidate to make him or her eligible for the job
opening.
 Job Specification gives detailed information about any job including job responsibilities, desired
technical and physical skills, conversational ability and much more.
 It helps in selecting the most appropriate candidate for a particular job
Components of Job Specification

There are many parameters which are considered while giving the job specification for a certain
profile.
1. Educational Qualification
This parameter gives an insight on how qualified a certain individual is. It covers their basic school
education, graduation, masters degree, other certifications etc.
2. Experience
Job specification clearly highlights the experience required in a particular domain for completing a
specific job. It includes work experience which can be from a specific industry, position, duration or in
a particular domain. Managerial experience in handling and managing a team can also be a job
specification criteria required for a particular position
3. Skills & Knowledge
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This is an important parameter in job specification especially with knowledge and skill based profiles.
The higher the position in a company, the more niche the skills become and more is the knowledge
required to perform the job. Skills like leadership, communication management, time management,
team management etc. are mentioned.
4. Personality traits and characteristics
The way in which a person behaves in a particular situation, handles complex problems, generic
behaviour etc. are all covered in the characteristics of a job description. It also covers the emotional
intelligence of a person i.e how strong or weak a person is emotionally
Advantages of Job Specification

There are several benefits of having a comprehensive job specification. Some advantages are listed
below:
1. Job specification highlights all the specific details required to perform the job at its best
2. It gives the HR managers a threshold and a framework on the basis on which they can identify the
best prospects
3. Helps in screening of resumes and saves time when there are multiple applications by choosing
those who are closest to the job specification
4. HR managers can used job specification as a benchmark to evaluate employees and give them
required trainings
5. It also helps companies during performance appraisal and promotions
Disadvantages of Job Specification

There are certain limitations of job specification. Some of the disadvantages are mentioned below:
1. It is a time consuming process as it has to be very thorough and complete
2. Job description is time bound and changes with changing technology and changing knowledge &
skill requirements
3. It can only give a framework of emotional characteristics and personality traits but cannot specify
the experience or forecast complex issues is any
Recruitment & Selection:-

Recruitment is a process of finding and attracting the potential resources for filling up the vacant
positions in an organization. It sources the candidates with the abilities and attitude, which are
required for achieving the objectives of an organization.
Recruitment process is a process of identifying the jobs vacancy, analyzing the job requirements,
reviewing applications, screening, short listing and selecting the right candidate.
The Selection is the process of choosing the most suitable candidate for the vacant position in the
organization. In other words, selection means weeding out unsuitable applicants and selecting those
individuals with prerequisite qualifications and capabilities to fill the jobs in the organization.
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Methods of Man Power Search (Recruitment & Selection Process):-

The recruitment and selection process is one of the most important aspects of running new and
established businesses alike.
1. Candidate sourcing:
The first and the most important step of candidate recruitment and selection. Candidate sourcing is
defined as the process in which the recruiter or the hiring manager uses a wide variety of recruitment
methods to choose the right and the most suitable candidate for the job and its associated positions.
It can be both online and offline basis. Online methods include posting job advertisements in job
posting websites like wisestep.com, naukri , monster etc and through proper online advertising of the
company and the job vacancies present.
Offline methods include providing a satisfactory performance in the professional networking
associations such as trade organizations and also having an active participation in talent
communities.
2. Application tracking:
After sourcing and choosing the right group of candidates suited for the job, the next step that many
companies follow is to track the application of the sourced and targeted candidates.
This step includes tracking the candidate application, and reviewing the resumes by mining the
application tracking software used for candidate selection and recruitment in many companies.
This system helps to manage the application process and store the candidate information for the
present and future use of the company.
Candidates who seem to deserve for the job position is then invited to attend the job interview
process headed by the recruiters and hiring managers of the company. Application tracking system
also allows candidates to track their application status.
3. Phone interview:
Preliminary telephone interviews is an essential method for obtaining the necessary and the required
info from the applicant including details like background, educational qualifications, work experience
and employee history.
The main purpose of conducting a telephonic interview is to check whether or not the candidate has
impressive linguistic skills and is able to communicate perfectly to the employer through the phone
without any falter.
It also shows whether or not the candidate is able to handle sudden emergencies without any errors
and is able to imply a perfect performance to the employer.
4. One to one interview and job selection process in recruitment:
Usually these types of interviews are done by the head of the human resource department or the
hiring manger after the employment specialist and the recruiters have done processing, studying and
tracking the candidate application.
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After the hiring manager has done interviewing the candidate, they try to narrow down the list of
selected candidates on the basis of their performance in the interview.
5. Handing over the employment offer:
After the hiring process of initial and primary interview sessions, (in some cases a secondary
interview is also conducted), the hiring manager informs the candidate about the employment rules
and regulations that the candidate has to follow once selected.
This includes pre employment rules and regulations and also includes different processes such
as background checks, drug test, license information, criminal records and so on.
When the recruiters exchange the company employment and recruiting information to the candidate,
a draft document containing the company rules along with the employment guidelines and
instructions is handed over to the employee.
This is done after both parties reach an understanding and an agreement has been reached between
the company and the now employed candidate.
Placement of Employees:
The last step in the procurement of the employees is placing the selected candidates on the right jobs
and introducing them to the organisation.
“Placement may be defined as the determination of the job to which a selected candidate is to be
assigned, and his assignment to the job.” It is matching of what the supervisor has reason to think he
can do, with the job requirements (job demands); it is matching of what he imposes (in strain, working
conditions) and what he offers in the form of payroll, with other promotional possibilities etc.
Right placement of workers can have the following advantages:

1. Reduced labour turnover rate.
2. Reduced absenteeism rate.
3. Increased safety of workers and lower accidents.
4. Increased morale of workers.
5. Better human relations in the organisations.
While taking the placement decision, the following consideration or principles must be kept in
mind:
1. Job Requirements:- An employee should be placed on the job according to the

requirements of the job such as physical and mental ability, eyesight, hearing, stress
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etc. The job shouldn’t be adjusted according to the qualification and abilities of the
employees.
2. Suitable Qualifications:- The job should be offered to only that person who is suitably
qualified. Over qualified and under qualified persons might create problems for the
organisation in the long run.
3. Adequate Information to the Job Incumbent:- The employee should be provided with
the complete information and facts relating to the job, including the working conditions
prevailing in the firm. He should also be made known to the rewards associated with the
performance levels.
4. Commitment and Loyalty:- While placing the new employee, an effort should be made
to develop a sense of commitment, loyalty and cooperation in his mind so that he may
realise his responsibilities better towards the job, the organisation and his associates.
5. Flexibility:- The placement in the initial period may be temporary as changes are likely
after the completion of training. The employee may be later transferred to the job where
he can do better justice.
Induction of Employees:
“Induction is concerned with introducing or orienting a new employee to the organisation. It is the
welcoming process to make the new employee feel at home and generate in him a feeling of
belongingness to the organisation”. It is the first step in a proper communication policy which seeks to
build a two-way channel of information between the management and employees.
Contents of Induction Programme:
Topics to be covered in induction –

1. Company’s history, mission, vision and philosophy.
2. Products and services of the company.
3. Company’s organisation structure.
4. Location of departments and employee services.
5. Employees activities like clubs, credit society.
6. Personnel policies and procedures.
7. Standing orders.
8. Rules and Regulations.
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9. Terms and conditions of services.

10. Grievance procedures.
11. Safety measures.
12. Benefits and services for employees.
13. Training, promotions and transfer facility.
14. Career advancement schemes.
15. Counselling facility.
Transfer of Employee-
Transfer is a process of placing employees in positions where they are likely to be more effective or
where they are to get more job satisfaction. In transfers, there is no change in the responsibility,
designation, status or salary. It is a process of employee’s adjustment with the work, time and place.
Transfer may also be made as a disciplinary action.
A transfer “is a change in job where the new job is substantially equal to the old in terms of pay,
status and responsibilities”.
Objectives of Transfer:
1. To meet or fulfill organizational needs – To fulfill organisational needs arising out of

change in technology, volume of production, production schedule, quality of product
etc., an employee may have to be transferred.
2. To satisfy employee needs – Sometimes employees themselves demand transfer due
to their personal problems like ill health, family problem native attractiveness or non-co-
operation from boss or fellow workers. To satisfy their needs employees may have to be
transferred.
3. To adjust the workforce – Employees for excess or surplus in one department may have
to be transferred to other department or section where there is shortage of workforce.
4. To reduce monotony and to make the employees versatile – If the employees have
stayed on a job continuously for a longer duration, to reduce their monotony and to
widen their knowledge and skill, employees are transferred.
5. For effective use of employees – If the management feels that the service of the able
employee is to be used in different branches of the same organisation, then such
employees will have to be transferred.
6. To punish Employees – If employees are found indulged in undesirable activities like
fraud, bribery, duping etc., such employees are transferred to remote places as a
disciplinary action.
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7. To give the relief to the employees – Employees who are overburdened and doing
complicated or risky work for long period are relieved from such work by transferring
such employees to a place of their choice.
8. To improve employees background by placing them in different jobs of various
departments and units.
Promotions of Employee:
“‘Promotion is advancement of an employee to a better job – better in terms of greater responsibility,
more prestige or status, greater skill and especially increased rate of pay or salary”.
“The upward reassignment of an individual in an organization’s hierarchy, accompanied by increased
responsibilities, enhanced status and usually with increased income though not always so”.
Conditions of promotions are:
 Reassignment of higher level job to an employee than what he is presently performing
 The employee will naturally be delegated with greater responsibility and authority than what he has
had earlier. Promotion normally accompanied higher pay. It means in some cases, the employee
perform higher level job and receive the salary related to the lower level job.
 Promotion may be temporary or permanent depending upon the organizational needs and employee
performance.
Purposes of Promotion:
 To utilize the employee’s skill knowledge at the appropriate level in the organizational hierarchy
 To develop competitive spirit and inculcate the zeal in the employees to acquire the skill, knowledge
etc. required by higher level jobs.
 To develop competent internal source of employees ready to take up jobs at higher levels in the
changing environment.
 To promote employees’ self development and make them await their turn of promotions. It reduces
labour turnover.
 To promote a feeling of contentment with the existing conditions of the company and a sense of
belongingness.
 To promote interest in training, development programmes and in team development areas.
 To build loyalty and to boost morale.
 To reward committed and loyal employees
 To get rid of the problems created by the leaders of workers’ unions by promoting them to the officers’
levels where they are less effective in creating problems.
 Promotion places the employees in a position where an employee’s skills and knowledge can be
better utilized.
 It creates and increases the interest of other employees in the company as they believe that they will
also get their turn.
 It creates among employees a feeling of content with the existing conditions of work and employment.
 It increases interest in acquiring h9gher qualifications, in training and in self development with a view
to meet the requirements of promotion.
 It improves morale and job satisfaction
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 Ultimately it improves organizational health.
Benefits of Promotion
1. it should be consistent in the sense that policy should be applied uniformly to all employees
irrespective of the background of the persons,
2. it should be fair and impartial.
3. systematic line of promotion channel should be incorporated,
4. it should provide equal opportunities for promotion in all categories of jobs, departments and regions
of an organization,
5. it should ensure open policy in the sense that every eligible employee should be considered for
promotion rather than a closed system,
6. it should contain clear cut norms and criteria for judging merit, length of service, potentiality etc.
7. appropriate authority should be entrusted with the task of making a final decision, it should contain
promotional counseling, encouragement, guidance and follow-up regarding promotional opportunities,
job requirements and acquiring the required skills, knowledge etc.
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UNIT – 3rd
Training and Development of Human Resource:-
Training can be defined as a refining process done with the selected candidates to make them perfect
and adaptable according to the changing working environment of the company.
The complete process of identifying, selecting, recruiting and training individuals helps them in their
overall professional growth and also contributes to the development of the company.
Training and Development is a subsystem of an organization which emphasize on the improvement
of the performance of individuals and groups. Training is an educational process which involves the
sharpening of skills, concepts, changing of attitude and gaining more knowledge to enhance the
performance of the employees. Good & efficient training of employees helps in their skills &
knowledge development, which eventually helps a company improve.
Training and development objectives:-
The principal objective of training and development division is to make sure the availability of a skilled
and willing workforce to an organization. In addition to that, there are four other objectives: Individual,
Organizational, Functional, and Societal.
 Individual Objectives – help employees in achieving their personal goals, which in turn,

enhances the individual contribution to an organization.
 Organizational Objectives – assist the organization with its primary objective by bringing

individual effectiveness.
 Functional Objectives – maintain the department’s contribution at a level suitable to the

organization’s needs.
 Societal Objectives – ensure that an organization is ethically and socially responsible to the

needs and challenges of the society.
Need for Training and Development:-

Training and development of employees is a costly activity as it requires a lot quality inputs from
trainers as well as employees. Here are a few critical reasons why the company endorses training
and development sessions.
• When management thinks that there is a need to improve the performances of employees
• To set up the benchmark of improvement so far in the performance improvement effort
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• To train about the specific job responsibility and skills like communication management, team
management etc
• To test the new methodology for increasing the productivity
Relation between Training and Development:-

There is a relation between training and development, and there is clear difference between the two
based on goals to be achieved. Development is made to answer the training problems:-
TRAINING DEVELOPMENT
Training is meant for operatives Development is meant for executives
It is reactive process It is pro- active process
AIM: To develop additional skills AIM: To develop the total personality
It is short term process It is continuous process
OBJECTIVE: To meet the present need of OBJECTIVE: To meet the future need of an
an employee employee
Initiative is taken by the management Initiative is taken by an individual.
Importance of Training and Development:-

The importance of training and development is as follows:
• Optimum utilization of Human resources
• Development of skills like team management, leadership etc
• To increase the productivity
• To provide the zeal of team spirit
• For improvement of organization culture
• To improve quality, safety
• To increase profitability
• Improve the morale and corporate image
Process of Human Resource Training And Development:-
Step 1: Decide If Training is needed
The first step in the training process is a basic one: to determine whether a problem can be solved by
training. Training is conducted for one or more of these reasons:
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1) Required legally or by order or regulation

2) to improve job skills or move into a different position
3) for an organization to remain competitive and profitable.
If employees are not performing their jobs properly, it is often assumed that training will bring them up
to standard. This may not always be the case. Ideally, training should be provided before problems or
accidents occur and should be maintained as part of quality control.
Step 2: Determine What Type of Training is needed
The employees themselves can provide valuable information on the training they need. They know
what they need/want to make them better at their jobs. Just ask them! Also, regulatory considerations
may require certain training in certain industries and/or job classifications. Once the kind of training
that is needed has been determined, it is equally important to determine what kind of training is not
needed. Training should focus on those steps on which improved performance is needed. This avoids
unnecessary time lost and focuses the training to meet the needs of the employees.
Step 3: Identifying Goals and Objectives
Once the employees' training needs have been identified, employers can then prepare for the
training. Clearly stated training objectives will help employers communicate what they want their
employees to do, to do better, or to stop doing! Learning objectives do not necessarily have to be
written, but in order for the training to be as successful as possible, they should be CLEAR and
thought–out before the training begins.
Step 4: Implementing the Training
Training should be conducted by professionals with knowledge and expertise in the given subject
area; period. Nothing is worse than being in a classroom with an instructor who has no knowledge of
what they are supposed to be teaching! Use in-house, experienced talent or an outside professional
training source as the best option. The training should be presented so that its organization and
meaning are clear to employees. An effective training program allows employees to participate in the
training process and to practice their skills and/or knowledge.
Step 5: Evaluation Training Program
One way to make sure that the training program is accomplishing its goals is by using an evaluation
of the training by both the students and the instructors Training should have, as one of its critical
components, a method of measuring the effectiveness of the training. Evaluations will help employers
or supervisors determine the amount of learning achieved and whether or not an employee's
performance has improved on the job as a result.
Advantages of training and development:-

Training and development has a cost attached to it. However, since it is beneficial for companies in
the long run, they ensure employees are trained regularly. Some advantages are:
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1. Helps employees develop new skills and increases their knowledge.

2. Improves efficiency and productivity of the individuals as well as the teams.
3. Proper training and development can remove bottle-necks in operations.
4. New & improved job positions can be created to make the organization leaner.
5. Keeps employees motivated and refreshes their goals, ambitions and contribution levels.
Training And Development (T&D) Methods:-
There are several T&D methods available. The use of a parti cula r me tho d de pend s
whi ch method accomp lish es the training needs and objectives. Training methods can be
classified into two categories:
I. On-the-Job Methods
This refers to the methods of training in which a person learns a job by actually
doing/performing it. A person works on a job and learns and develops expertise at the same
time.
1. Understudy
In this the employee is trained by his or her supervisor. The trainee is attached with
his or her senior and called understudy or assistant. For example, a future manager
might spend few months as assistant to the present manager.
2. Job rotation
This refers to shifting/movement of an employee from one job to another on regular

intervals.
3. Special projects
The trainees' may ask to work on special projects related with departmental objectives.
By this, the trainees will acquire the knowledge of the assigned work and also learn how to
work with others.
4. Experience
It refers to learning by doing. This is one of the oldest methods of on-the-job training. Although
this is very effective method but it also very time-consuming and wasteful. Thus it should
be followed by other training methods.
5. Committee assignment
In this, the trainees become members of a committee. The c o m m i t t e e i s a s s i g n e d a

p r o b l e m t o d i s c u s s a n d m a k e recommendations.
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6. Coaching
In this, the supervisor or the superior acts as a guide and instructor of the trainee. This
involves extensive demonstration and continuous critical evaluation and correction.
II. Off-the-Job Methods
These methods require trainees to leave their workplace and concentrate their entire time towards the
training objectives. These days off-the-job training methods have become popular due to limitations of
the on-the-job training methods such as facilities and environment, lack of group discussion and full
participation among the trainees from different disciplines, etc. In the off-thejob methods, the
development of trainees is the primary task rest everything is secondary. Following are the main off-
the-job training methods:
1. Special courses and lectures
These are the most traditional and even famous today, method of developing personnel. Special
courses and lectures are either designed by the company itself or by the management/professional
schools. Companies then sponsor their trainees to attend these courses or lectures. These are the
quick and most simple ways to provide knowledge to a large group of trainees.
2. Conferences and seminars
In this, the participants are required to pool their thoughts, ideas, viewpoints, suggestions and
recommendations. By attending conferences and seminars, trainees try to look at a problem from
different angles as the participants are normally from different fields and sectors.
3. Selected reading
This is the self-improvement training technique. The persons acquire knowledge and awareness by
reading various trade journals and magazines. Most of the companies have their own libraries. The
employees become the members of the professional associations to keep abreast of latest
developments in their respective fields.
4. Case study method
This technique was developed by Harvard Business School, U.S.A. It is used as a supplement to
lecture method. A case is a written record of a real business situation/problem faced by a company.
The case is provided to the trainees for discussion and analysis. Identification and diagnose of the
problem is the aim in case study method. Alternate courses of action are suggested from participants.
5. Programmed instruction/learning
This is step-by-step self-learning method where the medium may be a textbook, computer or the
internet. This is a systematic method for teaching job skills involving presenting questions or facts,
allowing the person to respond and giving the learner immediate feedback on the accuracy of his or
her answers."
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6. Brainstorming
This is creativity-training technique, it helps people to solve problems in a new and different way. In
this technique, the trainees are given the opportunity to generate ideas openly and without any fear of
judgement. Criticism of any idea is not allowed so as to reduce inhibiting forces. Once a lot of ideas
are generated then they are evaluated for their cost and feasibility.
7. Role-playing
In this method, the trainees are assigned a role, which they have to play in an artificially created
situation. For example, a trainee is asked to play the role of a trade union leader and another trainee
is required to perform the role of a HR manager. This technique results in better understanding of
each other's situation by putting foot in other's shoes.
8. Apprenticeship training
This training approach began in the Middle Ages when those who wanted to learn trade skill bound
themselves to a master craftsman and worked under his guidance. Apprenticeship training is a
structured process by which people become skilled workers through a combination of classroom
instruction and on-the-job training.
9. In-basket exercise
In this technique, the trainees are provided background information on a simulated firm and its
products, and key personnel. After this, the trainees are provided with in-basket of memos, letters,
reports, requests and other documents related with the firm. The trainee must make sense out of this
mass of paperwork and prepare memos, make notes and delegate tasks within a limited time period."
10. Business games
Business games involve teams of trainees. The teams discuss and analyse the problem and arrive at
decisions. Generally, issues related with inventories, sales, R&D, production process, etc. are taken
up for consideration.
11. Behaviour modeling
This is structured approach to teach specific supervisory skill. This is based on the social learning
theory in which the trainee is provided with a specific model of behaviour and is informed in advance
of the consequences of engaging in that type of behaviour.
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Performance Appraisal:-
A performance appraisal, referred to as a performance review, performance

evaluation or employee appraisal is a method by which the job performance of an employee is
documented and evaluated. Performance appraisals are a part of career development and consist of
regular reviews of employee performance within organizations.
A performance appraisal is a systematic, general and periodic process that assesses an individual
employee's job performance and productivity in relation to certain pre-established criteria and
organizational objectives.
It helps the managers place the right employees for the right jobs, depending on their skills. Often,
employees are often curious to know about their performance details and compare it with their fellow
colleagues and how they can improve upon it. So every company needs a good performance appraisal
system.
Performance appraisal is a systematic process in which employees job performance is evaluated in
relation to the projects on which employee has worked and his contribution to the organisation. It is also
known as an annual review or performance review.
Performance appraisal is generally done in systematic ways which are as follows:
1. The supervisors measure the pay of employees and compare it with targets and plans.
2. The supervisor analyses the factors behind work performances of employees.
3. The employers are in position to guide the employees for a better performance.
Objectives of Performance Appraisal:-
Performance Appraisal can be done with following objectives in mind:-

 To promote the employees, on the basis of performance and competence.
 To identify the requirement for training and development of employees.
 To provide confirmation to those employees who are hired as probationary employees, upon
completion of the term.
 To take a decision regarding the hike in employees pay, incentives etc.
 To facilitate communication between superior and subordinate.
 To help employees in understanding where they stand in terms of performance.
33
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a
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0Performance Appraisal Process:-
The figure shown above is a standard performance appraisal process that takes place in an
organization, wherein each step is important and arranged in a systematic manner. The
process is conducted periodically, usually twice a year, i.e. semi-annually and annually
called as mid-term review and annual review respectively.
Method of Performance Appraisal:-

In the process of designing performance appraisal process, it is important to identify the best method
for assessment. There are a number of methods introduced to gauge the quantity and quality of work
performed by an individual. These methods are broadly classified into two categories:_
1. Past-oriented Methods (Also known as Traditional Methods of Performance Appraisal)

34
a) Rating Scales
b) Checklists
c) Forced Choice
d) Forced Distribution
e) Critical Incident
f) Performance test and observation
g) Field review
h) Confidential Record
i) Essay method
j) Comparative Evaluation Approaches
k) Cost Accounting Method
l) Behaviorally Anchored Rating Scales
2. Future Oriented Methods (Also known as Modern Methods of Performance Appraisal)
a) Management by objectives (MBO)
b) Psychological Appraisal
c) Assessment Centres
d) 360-Degree Feedback
e) 720-Degree Feedback
A. Traditional Methods of Performance Appraisal )
1. Rating Scales: The numerical scale is prepared that represents the job evaluation criterion such as
the output, initiative, attendance, attitude, dependability, etc. and ranges from excellent to poor. Thus,
each employee is given the rating based on his performance against each set criteria and then the
consolidated score is computed accordingly. The rating scales are one of the easiest traditional
methods of performance appraisal and can be applied to any job.
2. Checklist: A checklist of employee traits in the form of statement is prepared where the rater put a
tick mark in “Yes” or “No” column against the trait checked for each employee. Once the checklist
gets completed the rater forwards the list to the HR department for the final evaluation of the
employee.
3. Forced Choice Method: Under this method, the rater is forced to answer the ready-made statements
as given in the blocks of two or more, about the employees in terms of true or false. Once he is done
with the list, it is forwarded to the HR department for the final assessment of the employee.
4. Forced Distribution Method: This method of performance appraisal is based on the assumption that
employee’s job performance conforms to the normal distribution curve i.e. a bell shaped curve.
Hence, the rater is compelled to put employees on each point on the scale. It is seen that cluster of
employees is placed at the highest point on a rating scale.
35
5. Critical Incidents Method: Under this method, the critical behavior of each employee that make a
difference in the effective or non-effective performance is recorded by the supervisor and is taken into
consideration while evaluating his performance.
6. Behaviorally Anchored Rating Scale: The descriptive statements about employees’ behavior, both
effective and ineffective are put on the scale points, and the rater is asked to indicate which
behavioral point describes the employee behavior the best.
7. Field Review Method: Under this method, the performance evaluation of an employee is done by
someone who does not belong to his department or is usually from the corporate office or the HR
department. The outsider reviews the performance of an employee through his records and holds
interviews with the assessed and his superiors.
8. Performance Tests and Observations: The test either written or oral is conducted to test the
knowledge and the skills of employees. Sometimes the employee is asked to demonstrate his skills in
the given situation and then he is evaluated on that basis.
9. Confidential Reports: The confidential reports are mostly prepared by the government departments,
wherein the employee is evaluated on some of the following parameters:
 Attendance
 Leadership
 Self-expression
 Ability to work with others
 Initiative
 Technical ability
 Integrity
 Responsibility, etc.
Essay Method: Under this method, the detailed description of the employee performance is
written by the rater. The performance of an employee, his relations with other Co-workers,
requirements of training and development programs, strengths and weaknesses of the
employee, etc. are some of the points that are included in the essay. The efficiency of this
traditional method of performance appraisal depend on the writing skills of the rater.
Cost Accounting Method: In this method, the employee’s performance is evaluated in monetary
terms, i.e. how much cost company is incurring on keeping the employee and how much he is
contributing to the firm in terms of his output.
Comparative Evaluation Approaches: Under this method, several comparative analysis are
done, wherein the performance of one employee is compared with that of another Co-worker,
and the rating is determined accordingly. The Ranking Method and the Paired Comparison
Method are the usual comparative forms used in this approach.
 Ranking Method: In the Ranking Method, superiors give the rank from best to worst, to their
subordinates on the basis of their merits. Here, the detailed description of why best or why the
worst is not given.
 Paired Comparison Method: Under this method, the performance of each employee is compared
with the other employee and then the decision on whose performance is better is made.
36
B. Modern Methods of Performance Appraisal
1. Management by Objectives (MBO): This concept was given by Peter.F.Drucker, according to him;

the performance of an employee can be accessed on the basis of the targets achieved by him as set
by the management of an organization. Firstly, the management sets the goals and communicates
the same to the employees, and then the performance of an employee is compared against these set
goals and is evaluated on this basis.
In case the employee is not able to achieve the pre-established goals, then management decides on
a new strategy or policy that should be undertaken for the accomplishment of unattainable goals.
2. Psychological Appraisals: This is one of the most frequently used modern methods of performance
appraisal, wherein the psychologist assesses the employee’s potential for the future performance
rather than the past one. Under this method, the psychologist conducts the in-depth interviews,
psychological tests, discussions with the supervisors and the reviews of other evaluations.
This assessment is done to determine the intellectual, emotional, motivational and other related
characteristics of an employee that is necessary to predict his potential for the future performance.
3. Assessment Centres: The assessment center is the central location where the managers come and
perform the job exercises. Here the assessed is requested to participate in in-basket exercises, role
playing, discussions, computer simulations, etc. Where they are evaluated in term of their persuasive
ability, communication skills, confidence, sensitivity to the feelings of others, mental alertness,
administrative ability, etc.
This entire exercise is done under the trainer who observes the employee behavior and then
discusses it with the rater who finally evaluates the employee’s performance.
4. 360-Degree Feedback: It is a feedback method wherein the details of an employee’s performance

are gathered from other stakeholders such as superiors, peers, team members and self. In this
method, the employee is asked about himself, i.e. what he feels about his performance, and then
accordingly he can realize his strengths and weaknesses.
Also, the peers or team members are asked about assessor’s performance through which the
employee knows about what others feel about him and can overcome his disbeliefs if any. Thus, this
method is used to have a detailed evaluation of an employee from all the perspectives.
5. 720-Degree Feedback: This is another feedback method, wherein the assessment is done not only
by the stakeholders within the company but also from the groups outside the organization. These
external groups who assess the employee’s performance are customers, investors, suppliers and
other financial institutions.
It is one of the most crucial modern methods of performance appraisal because this is the only group
that determines the success of the organization as a whole.
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Advantages of Performance Appraisal:-
It is said that performance appraisal is an investment for the company which can be justified by
following advantages:
1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion

programmes for efficient employees. In this regards, inefficient workers can be dismissed or
demoted in case.
2. Compensation: Performance Appraisal helps in chalking out compensation packages for
employees. Merit rating is possible through performance appraisal. Compensation packages
which includes bonus, high salary rates, extra benefits, allowances and pre-requisites are
dependent on performance appraisal. The criteria should be merit rather than seniority.
3. Employees Development: The systematic procedure of performance appraisal helps the
supervisors to frame training policies and programmes. It helps to analyse strengths and
weaknesses of employees so that new jobs can be designed for efficient employees. It also
helps in framing future development programmes.
4. Communication: For an organization, effective communication between employees and
employers is very important. Through performance appraisal, communication can be sought
for in the following ways:
a. Through performance appraisal, the employers can understand and accept skills of
subordinates.
b. The subordinates can also understand and create a trust and confidence in superiors.
c. It also helps in maintaining labour management relationship.
d. It develops the spirit of work and boosts the morale of employees.
5. Motivation: Performance appraisal serves as a motivation tool. Through evaluating
performance of employees, a person’s efficiency can be determined if the targets are
achieved. This very well motivates a person for better job and helps him to improve his
performance in the future.
Disadvantages of Performance Appraisal:-
1. If the factors being used in the performance appraisal are incorrect or not relevant, the appraisal
will fail to provide any useful or effective data.
2. Sometimes, equal weight age is not given to important factors when performing an appraisal.
3. Some objective factors are very vague and difficult to gauge like attitude and initiative. There is no
scientific method to measure these factors.
4. Managers are sometimes not qualified enough to correctly assess the employees and their
abilities. Thus, these mistakes can be very detrimental to the growth of the company.
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UNIT – 4th
Wage and Salary Administration-

Salary-
Payment, usually paid monthly and usually expressed as an annual amount, made by employers to
employees in return for work done.
Wages-
Payment for labor or services usually according to contract. An equivalent or a return for something
done, suffered or given
Wage and salary administration is defined as the process by which wage and salary levels and
structures are determined in organisational settings.
Characteristics of Wage and Salary Administration:
1. Payment of wages is in accordance with the terms of contract between the employer and the
worker.
2. The wages are determined on the basis of time-rate system or piece-rate system.
3. Wages change with the change in the time spent by the labourer.
4. Wages create utility.
5. Wages may be paid weekly, fortnightly, hourly, or on monthly basis.
6. Wage is the reward paid to the workers for the services rendered by them.
7. Wages can be paid in cash or in kind.
8. All kinds of allowances are included in wages.
Objectives of Wage and Salary Administration-
i. To compare or draft company HR policy

ii. Find out the income level and return ratio of similar industries
iii. To understand wage differentiations
iv. To examine the competitiveness of entry level employees
v. To establish hiring rates favourable to the community
vi. To keep abreast wage and salary rates with production cost
vii. To minimize labour turnover due to pay disparity
viii. To increase employee’s satisfaction and morale
ix. To learn about the trend of perks and benefits in the market
x. To resolve existing labour problems concerning compensation.
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Compensation Management-
Meaning-
Compensation is the monetary benefit which is given to an employee or worker giving their services
to an organization. Compensation includes components like salary, wages, bonuses etc. The
compensation provided helps in motivating the employees, build their career and ensure that their are
committed in achieving the company goals.
Compensation is something, most usually money, which is given to the employees of an organization
or company as payment or reparation for their service towards the organization or because of their
loss incurred due to any organizational activity.
Compensation can also be defined as follows:
1. A system of rewards that can motivate the employees to perform.
2. A tool that is used to foster values and culture.
3. An instrument that enables an organization to achieve its objectives.
Components of compensation:-
Compensation can be divided into the following components:-
1. Completely fixed (per month or year)
2. Some fixed component, along with a variable component (which is decided based on the rating of
the employee and his meeting of the targets)
3. Total variable component, where the total salary depends on the rating received during
evaluation
1. Direct Compensation:
a. Basic pay, dearness allowance, cash allowance
b. Incentive pay, bonus, commission, profit sharing, stock option
2. Indirect Compensation:
a. Legal requirement
b. Provident fund
c. Gravidity
d. Pension
e. Insurance
f. Medical leave
g. Accident benefits
h. Maturity leave
i. Optional sick leave
j. Casual leave
k. Travelling allowance
l. Telephone bills
m. Canteen allowance
n. Club membership
Objectives of Compensation Management:-
1. Attract qualified personnel:

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In the competitive business environment, managers pay high compensation to attract qualified
personnel. Unless the supply of human resource is more than demand, professionally qualified
people do not join organisations that pay low compensation.
2. Retain personnel:
If competing firms offer higher compensation, employees will leave the organisations resulting in high
labour turnover. This is costly for organisations in terms of appointing new employees and training
them. Compensation should not only attract employees, it must also retain them.
3. Equity in pay:
Compensation must be commensurate with the qualification of employees and with what similar
employees are getting in competing jobs.
4. Cost control:
Compensation adds to company’s cost. Proper compensation policies help to maintain control over
costs.
5. Avoid legal regulation:
Minimum wages are determined by the Government. A sound wage system should comply with legal
regulations for paying wages. It should avoid Government interference.
6. Easy to understand:
The wage system should not be complicated. It should be easily understood by employers and
employees.
Factors affecting Compensation:
1. Worth of employees:
The ability, qualification, skill and experience of employees affects the wage structure of the
company.
2. Contribution by employees:
Employees should positively contribute to organisational goals. How much an employee contributes
to organisational goals and how much he can contribute in future affects compensation plan of the
firm.
3. Bargaining power of trade union:
Companies whose trade unions are strong usually pay more than companies whose bargaining
capacity is low. Trade unions bargain for more wages if workers are skilled and efficient.
4. Demand and supply of manpower:
Demand and supply of manpower also affects wages. If demand for manpower is more than supply,
wages will be high and vice versa.
5. Remuneration paid by competing firms:
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Firms cannot pay less than what competitors are paying. Compensation has to be commensurate
with what other firms in the same industry are paying.
6. Ability to pay:
Wages depend upon ability of the firm to pay compensation. Firms which are economically and
technically sound pay good compensation.
7. Cost of living:
Reputed companies want their employees to maintain good standard of living. They pay
compensation keeping in view the standard of living. Cost of living index determines their wage
structure. Dearness allowance and city compensatory allowance are paid to meet the high cost of
living in the city.
8. Government regulation:
Government regulations play important role in fixing the compensation. Minimum Wages Act, 1948,
Payment of Wages Act, 1936, Industrial Disputes Act, 1947, Equal Remuneration Act, 1976, Pay
Commissions etc. regulate compensation policies of companies.
9. Job evaluation:
Wage determination is largely affected by job evaluation. It determines relationships amongst
different jobs in order to establish a systematic structure of wage rates for those jobs. It relates to
assessment of the job and not the performance of the person performing that job. This ensures that
people doing the same type of work receive equal rewards. Job evaluation measures differences
between jobs and places the jobs in different ranks to determine the wage structure for each group or
rank of jobs.
Features of a Good Compensation Plan:
1. It should be simple to understand.
2. There should be equal work for equal pay.
3. It should offer minimum wages and incentives for good performance.
4. It should attract and retain people in the organisation.
5. It should motivate employees to contribute their best to organisational goals
6. It should satisfy lower and higher-order needs of the employees.
7. It should maintain balance amongst managers and workers. Conflicts should be reduced.
8. It must be consistent with what competitors are paying to their employees.
9. It should be consistent with cost of living.
10. It should have incentive schemes so that workers more than their fellow workers.
11. It should have scope for promotions and pay hikes.
12. It must be based on merit and job evaluation of workers.
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Types of compensation:-
Types of compensation include:-
Direct Forms of Compensation

Salary
This type of wage is customarily a set sum of remuneration over a defined period of time. The most
traditional form is a dollar amount over a period of one year. The frequency of payment is another
part of the compensation and is based on industry standards. Most businesses pay for services twice
a month.
Salaries are the most commonly used tool to pay professional or licensed employees. In general
there is an expectation from the employer of a longer term commitment from the employee for
providing a regular uninterrupted compensation stream via a salary.
Hourly
This is a amount per hour of service to the employer, more commonly used to compensate unskilled
and skilled laborers in the workforce. This form of compensation comes with an implied
understanding that during times of slow or minimal workloads, the employee may not be used to
provide services. In effect, there is no guarantee of a regular cycle of pay.
Commission
When compensation is based on volume or some form of performance, this is known as commission
based remuneration. Other terms used include piecework or piecemeal. Many industries used this
type of remuneration to get a minimum standard of production in exchange for compensation. It is
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used to shift risk from the employer to the employee. There are two methods to calculate
commission. One is based on volume of services and the other is based on sales.
Bonuses
Bonuses are used to increase performance from the employee. This is a variable type of
remuneration and is more commonly found with salaried staff to incentivize them for a particular goal
whether time or volume based. Other reasons used for bonuses are to increase or maintain retention
of certain skills or the pool of skill-sets needed in the company. Sometimes bonuses are paid when
a company meets certain financial standards or goals over an extended period of time.
Bonuses are not commonly used with hourly or commission based employees due to the nature of
the type of compensation already established.
Indirect Forms of Compensation

Benefits
This particular group is traditionally thought of in the form of insurances (health, dental, life, disability
and vision) and retirement. Very few small businesses provide benefits to their employees due to
the cost involved. When small businesses begin providing benefits, they customarily start out with
retirement because of simplicity and low cost. As they grow, they add health insurance (mandated
by law for employers with 50 or more employees) and continue to expand the benefit package as the
number of employees increase and the risk of business performance decreases. Benefits allow for
retention and recruitment.
Other benefits can include transportation, paid time off, vacation time, and customized incentives
(lodging, meals, phones, etc.).
Equity Based Programs
Rarely found in the small business world for several reasons. These types of indirect compensation
tie the employee to the company via ownership. Due to the complexity and the legal issues involved,
very few small businesses use this tool. This is a sophisticated method to retain key employees and
is discussed in another article.
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Wage and Salary Administration

Wage and salary administration is a collection of practices and procedures used for planning and
distributing company-wide compensation programs for employees. These practices include
employees at all levels and are usually handled by the accounting department of a company. Wage
and salary administration procedures usually involve activities such as calculating the number of
hours worked in order to determine compensation, administering employment benefits, and
answering payroll questions from employees.
Objectives of Wage and Salary Administration
1. To recruit persons for a firm
2. To control pay-rolls
3. To satisfy people, reduce the incidence of turnover, grievances, and frictions.
4. To motivate people to perform better
5. To maintain a good public image.
Importance of Wage and Salary Administration
Wage and Salary Administration is important for the following reasons:
Attract and Retain the Employees: If an organization possesses good wage and salary structure, it
will attract and retain suitable, qualified, and experienced personnel.
Builds High Morale: The wage rates established for various categories of jobs should be internally
consistent; it will motivate the employees of the organization. It will build the high morale of
employees and act as an incentive to greater employee productivity and efficiency.
Satisfied Employees: A good wage and salary structure will keep the employees satisfied. There will
be lesser labor turnover, industrial disputes and employee grievances and exigencies.
Labor Cost Equitable: A good wage and salary structure will maintain two types of equitabilities viz.,
(a) labor cost equitable and, (b) equitable wage and salary structure. Pay according to the work
performed by an employee. If an employee is performing hazardous work pay him more.
Clearly drawn the line of promotion: If a company has a good wage and salary structure, it can
have a definite sequence of jobs and clearly drawn the line of promotion.
Image of Progressive Employer: A good and definite wage and salary structure would enable the
company to project in the public. All image of a progressive employer.
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Harmonious Industrial Relations: A good wage and salary structure will serve as a sound basis for
collective bargaining and enable the maintenance of satisfactory union-management and employee-
management relations.
Ensure Minimum Wages: A good wage and salary structure should also conform to the minimum
wage laws.
Functions of Wage and Salary Administration:
(i) To check all activities of the salary administration group against company policies.
(ii) To recommend to top management the wage policies for the administration of wage programme.
(iii) To approve, in broad, policy determining the system of job description and job evaluation.
(iv) To suggest changes in wage policies and in the salary or wage level.
(v) To review wage and salary schemes department wise.
(vi) To recommend to top management specific increases for executives above a particular limit.
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Employee Benefit Programs:-
Employee benefit programs are expensive. Unfortunately, the cost of many benefit package
components continues to increase. For a small business owner, it can be a huge expense. Small
businesses must carefully evaluate cost versus value of the major components of employee benefit
programs to select those they can afford and their employees want. The key factor is to offer the most
important benefits the business can afford to attract and keep the most qualified staff.
There are some employees benefit programs:-
1. Health Insurance
One of the most expensive components of a benefit package is health coverage. The health
care industry and the U.S. government are trying to create medical plans that smaller
businesses can afford and protect their employees sufficiently. The small business Health
Fairness Act is one of these efforts. One feature is the birth of Association Health Plans
(AHPs), which allows multiple small businesses to band together, creating larger groups to
purchase good health insurance plans at reduced cost. Health savings accounts also permit
employees to allocate pre-tax compensation dollars for medical needs.
2. Retirement Plans
Traditional pension plans, 401K programs and SEP IRAs (Simplified Employee Pension
Individual Retirement Accounts) are all popular with employees and small businesses. 401K
plans are often the most popular programs because they permit employees to contribute to
individual IRAs along with participating in their employer’s retirement plan. SEP IRA programs
are tailored for small business as they have few administration expenses and operate like
individual IRA accounts.
3. Disability Insurance
Short and long-term disability insurance is a valued benefit by both employee and employer.
Even if the business offers worker's compensation, disability insurance remains a major benefit
for two important reasons. First, disability (illness or injury) that occurs either at or away from
the workplace is covered. Second, disability claims typically are settled faster and easier than
those filed under workers compensation insurance programs. Disability insurance usually
offers around 60 to 65 percent of the employee’s regular monthly income to the worker.
4. Life Insurance
Life insurance coverage is both a valuable benefit from an employee perspective and usually
quite affordable for the small business. As the U.S. workforce average age starts to decline,
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this benefit should remain reasonably priced for most businesses. Most programs provide term
life coverage (pure protection with no cash savings account) with the opportunity for the
employee to purchase more insurance if they wish. Some plans also allow employees to
convert their protection to whole life coverage (cash buildup and tax deferred dividends) and/or
continue their coverage should they leave their employer.
5. Vacation and Holiday Pay
This subject remains one of the most popular benefits with employees throughout the business
community. Some smaller companies, utilizing many hourly and part-time employees, do not
offer this benefit. Even many well-compensated union personnel only earn income when they
work, not while on vacation or holiday. Yet, small business owners should seriously consider
offering this benefit as it ranks high with almost all employee groups.
6. Education Assistance
A much-desired employee benefit, education assistance is more important than ever. As the
cost of on-campus post-secondary education increases, many employees simply cannot afford
to improve their skills in the classroom. However, the many wonderful educational programs
offered online at reasonable cost can help small businesses improve their staff quality.
Available at any time of day, both formal degree programs and continuing education courses
can be very effective and economical.
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Incentives:-
Anything that can attract an employee’s attention and motivate them to work can be called as
incentive. An incentive aims at improving the overall performance of an organization. Incentives can
be classified as direct and indirect compensation. They can be prepared as individual plans, group
plans and organizational plans.
 “Incentives are defined as ‘variable rewards granted according to variations in the achievement
of specific results”.
 “Incentive is system of payment emphasizing the point of motivation, that is, the imparting of
incentives to workers for higher production and productivity”.
Types of incentive plans

There are 2 types or kinds or methods of incentive plans:-
1) Group incentive plan
2) Individual incentive plan
1) Group Incentives:-
Group incentives programs reward employees for their collective performance, rather than for each
employee’s individual performance. Group incentives programs are most effective when all group
members have some impact on achieving the goal, even through individual contributes might not be
equal.
Team members represent various cross-functional areas including research and development (R&D),
Marketing, finance, and manufacturing.
Well designed group incentives plans ultimately reinforce teamwork, cultivate loyalty to the company,
and increase productivity.
Types of Group Incentives Plans:
Companies use three major types of group incentives plans
1. Team Based or Small Group Incentive Plans:

A small group of employees shares a financial reward when a specific objective is met. Team based
is similar to individual incentives with one exception. Each group member receives a financial reward
for the attainment of group goal.
There are three types of teams in an Organization.
1. Work teams
2. Project teams
3. Parallel teams
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2. Work teams:
Work teams refer to organizational units that perform the work of the organization on an ongoing
basis. Membership is relatively permanent, and members work full time in the team. Customer
service teams and assembly teams on production lines represent excellent example of work teams.
3. Project Team:
Project teams consist of a group of people assigned to complete a onetime project. Members usually
have well-defined roles and may work on specific phase of project, either full time or in addition to
other work responsibility of teams. Project teams usually work across such functions as engineering,
product development and marketing to ensure that the final product meets company specification in
the term of cost.
2) Individual Incentives:-
it may either be time based or production based. Under time based plan a standard time is fixed for
doing the job. A worker is said to be efficient if he completes the job in time and he is given the
reward for his efficiency.
1. Halsey plan:
under Halsey plan minimum wages are guaranteed to every worker. A standard time is fixed
for the workers. If the workers finish the work before standard time they are given bonus. But
no penalty if they fails to do that.
2. Rowan plan:
it is the modification of the Halsey plan it also guarantees the minimum wages and does not
penalize the slow workers. Standard time is fixed and the bonus is paid on the basis of time
saved
3. Emerson plan:
in this plan minimum wages are guaranteed to the workers efficiency is measured on the basis
of the comparison of actual performance with the standard fixed. Under this method if the
efficiency is 100% the bonus would be paid at 20% and above 100% bonus at 30% would be
paid. Thus efficient workers will be rewarded at an increasing rate with the increase in saving
time.
4. Bedeaux plan:
under this minute is the time unit described as the standard minute. The standard time for each
job is fixed after undertaking time and motion study expressed in terms of B. the standard time
for a job is the number of B’s allowed to complete it. Generally the bonus paid to the worker is
75% of the wages for time saved. The rest 25% goes to the foreman.
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Fringe Benefits:-
Fringe benefits are forms of compensation you provide to employees outside of a stated wage or
salary. Common examples of fringe benefits include medical and dental insurance, use of a company
car, housing allowance, educational assistance, vacation pay, sick pay, meals and employee
discounts. Total compensation includes regular income and all of these paid benefits.
Fringe benefits refer to the extra benefits provides to the employees in addition of normal
compensation paid in terms of wages or salary.
Features of Fringe Benefits:
1. They are supplementary forms of compensation.

2. They are paid to all the employees ( unlike incentives which are paid only to the extra ordinary
performers) based on their membership in the organisation.
3. Fringe benefits are indirect compensation because they are extended as a condition for employment
and are not directly related with the performance.
4. These benefits may be statutory or voluntary. For example Provident funds are statutory but the
transportation facility is voluntary.
5. These benefits help raise the living standards of the employees.
Need for Fringe benefits:
1. Employee demand: The employees now a day’s demand for fringe benefits rather than pay hikes
because of reduction in tax burden on the employee’s side and in view of galloping price index and
cost of living.
2. Trade Unions demand: Various trade unions are competing with each other for getting more and
more benefits for their members. If one union succeeds in persuading the management for a new
benefit the other union will try to convince the management for an additional benefit.
3. Employer’s Preference: Employer may also wish to provide fringe benefits to the employees in a
view of increasing productivity and motivating the employees.
4. As a social security: Fringe benefits are also provided to the employees to protect them from certain
risk such as contingencies of life like accidents and occupational diseases.
5. To improve human relations: Improving human relation is a process of addressing the needs of the
employees and satisfying them. Fringe benefit satiates employee’s economical, social and
psychological needs.
Objectives of Fringe benefits:
 To create and improve sound industrial relations.

 To motivate the employees.
 To protect health of the employees and safety to the employees against threats such as accidents
and occupational diseases.
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 To promote employee welfare.

 To provide security against social risks such as old age benefits and maternity benefits.
 To create a sense of belongingness among the employee and to retain them. Fringe benefits are also
known as golden handcuffs.
 To meet the various legislative requirements relating to fringe benefits.
Types of Fringe benefits:
1. Payment for Time not worked:-

 Hours of work: Factory’s Act , 1948 specifies that no adult workers shall be required to work in
factory more than 48 hours a week. In some organisations number of working hours per week are
less than the legal requirements.
 Paid Holidays: According to Factory’s Act, 1948 an adult worker shall have a weekly paid holiday,
normally Sunday. When a worker is deprived of weekly paid holidays he/ she is to be compensated
with the same number of holidays in the same month. Some organisations offer two weekly paid
holidays.
 Shift Premium: Workers working on odd shift are to be compensated with more than the normal
wage rate, generally known as premium.
 Holiday Pay: Generally organisations offer double the normal rate to those workers who work on
holidays.
 Paid Vacation: Workers in mining , manufacturing and plantation who have worked for 240 days in
year are entitled for paid vacations at a rate of 1 day for every 20 days worked in case of adult
workers and 1 day for every 15 days worked in case of child workers.
2. Employee Security:-
Physical and job security to the employees should also be provided with a view to ensure security to
the employee and his family members. When the employee’s services get confirmed, his job
becomes secures. Further, a minimum and continuous wage or salary gives a sense of security to the
life.
 Retrenchment Compensation: The Industrial Disputes Act, 1947 provides for the payment of
compensation in case if lay off and retrenchment. Then on-seasonal industrial establishment
employing 50 or more workers have to give one month’s advance notice or one month’s wages to all
the employees who are retrenched after one year’s continuous service. The compensation is paid at
the rate of 45 day wage for every completed year of service. Workers are eligible for compensation
as stated above in case of closing down of undertakings.
 Lay Off Compensation: In case of lay off the employees are entitled to lay off compensation at the
rate equal to 50% of the total of the basic wage and dearness allowance for the period of their lay off
except for the weekly holidays. Lay off compensation can normally be paid up to 45 days a year.
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3. Safety and Healthy:-

Employee’s safety and health should be taken care in order to protect the employees against
accidents, unhealthy working conditions and to protect the worker’s productive capacity. In India,
Factory’s Act, 1948 stipulated certain requirements regarding working conditions with a view to
provide safe working environment. These provisions relate to cleanliness, disposal of waste and
effluents, ventilation and temperature, dust and fumes, artificial humidification, overcrowding, lighting,
urinals, drinking water, latrines, spittoons etc.
Provisions relating to safety measures include fencing of machinery, work on or near machinery in
motion, employment of young persons on dangerous machines, self acting machines, casing of new
machinery,hoists and lifts excessive weights, lifting machines, chains, ropes explosive or inflammable
dust , gas etc.
4. Workmen’s Compensation:-
In addition to safety and health measures, provisions for payments of compensation has also been
made under the Workmen’s Compensation Act, 1923. The Act is intended to meet the contingencies
of death and invalidity of worker due to employment injury and occupational diseases specified under
the Act as the sole responsibility of employer. Under the Act the amount of compensation depands
upon the nature of injury and and monthly wages of the employee. Dependants of the employee are
are eligible for compensation in case of death of the employee.
5. Heath Benefits:-
These benefits include:-
 Sickness benefits: Sickness benefit is roughly 50% of average daily wages and is payable for 91
days during 2 consecutive benefit period.
 Medical benefit: The Employee’s state Insurance Scheme provides full medical care in the form of
medical attendance, treatments, drugs and injections, specialist consultation, and hospitalization to
insured person and also to members of their families where the facility has been extended to the
families.
 Temporary Disablement benefits: TDB is payable to an employee suffers from employment injury
or occupational diseases and is certified to temporarily incapable of work.
 Permanent Disablement Benefit: PDB is payable to an employee who suffers permanent residual
disablement as a result of employment accident or occupational diseases. The maximum rate of PDB
can be equal to TDB.
 Maternity Benefits: Maternity benefits is payable to and insured women in the following cases
subject to contributory conditions: – (a) Confinement, (b) Miscarriage or medical termination of
pregnancy (MTP), (c) sickness arising out of pregnancy.
6. Voluntary Arrangement:-
However, most of the large organisations provide health services over and above the legal
requirements to their employees free of cost by setting up hospitals, clinics, dispensaries, and
homeopathic dispensaries. Company’s elaborate health service programmes includes:
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 Providing health maintenance services, emergency care, on the job treatment for minor complaints,
health counseling’s, medical supervision in rehabilitation, accidents and sickness prevention, health
education programmes, treatment in employee colonies etc.
 Medical benefits are extended to employee family members and to the retired employees and their
family members.
 Small organisations which cannot setup hospitals provide the medical services through local hospitals
and doctors. Sometimes they provide reimbursements of medical expenses borne by the employee.
7. Welfare and Recreational facilities:-
These benefits include canteens, consumer stores, credit societies, housing, legal aids, employee
counseling, welfare organisation, holiday homes, educational facilities, transportation, picnics and
parties etc.
Organisational participation and productivity sharing:-
Employee involvement, called also worker’s participation can be perceived as “a variety of processes
and structures which enable, and at times encourage employees to directly and indirectly contribute
to and influence decision-making in the firm and in the wider society”
Generally, employee involvement can have a direct or indirect form. Direct involvement means that
employees have an immediate influence on the decision-making processes within the company.
Typical forms of direct involvement are employee surveys, team briefings, autonomous working
groups or suggestion schemes (rewards for meeting company’s goals). Indirect involvement
(representative involvement) means that a specific group which represents all employees is involved
in the decision-making processes within the company.
Aspects of employee participation within the company:-
1. The degree of involvement: – this indicates the extent of involvement to which employees,
either directly or through their representatives, may exert some form of influence on
management decisions.
2. Scope: – the scope of management decisions that are open to influence by subordinate
employees may differ depending on the subject matter and may range from trivial to strategic
decisions.
3. The level: – the level at which the subordinates may be involved in management decisions
varies substantially and can range from departmental level, through to division and headquarter
level.
4. Forms of participation: – participation may be direct or indirect. Direct participation refers to
the face-to-face involvement while, indirect participation occurs when workers are represented
by trade unions in workers’ council or high-level consultation committees and through collective
bargaining.
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UNIT – 5th
Conflict Management:-
Conflict management is the process of limiting the negative aspects of conflict while increasing the
positive aspects of conflict. The aim of conflict management is to enhance learning and group
outcomes, including effectiveness or performance in an organizational setting. Properly managed
conflict can improve group outcomes.
Conflict management is the practice of being able to identify and handle conflicts sensibly, fairly,
and efficiently. Since conflicts in a business are a natural part of the workplace, it is important that
there are people who understand conflicts and know how to resolve them.
Conflict Management Techniques:-
1. Be aware of conflict

2. Take a considered and rational approach to conflict
3. Investigate the situation
4. Decide how to tackle the conflict
5. Identify options and agree on a way forward
6. Implement what have been agreed
7. Evaluate how things are going
8. Consider preventative strategies for the future
The 5 Conflict Management Styles:-

1. Accommodating
An accommodating style forsakes your own needs or desires in exchange for those of others. You
would be putting the concerns of others before your own. This style usually takes place when you
either simply gives in or is persuaded to give in.
This style could be appropriate to use when you care less about the issue than the others, want to
keep the peace, feel as though you are in the wrong, or feel like you have no choice but to agree to
the other point-of-view.
2. Avoiding
An avoiding style completely evades the conflict. You would neither pursue your beliefs nor those of
the others involved. Simply, you would continuously postpone or completely dodge the conflict
whenever it comes up.
This style could be appropriate to use when the conflict seems trivial, you don't have the time or need
more time to think, you feel as though you have no chance of winning, or you're afraid of being met
with resentment.
3. Compromising
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A compromising style attempts to find a solution that will at least partially please all parties. You
would work to find a middle ground between all the needs, which would typically leave people
unsatisfied or satisfied to a certain extent.
4. Collaborating
This style could be appropriate when multiple perspectives need to be addressed, there is an
important relationship present between the parties, the final solution is too important for anyone to be
displeased, or the beliefs of multiple stakeholders must be represented.
5. Competing
A competing style takes a firm stance and refuses to see the perspectives of the other parties. You
would keep pushing your viewpoint at others or keep rejecting their ideas until you get your way.
This style could be appropriate when you have to stand up for your rights or morals, need to make a
quick decision and force others to get on board, need to end a long-term conflict, or have to prevent a
terrible, opposing decision from being made.
Five Steps to Conflict Resolution:-
Step 1: Identify the source of the conflict- The more information you have about the cause of the
conflict, the more easily you can help to resolve it. To get the information you need, use a series of
questions to identify the cause, like, “When did you feel upset?” “Do you see a relationship between
that and this incident?” “How did this incident begin?”
Step 2: Look beyond the incident- Often, it is not the situation but the perspective on the situation
that causes anger to fester and ultimately leads to a shouting match or other visible and disruptive
evidence of a conflict.
Step 3: Request solutions- After getting each party’s viewpoint on the conflict, the next step is to get
each to identify how the situation could be changed. Again, question the parties to solicit their ideas:
“How can you make things better between you?”
Step 4: Identify solutions both disputants can support- You are listening for the most acceptable
course of action. Point out the merits of various ideas, not only from each other’s perspective, but in
terms of the benefits to the organization.
Step 5: Agreement- The mediator needs to get the two parties to shake hands and agree to one of
the alternatives identified in Step 4. Some mediators go as far as to write up a contract in which
actions and time frames are specified. However, it might be sufficient to meet with the individuals and
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have they answered these questions: “What action plans will you both put in place to prevent conflicts
from arising in the future?” and “What will you do if problems arise in the future?”
Grievance Handling:-
A grievance is any dissatisfaction or feeling of injustice having connection with one’s employment
situation which is brought to the attention of management.
To understand what a grievance is, it is necessary to distinguish between dissatisfaction,
complaint, and grievance.
1. Dissatisfaction is anything that disturbs an employee, whether or not the unrest is expressed in
words.
2. Complaint is a spoken or written dissatisfaction brought to the attention of the supervisor or the
shop steward.
3. Grievance is a complaint that has been formally presented to a management representative or to a
union official.
“Grievance is any discontent or dissatisfaction whether expressed or not, whether valid or not, arising
out of anything connected with the company which an employee thinks, believes or even feels to be
unfair, unjust or inequitable”.
In short, Grievance is a state of dissatisfaction, expressed or unexpressed, written or unwritten,
justified or unjustified, having connection with employment situation.
Features of Grievance:
1. A grievance refers to any form of discontent or dissatisfaction with any aspect of the organization.
2. The dissatisfaction must arise out of employment and not due to personal or family problems.
3. The discontent can arise out of real or imaginary reasons
4. The discontent may be voiced or unvoiced, but it must find expression in some form.
5. Broadly speaking, thus, a grievance is traceable to be perceived as non-fulfillment of one’s expec-
tations from the organization.
Causes of Grievances:
1. Economic:
Employees may demand for individual wage adjustments. They may feel that they are paid less when
compared to others. For example, late bonus, payments, adjustments to overtime pay, perceived
inequalities in treatment, claims for equal pay, and appeals against performance- related pay awards.
2. Work environment:
57
It may be undesirable or unsatisfactory conditions of work. For example, light, space, heat, or poor
physical conditions of workplace, defective tools and equipment, poor quality of material, unfair rules,
and lack of recognition.
3. Supervision:
It may be objections to the general methods of supervision related to the attitudes of the supervisor
towards the employee such as perceived notions of bias, favoritism, nepotism, caste affiliations and
regional feelings.
4. Organizational change:
Any change in the organizational policies can result in grievances. For example, the implementation
of revised company policies or new working practices.
5. Employee relations:
Employees are unable to adjust with their colleagues, suffer from feelings of neglect and victimization
and become an object of ridicule and humiliation, or other inter- employee disputes.
6. Miscellaneous:
These may be issues relating to certain violations in respect of promotions, safety methods, transfer,
disciplinary rules, fines, granting leaves, medical facilities, etc.
Effects of Grievance:-
1. On the production:
a. Low quality of production
b. Low productivity
c. Increase in the wastage of material, spoilage/leakage of machinery
d. Increase in the cost of production per unit
2. On the employees:
a. Increase in the rate of absenteeism and turnover
b. Reduction in the level of commitment, sincerity and punctuality
c. Increase in the incidence of accidents
d. Reduction in the level of employee morale.
3. On the managers:
a. Strained superior-subordinate relations.
b. Increase in the degree of supervision and control.
c. Increase in indiscipline cases
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d. Increase in unrest and thereby machinery to maintain industrial peace
How to Manage Employee Grievance

 Find a permanent solution
 Listen Well
 Respond Quickly
 Keep an open mind
 Come up with alternative course of action
 Keep all communication line up
 Establish and implement good policies on handling employee’s grievance.
Industrial Relation:-
Industrial relations has become one of the most delicate and complex problems of modern industrial
society. Industrial progress is impossible without cooperation of labors and harmonious relationships.
Therefore, it is in the interest of all to create and maintain good relations between employees (labor)
and employers (management).
The term ‘Industrial Relations’ comprises of two terms: ‘Industry’ and ‘Relations’. “Industry” refers to
“any productive activity in which an individual (or a group of individuals) is (are) engaged”. By
“relations” we mean “the relationships that exist within the industry between the employer and his
workmen.” The term industrial relations explain the relationship between employees and
management which stem directly or indirectly from union-employer relationship.
Industrial relations are the relationships between employees and employers within the organizational
settings. The field of industrial relations looks at the relationship between management and workers,
particularly groups of workers represented by a union. Industrial relations are basically the
interactions between employers, employees and the government, and the institutions and
associations through which such interactions are mediated.
industrial relations also includes the processes through which these relationships are expressed
(such as, collective bargaining, workers’ participation in decision-making, and grievance and dispute
settlement), and the management of conflict between employers, workers and TRADE unions, when
it arises.
 Industrial relations as “the complex interrelations among managers, workers and agencies of the
governments”.
 “Industrial relations is the process of management dealing with one or more unions with a view to
negotiate and subsequently administer collective bargaining agreement or labour contract”.
Importance of Industrial Relations:-
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1. Uninterrupted production – The most important benefit of industrial relations is that this ensures
continuity of production. This means, continuous employment for all from manager to workers.
The resources are fully utilized, resulting in the maximum possible production. There is
uninterrupted flow of income for all. Smooth running of an industry is of vital importance for
several other industries; to other industries if the products are intermediaries or inputs; to
exporters if these are export goods; to consumers and workers, if these are goods of mass
consumption.
2. Reduction in Industrial Disputes – Good industrial relations reduces the industrial disputes.
Disputes are reflections of the failure of basic human urges or motivations to secure adequate
satisfaction or expression which are fully cured by good industrial relations. Strikes, lockouts, go-
slow tactics, gherao and grievances are some of the reflections of industrial unrest which do not
spring up in an atmosphere of industrial peace. It helps promoting co-operation and increasing
production.
3. High morale – Good industrial relations improve the morale of the employees. Employees work
with great zeal with the feeling in mind that the interest of employer and employees is one and the
same, i.e. to increase production. Every worker feels that he is a co-owner of the gains of industry.
The employer in his turn must realize that the gains of industry are not for him along but they
should be shared equally and generously with his workers.
4. Mental Revolution – The main object of industrial relation is a complete mental revolution of
workers and employees. The industrial peace lies ultimately in a transformed outlook on the part
of both. It is the business of leadership in the ranks of workers, employees and Government to
work out a new relationship in consonance with a spirit of true democracy.
5. Reduced Wastage – Good industrial relations are maintained on the basis of cooperation and
recognition of each other. It will help increase production. Wastages of man, material and
machines are reduced to the minimum and thus national interest is protected.
Objectives of Industrial Relation:-
 To safeguard the interest of labor and management by securing the highest level of mutual
understanding and good-will among all those sections in the industry which participate in the
process of production.
 To avoid industrial conflict or strife and develop harmonious relations, which are an essential
factor in the productivity of workers and the industrial progress of a country.
 To raise productivity to a higher level in an era of full employment by lessening the tendency to
high turnover and frequency absenteeism.
 To establish and promote the growth of an industrial democracy based on labor partnership in
the sharing of profits and of managerial decisions, so that ban individuals personality may grow
its full stature for the benefit of the industry and of the country as well.
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 To eliminate or minimize the number of strikes, lockouts and gheraos by providing reasonable
wages, improved living and working conditions, said fringe benefits.
 To improve the economic conditions of workers in the existing state of industrial managements
and political government.
 Socialization of industries by making the state itself a major employer
 Vesting of a proprietary interest of the workers in the industries in which they are employed.
Employee welfare:-
Welfare includes anything that is done for the comfort and improvement of employees and is provided
over and above the wages. Welfare helps in keeping the morale and motivation of the employees
high so as to retain the employees for longer duration. The welfare measures need not to be in
monetary terms only but in any kind/forms. Employee welfare includes monitoring of working
conditions, creation of industrial harmony through infrastructure for health, industrial relations and
insurance against disease, accident and unemployment for the workers and their families.
Employee welfare entails all those activities of employer which are directed towards providing the
employees with certain facilities and services in addition to wages or salaries.
Objectives Employee Welfare:

 To provide better life and health to the workers
 To make the workers happy and satisfied

 To relieve workers from industrial fatigue and to improve intellectual, cultural and material
conditions of living of the workers.
Features of Employee Welfare:
 Labor welfare includes various facilities, services and amenities provided to workers for improving
their health, efficiency, economic betterment and social status.
 Welfare measures are in addition to regular wages and other economic benefits available to
workers due to legal provisions and collective bargaining
 Labor welfare schemes are flexible and ever-changing. New welfare measures are added to the
existing ones from time to time.
 Welfare measures may be introduced by the employers, government, employees or by any social
or charitable agency.
 The purpose of labor welfare is to bring about the development of the whole personality of the
workers to make a better workforce.
Benefits of Employee Welfare:-

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The important benefits of welfare measures can be summarized as follows:
 They provide better physical and mental health to workers and thus promote a healthy work
environment
 Facilities like housing schemes, medical benefits, and education and recreation facilities for
workers’ families help in raising their standards of living. This makes workers to pay more
attention towards work and thus increases their productivity.
 Employers get stable labor force by providing welfare facilities. Workers take active interest in
their jobs and work with a feeling of involvement and participation.
 Employee welfare measures increase the productivity of organization and promote healthy
industrial relations thereby maintaining industrial peace.
 The social evils prevalent among the labors such as substance abuse, etc are reduced to a
greater extent by the welfare policies.
Principles of Employee Welfare Service
Following are generally given as the principles to be followed in setting up a employee welfare
service:
 The service should satisfy real needs of the workers. This means that the manager must first
determine what the employee’s real needs are with the active participation of workers.
 The service should such as can be handled by cafeteria approach. Due to the difference in Sex,
age, marital status, number of children, type of job and the income level of employees there are
large differences in their choice of a particular benefit. This is known as the cafeteria approach.
Such an approach individualises the benefit system though it may be difficult to operate and
administer.
 The employer should not assume a benevolent posture.
 The cost of the service should be calculate and its financing established on a sound basis.
 There should be periodical assessment or evaluation of the service and necessary timely on the
basis of feedback.
Types of Employees Welfare:-
A comprehensive list of welfare activities on labour welfare into two broad groups, namely:
1. Welfare measures inside the work place; and

2. Welfare measures outside the work place.
1. Welfare Measures inside the Work Place
a) Conditions of the work Environment
Safety and cleanliness: attention to approaches.

Housekeeping
Workshop sanitation and cleanliness.
Control of effluents
Convenience and comfort during work
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Distribution of work hours

Workmen’s safety measures
Supply of necessary beverages
Notice Boards
b) Conveniences
Provision of drinking water
Urinals and bathrooms
Provision for spittoons
Canteen services
Rest rooms and reading rooms
C) Worker’s Health Services
Factory health center
Dispensary
Ambulance
Emergency aid
Health education
d) Women and Child Welfare
Services Crèche and child care
Separate services for woman workers
Family planning
e) Workers’ recreation
Indoor games; strenuous games to be avoided duringintervals of work
f) Economic services
Co operatives, loans, financial grants
Thrift and savings schemes
Unemployment insurance
Profit sharing and bonus schemes
Gratuity and pension
g) Labour management participation
Formation and working of various committees
Workmen’s arbitration council
Research bureau
h) Workers education
Reading room
Library
Adults education
Daily news review
Factory news bulletin
2. Welfare Measures outside the Work Place
a) Water, sanitation, waste disposal.

b) Roads, lighting, parks, recreation, playgrounds.
c) Schools: nursery, primary, secondary and high school.
d) Markets, co operatives, consumer and credit societies.
e) Bank
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f) Transport
g) Communication: post, telegraph and telephone.
h) Health and medical services: dispensary, emergency ward, outpatient and in-patient care,
family visiting, family planning
i) Recreation: games; clubs; craft centers; cultural programmes
j) Watch and ward; security.
k) Administration of community services and problems.
Welfare facilities may also be categorized as (a) intra- mural and (b) extra-mural
 Intra-mural facilities
Intra-mural activities consist of facilities provided with in the factories and include medical
facilities, compensation for accidents, provision of crèches and canteens, supply of drinking
water, washing and bathing facilities, provision of safety measures, activities relating to
improving conditions of employment, and the like.
 Extra-mural facilities
Extra-mural activities cover the services and facilities provided outside the factory such as
housing accommodation, indoor and out door recreational facilities, amusement and sports,
educational facilities for adults and children, and the like. It may be started that the welfare
activities may be provided by the employer, the government, non-government organization and
the trade unions, while, what employees provide will be started later; the activities undertaken
by other agencies are mentioned here.
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. In the United
States, trade unions go by the name labor unions. A labor union, or trade union, is an organization of
workers who have joined together to achieve goals in areas such as wages and working conditions.
The union negotiates contracts and conditions with employers, keeping employee satisfaction high
and protecting workers from unsafe or unfair working conditions.
 According to Section 2(b) of the Trade Unions Act of 1926, “a trade union is any combination
of persons, whether temporary or permanent, primarily for the purpose of regulating the
relations between workers and employers, or between workers and workers and for imposing
restrictive conditions on the conduct on the conduct of any trade or business, and includes the
federation of two or more trade unions.”
 Trade unions are associations of workers formed to represent their interests and improve their
pay and working conditions.
 “A trade union is an association of employees designed primarily to maintain or improve the
condition of employment of its members.”
 Trade union may be defined as “a continuous association of wage earners for the purposes of
maintaining or improving the conditions of their working lives.”
Characteristics of Trade Unions:-
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1. Association of employees: A trade union is essentially an association of employees belonging to a

particular class of employment, profession, trade or industry. For example, there are unions for
teachers, doctors, film, artistes, weavers, mine workers and so on.
2. Voluntary Association: An employee joins the trade union out of his free will. A person cannot be
compelled to join a union.
3. Permanent Body: A trade union is usually a permanent body. Members may come and go but the
trade union remains.
4. Common Interest: The member of a trade union have certain matters of common interest-job
security, better pay and working conditions and so on, which bring them together.
5. Collective Action: Even when an individual employee has any grievance over certain management
decisions, the matter is sorted out by the intervention of the trade union Employees are able to initiate
collective action to solve any problem concerning any particular employee or all the employees.
6. Rapport with the Management: The trade union seeks to improve relations between the employees
and employers. The officials of the trade union hold talks with the members of the management
concerning the problems of the employees in order to find an amicable solution. It is thus possible for
the employees to have better rapport with the management.
Need for Trade Unions:-
 To ensure job security and right pay for the members :- One of the basic needs of any employee
is security of service. The main reason why an employee joins a union is to get him secured. Apart
from job security and employees need to get pay commensurate with their qualifications and skills.
Trade unions strive to get both job security and correct pay for all employees.
 To ventilate the grievances of employees to the management:- When the employees in general
or some in particular have any grievance, they may not be able to convey the same to the
management in their personal capacity. Such grievances may be brought to the knowledge of the
management through the trade union. The members of the management may be indifferent to the
demands of the individual employees but they cannot be so when it comes to union demands.
Objectives of Trade Union:
1. Better wages
2. Better working conditions
3. Protection against exploitation
4. Protection against victimization
5. Provide welfare measures
6. Promote industrial peace
7. Take up Collective Bargaining
8. Look after the interest of trade
Importance of Trade Unions:-

1. Trade Unions are workers’ tool for collective bargaining. Industries with trade unions always have
higher wage structures. Trade Unions negotiate with employers for better terms and conditions of
employment and for healthy workplace standards.
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2. Trade Unions strengthen workers’ demand for better labour and industrial legislation. The ability of
unions to represent workers and their families stand as an asset, for which political parties try to woo
them by offering better deals in terms of pro labour legislation. Better medical facilities, welfare
schemes, annual leave, insurance and other benefits are the results.
3. Trade unions can ensure more job security for its members than non unionized, unorganized
workers.
4. Unions provide legal support to workers when they face police action and legal tangles.
5. Factories with union activity are safer when it comes to chance for industrial accidents. Unions
pressurize employers to ensure better safety standards and use their influence with law enforcement
agencies to assure better safety measures at workplace.
6. Trade unions protect workers against physical and mental torture and exploitation of superiors at
workplace.
7. Workers’ individual rights and liberties are better protected by trade unions. It protects women
employees against sexual harassment.
8. Trade Unions in advanced countries often provide educational support and training for skill up-
gradation.
9. Trade unions can negotiate with management for mutual give and take in matters of increased
productivity.
10. Since trade unions protect their interests, workers can remain motivated and their economic,
social, political well being are taken care of.
Types of Trade Unions:-
i. Craft unions:
These represent workers with particular skills e.g. plumbers and weavers. These workers may be
employed in a number of industries.
ii. General unions:
These unions include workers with a range of skills and from a range of industries.
iii. Industrial unions:
These seek to represent all the workers in a particular industry, for instance, those in the rail industry.
iv. White collar unions:
66
These unions represent particular professions, including pilots and teachers. Unions in a country,
often belong to a national union organisation. For example, in India, a number of unions belong to the
All India Trade Union Congress (AITUC).
This is the oldest and one of the largest trade union federations in the country. A number of them also
belong to international trade union organisations such as the International Confederation of Free
Trade Unions, which has more than 230 affiliated organisations in 150 countries.
Functions of Trade Unions:
(1) Collective bargaining with the management for securing better work environment for the workers/
employees.
(2) Providing security to the workers and keeping check over the hiring and firing of workers.
(3) Helping the management in grievances of workers at appropriate level.
(4) If any dispute/matter remains unsettled referring the matter for arbitration.
(5) To negotiate with management certain matters like hours of work, fringe benefits, wages and
medical facilities and other welfare schemes.
(6) To develop cooperation with employers.
(7) To arouse public opinion in favour of labour/workers.
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Dispute Resolution:-
Employment relations require a greater responsibility on the part of the employer in managing
disputes that might arise in an organisation. Employer/employee relations are often under stress.
HRM must act as buffer in avoiding situations that lead to disputes and claims in courts.
Mediation processes help in dispute resolution. Fairness in dealing with the dispute situations helps
HRM to stand out from the organisation in which they are part of. The Employment Relations Act
enables HRM to avoid disputes and punitive damage claims. Sound legal knowledge will be required
to manage employment agreements, which will result in the avoidance of dispute situations.
Dispute resolution processes are the methods or techniques that a company uses to resolve any
dispute that occurs in the company.
Dispute resolution processes are broadly divided into two major types −
 Adjudicative processes − Process like litigation or arbitration, in which a judge, jury or

arbitrator is involved and determines the result on the basis of facts and proofs presented.
 Consensual processes − Process like collaborative law, mediation, conciliation, or
negotiation, in which the parties attempt to reach to a settlement through mutual
understanding.
Dispute Resolution is an essential requirement in national as well as international HRM. Even in

International Trade, the disputes are resolved by negotiation, mediation, arbitration and legal actions.
Dispute Resolution refers to a technique of settling the conflicts or claims between two parties, i.e.
employer and employees. The technique aims at achieving fairness for both the groups and arriving
68
at an agreement between by consensus, often initiated by a third party. These disputes are caused
by wage demands, unfair labour practices, political interferences, union rivalry, etc.
Methods of Dispute Resolution
1. Collective Bargaining: A process in which the representatives of employees or say labour unions
and employers meet and discuss various matters relating to wage and benefits to arrive at a mutual
agreement.
2. Code of Discipline: In this method, the duties and responsibilities of both the parties are defined.
When these norms are strictly followed, the probability of disputes can be reduced. The Ministry of
Labour of India has released a code of conduct for industries.
3. Grievance Procedure: Grievance takes place when there is a violation of the provision of law or
breach of terms and conditions of employment by the management. The redressal can be sought by
the aggrieved employee through defined grievance procedure.
69
4. Arbitration: A process wherein, an independent party intervenes and studies the bargaining situation
hears both the parties and collects necessary data. After that, the recommendations are made by the
arbitrator which is binding on the warring groups.
5. Conciliation: Under this process, the representatives of both management and labour union are
brought together before the conciliator to persuade them to reach a consensus. The conciliator may
be an individual or a group of people. The conciliator cannot enforce his decision on the parties
concerned.
6. Adjudication: When the dispute is not settled through conciliation, recourse to adjudication is taken,
only on the recommendation of the conciliation officer. The process is an obligatory resolution of the
industrial dispute by labour court or tribunal, wherein the verdict of the labour court is binding on the
groups.
7. Consultative Machinery: To settle industrial conflicts, bipartite or tripartite bodies are set by the
government at the plant, industry, state and national levels, with a view to bringing parties together for
mutual discussion and settlement of disputes.
70
Grievance Resolution:-
A grievance is generally defined as a claim by an employee that he or she is adversely affected by
the misinterpretation or misapplication of a written company policy or collectively bargained
agreement.
The grievance procedure may also be part of a collective bargaining agreement.
A grievance procedure is a means of internal dispute resolution by which an employee may have his
or her grievances addressed. Most collective bargaining agreements include procedures for filing and
resolving grievances.
Grievance processes may differ somewhat from employer to employer and under various collective
bargaining agreements. However, most will have certain general processes in common.
Grievance means any type of dissatisfaction or discontentment’s arising out of factors related to an
employee’s job which he thinks are unfair. A grievance arises when an employee feels that something
has happened or is happening to him who he thinks is unfair, unjust or inequitable.
Steps of Grievance Resolution:-
Step 1- Employee Discusses Complaint with Immediate Supervisor

In addition to having an open-door policy with your employees, encourage staff to share the specific
incident with their immediate supervisor within five business days of its occurrence. If the situation
can’t be resolved at this point – or the employee feels uncomfortable speaking to the manager about
the matter.
Step 2- Employee Submits a Written Complaint to a Second-Level Manager
With this step, the employee submits a formal written complaint for review by a designated senior
manager (or human resources representative, if your company has an HR department). Whenever
possible, this written complaint should be submitted within seven business days of the first
discussion.
Step 3- Senior Manager Holds a Meeting with Employee
A meeting between the senior manager (or HR representative) and the employee should be held
within five business days of receiving the written complaint. This meeting provides an opportunity for
the senior manager and the employee to discuss the complaint in depth.
Step 4- Senior Manager Investigates the Complaint
Depending on what comes up in the previous meeting, the designated senior manager may need to
explore the complaint further. This may require interviewing coworkers or reviewing related
paperwork. Thorough documentation is essential for formulating a resolution. Therefore, the senior
manager must put all the latest details surrounding the complaint in writing.
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Step 5- Document the Decision or Resolution

After the situation is thoroughly examined, the senior manager will need to reach a decision or
resolution. There’s no “one size fits all” with employee concerns. Every situation is different, so every
resolution is different.
Step 6- Share the Decision with the Employee
Now it’s time for the senior manager to meet with the employee to talk about the final decision and
what happens next. This one-on-one meeting is a crucial part of the process. The senior manager
should point out that they heard the employee’s concerns, took the issue seriously and that reached
an appropriate resolution.
Sources of Grievance:-
1.Grievance resulting from management policies include:
 Wage rates
 Leave policy
 Overtime
 Lack of career planning
 Role conflicts
 Lack of regard for collective agreement
 Disparity between skill of worker and job responsibility
2. Grievance resulting from working conditions include:
 Poor safety and bad physical conditions

 Unavailability of tools and proper machinery
 Negative approach to discipline
 Unrealistic targets
3. Grievance resulting from inter-personal factors includes:
 Poor relationships with team members

 Autocratic leadership style of superiors
 Poor relations with seniors
 Conflicts with peers and colleagues
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Grievance Management:-
Steps in Grievance Management Procedure:
i.
Acknowledge Dissatisfaction:
Managerial/supervisory attitude to grievances is important. They should focus attention on
grievances, not turn away from them. Ignorance is not bliss, it is the bane of industrial conflict.
Condescending attitude on the part of supervisors and managers would aggravate the problem.
ii. Define the Problem:

Instead of trying to deal with a vague feeling of discontent, the problem should be defined properly.
Sometime the wrong complaint is given. By effective listening, one can make sure that a true
complaint is voiced.
iii. Get the Facts:
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Facts should be separated from fiction. Though grievances result in hurt feelings, the effort should be
to get the facts behind the feelings. There is need for a proper record of each grievance.
iv. Analyse and Decide:

Decisions on each of the grievances will have a precedent effect. While no time should be lost in
dealing with them, it is no excuse to be slip-shod about it. Grievance settlements provide
opportunities for managements to correct themselves, and thereby come closer to the employees.
v. Follow up:
Decisions taken must be followed up earnestly. They should be promptly communicated to the
employee concerned. If a decision is favourable to the employee, his immediate boss should have the
privilege of communicating the same.
Need for a Grievance Management Procedure:

(i) Most grievances seriously disturb the employees. This may affect their morale,
productivity and their willingness to cooperate with the organisation.
(ii) It is not possible that all the complaints of the employees would be settled by first-
time supervisors, for these supervisors may not have had a proper training for the
purpose, and they may lack authority.
(iii) It serves as a check on the arbitrary actions of the management because
supervisors know that employees are likely to see to it that their protest does reach
the higher management.
(iv) It serves as an outlet for employee gripes, discontent and frustrations. It acts like a
pressure valve on a steam boiler.
(v) The management has complete authority to operate the business as it sees fit
subject, of course, to its legal and moral obligations and the contracts it has entered
into with its workers or their representative trade union.
Objectives of a Grievance Management Procedure:

1. To enable the employee to air his/her grievance.
2. To clarify the nature of the grievance.
3. To investigate the reasons for dissatisfaction.
4. To obtain, where possible, a speedy resolution to the problem.
5. To take appropriate actions and ensure that promises are kept.
6. To inform the employee of his or her right to take the grievance to the next stage of the
procedure, in the event of an unsuccessful resolution.
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Benefits of a Grievance Management Procedure:

1. It encourages employees to raise concerns without fear of reprisal.
2. It provides a fair and speedy means of dealing with complaints.
3. It prevents minor disagreements developing into more serious disputes.
4. It saves employers time and money as solutions are found for workplace problems. It helps
to build an organizational climate based on openness and trust.
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Human Resource Management

Faculty Name- Dr. Sadaf Khan

Human resource management (HRM or HR) is the strategic approach to the effective management

Human resource management is therefore focused on a number of major areas, including:

 Recruiting and staffing

 Training development specialist

2. To utilize the available human resources effectively.

3. To increase to the fullest the employee’s job satisfaction and self-actualisation.

organisation a desirable personal and social situation.

6. To establish and maintain cordial relations between employees and management.

7. To reconcile individual/group goals with organizational goals.

Labour or Personnel Industrial Relations

1. The Labour or Personnel Aspect:

3. Industrial Relations Aspects:

disciplinary actions, settlement of disputes, etc.

Managerial functions Operative functions

(1) Managerial Functions:

Planning is a predetermined course of actions. It is a process of determining the organisational goals

subordinates, establishing channels of authority and communication, coordinating the work of

subordinates, and so on.

setting performance standard, compensating employees, evaluating performance, counseling

employees, training and developing employees.

achieving the goals of the organisation.

(2) Operative Functions:

These functions are as follows-

orientation of new employees.

may comprise training to employees, executive training to develop managers, organisation

development to strike a better fit between organisational climate/culture and employees.

and salary administration, bonus, incentives, etc.

insurance, etc. are also arranged.

HRM in a Challenging Environment:-

1. Work force Diversity:

generally a shortage of suitable persons.

Features of Human Resource Planning:

Human Resource Planning

Well Defined Adjusting Demand

Determining Human Creating Proper Work

1. Well Defined Objectives:-

better commitment of people and so on.

2. Determining Human Resource Needs:-

3. Keeping Manpower Inventory:-

4. Adjusting Demand and Supply:-

5. Creating Proper Work Environment:-

Objectives of Human Resource Planning:-

 Guarantee ample supply of resources, whenever there is a need for it.

Need for Human Resource Planning:-

Importance of Human Resource Planning:-

 It compels the organization to evaluate the weaknesses and strengths of personnel

 The organization as a whole is benefited when it comes to increase in productivity,

Human Resource Planning Process:-

1. Objectives of human resource planning: human resource planning must be matched with

2. Current manpower stock: Current manpower stock must be continuously maintained by every

Growth and expansion helps in creating a number of positions at work place.

6. Employment programme: here it is required to prepare programmes of recruitment, selection,

Different techniques that facilitate the job analysis process:-

1. Job Analysis Method: Interview:-

 Structured interviews follow a systematic approach where employees are interviewed

2. Job Analysis Method: Questionnaires:-

 Knowledge, skills, experience, and qualifications