CHAPTER II

REVIEW OF LITERATURE

This chapter deals with the review of concerned literature of the

study. Many authors have highlighted the importance of human

resource management from different angles. Some of the earlier

research studies are summed up in order to have clear focus on the

present study.

Narendra K. Sethi and Manju Ahula in their study have brought

to light the importance of human resource planning. Human resource

system is seen as the function, which has the specific task of

integrating all other functions of management6.

The study found that the element of effective human resource

planning, the process of organizational staffing and the performance

appraisal procedure are the three important parts of total human

resources system. When these three processes are integrated

efficiently in an organization, the outcome would be better

productivity and results.

Udai Pareek has explained that the concept of human resource

as distinct from personnel. Human resource management is primarily

a system that gives importance to the employee and his supervisor.

He stressed that all activities of human resources management should

help to strengthen this two-person relationship and increase the trust

6
Narendra K. Sethi and Manju Ahuja, “Human Resource Management and
Planning”, Indian Management, Vol., 21, No.8, July 1982, p.3.

32
and mutual understanding between the superior and the

subordinate.7

Pestonjee had described that productivity is a problem on which

research and theoretical opinions revolve around. He had explored

the relationship between industrial output and the personality

dimensions of operators. He observed that productivity is a complex

problem and one cannot develop a clear insight into it unless one

explores the human variables in depth. He viewed that psychological

variables can act as potent determinants of productivity. Human

resource mechanism is more psychological in nature since human

mind and attitude are involved8.

Kulkarni in his article had observed that schemes and projects

designed to serve basic human needs such as health, education, food

etc., do not directly contribute to an organisation’s business

objectives. The corporates have taken up serious effort towards

inducting modern management techniques as on aids to the efficient

running of the “HRD”. The study had encouraged the importance of

introducing these techniques and methods to other industries and

had discussed their various dimensions.

He felt that the management movement had not caught up

among the managers of HRDP and it will not do so, unless agencies

7
Udai Pareek, “Changing Concepts of Human Resource Management,”
Productivity, January 1981, Vol.22, p.3.
8
O.M. Pestonjee, “Productivity – A Hyman Resource Prospective”,
Productivity, Vol.27, No.3., September – October 1984, p7.

33
like All India Management Association and a number of corporate

bodies make a conscious and deliberate effort to generate

management ethics among the policy makers and managers of HRDP’s

in the country.9

Bhatia in his article had analyzed the challenges of HRM under

three broad groups.

(a) Organization level

Human resource planning has to be integrated with the

strategic plans of the organization.

(b) Work place

Adopting the work force to rapid changes in technology.

(c) Human Resource Development

The study also explained the plans, viz., approaches, change in

techniques and strategies, which the companies are developing to

make their organizations more effective, more participative and more

acceptable. He finds that the most important mistake by the

management today is the sad neglect of grievance handling.10

Taneja in his article’ towards better technology, utilizing human

resources observed that one cannot manage machines, finance,

marketing production etc., without the proper utilization of human

resources. As a supplement to human resources which are precious

9
M.N. Kulkarni, “Managing Human Resource Development Programmes
(HRDP) Challenges and Opportunities”, Indian Management, December 1986, Vol.
24, p.14.
10
Naval H.Tata, “Harmony in Industrial Relations”, Indian Management, July
Vol. No.2, September, 1986, p.129.

34
and rare, we should be able to adopt technology to suit our

environment and conditions. He concluded that both the technology

and social values are changing and in this background an

organization should maintain a balance between changing technology

and social values with the aim to maximize the utilization of human

resources.11

Kanungo and Mendonea in their research study discussed the

objectives of reward system and its evaluation. Intrinsic rewards are

those that are built into or inherent in the job such as responsibility,

feelings of accomplishment. Employees gain these rewards directly as

they perform the job tasks. Extrinsic rewards are those that are

external to the job for example, pay, benefits, praise, pleasant working

conditions, job security etc. The intrinsic rewards generate in the

employees a level of satisfaction, which induces a high level of

performance for this reason intrinsic rewards are regarded as the real

and only ‘motivations’. He had suggested that employers should

provide extrinsic rewards for employee satisfaction and intrinsic

reward for augmenting employee productivity.12

Khan in his study had stated that manpower resources are in

fact a double edged weapon. If it is misused, it would lead to economic

retardation of a country.

11
Ram S. Taneja, “Towards better technology. Utilizing Human Resources”,
Indian Management, Vol. 26, No.6, June 1987, p.12.
12
Rabindra N. Kanungo and Manual Mendoma, “Work Rewards and
Management of Human Resources”, Indian Management, Vol.26, No.4, April 1986,
p.8.

35
 He viewed that an effective HRD programme should include (a)

Proper HRD strategy (b) adequate manpower development procedures

and ( c) a specialized motivational plan. In this age of changing

technology human resource development is a pre-condition both for

maintaining and further developing the national economy.13

Sreenivasan and Siva Subramanian in their study had

expressed the view that a good organization which is functioning

successfully cannot exist on probabilities Efficient people have to be

put on appropriate tasks to make them effective. They observed that

it is very difficult to select a right person to suit the needs of jobs.

Individual capabilities become obsolete due to changing work

environment. According to them, HRM makes ineffective men more

effective through different techniques that the empirical studies have

endowed to the world of management.14

Prabat in his study had explained that planning normally

addresses itself to perspective changes in business objectives and the

forces affecting the business. Strategic planning is therefore vital for

effective management especially of large companies. As a company

grows large or changes, from production to marketing, systematic

manpower planning becomes a necessity. Lack of adequate talent

may be the single major constraint in the ability to sustain future

13
Muktar N.Khan, “Human Resource Development in a Changing
Technology”, Human Resource Development – Strategic Approaches and
Experiences (Edited) Mathur, Arihani Publishers, Jaipur, 1990, p.127.
14
V. Sreenivasan and V. Siva Subramanian, “HRM – Effective and Efficient”,
Indian Management, Vol.27, No5, May 1988, p20.

36
growth. He concluded that it is therefore imperative to link human

resource planning to strategic business planning to ensure an overall

success in the business.15

Chetty and Krishnaswamy in their article had focused the need

for periodical review of human resources and their study found that

areas such as participation of management, employee turnover, job

data, training of employees, retraining programme etc. need periodical

review for effectiveness. They stated that whenever there is a change

in the level of organization activity either expansion of existing product

range or addition of new products or services, the impact is felt on

manpower allocation and requirements. The degree of impact

depends upon the intensity of change in the activity levels. If

periodical HR reviews are undertaken, the process of change and

adjustments with regard to human resources development and

utilization can be greatly facilitated.16

Jyothi in his article had explained that HRD is a broad term

which indicated that all activities designed to get employees to work

more effectively within a given organization. HRD comprised

knowledge, skill and capacity of human resources to develop their

competence. HRD or development of people lay in the organizational

growth and progress. It was therefore found that training being the

15
P.N. Prabat, “Linking Human Resource Planning with Strategic Planning”,
Indian Management, Vol. 27, No.5, May 1988, p.20.
16
B.S. Chetty and K.N. Krishnaswamy, “Skills of Human Resources; Need for
Periodical Review,” Productivity; Vol. 29, No.1, July-September 1988, p.163.

37
most vital tool of human resources, development naturally formed the

major part of the human resource development. The performance of

the human resource in business, industry or any other institution will

mainly depend on the system of selection and training17.

Rao in his study had stated that the need for focusing attention

on the development of human resources was increasingly being felt in

Indian Industry. The study highlighted the manner in which some of

the HRD subsystems were being practiced and utilized in Indian

organizations. The author has noted from a study that the trends

indicate that a lot of innovative activities were going on in Indian

organisations both in the private and public sectors indicating a

modernizing trend in the personnel function.18

Gupta in his study had stated that the productivity of any

organization can be improved by application of capital intensive high

technology, scientific and modern technique and attitudinal change of

employees by improving work culture. The author had said that the

study in many organizations in developed and developing countries

proved that technology itself may improve productivity but it cannot

sustain it for a long time. 19

17
S.S. Jyothi, ‘Training and Development of Human Resources”, HRD
strategic Approaches and experiences (Edited) by B.L. Mathur, Anibant Publishers,
Jaipur, 1990, p143.
18
T.V. Rao, “HRD Practices in Indian Industry”, Lokudyog, Vol.15, No.12,
March 1982, p.5.
19
T.K. Gupta, “HRD-Key to improve productivity”, Management Review,
Vol.13, No.2, Feb-1986, p.17.

38
 He recommends that it would be necessary that an integration

of high technology, scientific technique and work culture is

continuously followed up through detailed HRD process covering every

section of employees. High technology had to be imparted to lower

level of employees by training them in theory as well as practice. This

required massive and continuous education programme.

Subratesh Ghose in his article had identified the problems areas

and the role of participate management may be effective approach for

raising the level of productivity, provided certain pre-conditions are

fulfilled and the problems are sought to be encountered seriously. For

that, of course the scheme should be meaningful and significance in

coverage so as to make the workers interested in participation and the

management also must be ready in spirit to involve the workers in the

process of decision making for improving labour productivity.20

Parthasarathy in his article had analyzed the different stages of

manpower planning and observed that in the present era of rapidly

changing political and economical activities, forecasting of any

resource is difficult and manpower is not an exception. To have an

accurate and reliable forecast, an organization should have systematic

personnel records and rational personnel policies. He has observed

20
Subratesh Ghosh, “Participative Management for Higher Productivity”,
Productivity, , Vol.24, October-December 1983, p.349.

39
that manpower forecasting is the most complex part of the exercise for

which the use of scientific technique is a must.21

Ashok Pratap Singh in his study had observed that productivity

is influenced not only by physical aspects but demographic,

situational, attitudinal variables which are not less important for the

productive efficiency of employees. In an intensive study of the effects

of alienation, anxiety and job involvement on the performance of the

workers in a Kanpur textile mill he found that ‘alienation’ had a

negative relationship with the productivity of workers. A high degree of

‘anxiety’ exerted a deteriorating effect on productivity and high ‘job

involvement’ was a necessary condition for the employees to enhance

their productivity level. 22

Dravid in his article had stated that HRD practitioners in India

had little understanding as to how human resource management

activities contributed to the effectiveness of a business organization

and they were increasingly obsessed with the development of tools and

technologies only. He had stressed the fact that the element of

human resource planning should be mixed with strategic planning,

21
Parthasarathy, “Manpower Planning”, Lok Udyog, Bureau of public
Enterprises, Vol.16, No.5, August, 1982, p.23.
22
Ashok Pratap Singh, “Human Resource in Industrial Productivity – A
Psychological Perspective”, Economic and business affairs- Facts for you, Vo.10,
No.9, March 1989, p12.

40
and human resource personnel should be taught to support the

strategic planning process. 23

Krishna in his article had observed that with the emergence

electronics and computers, the rate of obsolescence in human skills

were increasing. The profits of the working force, their demands and

aspirations constantly affected professionals and helped in creating

environments for this continuing education and upgradation of skills

and knowledge and prevent them from becoming obsoletes. Human

resource, obsolescence takes place gradually and not abruptly without

warning. There is advance intimation, which can be forecast, detected

and planned for any attempt at detection or prevention. A general

understanding of the factors responsible for obsolescence and their

effect on the company’s personnel and manpower planning policies

had to be made. For this, continuing education can be useful as a

means of tackling obsolescence and would be useful when they were

planned well and tailor-made to meet specific needs. 24

Suri in his study had stated that an effective use of materials,

money, machines and human resources was essential for achieving a

higher level of productivity in industry. Other resources have

limitations, while the human resources had unlimited potential. Its

quality could be improved by intervention of training. He concluded

23
R.N.Dravid, “Importance of Values in HRD”, The Hindu, Thursday August
1, 1991, p 18.
24
N.V.Krishna, ‘Human Resource Obsolescence in Organizations – Issues and
Strategies”, Indian Management, Vol.30, March 1991, p. 45.

41
that our knowledge on the impact of training on productivity, facilities

and constraints was highly inadequate and a comprehensive research

on this aspect had to be initiated.25

Gani in his article had stated that the effective and efficient

management of human resources played a key role in increasing

productivity and establishing a strong and progressive economic base.

The future year will present an interplay of various economic, social,

cultural, legal and technical challenges which would require not only

dedicated efforts and optimum utilization of scarce resources but also

considerable change in the attitude, working system, strategy and

human relations skill. To be a world leader India should think of

HRM to take care of challenges which the 21st century will bring with

it. 26

Raju in his study had expressed productivity as the degree of

effective utilization of each of the major factors of production viz.,

land, capital, labour and organization. He feels that productivity of an

organization depends on the state of technology and working capital

utilization. He had stressed on the fact that human resources was the

most important of all resources. The motivation, morale and creative

culture of employees could make all the difference between success

and failure of the enterprise. Therefore, the management should

25
G.K.Suri, Training for productivity in industry, HRD and productivity –
New perspectives, National productivity council, New Delhi 1988, p.63.
26
A.Gani, “Personnel Challenges by 2000 A.D”., Indian Management,
Vol.30, No.1, January 1991, p 31.

42
create a climate of trust and concern for the men in the organization.

Where there is no trust, employees would take no worthwhile

initiatives. Team work and harmonious industrial relations were

essential for excellence in performance.27

Ashok Arya in his study had observed that effective

management training and influence over the behavior, skill, potential

and capabilities of the employees will act as effective tools for

manipulating the internal business environment. While making the

various physical arrangements for creative comforts, the emphasis

should be on overall cost effectiveness without compromising on the

comforts of the participants. He averred that within the same budget

allocation training and development department could conduct more

programmes.28

According to Ragnar Arvidson, ‘the basic factors required for

satisfactory employer and employee relationship are (1) clean work

place (2) safety provisions (3) insurance benefits (4) vacations and

holidays (5) social policies (6) personnel policies (7) status (8) fair pay

rates.”29

Bhatia in his article had discussed two levels of strategy. a)

Competitive strategy indicating the way in which a company will

27
C.S.N.Raju, Team work and Harmonious employee relations lead to better
productivity, improvement in Productivity in Public enterprises, Center for public
sector studies, New Delhi, 1985, p 69.
28
Ashok Arya, “Management Training – Its impact on Organizations”, Indian
Management, Vol. 30, No. 4-5, April-May 1991, p.65.
29
Ragnar Arvindson, Taimani K.K., A Study of Personnel Management in
Selected Super Markets in India, ICA New Delhi, 1971, p 122.

43
compete in its business and to outline how the company is to gain and

to sustain the competitive advantage b) Corporate strategy which

determines the way in which company will operate and how it will gain

additional competitive advantage by coordinating the various

businesses.”30

Suvendu Das in his article had pointed out important

implications for HRM such as fast changing technology – especially

the acceleration of change and the automation in the minds of the

people, technological innovations leading to restructuring of

organization, operation and culture, changing profile of employees

demography, equal rights movement, phenomenon of knowledge

workers, brawn to brain and under employment.”31

Santwana Chaudhuri in his article had stated that the

performance of the companies could be evaluated in terms of key

human resource indicators like absenteeism, impact of training

motivation level, performance report or assessment sheet, rate of

industrial disputes, labour turnover etc.,32

Vasanthi Srinivasan in her research had identified the following

concepts: The concept of human resource management which had

been receiving increasing attention in recent times. It is seen as a

30
R.L.Bhatia, “HRM Strategies for Competitive Advantage”, Personnel
Today, June 1993, p.4.
31
Suvendu Das, “Human Value Management”, Personnel Today, June 1993,
p. 15.
32
Santwana Chaudhuri in his article “Role of Human Resource Management
for Effective Implementation of Memorandum of Understanding”. Personnel Today,
December 1993, p.22.

44
value added function to the organizational products and processes.

The review of literature shows that most of the indicators used to

assess the effectiveness of the human resource department were

outcome based indicators. In recent years, researchers are advocating

the usage of the constituency approach to assessing the effectiveness

of the HR department. This view holds that the HR department being

a support function interacts with a network of constituencies. The

constituencies are those parties that exert a hold on it. That is, they

either affect or are affected by an organization’s actions, behaviours

and policies’. The HR department will be considered an effective one if

it is able to satisfy the demands of most of these constituencies.

The study revealed that most of the interactions between the

constituencies and the HR department were at the initiative of the

constituencies and were focused on maintenance related matters. The

HR department did not appear to be involved in the mainstream

initiatives like Total Quality Management and manufacturing redesign

due to two factors, viz.,role ambiguity of the HR managers and the

lack of expertise in areas beyond their functional competence. The

indicators used by the HR department to assess their performance

and the indicators which emerged from the constituencies varied

significantly. While the indicators used by the HR department were

outcome based and quantitative, the indicators that emerged from the

constituencies were primarily process based and qualitative. This

45
difference had implications for HR managers in performing their roles

effectively.”33

Upadhyay in his article had specified that with the passage of

time, the cultural values of India which were once considered unique

in the world had slowly and gradually deteriorated.

With the advent of the industrialization in the West, the pattern

of the society had to face a great challenge. The subcontinent was

also subjected to the pressure emanating from the foreign rule. New

ethos of industrialization brought about tremendous social change

dividing the people into two blocks, viz.,haves and have nots.”34

Dhar had observed that “all development starts with self-

development and hence self-development is the essence of human

resource development (HRD). If an individual is not basically

interested in developing himself, no efforts made by the organization

to develop the individual can succeed. It is for the individual himself

to take the initiative aimed at self-development and the responsibility

for this lies primarily with the individual concerned.

The employees as a ‘whole-man’ comes to work and carries with

him both the business character of an employee and also the non-

business character of a man, a son, a father, a husband, a brother

etc. This whole man, therefore, is under various pulls and pressures

33
Vasanthi Srinivasn, “Assessing the Effectiveness of HR Department: A
Multiple Constituency Framework” Indian Institute of Management, Bangalore.
1994.
34
N. Upadhyay, “Human Resource Development and Value Management”
Personnel Today, December 1996, p.17.

46
and that often makes him a very complex character. Therefore, it is

time that the managements of industrial enterprises try to understand

this genesis and start looking at this “WHOLE” man.

The author viewed that the whole conflict of human society in

general and of human relationships in the particular is between

“worlds” – not between persons. The world is created by men with

their own closed mental attitude, ego-state, biases, enviousness,

jealousy etc. men live in world created by their own perceptions.

And there exists so many ‘worlds’ as every person is strangely a

‘world’ by himself. He has created around himself a flimsy enclosure

of projections, ideas, notions, conceptions, interpretations – all

strange blockades. He is a projector going on and on, projecting

things which are nowhere; only inside him”.35

Amarchand in his article focused on discipline to precede

development in the following manner:

The crux of the matter lies not in the ‘Development’ part but in

the ‘Discipline’ part of the Human Resources. The individual at work,

in all the places of work knows what he is supposed to do but if he

/she is not willing to do, cannot be compelled to do. Basically it is a

question of discipline – discipline that is enforced as well as self

discipline.”36

35
J.L. Dhar, “HRD through Self Development – A Hard Look”, Personnel
Today: December 1996, p 11, 12.
36
D. Amarchand, “Human Resource Discipline”, Personnel Today, Dec 1996,
p. 45.

47
 Chandrasekar wrote that the future belongs to dynamic and

vibrant organizations. Such organizations will ensure that their

culture and environment encouraged work commitment and

involvement of employees”

He had also focused the functional elements of HRM such as

role of Managers, man power planning, selection, training and

development, performance counseling, career planning, rewards and

recognition, improvement management, information technology. HRM

is no longer an activity carried out only by the personnel or HRD

department of the organizations. It is the job of every manager within

the organization.

He had finally stated that the challenges facing the HRM are

both daunting and exciting. Those who can meet these challenges will

survive, thrive and experience of self-satisfaction”.37

Selvaraj in his research paper had observed that labour had an

interest in the operating results and the financial strength of a

company.38

Raja Gopalan in his research paper had stated the following Ten

Commandments for organisational effectiveness.

37
S. Chandrasekar, Challenges Facing HRM, Special Report An Economic
Times, Dt. 28-12-1996.
38
M. Selvaraj, “Financial Administration and Human Resource Management in
Indian Cement Industry – An Empirical Approach”, 1996, p.23.

48
1. The aptitude of the employee in relation to their jobs is the most

important human factor on which the super structure of the

human resource development can be built.

2. If a person works on a job of his liking his achievement

motivation remains quite high.

3. Training is an inseparable part of organizational effectiveness.

Employees must be exposed to knowledge and training on

ongoing basis to keep pace with the fast changing technology.

4. Greater exposure to a job improves the efficiency in terms of the

speed and quality. However, timely job rotation is necessary

before the job becomes uninteresting and routine for the

concerned employees.

5. Organizational commitment of the employees has been

recognized as the key factor to the effectiveness of any

organization.

6. Satisfaction of psycho-socio needs through the job contributes

greatly to the organizational effectiveness.

7. Organizational culture or climate has a major influence on

motivation, productivity and job satisfaction of employees.

8. The leadership style and the effectiveness of the leaders greatly

contribute to the organizational effectiveness.

9. The ability of the organization to use the organizational

development (OD) process to rectify in time the distortions in

various organizational factors and effect organizational changes

49
 to take care of various external environmental factors including

technological developments improves its effectiveness.

10. The organizational philosophy exerts most powerful impact on

various factors contributing to the organizational

effectiveness.”39

Alok Kumar Pramanik in his article had stated that “HRD

believes that human potential is limitless and that is the duty of the

organization to help individual in identifying his or her strength and

making full use thereof.”40

These research studies and articles focused on the implications

and the importance of human resource management in every

organization whether it is a private sector or a public sector. Proper

planning of man power and effective utilization of human resources

together with other physical resources pave the way for prosperity.

39
V. Raja Gopalan, “A Study of Liquidity, Profitability and Human Resource
Management in Central Co-operative Bank, Thanjavur”, 1998.
40
Alok Kumar Pramanik, “Concept and use of Human Resource
Development”, Southern Economist, 1998, p5.

50