Notes HRM

MINISTRY OF COMMERCE & INDUSTRY
GOVERNMENT OF INDIA
INTEGRATED PROGRAM IN RETAIL

MANAGEMENT
SEMESTER – 3
HUMAN RESOURCE MANAGEMENT
HANDBOOK
PREPARED BY: MS. AASTHA GARG

REVIEWED BY: MR. A K SHARMA
HOD: MR. A K SHARMA
FDDI SCHOOL OF RETAIL MANAGEMENT

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FDDI/ IPRM FMRM/TTLM/ IRM 305
CONTENTS
Sr. No. Content Page Number
1 Introduction to Human Resource management 3
2 Human Resource Planning 17
3 Job Analysis and Job Design 29
4 Recruitment 43
5 Selection 53
6 Performance Appraisal 61
7 Human Resource Development- Employee Training 73
8 Human Resource Development-Executive Development 83
9 Employee Mobility 89
10 Wage and salary Administration 104
11 Compensation and Incentives 114
12 Grievance Handling 121
13 Bibliography 130
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INTRODUCTION TO HUMAN RESOURCE
UNIT 1
MANAGEMENT
Structure of Unit:
 Objectives
 Introduction
 What is Human Resource Management?
 Nature of HRM
 Scope of HRM
 Objectives of HRM
 Functions of HRM
 Role of HRM
 HRM in the New Millennium
Objectives
After studying this unit, the student will be able to:
 Understand the basic concepts of human resource management (HRM).

 Explain what human resource management is and how it relates to the management
process. Provide an overview of functions of HRM.
 Describe how the major roles of HR management are being
transformed. Explain the role of HRM in the present millennium.
Introduction
Human beings are social beings and hardly ever live and work in isolation. We always plan,
develop and manage our relations both consciously and unconsciously. The relations are the
outcome of our actions and depend to a great extent upon our ability to manage our actions.
From childhood each and every individual acquire knowledge and experience on
understanding others and how to behave in each and every situations in life. The whole
context of Human Resource Management revolves around this core matter of managing
relations at work place.
There is no best way to manage people and no manager has formulated how people can be
managed effectively, because people are complex beings with complex needs. Effective HRM
depends very much on the causes and conditions that an organizational setting would
provide. Any Organization has three basic components, People, Purpose, and Structure.
Today, companies that offer products with the highest quality are the ones with a leg up on
the competition; But the only thing that will uphold a company’s advantage tomorrow is the
caliber of people in the organization.
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Having competent staff on the payroll does not guarantee that a firm’s human resources will
be a source of competitive advantage. However in order to remain competitive, to grow, and
diversify an organization must ensure that its employees are qualified, placed in appropriate
positions, properly trained, managed effectively, and committed to the firm’s success. The
goal of HRM is to maximize employees’ contributions in order to achieve optimal productivity
and effectiveness, while simultaneously attaining individual objectives (such as having a
challenging job and obtaining recognition), and societal objectives (such as legal compliance
and demonstrating social responsibility).
What is Human Resource Management?
HRM is the study of activities regarding people working in an organization. It is a managerial

function that tries to match an organization’s needs to the skills and abilities of its
employees.
Definitions of HRM
Human resources management (HRM) is a management function concerned with hiring,

motivating and maintaining people in an organization. It focuses on people in organizations.
Human resource management is designing management systems to ensure that human
talent is used effectively and efficiently to accomplish organizational goals.
HRM is the personnel function which is

concerned with procurement,
development, compensation, integration
and maintenance of the personnel of an
organization for the purpose of
contributing towards the
accomplishments of the organization’s
objectives. Therefore, personnel
management is the planning, organizing,
directing, and controlling of the
performance of those operative functions
(Edward B. Philippo).
According to the Invancevich and Glueck, “HRM is concerned with the most effective use of
people to achieve organizational and individual goals. It is the way of managing people at
work, so that they give their best to the organization”.
According to Dessler (2008) the policies and practices involved in carrying out the “people”
or human resource aspects of a management position, including recruiting, screening,
training, rewarding, and appraising comprises of HRM.
In short Human Resource Management (HRM) can be defined as the art of procuring,
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developing and maintaining competent workforce to achieve the goals of an organization in
an effective and efficient manner.
Nature of HRM
HRM is a management function that helps manager’s to recruit, select, train and develop
members for an organization. HRM is concerned with people’s dimension in organizations.
1. HRM Involves the Application of Management Functions and Principles. The functions
and principles are applied to acquiring, developing, maintaining and providing
remuneration to employees in organization.
2. Decision Relating to Employees must be Integrated. Decisions on different aspects of
employees must be consistent with other human resource (HR) decisions.
3. Decisions Made Influence the Effectiveness of an Organization. Effectiveness of an
organization will result in betterment of services to customers in the form of high quality
products supplied at reasonable costs.
4. HRM Functions are not Confined to Business Establishments Only but applicable to non-
business organizations such as education, health care, recreation and like.
Scope of HRM
The scope of HRM is indeed vast. All major activities in the working life of a worker – from the
time of his or her entry into an organization until he or she leaves the organizations comes
under the purview of HRM. The major HRM activities include HR planning, job analysis, job
design, employee hiring, employee and executive remuneration, employee motivation,
employee maintenance, industrial relations and prospects of HRM.
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The scope of Human Resources Management extends to:
 All the decisions, strategies, factors, principles, operations, practices, functions, activities
and methods related to the management of people as employees in any type of
organization.
 All the dimensions related to people in their employment relationships, and all the
dynamics that flow from it.
The scope of HRM is really vast. All major activities n the working life of a worker – from the
time of his or her entry into an organization until he or she leaves it comes under the purview
of HRM. American Society for Training and Development (ASTD) conducted fairly an
exhaustive study in this field and identified nine broad areas of activities of HRM. These are
given below:
a) Human Resource Planning: The objective of HR Planning is to ensure that the organization
has the right types of persons at the right time at the right place. It prepares human
resources inventory with a view to assess present and future needs, availability and
possible shortages in human resource. Thereupon, HR Planning forecast demand and
supplies and identify sources of selection. HR Planning develops strategies both long-term
and short-term, to meet the man-power requirement.
b) Design of Organization and Job: This is the task of laying down organization structure,
authority, relationship and responsibilities. This will also mean definition of work contents
for each position in the organization. This is done by “job description”. Another important
step is “Job specification”. Job specification identifies the attributes of persons who will be
most suitable for each job which is defined by job description.
c) Selection and Staffing: This is the process of recruitment and selection of staff. This
involves matching people and their expectations with which the job specifications and career
path available within the organization.
d) Training and Development: This involves an organized attempt to find out training needs
of the individuals to meet the knowledge and skill which is needed not only to perform
current job but also to fulfil the future needs of the organization.
e) Organizational Development: This is an important aspect whereby “Synergetic effect” is

generated in an organization i.e. healthy interpersonal and inter-group relationship within
the organization.
f) Compensation and Benefits: This is the area of wages and salaries administration where
wages and compensations are fixed scientifically to meet fairness and equity criteria. In
addition labour welfare measures are involved which include benefits and services.
g) Employee Assistance: Each employee is unique in character, personality, expectation and
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temperament. By and large each one of them faces problems everyday. Some are personal
some are official. In their case he or she remains worried. Such worries must be removed to
make him or her more productive and happy.
h) Union-Labour Relations: Healthy Industrial and Labour relations are very important for
enhancing peace and productivity in an organization. This is one of the areas of HRM.
i) Personnel Research and Information System: Knowledge on behavioral science and

industrial psychology throws better insight into the workers expectations, aspirations and
behaviour. Advancement of technology of product and production methods have created
working environment which are much different from the past. Globalization of economy has
increased competition many fold. Science of ergonomics gives better ideas of doing a work
more conveniently by an employee. Thus, continuous research in HR areas is an unavoidable
requirement. It must also take special care for improving exchange of information through
effective communication systems on a continuous basis especially on moral and motivation.
Objectives of HRM
The primary objective of HRM is to ensure the availability of competent and willing workforce
to an organization. The specific objectives include the following:
1) Human capital : assisting the organization in obtaining the right number and types of
employees to fulfill its strategic and operational goals
2) Developing organizational climate: helping to create a climate in which employees are
encouraged to develop and utilize their skills to the fullest and to employ the skills
and abilities of the workforce efficiently
3) Helping to maintain performance standards and increase productivity through
effective job design; providing adequate orientation, training and development;
providing performance-related feedback; and ensuring effective two-way
communication.
4) Helping to establish and maintain a harmonious employer/employee relationship
5) Helping to create and maintain a safe and healthy work environment
6) Developing programs to meet the economic, psychological, and social needs of the
employees and helping the organization to retain the productive employees
7) Ensuring that the organization is in compliance with provincial/territorial and federal
laws affecting the workplace (such as human rights, employment equity, occupational
health and safety, employment standards, and labour relations legislation). To help
the organization to reach its goals
8) To provide organization with well-trained and well-motivated employees
9) To increase the employees satisfaction and self-actualization
10) To develop and maintain the quality of work life
11) To communicate HR policies to all employees.
12) To help maintain ethical polices and behavior.
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The above stated HRM objectives can be summarized under four specific objectives: societal,
organizational, and functional and personnel.
1) Societal Objectives: seek to ensure that the organization becomes socially responsible to
the needs and challenges of the society while minimizing the negative impact of such
demands upon the organization. The failure of the organizations to use their
resources for the society’s benefit in ethical ways may lead to restriction.
2) Organizational Objectives: it recognizes the role of HRM in bringing about organizational

effectiveness. It makes sure that HRM is not a standalone department, but rather a
means to assist the organization with its primary objectives. The HR department exists
to serve the rest of the organization.
3) Functional Objectives: is to maintain the department’s contribution at a level

appropriate to the organization’s needs. Human resources are to be adjusted to suit
the organization’s demands. The department’s value should not become too
expensive at the cost of the organization it serves.
4) Personnel Objectives: it is to assist employees in achieving their personal goals, at least

as far as these goals enhance the individual’s contribution to the organization.
Personal objectives of employees must be met if they are to be maintained, retained
and motivated.
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HRM Objectives Supporting Functions
1. Societal Objectives Legal compliance
Benefits
Union- management relations
2. Organizational Objectives Human Resource Planning
Employee relations
Selection
Training and development
Appraisal
Placement
Assessment
3. Functional Objectives Appraisal
Placement
Assessment
4. Personal Objectives Training and development
Appraisal
Placement
Compensation
Assessment
Functions of HRM
Human Resources management has an important role to play in equipping organizations to

meet the challenges of an expanding and increasingly competitive sector. Increase in staff
numbers, contractual diversification and changes in demographic profile which compel the
HR managers to reconfigure the role and significance of human resources management.
The functions are responsive to current staffing needs, but can be proactive in reshaping
organizational objectives. All the functions of HRM are correlated with the core objectives of
HRM. For example personal objectives is sought to be realized through functions like
remuneration, assessment etc.HR management can be thought of as seven interlinked
functions taking place within organizations.
Additionally, external forces—legal, economic, technological, global, environmental,

cultural/geographic, political, and social—significantly affect how HR functions are designed,
managed, and changed. The functions can be grouped as follows:
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o Strategic HR Management: As a part of maintaining organizational competitiveness,
strategic planning for HR effectiveness can be increased through the use of HR metrics and
HR technology. Human resource planning (HRP) function determine the number and type of
employees needed to accomplish organizational goals. HRP includes creating venture teams
with a balanced skill-mix, recruiting the right people, and voluntary team assignment.
o Equal Employment Opportunity: Compliance with equal employment opportunity (EEO)

laws and regulations affects all other HR activities.
o Staffing: The aim of staffing is to provide a sufficient supply of qualified individuals to fill jobs
in an organization. Job analysis, recruitment and selection are the main functions under
staffing. Workers job design and job analysis laid the foundation for staffing by identifying
what diverse people do in their jobs and how they are affected by them.
o Talent Management and Development: Beginning with the orientation of new employees,
talent management and development includes different types of training. Orientation is the
first step towards helping a new employee to adjust himself to the new job and the
employer. It is a method to acquaint new employees with particular aspects of their new job,
including pay and benefit programmes, working hours and company rules and expectations.
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o Training and Development programs provide useful means of assuring that the employees
are capable of performing their jobs at acceptable levels and also more than that. All the
organizations provide training for new and in experienced employee. In addition,
organization often provide both on the job and off the job training programmes for those
employees whose jobs are undergoing change.
o Likewise, HR development and succession planning of employees and managers is necessary

to prepare for future challenges. Career planning has developed as result of the desire of
many employees to grow in their jobs and to advance in their career. Career planning
activities include assessing an individual employee’s potential for growth and advancement
in the organization.
o Performance appraisal includes encouraging risk taking, demanding innovation, generating

or adopting new tasks, peer evaluation, frequent evaluations, and auditing innovation
processes.
o Total Rewards: Compensation in the form of pay, incentives and benefits are the rewards
given to the employees for performing organizational work. Compensation management is
the method for determining how much employees should be paid for performing certain
jobs. Compensation affects staffing in that people are generally attracted to organizations
offering a higher level of pay in exchange for the work performed. To be competitive,
employers develop and refine their basic compensation systems and may use variable pay
programs such as incentive rewards, promotion from within the team, recognition rewards,
balancing team and individual rewards etc.
o Risk Management and Worker Protection: HRM addresses various workplace risks to
ensure protection of workers by meeting legal requirements and being more responsive to
concerns for workplace health and safety along with disaster and recovery planning.
o Employee and Labor Relations: The relationship between managers and their employees
must be handled legally and effectively. Employer and employee rights must be addressed. It
is important to develop, communicate, and update HR policies and procedures so that
managers and employees alike know what is expected.
Role of HRM
The role of HRM is to plan, develop and administer policies and programs designed to make
optimum use of an organizations human resources. It is that part of management which is
concerned with the people at work and with their relationship within enterprises. Its
objectives are: (a) effective utilization of human resources, (b) desirable working
relationships among all members of the organizations, and (c) maximum individual
development. Human resources function as primarily administrative and professional. HR
staff focused on administering benefits and other payroll and operational functions and
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didn’t think of themselves as playing a part in the firm’s overall strategy. The primary
responsibilities of Human Resource managers are:
a. To develop a thorough knowledge of corporate culture, plans and policies. To act as an

internal change agent and consultant
b. To initiate change and act as an expert and facilitator To actively involve in company’s
strategy formulation
c. To keep communication line open between the HRD function and individuals and groups both
within and outside the organization
d. To identify and evolve HRD strategies in consonance with overall business strategy
e. To facilitate the development of various organizational teams and their working relationship
with other teams and individuals
f. To try and relate people and work so that the organization objectives are achieved efficiently
and effectively
g. To diagnose problems and determine appropriate solution particularly in the human resource
areas
h. To provide co-ordination and support services for the delivery of HRD programmes and
services
i. To evaluate the impact of an HRD intervention or to conduct research so as to identify,
develop or test how HRD In general has improved individual and organizational performance.
Different management gurus have deliberated different roles for the HR manager based on
the major responsibilities that they full fill in the organization. Few of the commonly accepted
models are enumerated below.
Current Classification of HR roles
The nature and extent of these roles depend on both what upper management wants HR
management to do and what competencies the HR staff have demonstrated. Three roles are
typically identified for HR. The focus of each of them, as shown in Figure 1.is elaborated
below:
Strategic HR
Administrative Operational Actions
Personnel practices Managing employee Organizational/business
Legal compliance forms relationship issues Strategies
HR strategic or planning
and paperwork Employee advocate
Evaluation of HR
effectiveness.
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1. Administrative Role of HR
The administrative role of HR management has been heavily oriented to administration and
recordkeeping including essential legal paperwork and policy implementation. Major changes
have happened in the administrative role of HR during the recent years. Two major shifts
driving the transformation of the administrative role are: Greater use of technology and
Outsourcing.
Technology has been widely used to improve the administrative efficiency of HR and the
responsiveness of HR to employees and managers, more HR functions are becoming available
electronically or are being done on the Internet using Web-based technology. Technology is
being used in most HR activities, from employment applications and employee benefits
enrollments to e-learning using Internet-based resources.
2. Operational and Employee Advocate Role for HR
HR managers manage most HR activities in line with the strategies and operations that have
been identified by management and serves as employee “champion” for employee issues and
concerns.HR often has been viewed as the “employee advocate” in organizations. Employee
advocacy helps to ensure fair and equitable treatment for employees regardless of personal
background or circumstances.
The operational role requires HR professionals to cooperate with various departmental and
operating managers and supervisors in order to identify and implement needed programs
and policies in the organization. Operational activities are tactical in nature. Compliance with
equal employment opportunity and other laws is ensured, employment applications are
processed, current openings are filled through interviews, supervisors are trained, safety
problems are resolved, and wage and benefit questions are answered. For carrying out these
activities HR manager matches HR activities with the strategies of the organization.
3. Strategic Role for HR
The strategic HR role means that HR professionals are proactive in addressing business
realities and focusing on future business needs, such as strategic planning, compensation
strategies, the performance of HR, and measuring its results. However, in some organizations,
HR often does not play a key role in formulating the strategies for the organization as a
whole; instead it merely carries them out through HR activities.
HR should be responsible for knowing what the true cost of human capital is for an employer.
For example, it may cost two times key employees’ annual salaries to replace them if they
leave. Turnover can be controlled though HR activities, and if it is successful in saving the
company money with good retention and talent management strategies, those may be
important contributions to the bottom line of organizational performance.
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It is the era when for the competitive triumph of the organization there is a need to involve
HRM significantly in an integrated manner, which demands such capabilities from the HR
specialists. The role of HR shifted from a facilitator to a functional peer with competencies in
other functions, and is acknowledged as an equal partner by others. The HR is motivated to
contribute to organizational objectives of profitability and customer satisfaction, and is seen
as a vehicle for realization of quality development. The department has a responsibility for
monitoring employee satisfaction, since it is seen as substitute to customer satisfaction.
HRM in the New Millennium
Human Resources have never been more indispensable than today. The competitive forces
that we face today will continue to face in the future demanding organizational excellence. In
order to achieve this extended quality, organization’s need to focus on learning, quality
development, teamwork, and reengineering. These factors are driven by the way
organizations implement things and how employees are treated.
1. HR Can Help in Dispensing Organizational Excellence: To achieve this paradigm shift in

the organization excellence there is a need for organizations to reform the way in which
work is carried out by the Human Resource department.
HR should be a representative of the employees and should help the organization in

improving its capacity for change. HR will help the organizations in facing the competitive
challenges such as globalization, profitability through growth, technology, intellectual
capital, and other competitive challenges that the companies are facing while adjusting to
uncontrollably challenging changes in business environment.
2. Human Resource Should be a Strategy Partner: HR should also become a partner in

strategy executions by propelling and directing serious discussions of how the company
should be organized to carry out its strategy. Creating the conditions for this discussion
involves four steps. First HR need to define an organizational architecture by identifying
the company’s way of doing business. Second, HR must be held responsible for
conducting an organizational audit. Third, HR as a strategic partner needs to identify
methods for restoring the parts of the organizational architecture that need it. Fourth and
finally, HR must take stock of its own work and set clear priorities.
3. HR Accountability Should be Fixed to Ensure Employee Commitment: HR must be held

accountable for ensuring that employees feel committed to the organization and
contribute fully. They must take responsibility for orienting and training line management
about the importance of high employee morale and how to achieve it. The new HR should
be the voice of employees in management discussions. The new role for HR might also
involve suggesting that more teams be used on some projects or that employees be given
more control over their own work schedules.
4. The New HR Must Become a Change Agent: The new HR must become a change agent,
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which is building the organization’s capacity to embrace and capitalize on change. Even
though they are not primarily responsible for executing change it is the duty of the HR
manager to make sure that the organization carries out the changes framed for
implementation.
5. Improving the Quality of HR: The most important thing that managers can do to drive the
new mandate for HR is to improve the quality of the HR staff itself. Senior executives must
get beyond the stereotypes of HR professionals as incompetent support staff and unleash
HR’s full potential
6. Change in Employment Practices: The balance sheet of an organization shows human

resource as an expense and not as a Capital. In the information age, it is perceived that
the machines can do the work more efficiently than most people however; technology to
work is dependent on people. The challenges for Employment Practice in the New
Millennium will require that there should be strategic involvement of the people and
labour-management partnerships as they both have to take organization ahead.
7. Benchmarking Tool Must be Mastered by HR Professionals: HR professionals must

master benchmarking, which is a tool for continuous improvement- directing the human
side associated with the strategic path adopted by the organization. Through this, HR
department will start appreciating the changes happening within and outside the
environment while expanding the knowledge about how to add value to decision making
at the highest level of the organization.
8. Aligning Human Resources to Better Meet Strategic Objectives: Too often organizations
craft their strategy in a vacuum. Some organizations don’t even include key people during
strategy formulation resulting in lacunae between the actual problems and the solutions
implemented- as critical inputs are not sought from those individuals who are supposed
to implement the new strategies.
9. Promote From Within and Invest in Employees: Promoting employees from within sends
a powerful message that the organization’s employees are valued. New blood and fresh
ideas often come from newcomers to the organization. To avoid stagnation of the firm,
new ideas and approaches are critical. Yet to improve employee morale, promoting
individuals from within the organization is essential. This communicates that the
organization values their employees and invests in their human resources.
10. Review the Recruitment and Selection Process: A key element of human resource
planning is ensuring that the supply of appropriate employees (with the right skill mix) is
on board when needed. This requires a proactive approach whereby the organization
anticipates its needs well in advance. It is important to identify the competencies being
sought. That is, the criteria upon which selection decisions are to be made should be
decided in advance. A firm must identify those skill sets required by employees to be
successful.
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11. Communicate Mission and Vision: If employees are expected to contribute to the
attainment of the organization’s strategic objectives, they must understand what their
role is. This can be achieved in part by clearly communicating the mission and vision
statements of the firm. The mission communicates the identity and purpose of the
organization. It provides a statement of who the firm is and what their business is. Only
those employees who understand this purpose can contribute to the fullest extent
possible. The vision statement provides a picture of the future state of the firm.
12. Use Teams to Achieve Synergy: Through the effective use of teams, organizations can
often achieve synergy. Team goals, however, must be aligned with the organization’s
strategic objectives. Aligning team objectives with overall corporate objectives ensures
that people are working toward the same goal.
UNIT 1 REVIEW QUESTIONS
a) Define HRM? What are its functions and objectives?

b) Elaborate about the nature of HRM and its relevance in present scenario.
c) Explain the role of HR manager in HRM.
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UNIT 2 HUMAN RESOURCE PLANNING
Structure of Unit:
 Objectives
 Introduction
 Human Resource Planning (HRP)
 Definition of Human Resource Planning
 Nature of HRP
 Objectives of Human Resource Planning
 Need for HRP in Organizations
 Importance of HRP
 Factors Affecting HRP
 HRP Process
 Requisites for Successful HRP
 Barriers to Human HRP
Objectives
After studying this unit, the student will be able to:
 Understand the nature and need of HRP

 Able to gain information about different factors that affect HRP
 Realize the importance of human resource planning in current organizational scenario
 Understand the HRP process and the pre requisites for successful HRP process
Introduction
HR strategy should sub serve the interest of the organization, translating firm’s goals and
objectives into a consistent, integrated and complimentary set of programmes and policies
for managing people. First part of Human resource strategy is HRP – Human Resource
Planning. All other HR activities like employee hiring, training and development,
remuneration, appraisal and labour relations are derived from HRP. HR planning affects what
employers do when recruiting, selecting, and retaining people, and of course these actions
affect organizational results and success.
Staffing an organization is an HR activity that is both strategic and operational in nature. As

the HR Headline indicates, HR planning is important in a wide variety of industries and firms.
HR planning affects what employers do when recruiting, selecting, and retaining people, and,
of course these actions affect organizational results and success. Human Resources planning
mean different means to different organizations. To some companies, human resources
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planning mean management development. It involve helping executives to make better
decisions, communicate more effectively, and know more about the firm. The purpose of
HRP is to make the manager a better equipped for facing the present and future.
Human Resource Planning (HRP)
Human resource planning is important for helping both organizations and employees to
prepare for the future. The basic goal of human resource planning is to predict the future and
based on these predictions, implement programmes to avoid anticipated problems. Very
briefly humans resource planning is the process of examining an organization’s or individual’s
future human resource needs for instance, what types of skills will be needed for jobs of the
future compared to future human resource capabilities (such as the types of skilled
employees you already have) and developing human resource policies and practices to
address potential problems for example, implementing training programmes to avoid skill
deficiencies.
Definition of Human Resource Planning
According to Vetter, “HRP is the process by which

management determines how the organization should
move from its current man power position to desired
manpower position. Through planning, management
strives to have the right time, doing things which result
in both the organization and individual receiving
maximum long run benefits”.
According to Gordon Mc Beath, “HRP is concerned

with two things: Planning of manpower requirements
and Planning of Manpower supplies”.
Simply HRP can be understood as the process of forecasting an organization’s future

demands for and supply of the right type of people in the right number. In other words HRP is
the process of determining manpower needs and formulating plans to meet these needs.
HRP is a Four-Phased Process.
o The first phase involves the gathering and analysis of data through manpower inventories
and forecasts,
o The second phase consists of establishing manpower objectives and policies and gaining top
management approval of these.
o The third phase involves designing and implementing plans and promotions to enable the
organization to achieve its manpower objectives.
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o The fourth phase is concerned with control and evaluation of manpower plans to facilitate
progress in order to benefit both the organization and the individual. The long run view
means that gains may be sacrificed in the short run for the future grounds. The planning
process enables the organization to identify what its manpower needs is and what potential
manpower problems required current action. This leads to more effective and efficient
performance.
Nature of HRP
Human resource planning is the process of analyzing and identifying the availability and the
need for human resources so that the organization can meet its objectives. The focus of HR
planning is to ensure that the organization has the right number of human resources, with
the right capabilities, at the right times, and in the right places. In HR planning, an
organization must consider the availability and allocation of people to jobs over long periods
of time, not just for the next month or the next year.
HRP is a sub system in the total organizational planning. Actions may include shifting
Employees to other jobs in the organization, laying off employees or otherwise cutting back the
number of employees, developing present employees, and/or increasing the number of
employees in certain areas. Factors to consider include the current employees’ knowledge,
skills, and abilities and the expected vacancies resulting from retirements, promotions,
transfers, and discharges. To do this, HR planning requires efforts by HR professionals working
with executives and managers.
Objectives of Human Resource Planning
1. To ensure optimum utilization of human resources currently available in the

organization.
2. To assess or forecast the future skill requirement of the organization.
3. To provide control measures to ensure that necessary resources are available as and
when required.
4. A series of specified reasons are there that attaches importance to manpower planning
and forecasting exercises. They are elaborated below:
 To link manpower planning with the Organizational planning

 To determine recruitment levels
 To anticipate redundancies
 To determine optimum training levels
 To provide a basis for management development programs.
 To cost the manpower
 To assist productivity bargaining
 To assess future accommodation requirement
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 To study the cost of overheads and value of service functions
 To decide whether certain activity needs to be subcontracted, etc.
HRP exists as a part of planning process of business. This is the activity that aims to
coordinate the requirements for the availability of the different types of employers. The
major activities are the forecasting, (future requirements), inventorying (present strength),
anticipating (comparison of present and future requirements) and planning (necessary
program to meet the requirements).
HR needs are computed by subtracting HR supplies or number of the employees available

from expected HR demands or number of people required to produce a desired level of
outcome. The objective of HR is to provide right personnel for the right work and optimum
utilization of the existing human resources.
The objectives of human resource planning may be summarized as below:
Forecasting Human Resources Requirements: HRP is essential to determine the future needs
of HR in an organization. In the absence of this plan it is very difficult to provide the right kind
of people at the right time.
Effective Management of Change: Proper planning is required to cope with changes in the
different aspects which affect the organization. These changes need continuation of
allocation/ reallocation and effective utilization of HR in organization.
Realizing the Organizational Goals: In order to meet the expansion and other organizational
activities the organizational HR planning is essential.
Promoting Employees: HRP gives the feedback in the form of employee data which can be
used in decision-making in promotional opportunities to be made available for the
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organization.
Effective Utilization of HR: The data base will provide the useful information in identifying
surplus and deficiency in human resources. The objective of HRP is to maintain and improve
the organizational capacity to reach its goals by developing appropriate strategies that will
result in the maximum contribution of HR.
Need for HRP in Organizations
Major reasons for the emphasis on HRP at the Macro level:
1) Employment-Unemployment Situation: Though in general the number of educated

unemployment is on the rise, there is acute shortage for a variety of skills. This emphasizes
on the need for more effective recruitment and employee retention.
2) Technological Change: The changes in production technologies, marketing methods and
management techniques have been extensive and rapid. Their effect has been profound on
the job contents and job contexts. These changes have caused problems relating to
redundancies, retention and redeployment. All these suggest the need to plan manpower
needs intensively and systematically.
3) Demographic Change: The changing profile of the work force in terms of age, sex, literacy,
technical inputs and social background has implications for HRP.
4) Skill Shortage: Unemployment does not mean that the labour market is a buyer’s market.
Organizations generally become more complex and require a wide range of specialist skills
that are rare and scare. A problem arises in an organization when employees with such
specialized skills leave.
5) Governmental Influences: Government control and changes in legislation with regard to
affirmative action for disadvantages groups, working conditions and hours of work,
restrictions on women and child employment, causal and contract labour, etc. have
stimulated the organizations to be become involved in systematic HRP.
6) Legislative Control: The policies of “hire and fire” have gone. Now the legislation makes it
difficult to reduce the size of an organization quickly and cheaply. It is easy to increase but
difficult to shed the fat in terms of the numbers employed because of recent changes in
labour law relating to lay-offs and closures. Those responsible for managing manpower
must look far ahead and thus attempt to foresee manpower problems.
7) Impact of the Pressure Group: Pressure groups such as unions, politicians and persons
displaced from land by location of giant enterprises have been raising contradictory
pressure on enterprise management such as internal recruitment and promotion,
preference to employees’ children, displace person, sons of soil etc.
8) Systems Approach: The spread of system thinking and advent of the macro computer as the
part of the on-going revolution in information technology which emphasis planning and
newer ways of handling voluminous personnel records.
9) Lead Time: The log lead time is necessary in the selection process and training and
deployment of the employee to handle new knowledge and skills successfully.
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Importance of HRP
HRP is the subsystem in the total organizational planning. Organizational planning includes
managerial activities that set the company’s objective for the future and determines the
appropriate means for achieving those objectives. The importance of HRP is elaborated on
the basis of the key roles that it is playing in the organization.
1. Future Personnel Needs: Human resource planning is significant because it helps to

determine the future personnel needs of the organization. If an organization is facing the
problem of either surplus or deficiency in staff strength, then it is the result of the
absence of effecting HR planning. The excess of labor problem would have been there if
the organization had good HRP system. Effective HRP system will also enable the
organization to have good succession planning.
2. Part of Strategic Planning: HRP provides inputs in strategy formulation process in terms
of deciding whether the organization has got the right kind of human resources to carry
out the given strategy. HRP is also necessary during the implementation stage in the
form of deciding to make resource allocation decisions related to organization structure,
process and human resources. In some organizations HRP play as significant role as
strategic planning and HR issues are perceived as inherent in business management.
3. Creating Highly Talented Personnel: Even though India has a great pool of educated
unemployed, it is the discretion of HR manager that will enable the company to recruit
the right person with right skills to the organization. Even the existing staff hope the job
so frequently that organization face frequent shortage of manpower. Manpower
planning in the form of skill development is required to help the organization in dealing
with this problem of skilled manpower shortage
4. International Strategies: An international expansion strategy of an organization is

facilitated to a great extent by HR planning. The HR department’s ability to fill key jobs
with foreign nationals and reassignment of employees from within or across national
borders is a major challenge that is being faced by international business. Without
effective HRP and subsequent attention to employee recruitment, selection, placement,
development, and career planning, the growing competition for foreign executives may
lead to expensive and strategically descriptive turnover among key decision makers.
5. Foundation for Personnel Functions: HRP provides essential information for designing
and implementing personnel functions, such as recruitment, selection, training and
development, personnel movement like transfers, promotions and layoffs.
6. Increasing Investments in Human Resources: Organizations are making increasing

investments in human resource development compelling the increased need for HRP.
Organizations are realizing that human assets can increase in value more than the
physical assets. Organizations can make investments in its personnel either through
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direct training or job assignment and the rupee value of such a trained, flexible,
motivated productive workforce is difficult to determine.
7. Resistance to Change: Employees are always reluctant whenever they hear about
change and even about job rotation. Organizations cannot shift one employee from one
department to another without any specific planning. Even for carrying out job rotation
(shifting one employee from one department to another) there is a need to plan well
ahead and match the skills required and existing skills of the employees.
8. Uniting the Viewpoint of Line and Staff Managers: HRP helps to unite the viewpoints of
line and staff managers. Though HRP is initiated and executed by the corporate staff, it
requires the input and cooperation of all managers within an organization. Each
department manager knows about the issues faced by his department more than anyone
else. So communication between HR staff and line managers is essential for the success
of HR Planning and development.
9. Succession Planning: Human Resource Planning prepares people for future challenges.
The ‘stars’ are picked up, trained, assessed and assisted continuously so that when the
time comes such trained employees can quickly take the responsibilities and position of
their boss or seniors as and when situation arrives.
10. Other Benefits: (a) HRP helps in judging the effectiveness of manpower policies and
programmes of management. (b) It develops awareness on effective utilization of human
resources for the overall development of organization. (c) It facilitates selection and
training of employees with adequate knowledge, experience and aptitudes so as to carry
on and achieve the organizational objectives (d) HRP encourages the company to review
and modify its human resource policies and practices and to examine the way of utilizing
the human resources for better utilization.
Factors Affecting HRP
HRP is influenced by several factors. The most important of the factors that affect HRP are
1. Type and Strategy of the Organization: Type of the organization determines the
production processes involve, number and type of staff needed and the supervisory and
managerial personnel required. HR need is also defined by the strategic plan of organization.
The organization must determine the width of the HR plan. Organization can choose a narrow
focus by planning in only one or two HR areas like recruitment and selection or can have a
broad perspective by planning in all areas including training and remuneration.
The nature of HR plan is also depended upon the flexibility that is practiced in the
organization. HR plan should have the ability to anticipate and deal with contingencies.
Organizations frame HRP in such a way that it can contain many contingencies, which reflect
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different scenarios thereby assuring that the plan is flexible and adaptable.
2. Organizational Growth Cycles and Planning: The stage of growth in which an organization
is determines the nature and extends of HRP. Small organizations in the earlier stages of
growth may not have well defined personnel planning. But as the organization enters the
growth stage they feel the need to plan its human resource.
At this stage organization gives emphasis upon employee development. But as the
organization reaches the mature stage it experience less flexibility and variability resulting in
low growth rate. HR planning becomes more formalized and less flexible and less innovative
and problem like retirement and possible retrenchment dominate planning.
During the declining stage of the organization HRP takes a different focus like planning to do
the layoff, retrenchment and retirement. In declining situation planning always becomes
reactive in nature towards the financial and sales distress faced by the company.
3. Environmental Uncertainties: Political, social and economic changes affect all

organizations and the fluctuations that are happening in these environments affect
organizations drastically. Personnel planners deal with such environmental uncertainties by
carefully formulating recruitment, selection, training and development policies and
programmes. The balance in the organization is achieved through careful succession planning,
promotion channels, layoffs, flexi time, job sharing, retirement, VRS and other personnel
related arrangements.
4. Time Horizons: HR plans can be short term or long term. Short term plans spans from six
months to one year, while long term plans spread over three to twenty years. The extent of
time period depends upon the degree of uncertainty that is prevailing in an organizations
environment. Greater the uncertainty, shorter the plan time horizon and vice versa.
5. Type and Quality of information: The information used to forecast personnel needs
originates from a multitude of sources. The forecast depends to a large extent upon the type
of information and the quality of data that is available to personnel planners. The quality and
accuracy of information depend upon the clarity with which the organizational decision
makers have defined their strategy, structure, budgets, production schedule and so on.
6. Nature of Jobs Being Filled: Personnel planners need to be really careful with respect to
the nature of the jobs being filled in the organization. Employees belonging to lower level
who need very limited skills can be recruited hastily but, while hiring employees for higher
posts, selection and recruitment need to be carried out with high discretion. Organization
need to anticipate vacancies far in advance as possible, to provide sufficient time to recruit
suitable candidate.
7. Outsourcing: Several organizations outsource part of their work to outside parties in the
form of subcontract. Outsourcing is a regular feature both in the public sector as well as in
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the private sector companies. Many of the organizations have surplus labour and hence
instead of hiring more people they go for outsourcing. Outsourcing is usually done for non
critical activities. Outsourcing of non- critical activities through subcontracting determines
HRP.
HRP Process
HRP effectively involves forecasting personnel needs, assessing personnel supply and
matching demand – supply factors through personnel related programmes. The HR planning
process is influenced by overall organizational objectives and environment of business.
Environmental Scanning:
It refers to the systematic monitoring of the external forces influencing the organization. The
following forces are essential for pertinent HRP.
o Economic factors, including general and regional conditions.

o Technological changes
o Demographic changes including age, composition and literacy
o Political and legislative issues, including laws and administrative rulings Social concerns,
including child care, educational facilities and priorities.
By scanning the environment for changes that will affect an organization, managers can
anticipate their impact and make adjustments early.
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HR Demand Forecast:
Demand forecasting is the process of estimating the future quantity and quality of people
required to meet the future needs of the organization. Demand forecasting is influenced by
both internal factors and external factors: external factors include-competition, economic
climate, laws and regulatory bodies, changes in technology and social factors whereas
internal factors are budget constraints, production level, new products and services,
organizational structure and employee separations.
Demand forecasting is essential because it helps the organization to 1. Quantify the jobs,
necessary for producing a given number of goods, 2. To determine the nature of staff mix
required in the future, 3. To assess appropriate levels in different parts of organization so as
to avoid unnecessary costs to the organization, 4. To prevent shortages of personnel where
and when, they are needed by the organization. 5. To monitor compliances with legal
requirements with regard to reservation of jobs.
Techniques like managerial judgment, ratio- trend analysis, regression analysis, work study
techniques, Delphi techniques are some of the major methods used by the organization for
demand forecasting.
HR Supply Forecast:
Supply forecast determines whether the HR department will be able to procure the required
number of workers. Supply forecast measures the number of people likely to be available
from within and outside an organization, after making allowance for absenteeism, internal
movements and promotions, wastage and changes in hours, and other conditions of work.
Supply forecast is required because it is needed as it

1. Helps to quantify the number of people and positions expected to be available in future to
help the organization realize its plans and meet its objectives
2. Helps to clarify the staff mixes that will arise in future
3. It assesses existing staffing in different parts of the organization.
4. It will enable the organization to prevent shortage of people where and when they are
most needed.
5. It also helps to monitor future compliance with legal requirements of job reservations.
Supply analysis covers the existing human resources, internal sources of supply and external
sources of supply.
HR Programming:
Once an organization’s personnel demand and supply are forecasted the demand and supply
need to be balanced in order that the vacancies can be filled by the right employees at the
right time.
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HR Plan Implementation:
HR implementation requires converting an HR plan into action. A series of action are initiated
as a part of HR plan implementation. Programmes such as recruitment, selection and
placement, training and development, retraining and redeployment, retention plan,
succession plan etc when clubbed together form the implementation part of the HR plan.
Control and Evaluation:
Control and evaluation represent the final phase of the HRP process. All HR plan include
budgets, targets and standards. The achievement of the organization will be evaluated and
monitored against the plan. During this final phase organization will be evaluating on the
number of people employed against the established (both those who are in the post and
those who are in pipe line) and on the number recruited against the recruitment targets.
Evaluation is also done with respect to employment cost against the budget and wastage
accrued so that corrective action can be taken in future.
Requisites for Successful HRP
1. HRP must be recognized as an integral part of corporate planning

2. Support of top management is essential
3. There should be some centralization with respect to HRP responsibilities in order
to have co-ordination between different levels of management.
4. Organization records must be complete, up to date and readily available.
5. Techniques used for HR planning should be those best suited to the data
available and degree of accuracy required.
6. Data collection, analysis, techniques of planning and the plan themselves need to be
constantly revised and improved in the light of experience.
Barriers to HRP
Human Resource Planners face significant barriers while formulating an HRP. The major
barriers are elaborated below:
1) HR practitioners are perceived as experts in handling personnel matters, but are not
experts in managing business. The personnel plan conceived and formulated by the HR
practitioners when enmeshed with organizational plan, might make the overall strategic
plan of the organization ineffective.
2) HR information often is incompatible with other information used in strategy

formulation. Strategic planning efforts have long been oriented towards financial
forecasting, often to the exclusion of other types of information. Financial forecasting
takes precedence over HRP.
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4) Conflict may exist between short term and long term HR needs. For example, there can
be a conflict between the pressure to get the work done on time and long term needs,
such as preparing people for assuming greater responsibilities. Many managers are of
the belief that HR needs can be met immediately because skills are available on the
market as long as wages and salaries are competitive. Therefore, long times plans are not
required, short planning are only needed.
5) There is conflict between quantitative and qualitative approaches to HRP. Some people
view HRP as a number game designed to track the flow of people across the department.
Others take a qualitative approach and focus on individual employee concerns such as
promotion and career development. Best result can be achieved if there is a balance
between the quantitative and qualitative approaches.
6) Non-involvement of operating managers renders HRP ineffective. HRP is not strictly an

HR department function. Successful planning needs a co-ordinated effort on the part of
operating managers and HR personnel.
1. Explain the role of HR professional in human resource planning process in

organizations.
2 Describe the various forecasting techniques and how these techniques are being
used in human resource planning.
3 Explain the barriers to HRP. Bring out the requisites for effective planning.
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UNIT 3 JOB ANALYSIS AND JOB DESIGN
Structure of Unit:
 Objectives
 Introduction
 Job Analysis Defined
 Uses of Job Analysis
 Steps in Job Analysis
 Methods for Collecting Job Analysis Data
 Job Description
 Writing Job Description
 Job Specification
 Job Design
 Methods of Job Design
Objectives
After completing this unit, the student will be able to:
 Define job analysis.

 Understand the basic steps in a Job analysis.
 Identify the major methods of collecting Job analysis data. Recognize the major
elements of job descriptions
 Explain how to prepare job descriptions and job specification and their use. Point out
and explain job design and its various methods
 Distinguish between job enlargement and job enrichment.
Introduction
Manpower planning is concerned with determination of quantitative and qualitative

requirements of manpower for the organization. Determination of manpower requirements
is one of the most important problems in manpower planning. Job analysis and job design,
provide this knowledge. Before going through the mechanism of job analysis and job design,
it is relevant to understand the terms which are used in job analysis and job design.
Job: A job may be defined as a “collection or aggregation of tasks, duties and responsibilities
which as a whole, are regarded as a regular assignment to individual employees,” and which
is different from other assignments, In other words, when the total work to be done is
divided and grouped into packages, we call it a “job.” Each job has a definite title based upon
standardized trade specifications within a job; two or more grades may be identified, where
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the work assignment may be graded according to skill, the difficulty of doing them, or the
quality of workmanship.
Decenzo and P. Robbins define other terms as follows:
Task: It is a distinct work activity carried out for a distinct purpose.

Duty: It is a number of tasks.
Position: It refers to one or more duties performed by one person in an organization,
There are at least as many positions as there are workers in the organization;
vacancies may create more positions than employees.
Job: It is a type of position within the organization.
Job Family: It is group of two or more jobs that either call for similar worker characteristics
or contain parallel work tasks as determined by job analysis.
Occupation: It is a group of similar jobs found across organizations.
Career: It represents a sequence of positions, jobs, or occupations that a person has
over his working life.
Career
Occupation
Job Family
Job
Position
Duty
Task
Element
Job Analysis Information Hierarchy

(Adapted from Decenzo and P. Robbins, Personnel/Human Resource Management)
Job Analysis Defined
Developing an organizational structure, results in jobs which have to be staffed. Job analysis is
the procedure through which you determine the duties and nature of the jobs and the kinds
of people (in terms of skills and experience) who should be hired for them.’ It provides you
with data on job requirements, which are then used for developing job descriptions (what the
job entails) and job specifications (what kind of people to hire for the job). Some of the
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definitions of job analysis ate given as follows, to understand the meaning of the term more
clearly:
According to DeCenzo and P. Robbins, “A job analysis is a systematic exploration of the

activities within a job. It is a basic technical procedure, one that is used to define the duties,
responsibilities, and accountabilities of a job.” Thus, job analysis involves the process of
identifying the nature of a job (job description) and the qualities of the likely job holder (job
specification).
Uses of Job Analysis

1. Achievement of Goals: Weather and Davis have stated, “Jobs are at the core of every
organization’s productivity, if they are designed well and done right, the organization
makes progress towards its objectives. Otherwise, productivity suffers, profits fall, and the
organization is less able to meet the demands of society, customer, employees, and other
with a stake in its success.”
2. Organizational Design: Job analysis will be useful in classifying the jobs and the
interrelationships among the jobs. On the basis of information obtained through job
analysis, sound decisions regarding hierarchical positions and functional differentiation
can be taken and this will improve operational efficiency.
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3. Organization and Manpower Planning: It is helpful in organization planning, for it defines
labour in concrete terms and co-ordinates the activities of the work force, and clearly
divides duties and responsibilities.
4. Recruitment and Selection: Job analysis provides you with information on what the job
entails and what human requirements are required to carry out these activities. This
information is the basis on which you decide what sort of people to recruit and hire.
5. Placement and Orientation: Job analysis helps in matching the job requirements with the
abilities, interests and aptitudes of people. Jobs will be assigned to persons on the basis of
suitability for the job. The orientation programme will help the employee in learning the
activities and understanding duties that are required to perform a given job more
effectively.
6. Employee Training and Management Development: Job analysis provides the necessary
information to the management of training and development programmes. It helps in to
determine the content and subject matter of in training courses. It also helps in checking
application information, interviewing test results and in checking references.
7. Job Evaluation and Compensation: Job evaluation is the process of determining the
relative worth of different jobs in an organization with a view to link compensation, both
basic and supplementary, with the worth of the jobs. The worth of a job is determined on
the basis of job characteristics and job holder characteristics. Job analysis provides both in
the forms of job description and job specification.
8. Performance Appraisal: Performance appraisal involves comparing each employee’s

actual performance with his or her desired performance. Through job analysis industrial
engineers and other experts determine standards to be achieved and specific activities to
be performed.
9. Health and Safety: It provides an opportunity for identifying hazardous conditions and
unhealthy environmental factors so that corrective measures may be taken to minimize
and avoid the possibility of accidents.
10. Employee Counseling: Job analysis provides information about career choices and
personal limitation. Such information is helpful in vocational guidance and rehabilitation
counseling. Employees who are unable to cope with the hazards and demands of given
jobs may be advised to opt for subsidiary jobs or to seek premature retirement.
Steps in Job analysis:
1. Determine the Use of the Job Analysis Information: Start by identifying the use to which
the information will be put, since this will determine the type of data you collect and the
technique you use to collect them.
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2. Collection of Background Information: According to Terry, “The make-up of a job, its
relation to other jobs, and its requirements for competent performance are essential
information needed for a job evaluation. This information can be had by reviewing
available background information such as organization charts (which show how the job in
question relates to other jobs and where they fit into the overall organization); class
specifications (which describe the general requirements of the class of job to which the
job under analysis belongs); and the existing job descriptions which provide a starting
point from which to build the revised job description”.
3. Selection of Jobs for Analysis: To do job analysis is a costly and time consuming process.
It is hence, necessary to select a representative sample of jobs for purposes of analysis.
Priorities of various jobs can also be determined. A job may be selected because it has
undergone undocumented changes in job content. Some organizations establish a time
cycle for the analysis of each job. For example: A job analysis may be required for all jobs
every three years. New jobs must also be subjected to analysis.
4. Collection of Job Analysis Data: Job data on features of the job, requited employee
qualification and requirements, should be collected either form the employees who
actually perform a job; or from other employees (such as foremen or supervisors) who
watch the workers doing a job and there by acquire knowledge about it; or from the
outside persons, known as the trade job analysis who are appointed to watch employees
performing a job.
5. Processing the Information: Once job analysis information has been collected, the next
step is to place it in a form that will make it useful to those charged with the various
personnel functions. Several issues arise with respect to this. First, how much detail is
needed? Second, can the job analysis information be expressed in quantitative terms?
These must be considered properly.
6. Preparing Job Descriptions and Job Classifications: Job information which has been
collected must be processed to prepare the job description form. It is a statement
showing full details of the activities of the job. Separate job description forms may be
used for various activities in the job and may be compiled later on. The job analysis is
made with the help of these description forms. These forms may be used as reference for
the future.
7. Developing Job Specifications: Job specifications are also prepared on the basis of
information collected. It is a statement of minimum acceptable qualities of the person to
be placed on the job. It specifies the standard by which the qualities of the person are
measured. Job analyst prepares such statement taking into consideration the skills
required in performing the job properly. Such statement is used in selecting a person
matching with the job.
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Methods for Collecting Job Analysis Data
As discussed earlier, information is to be collected for job analysis. Such information may be
collected by the trained job analysis, superiors concerned and job holders themselves. Job
information is collected through the following methods:
1. Participant Diary/Logs: Workers can be to keep participant diary/long or lists of things

they do during the day. For every activity he or she engages in, the employee records the
activity (along with the time) in a log. This method provides more accurate information if
done faithfully. However, it is quite time consuming. Further, each job holder may
maintain records according to his own way which presents problems in analysis at later
stage. Therefore, it has limited application.
2. Interview: There are three types of interviews you can use to collect job analysis data:
individual interviews with each employee; group interviews with groups of employees
having the same job; and supervisor interviews with one or more supervisors who are
thoroughly knowledgeable about the job being analyzed. The group interview is used
when a large number of employees are performing similar or identical work, since this
can be a quick and inexpensive way of learning about the job.
3. Critical Incidents: In this method, job holders are asked to describe incidents concerning
the job on the basis of their past experience. The incidents so collected are analyzed and
classified according to the job areas they describe. The analyst requires a high degree of
skill to analyze the contents of descriptions given by workers.
4. Technical Conference Method: This method utilizes supervisors with extensive

knowledge of the job. Here, specific characteristics of a job are obtained from the
“experts.” Although it is a good data gathering method, it often overlooks the incumbent
worker’s perception about what they do on their job.
5. Job Performance: Under this method, the job analyst actually performs the job under
study to get first-hand experience of the actual tasks, and physical and social demands of
the job. This method can be used only for jobs where skill requirements are low and can
be learnt quickly and easily. This is a time-consuming method and is not appropriate for
jobs requiring extensive training.
6. Functional Job Analysis: Functional job analysis (FJA) is employee- oriented analytical
approach of job analysis. This approach attempts to describe the whole person on the
job. The main features of FJA include the following:
 The extent to which specific instruction are necessary to perform the task
 The extent to which reasoning and judgment are required to perform the task The
mathematical ability required to perform the task and
 The verbal and language facilities required to perform the task.
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7. Observation Method: Using this method, a job analyst watches employees directly on the
job. Observations are made on various tasks, activities, the pace at which tasks are carried
out, and the way different activities are performed. This method is suitable for jobs that
involve manual, standardized, and short job cycle activities. This method also requires
that the entire range of activities be observable; possible with some jobs.
8. Questionnaires: The method is usually employed by engineering consultants. Properly

drafted questionnaires are sent out to job-holders for completion and are returned to
supervisors. However, the information received is often unorganized and incoherent. The
idea in issuing questionnaire is to elicit the necessary information from job –holders so
that any error may first be discussed with the employee and, after corrections, may be
submitted to the job analyst.
Questionnaire for Job Analysis
1. Your Name ………..………..………..………..………..………..………..

2. Title or Designation of your job …………………………………………
3. Regular or Extra …………………………………………………………
4. Your Department ……………………………………………………….
5. To whom do you report directly (Name and Title): ………………………
6. Description of work:
(a) Daily Duties:
(b) Periodical Duties:
(c) Occasional Duties:
7. Your knowledge Requirements:
(A) Store Procedure and Methods:
(B) Merchandise:
8. What Equipment do you use?
9. What Materials do you work with or sell?
10. If you supervise the work of others, state how many and what their jobs are.
11. To what job would you normally expect to be promoted?
12. From what job were you transferred to your present job?
This technique is time consuming and generally does not yield satisfactory results because
many employees do not complete the questionnaire or furnish incorrect information because
of their own limitations. The use of questionnaire is recommended only in case of those
technical jobs where the job contents are not completely known to the supervisor or the
operation is too complex to observe.
Job Description
Job description is the immediate product of job analysis process; the data collected through
job analysis provides a basis for job description and job specification. It is a written record of
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the duties, responsibilities and requirements of a particular job. It is concerned with the job
itself and not with the job holders. It is a statement describing the job in such terms as its
title, location, duties, working conditions and hazards.
Flippo has Defined Job Description as, “A job description is an organized, factual statement
of duties and responsibilities of a specific job. In brief, it should tell what is to be done. How it
is done why. It is a standard of function, in that defines the appropriate and authorized
content of a job.
“Job description” is different from “performance assessment.” The former concerns such
functions as planning, co-ordination, and assigning responsibility; while the latter concerns
the quality of performance itself. Though job description is not assessment, it provides an
important basis establishing assessment standards and objectives.
Writing Job Description
A Job description is a written statement of what the job holder actually does, how he or she
does it, and under what conditions the job is performed. This information is in turn used to
write a job specification. This lists the knowledge, abilities, and skills needed to perform the
job satisfactorily. While there is no standard format you must use in writing a job description,
most descriptions contain at least sections on:
1. Job Identification: It includes the job title, alterative title, department, division, and plant
and code number of the job. The job title identifies and designates the job properly, the
department, division, etc., indicate the name of the department where it is situated –
whether it is the maintenance department, mechanical shop etc. Location gives the name
of the place. This portion of job description gives answer to two important questions: to
what higher level job is this job accountable. And who is supervised directly?
2. Job Summary: Job summary describes the contents of the jobs in terms of activities or
tasks performed. Job summary should clear the nature of the job. Primary, secondary and
other duties to be performed on the job should clearly be indicated separately.
3. Duties and Responsibilities: This is the most important phase of job description and
should be prepared very carefully. It describes the duties to be performed along with
frequency of each major duty. Responsibilities concerning custody of money, supervision
and training of staff etc. are also described in this part.
4. Supervision: Under it is given number of persons to be supervised along with their job
titles, and the extent of supervision involved –general, intermediate or close supervision.
5. Relation to Other Jobs: It describes the vertical and horizontal relationships f work flow. It
also indicates to whom the jobholder will report and who will report to him. It gives an
idea of channels of promotion.
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6. Machine, tools and equipment define each major type or trade name of the machines and
tools and the raw materials used.
7. Working Conditions: The working environment in terms of heat, light, noise, dust and
fumes etc, the job hazards and possibility of their occurrence and working conditions
should also be described. It will be helpful in job evaluation.
8. Social Environment: It specifies the social conditions under which the work will be
performed. In this part the size of work group, interpersonal interactions required to
perform the job and development facilities are mentioned
Job Specification
The job specification states the minimum acceptable qualifications that the incumbent must
possess to perform the job successfully. Based on the information acquired through job
analysis, the job specification identifies the knowledge, skills, and abilities needed to do the
job effectively. Individuals possessing the personal characteristics identified in the job
specification should perform the job more effectively than individuals lacking these personal
characteristics. The job specification, therefore, is a important tool in the selection process,
for it keeps the selector’s attention on the list of qualifications necessary for an incumbent to
perform the job and assists in determining whether candidates are qualified.
According to Dale Yoder, “The job specification, as such a summary properly described is thus
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a specialized job description, emphasizing personnel requirement and designed especially to
facilitate selection and placement.”
Flippo has defined job specification as, “Job specification is a statement of the minimum
acceptable human qualities necessary to perform a job properly ………….. It is a standard of
personnel and designates the qualities required for acceptable performance.”
In is clear from the above definitions that job specification is a statement of summary of
personnel requirements for a job. It may also be called “standard of personal for the
selection”
A Job Specification should include:
(i) Physical characteristics, which include health, strength, endurance, age, height, weight,
vision, voice, eye, hand and foot co-ordination, motor co-ordination, and colour
discrimination.
(ii) Psychological and social characteristics such as emotional stability, flexibility, decision
making ability, analytical view, mental ability, pleasing manners, initiative, conversational
ability etc.
(iii) Mental Characteristics such as general intelligence, memory, judgement, ability to
concentrate, foresight etc.
(iv) Personal Characteristics such as sex, education, family background, job experience,
hobbies, extracurricular activities etc.
All these characteristics must be classified into three categories:
 Essential attributes which a person must possess.

 Desirable attributes which a person ought to posses.
 Contra indicators which will become a handicap to successful job performance.
Job Design
Job design is of comparatively recent origin. The human resource managers have realized
that the design of a job has considerable influence on the productivity and job satisfaction;
poorly designed jobs often result in boredom to the employees, increased turnover, job
dissatisfaction, low productivity and an increase in overall costs of the organization. All these
negative consequences can be avoided with the help of proper job design.
Michael Armstrong has defined job design as “the process of deciding on the content of a
job in terms of its duties and responsibilities, on the methods to be used in carrying out the
job, in terms of techniques, systems and procedures, and on the relationships that should
exist between the job holder and his superiors, subordinates and colleagues.”
Job design is an attempt to create a match between job requirements and human attributes.
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It involves organizing the components of the job and the interaction patterns among the
members of a work group. It helps in developing appropriate design of job to improve
efficiency and satisfaction.
Principles of Job Design:
Robertson and Smith (1985) have suggested the following five principles of job design:
 To influence skill variety, provide opportunities for people to do several tasks and combine
tasks.
 To influence task identity, combine tasks and from natural work units.
 To influence task significance, form natural work units and inform people of the importance
of their work.
 To influence autonomy, give people responsibility for determining their own working
systems. To influence feedback; establish good relationship and open feedback channels.
Methods of Job Design
The various techniques of job design and redesign are discussed below:
1. Job Simplification: In job simplification, the complete job is broken down into small
subparts; this is done so that employee can do these jobs without much specialized training.
Moreover, small operations of the job can also be performed simultaneously so that the
complete operation can be done more quickly. For job simplification, generally time and
motion studies are used.
2. Job Rotation: Another technique designed to enhance employee motivation is job rotation,
or periodically assigning employees to alternating jobs or tasks. The advantage of job
rotation is that employees do not have the same routine job day after day. Job rotation only
addresses the problem of assigning employees to jobs of limited scope; the depth of the job
does not change. The job cycle of the actual daily work performed has not been lengthened
or changed. Instead, employees are simply assigned to different jobs with different cycles.
Because job rotation does not change the basic nature of jobs, it is criticized as nothing more
than having an employee perform several boring and monotonous jobs rather than one.
Some employees dislike job rotation more than being assigned to one boring job because
when they are assigned to one job they know exactly where to report and what work to
expect each day. Workers quickly realize that job rotation does not increase their interest in
their work.
Job rotation is often effectively used as a training technique for new, inexperienced
employees. At higher organizational levels, rotation also helps to develop managerial
generalists because it exposes them to several different operations.
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Advantage of Job Rotation Technique:
o The employee experiences variety of work, workplace and peer group. Job rotation helps to
broaden the knowledge and skills of an employee.
o The main advantage of job rotation is that it relieves the employee from the boredom and
monotony of doing the same job.
o With the help of this method, people become more flexible. They are prepared to assume
responsibility especially at other positions.
o Job rotation broadens the work experience of employees and turns specialists into
generalists.
o It is beneficial for the management also as the management gets employees who can
perform a variety of tasks to meet the contingencies.
Disadvantage of Job Rotation Technique:
 Job rotation also creates disruptions. Members of the work group have to adjust to the new
employee.
 Productivity is reduced by moving a worker into new position just when his efficiency at the
prior job was creating organizational economies.
 Training costs are increased.
 The supervisor may also have to spend more time answering question and monitoring the
work of the recently rotated employee.
 It can demotivate intelligent and ambitious trainees who seek specific responsibilities in
their chosen specialty.
3. Job Enlargement: Another means of increasing employee’s satisfaction with routine jobs is
job enlargement, or increasing the number of tasks performed (i.e. increasing the scope of
the job). Job enlargement, like job rotation, tries to eliminate short job cycles that create
boredom. Unlike job rotation, job enlargement actually increases the job cycle. When a job is
enlarged, either the tasks being performed are enlarged or several short tasks are given to
one worker. Although job enlargement actually changes the pace of the work and the
operation by reallocating tasks and responsibilities, it does not increase the depth of a job.
The focus of designing work for job enlargement is the exact opposite of that for job
specialization. Instead of designing jobs to be divided up into the fewest of tasks per
employee, a job is designed to have many tasks for the employee to perform. An enlarged job
requires a longer training period because there are more tasks to be learned. Enlargement is
done only on the horizontal level. Job enlargement has the following advantages:
 Increase in diversity of jobs Job satisfaction

 Provides wholeness and identity with the task and increases the knowledge necessary to
perform it.
 Provides variety of skills.
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 Reduces tension and boredom.
 Trains and develops more versatile employees.
Despite these advantages this is not a completely satisfactory method of job design as it does
not increase the depth of a job. Enlarged jobs require longer training period as there are
more tasks to be learned.
4. Job Enrichment: The concept of job enrichment has been derived from Herzberg’s two-
factor theory of motivation in which he has suggested that job content is one of the basic
factors of motivation. If the job is designed in such a manner that it becomes more interesting
and challenging to the job performer and provides him opportunities for achievement,
recognition, responsibility, advancement and growth, the job itself becomes a source of
motivation to the individual.
According to P. Robbins, “Job enrichment refers to the vertical expansion of the jobs. It
increases the degree to which the worker controls the planning, execution and evaluation of
his work.”
According to Mondy. Holmes, and Flippo, “Job enrichment refers to basic changes in the
content and level of responsibility of a job so to provide for the satisfaction of the motivation
needs of personnel.
Job Enrichment Bases
Tasks Motivator involved
Assign specific or specialized task to Responsibility, growth, advancement

individuals enabling them to become expert
Making periodic reports directly available Internal recognition

to the individual himself rather than to the
supervisor.
Giving a person a whole, natural unit of Responsibility, achievement, recognition

work (module, exchange district, division,
area, etc.)
Increasing the accountability of individuals Responsibility, recognition

for own work
Techniques of Job Enrichment: In order to enrich the jobs. The management should adopt
the following measures:
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 Freedom in decisions
 Assign a natural work unit to an employee. Encouraging participation
 Allow the employee to set his own standards of performance. Minimize the controls to
provide freedom to the employees
 Make an employee directly responsible for his performance.
 Encourage participation of employees in deciding organizational goals and policies. Expand
job vertically
 Introducing new, difficult and creative tasks to the employees. Sense of achievement.
Advantages of Job Enrichment: The advantages of job enrichment are as follows:
 Job enrichment is the most widely used of job design as it provides a meaningful learning to
employees.
 It makes the work interesting and employee get motivated.
 It helps in reducing the rate of labour turnover and absenteeism. It increases skills of the
employees.
 It increases morale and performance and reduce boredom and dissatisfaction.
Disadvantages of Job Enrichment:
A few limitations of or problems with job enrichment are as follows:
 Increase cost
 Need more employee counseling, training, and guidance. Not applicable to all jobs.
 Negative impact on personnel. Imposed on people.
 Objected by unions
 Pay dissatisfaction
1. What do you understand by job analysis? What is its importance in the management of
human resources?
2. What is job analysis? What steps are involved in the preparation of job analysis?
3. What are the byproducts of job analysis? Discuss the techniques used for collecting data
for job analysis?
4. What is job description? How is it prepared?
5. Define job specification? How is it different from job description?
6. Distinguish between :
(a) Job description and job specification
(b) Job enlargement and job enrichment
7. “Job analysis is the most basic personnel management function.” Discuss.
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UNIT 4 RECRUITMENT
Structure of Unit:
 Objectives
 Introduction
 Recruitment: Meaning and Definition
 Process of Recruitment
 Recruitment Policy
 Factor Affecting Recruitment
 Sources of Recruitment
 Methods of Recruitment
Objectives
 Define recruitment.
 Cite the steps in recruitment process.
 Understand the prerequisites of a good recruitment policy. Describe the various sources
of recruitment.
 Understand the methods through which prospective candidates may be recruited. Point
out the various factors affecting recruitment.
Introduction
Successful human resource planning should identify our human resource needs. Once we
know these needs, we will want to do something about meeting them. The next step in the
acquisition function, therefore, is recruitment. This activity makes it possible for us to acquire
the number and types of people necessary to ensure the continued operation of the
organization.
Hallett says, “It is with people that quality performance really begins and ends.” Robert Heller
also says, “If people of poor calibre are hired, nothing much else can be accomplished and
Gresham’s law will work: the bad people will drive out the good or cause them to
deteriorate.”
Recruiting is the discovering of potential candidates for actual or anticipated organizational

vacancies. Or, from another perspective, it is a linking activity-bringing together those with
jobs to fill and those seeking jobs.
Recruitment: Meaning and Definition

Page - 43
Recruitment forms a step in the process which continues with selection and ceases with the
placement of the candidate. It is the next step in the procurement function, the first being the
manpower planning. Recruiting makes it possible to acquire the number and types of people
necessary to ensure the continued operation of the organisation. Recruiting is the discovering
of potential applicants for actual or anticipated organisational vacancies.
According to Edwin B. Flippo, “Recruitment is the process of searching for prospective

employees and stimulating them to apply for jobs in the organisation.”
In the words of Dale Yoder, “ Recruiting is a process to discover the sources of manpower to
meet the requirements of the staffing schedule and to employ effective measures for
attracting that manpower in adequate numbers to facilitate effective selection of an efficient
working force.”
Human Resource
Planning
Job Analysis
Recruitment
Selection
Placement
Recruitment to Human Resource Acquisition Process
Process of Recruitment
Recruitment process passes through the following stages:

 Recruitment process begins when the personnel department receives requisitions for
recruitment from any department of the company, The personnel requisitions contain
details about the position to be filled, number of persons to be recruited, the duties to be
performed, qualifications expected from the candidates, terms and conditions of
employment and the time by which the persons should be available for appointment etc.
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 Locating and developing the
sources of required number and type of
employees. Identifying the prospective
employees with required characteristics.
 Developing the techniques to
attract the desired candidates. The
goodwill of an organisation in the market
may be one technique. The publicity about
the company being a good employer may
also help in stimulating candidates to
apply. There may be others of attractive
salaries, proper facilities for development
etc.
 Evaluating the effectiveness of
recruitment process.
According to Famularo, personnel recruitment process involves five elements, viz., a

recruitment policy, a recruitment organisation, a forecast of manpower, the development of
sources of recruitment, and different techniques used for utilising these sources, and a
method of assessing the recruitment programme. The explanation of these is described
below:
1. Recruitment Policy: It specifies the objectives of recruitment and provides a framework for
the implementation of the recruitment programme. It also involves the employer’s
commitment to some principles as to find and employ the best qualified persons for each job,
to retain the most promising of those hired, etc. It should be based on the goals, needs and
environment of the organisation.
2. Recruitment Organisation: The recruitment may be centralised like public sector banks or
decentralised. Both practices have their own merits. The choice between the two will depend
on the managerial philosophy and the particular needs of the organisation.
3. Sources of Recruitment: Various sources of recruitment may be classified as internal and

external. These have their own merits and demerits.
4. Methods of Recruitment: Recruitment techniques are the means to make contact with
potential candidates, to provide them necessary information and to encourage them to apply
for jobs.
5. Evaluation of Recruitment Programme: The recruitment process must be evaluated

periodically. The criteria for evaluation may consist of cost per applicant, the hiring ratio,
performance appraisal, tenure of stay, etc. After evaluation, necessary improvements should
be made in the recruitment programme.
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Recruitment Policy
As Yoder et al observe recruitment policy spells out the objectives of the recruitment and
provides a framework for implementations of the recruitment programme in the form of
procedures. It may involve a commitment to broad principles such as filling vacancies with
the best qualified individuals. The recruitment policy may embrace several issues such as the
extent of promotion from within, attitudes of enterprise in recruiting old, handicapped, and
minor individuals, minority group members, part-time employees and relatives of present
employees. In addition, the recruitment policy may also involve the organisation system to be
developed for implementing the recruitment programme and procedures to be employed.
Recruitment policy covers the following areas:
 To prescribe the degree of emphasis. Inside the organisation or outside the organisation.
 To provide the weightage that would be given to certain categories of people such as local
population, physically-handicapped personnel, personnel from scheduled castes/tribes and
other backward classes.
 To prescribe whether the recruitment would be centralised or decentralised at unit levels.
 To specify the degree of flexibility with regard to age, qualifications, compensation structure
and other service conditions.
 To prescribe the personnel who would be involved in recruitment process and the role of
human resource department in this regard.
 To specify the budget for meeting the expenditures incurred in completing the recruitment
process.
According to Yoder, “the recruitment policy is concerned with quantity and qualifications of
manpower.” It establishes broad guidelines for the staffing process. Generally, the following
factors are involved in a recruitment policy:
 To provide each employee with an open road and encouragement in the continuing
development of his talents and skills;
 To provide individual employees with the maximum of employment security, avoiding,
frequent lay-off or lost time;
 To avoid cliques which may develop when several members of the same household or
community are employed in the organisation;
 To carefully observe the letter and spirit of the relevant public policy on hiring and, on the
whole, employment relationship;
 To assure each employee of the organisation interest in his personal goals and employment
objective; To assure employees of fairness in all employment relationships, including
promotions and transfers;
 To provide employment in jobs which are engineered to meet the qualifications of
handicapped workers and minority sections; and
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Prerequisites of a Good Recruitment Policy:
The recruitment policy of an Organisation must satisfy the following conditions:

 It should be in conformity with its general personnel policies;
 It should be flexible enough to meet the changing needs of an organisation;
 It should be so designed as to ensure employment opportunities for its employees on a long-
term basis so that the goals of the organisation should be achievable; and it should develop
the potentialities of employees;
 It should match the qualities of employees with the requirements of the work for which they
are employed; and
 It should highlight the necessity of establishing job analysis.
Factor Affecting Recruitment
The factors affecting recruitment can be classified as internal and external factors.
The internal factors are:

 Wage and salary policies;
 The age composition of existing working force; Promotion and retirement policies;
 Turnover rates;
 The nature of operations involved the kind of personnel required; The level and
seasonality of operations in question;
 Future expansion and reduction programmes; Recruiting policy of the organisation;
 Human resource planning strategy of the company;
 Size of the organisation and the number of employees employed;
 Cost involved in recruiting employees
 Growth and expansion plans of the organisation.
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The external factors are:
 Supply and demand of specific skills in the labour market;

 Company’s image perception of the job seekers about the company.
External cultural factors: Obviously, the culture may exert considerable check on recruitment.
Economic factors: such as a tight or loose labour market, the reputation of the enterprise in
the community as a good pay master or otherwise and such allied issues which determine the
quality and quantity of manpower submitting itself for recruitment. Political and legal factors
also exert restraints in respect of nature and hours of work for women and children, and
allied employment practices in the enterprise, reservation of Job and so on.
Sources of Recruitment
After the finalisation of recruitment plan indicating the number and type of prospective
candidates, they must be attracted to offer themselves for consideration to their
employment. This necessitates the identification of sources from which these candidates can
be attracted. Some companies try to develop new sources, while most only try to tackle the
existing sources they have. These sources, accordingly, may be termed as internal and
external.
Internal Sources
It would be desirable to utilise the internal sources

before going outside to attract the candidates. Yoder
and others suggest two categories of internal sources
including a review of the present employees and
nomination of candidates by employees. Effective
utilisation of internal sources necessitates an
understanding of their skills and information regarding
relationships of jobs. This will provide possibilities for
horizontal and vertical transfers within the enterprise
eliminating simultaneous attempts to lay off employees
in one department and recruitment of employees with
similar qualification for another department in the
company. Promotion and transfers within the plant
where an employee is best suitable improves the morale along with solving recruitment
problems.
Merits of Internal Sources: The following are the merits of internal sources of recruitment:
 It creates a sense of security among employees when they are assured that they would be
preferred in filling up vacancies.
 It improves the morale of employees, for they are assured of the fact that they would be
preferred over outsiders when vacancies occur.
 It promotes loyalty and commitment among employees due to sense of job security and
Page - 48
opportunities for advancement.
 The employer is in a better position to evaluate those presently employed than outside
candidates. This is because the company maintains a record of the progress, experience and
service of its employees.
 Time and costs of training will be low because employees remain familiar with the
organisation and its policies.
 Relations with trade unions remain good. Labour turnover is reduced.
 As the persons in the employment of the company are fully aware of, and well acquainted
wit, its policies and know its operating procedures, they require little training, and the
chances are that they would stay longer in the employment of the organisation than a new
outsider would.
 It encourages self-development among the employees. It encourages good individuals who
are ambitious.
 It encourages stability from continuity of employment.
 It can also act as a training device for developing middle and top-level managers.
Demerits of Internal Sources: However, this system suffers from certain defects as:
 There are possibilities that internal sources may “dry up”, and it may be difficult to find the
requisite personnel from within an organisation.
 It often leads to inbreeding, and discourages new blood from entering and organisation.
 As promotion is based on seniority, the danger is that really capable hands may not be
chosen. The likes and dislikes of the management may also play an important role in the
selection of personnel.
External Sources
DeCenzo and Robbins remark, “Occasionally, it

may be necessary to bring in some ‘new blood’ to
broaden the present ideas, knowledge, and
enthusiasm.” Thus, all organisations have to
depend on external sources of recruitment.
Among these sources are included:
 Employment agencies.
 Educational and technical institutes
 Casual labour or “applicants at the gate” and nail applicants.
Public and private employment agencies play a vital role in making available suitable
employees for different positions in the organisations. Usually, these agencies facilitate
recruitment of technical and professional personnel. Because of their specialisation, they
effectively assess the needs of their clients and aptitudes and skills of the specialised
personnel. These students are recruited as management trainees and then placed in special
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company training programmes. In addition, vocational schools and industrial training
institutes provide specialised employees, apprentices, and trainees for semiskilled and skilled
jobs.
Recruiting Sources Used by Skill and Level
Skill/Level Recruiting Source Percentage of Use
Unskilled and Semiskilled Informal contacts 85
Walk-ins 74
Public Employment Agencies 66
Want Ads 52
Skilled Informal Contacts 88
Walk-ins 66
Want Ads 55
Professional Employees Internal Search 94
Informal Contacts 92
Walk-ins 71
Want Ads 48
Private Employment Agencies 22
Managerial Level Internal Search 100
Informal Contacts 71
Walk-ins 31
Private Employment Agencies 20
Source: Adapted from Stephen L. Mangum, “Recruitment and job Search: The Recruitment Tactics of Employers.
“Personnel Administrator, June 1982, p. 102.
Advantages of External Recruitment:
 It will help in bringing new ideas, better techniques and improved methods to the
organisation.
 The existing employees will also broaden their personality.
 The entry of qualitative persons from outside will be in the interest of the organisation in
the long run.
 The suitable candidates with skill, talent, knowledge are available from external sources.
 The entry of new persons with varied expansion and talent will help in human resource
mix.
Disadvantages of External Sources:
 Orientation and training are required as the employees remain unfamiliar with the
organisation. It is more expensive and time-consuming. Detailed screening is necessary
as very little is known about the candidate.
 If new entrant fails to adjust himself to the working in the enterprise, it means yet more
expenditure on looking for his replacement.
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 Motivation, morale and loyalty of existing staff are affected, if higher level jobs are filled
from external sources. It becomes a source of heart-burning and demoralization among
existing employees.
Methods of Recruitment
Methods of recruitment are different from the sources of recruitment. Sources are the
locations where prospective employees are available. On the other hand, methods are way of
establishing links with the prospective employees. Various methods employed for recruiting
employees may be classified into the following categories:
1. Direct Methods: These include sending recruiters to educational and professional

institutions, employees, and manned exhibits. One of the widely used direct methods is that
of sending of recruiters to colleges and technical schools. Most college recruiting is done in
co-operation with the placement office of a college.
Methods of Contacting Prospective Candidates

Based on personnel to be recruited
Managerial/technical personnel Operative personnel
Advertisement Public employment exchanges
Internet Labour unions
Walk-ins Employee referrals
Campus recruitments Gate hiring
Job fairs Labour contractors
Consultancy firms
Personnel contacts
Poaching and raiding
Based on the movement of the organisation
Direct methods Third party method

Advertisement Consultancy firms
Internet recruiting Public employment exchanges
Campus recruitment Labour unions
Job fairs Employee referrals
Personnel contacts Labour contractors
2. Indirect Methods:
The most frequently used indirect method of recruitment is advertisement in newspapers,

journals, and on the radio and television. Advertisement enables candidates to assess their
suitability. It is appropriate when the organisation wants to reach out to a large target group
scattered nationwide. When a firm wants to conceal its identity, it can give blind
advertisement in which only box number is given. Considerable details about jobs and
qualifications can be given in the advertisements.
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3. Third-Party Methods:
The most frequently used third-party methods are public and private employment agencies.
Public employment exchanges have been largely concerned with factory workers and clerical
jobs. Private agencies provide consultancy services and charge a fee. They are usually
specialized for different categories of operatives, office workers, salesmen supervisory and
management personnel. Other third-party methods include the use of trade unions. Labour-
management committees have usually demonstrated the effectiveness of trade unions as
methods of recruitment.
1. Define recruitment and identify the various factors which affect recruitment.
2. Discuss the steps of recruitment process. How will you reconcile the internal and external
sources of recruitment?
3. Discuss various sources of recruitment.
4. What is realistic job preview? How does it differ from traditional job preview?
5. What do you mean by recruitment policy? Explain the prerequisites of a good
recruitment policy.
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UNIT 5 SELECTION
Structure of Unit:
 Objectives
 Introduction: Selection
 Selection Procedure
 Selection Decision Outcomes
 Placement – Orientation - Socialization
Objectives
After completing this unit, you will be able to:

 Understand and define selection and its process.
 Understand the selection process so as to make it effective. Explain how the final
selection decision is made.
 Point out the outcomes of selection decision.
 Understand in brief about placement and orientation. Develop a selection decision
process.
Introduction
Human resource selection is the process of choosing qualified individuals who are available to
fill positions in an organization. In the ideal personnel situation, selection involves choosing
the best applicant to fill a position. Selection is the process of choosing people by obtaining
and assessing information about the applicants with a view to matching these with the job
requirements. It involves a careful screening and testing of candidates who have put in their
applications for any job in the enterprise. It is the process of choosing the most suitable
persons out of all the applicants. The purpose of selection is to pick up the right person for
every job.
According to Dale Yoder, “Selection is the process in which candidates for employment are
divided into two classes-those who are to be offered employment and those who are not”.
According to Keith Davis, “Selection is the process by which an organisation chooses from a
list of screened applicants, the person or persons who best meet the selection criteria for the
position available.”
Thus, the selection process is a tool in the hands of management to differentiate between the
qualified and unqualified applicants by applying various techniques such as interviews, tests
etc. The cost of selecting people who are inadequate performers or who leave the
organisation before contributing to profits proves a major cost of doing business.
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Difference between Recruitment and Selection: Difference between recruitment and
selection has been described by Flippo as, “Recruitment is a process of searching for
prospective employees and stimulating and encouraging them to apply for jobs in an
organisation. It is often termed positive as is stimulates people to apply for jobs, selection on
the other hand tends to be negative because it rejects a good number of those who apply,
leaving only the best to be hired.” Recruitment and selection differs in following manner:
1. Difference in Objective: The basic objective of recruitment is to attract maximum number

of candidates so that more options are available. The basic objective of selection is to choose
best out of the available candidates.
2. Difference is Process: Recruitment adopts the process of creating application pool as large
as possible and therefore. It is known as positive process. Selection adopts the process
through which more and more candidates are rejected and fewer candidates are selected or
sometimes even not a single candidate is selected. Therefore, it is known as negative process
or rejection process.
3. Technical Differences: Recruitment techniques are not very intensive, and not require high
skills. As against this, in selection process, highly specialised techniques are required.
Therefore, in the selection process, only personnel with specific skills like expertise in using
selection tests, conducting interviews, etc., are involved.
4. Difference in Outcomes: The outcome of recruitment is application pool which becomes

input for selection process. The outcome of selection process is in the form of finalising
candidates who will be offered jobs.
Selection Procedure
The selection procedure is concerned with securing relevant information about an applicant.
This information is secured in a number of steps or stages. The objective of selection process
is to determine whether an applicant meets the qualification for a specific job and to choose
the applicant who is most likely to perform well in that job. Selection is a long process,
commencing from the preliminary interview of the applicants and ending with the contract of
employment (sometimes).
The selection procedure consists of a series of steps. Each step must be successfully cleared
before the applicant proceeds to the next. The selection process is a series of successive
hurdles or barriers which an applicant must cross. These hurdles are designed to eliminate an
unqualified candidate at any point in the selection process.
The major factors which determine the steps involved in a selection process are as follows:
 Selection process depends on the number of candidates that are available for selection.
 Selection process depends on the sources of recruitment and the method that is adopted for
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making contact with the prospective candidates.
 Various steps involved in as selection process depend on the type of personnel to be
selected.
Steps for selection
1. Application Pool: Application pool built-up through recruitment process is the base for
selection process. The basic objective at the recruitment level is to attract as much
worthwhile applications as possible so that there are more options available at the selection
stage.
2. Preliminary Screening and Interview: It is highly noneconomic to administer and handle all
the applicants. It is advantageous to sort out unsuitable applicants before using the further
selection steps. For this purpose, usually, preliminary interviews, application blank lists and
short test can be used. All applications received are scrutinized by the personnel department
in order to eliminate those applicants who do not fulfill required qualifications or work
experience or technical skill, his application will not be entertained. Such candidate will be
informed of his rejection. Necessary information is obtained from the candidates about their
education, skills, experience, expected salary etc. If the candidate is found suitable, he is
elected for further screening. Preliminary interview saves time and efforts of both the
company and the candidate.
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3. Application Blank or Application Form: An application blank is a traditional widely
accepted device for getting information from a prospective applicant which will enable the
management to make a proper selection. The blank provides preliminary information as well
as aid in the interview by indicating areas of interest and discussion. It is a good means of
quickly collecting verifiable (and therefore fairly accurate) basic historical data from the
candidate. Information is generally taken on the following items:
(a) Biographical Data: Name, father’s name, data and place of birth, age, sex, nationality,
height, weight, identification marks, physical disability, if any, marital status, and number of
dependants.
(b) Educational Attainment: Education (subjects offered and grades secured), training
acquired in special fields and knowledge gained from professional/technical institutes or
through correspondence courses.
(c) Work Experience: Previous experience, the number of jobs held with the same or other
employers, including the nature of duties, and responsibilities and the duration of various
assignments, salary received, grades, and reasons for leaving the present employer.
(d) Salary and Benefits: Present and expected.
(e) Other Items: Names and addresses of previous employers, references, etc. An application
blank is a brief history sheet of an employee’s background and can be used for future
reference, in case needed.
4. Selection Tests: Many organisations hold different kinds of selection tests to know more
about the candidates or to reject the candidates who cannot be called for interview etc.
Selection tests normally supplement the information provided in the application forms.
Selection tests may give information about their aptitude, interest, personality, which cannot
be known by application forms. Types of tests and rules of good of testing have been
discussed in brief below:
I. Aptitude Tests: These measure whether an individual has the capacity or talent ability
to learn a given job if given adequate training. These are more useful for clerical and
trade positions.
II. Personality Tests: At times, personality affects job performance. These determine
personality traits of the candidate such as cooperativeness, emotional balance etc.
These seek to assess an individual’s motivation, adjustment to the stresses of
everyday life, capacity for interpersonal relations and self-image.
III. Interest Tests: These determine the applicant’s interests. The applicant is asked
whether he likes, dislikes, or is indifferent to many examples of school subjects,
occupations, amusements, peculiarities of people, and particular activities.
IV. Performance Tests: In this test the applicant is asked to demonstrate his ability to do
the job. For example, prospective typists are asked to type several pages with speed
and accuracy.
V. Intelligence Tests: This aim at testing the mental capacity of a person with respect to
reasoning, word fluency, numbers, memory, comprehension, picture arrangement,
etc. It measures the ability to grasp, understand and to make judgement.
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VI. Knowledge Tests: These are devised to measure the depth of the knowledge and
proficiency in certain skills already achieved by the applicants such as engineering,
accounting etc.
VII. Achievement Tests: Whereas aptitude is a capacity to learn in the future,
achievement is concerned with what one has accomplished. When applicants claim to
know something, an achievement test is given to measure how well they know it.
VIII. Projective Tests: In these tests the applicant projects his personality into free
responses about pictures shown to him which are ambiguous.
5. Interview: An interview is a procedure designed to get information from a person and to

assess his potential for the job he is being considered on the basis of oral responses by the
applicant to oral inquiries by the interviewer. Interviewer does a formal in-depth
conversation with the applicant, to evaluate his suitability. This tool is used when
interviewing skilled, technical, professional and even managerial employees. It involves two-
way exchange of information. The interviewer learns about the applicant and the candidate
learns about the employer.
Objectives of Interviews:
 To obtain additional information from the candidate.
 Facilitates giving to the candidate information about the job, company, its policies,
products etc.
 To assess the basic suitability of the candidate.
The selection interview can be:
 One to one between the candidate and the interviewer

 Two or more interviewers by employers representatives-sequential
 By a panel of selections, i.e., by more than representative of the employer
 The sequential interview involves a series of interviews; each interviewer meeting the
candidate separately. The panel interview consists of two or more interviews meeting the
candidate together.
Types of interviews: Interviews can be classified in various ways according to:
(A) Degree of Structure

(B) Purpose of Interview
(C) Content of Interview
Degree of Structure:
I. Unstructured or non directive: in which you ask questions as they come to mind. There
is no set format to follow.
II. Structured or directive: in which the questions and acceptable responses are specified
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in advance. The responses are rated for appropriateness of content.
In structured interviews all applicants are generally asked all required questions by all
interviewers. Structured interviews are generally more valid. However structured interviews
do not allow the flexibility to pursue points of interests as they develop.
Purpose of Interview: A selection interview is a type of interview designed to predict future

job performance, on the basis of applicant’s responses to the oral questions asked to him.
A stress interview is a special type of selection interview in which the applicant is made
uncomfortable by series of awkward and rude questions. The aim of stress interview is
supposedly to identify applicant’s low or high stress tolerance. In such an interview the
applicant is made uncomfortable by throwing him on the defensive by series of frank and
often discourteous questions by the interviewer.
Content of Interview: The content of interview can be of a type in which individual’s ability to
project a situation is tested. This is a situation type interview.
In job-related interview, interviewer attempts to assess the applicant’s past behaviors for job
related information, but most questions are not considered situational.
In a behavior interview a situation in described and candidates are asked how the behaved in
the past in such a situation. While in situational interviews candidates are asked to describe
how they would react to situation today or tomorrow.
Principles of Interviewing
To make it effective, an interview should be properly planned and conducted on certain

principles; Edwin Flippo has described certain rules and principles of good interviewing to this
end:
 Provide proper surroundings. The physical setting for the interview should be both
private and comfortable.
 The mental setting should be one of rapport.
 The interviewer must be aware of non-verbal behaviour
 Plan for the interview by thoroughly reviewing job specifications and job descriptions.
 Determine the specific objectives and the method of the interviewing.
 The interviewer should possess and demonstrate a basic liking and respect for people.
 Questions should be asked in a manner that encourages the interviewee to talk. Put the
applicant at ease.
 Make a decision only when all the data and information are available. Avoid decisions
that are based on first impressions.
 Conclude the interview tactfully, making sure that the candidate leaves feeling neither
too elated nor frustrated.
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 Maintain some written record of the interview during immediately after it.
 Listen attentively and, if possible, protectively.
 ‘Body language’ must not be ignored.
 The interviewer should make some overt sign to indicate the end of the interview.
6. Background Investigation: The next step in the selection process is to undertake an

investigation of those applicants who appear to offer potential as employees. This may
include contacting former employers to confirm the candidate’s work record and to obtain
their appraisal of his or her performance/ contacting other job-related and personal
references, and verifying the educational accomplishments shown on the application.
The background investigation has major implications Many past employers are reluctant to
give any information to another company other than factual information (e.g., date of
employment).Even though there is some reluctance to give this information, there are ways
in which personnel administrators can obtain it.
7. Physical Examination: After the selection decision and before the job offer is made, the
candidate is required to undergo physical fitness test. Candidates are sent for physical
examination either to the company’s physician or to a medical officer approved for the
purpose. Such physical examination provides the following information.
 Whether the candidate’s physical measurements are in accordance with job

requirements or not? Whether the candidate suffers from bad health which should be
corrected?
 Whether the candidate has health problems or psychological attitudes likely to interfere
with work efficiency or future attendance?
 Whether the candidate is physically fit for the specific job or not?
8. Approval by Appropriate Authority: On the basis of the above steps, suitable candidates
are recommended for selection by the selection committee or personnel department.
Though such a committee or personnel department may have authority to select the
candidates finally, often it has staff authority to recommend the candidates for selection to
the appropriate authority. Organisations may designate the various authorities for approval
of final selection of candidates for different categories of candidates.
9. Final Employment Decision: After a candidate is finally selected, the human resource
department recommends his name for employment. The management or board of the
company offers employment in the form of an appointment letter mentioning the post, the
rank, the salary grade, the date by which the candidate should join and other terms and
conditions of employment.
10. Evaluation: The selection process, if properly performed, will ensure availability of
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competent and committed personnel. A period audit, conducted by people who work
independently of the human resource department, will evaluate the effectiveness of the
selection process. The auditors will do a thorough and the intensive analysis and evaluate the
employment programme.
Placement – Orientation - Socialization
After an employee has been recruited he is provided with basic background information
about the employer, working conditions and the information necessary to perform his job
satisfactorily. The new employee’s initial orientation helps him perform better by providing
him information of the company rules, and practices. A few basic principles should be
followed at the time of placement of an employee on the job.These may be enumerated as
below:
 The job should be offered to the man according to his qualifications. The placement should
neither be higher nor lower than the qualifications.
 While introducing the job to the new employee, an effort should be made to develop a sense
of loyalty and cooperation in him so that he may realise his responsibilities better towards
the job and the organisation.
 The employee should be made conversant with the working conditions prevailing in the
industry and all things relating to the job. He should also be made aware of the penalties if
he commits a wrong.
 Man should be placed on the job according to the requirements of the job. The job should
not be adjusted according to the qualifications or requirements of the man. Job first; man
next, should be the principle of placement.
 The placement should be ready before the joining date of the newly selected person.
 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.
1. What do you understand by selection process? Discuss various steps involved in it

2. Discuss the characteristics of a good test. Explain various types of tests used in the
selection process.
3. What is an interview? What purpose does it serve? Discuss various types of interviews.
4. Explain various steps involved in the selection of personnel.
5. What do you understand by placement and orientation?
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UNIT 6 PERFORMANCE APPRAISAL
Structure of Unit:
 Objectives
 Introduction
 Meaning of Performance Appraisal
 Need and Importance of Performance Appraisal
 Objectives of Performance Appraisal
 Methods of Performance Appraisal
 The Performance Appraisal Process
 Factors Affecting Performance Appraisal
 Benefits of Performance Appraisal
 Problems of Performance Appraisal
 Performance Appraisal Practices in India
Objectives

 Understand the concept of performance appraisal;
 State the meaning and importance of performance appraisal; Discuss the benefits and
problems of appraisal;
 Enumerate the steps in performance appraisal process; Outline the objectives of
performance appraisal;
 Describe various appraisal methods;
 Outline few performance appraisal practices in India:
Introduction
In simple terms, performance appraisal may be understood as the review of an individual’s
performance in an orderly way. The performance is measured by considering factors like job
knowledge, quality and quantity of output, initiative, leadership abilities, supervision,
dependability, co-operation, judgment, versatility, health, and the like. Evaluation should not
be restricted to past performance alone but, the future performances of the employee
should also be assessed.
Meaning of Performance Appraisal

It is the systematic assessment of an individual with respect to his or her performance on the
job and his or her potential for development in that job. Thus, performance appraisal is a
systematic and objective way of evaluating the relative worth or ability of an employee in
performing his job. The two aspects of performance appraisal considered to be important
are: systematic and objective.
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The appraisal is said to be systematic when it evaluates all performances in the same manner,
by applying the same approach, so that appraisal of different persons are comparable. Such
an appraisal is taken from time to time according to plan; it is not left to probability. Thus,
both raters’ and rates know the system of performance appraisal and its timing.
According to Flippo, “performance appraisal is the systematic, periodic and an impartial

rating of an employee’s excellence in the matters pertaining to his present job and his
potential for a better job.”
It is a systematic way of judging the relative worth of an employee while carrying out his
work in an organization. It also helps recognize those employees who are performing their
tasks well and also- who are not performing their tasks properly and the reasons for such
(poor) performance.
According to International Labor Organization, “A regular and continuous evaluation of the

quality, quantity and style of the performance along with the assessment of the factors
influencing the performance and behavior of an individual is called as performance
appraisal.”
Need and Importance of Performance Appraisal
Performance is always measured in terms of outcome and not efforts. Performance Appraisal
is needed in most of the organizations in order:
(1) To give information about the performance of employees on the job and give ranks on
the basis of which decisions regarding salary fixation, demotion, promotion, transfer
and confirmation are taken.
(2) To provide information about amount of achievement and behavior of subordinate in
their job. This kind of information helps to evaluate the performance of the
subordinate, by correcting loopholes in performances and to set new standards of
work, if required.
(3) To provide information about an employee’s job-relevant strengths and &
weaknesses.
(4) To provide information so as to identify shortage in employee regarding ability,
awareness and find out training and developmental needs.
(5) To avoid grievances and in disciplinary activities in the organization.
(6) it is an ongoing process in every large scale organization.
Performance appraisals in an organization provide employees and managers with an

opportunity to converse in the areas in which employees do extremely well and those in
which employees need improvement. Performance appraisals should be conducted on a
frequent basis, and they need not be directly attached to promotion opportunities only. It is
important because of several reasons such as:
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I. Personal Attention: Performance appraisal evaluation, gives employee to draw personal
concern from supervisor and talk about their own strengths and weaknesses.
II. Feedback: Employees on a regular basis get feedback of their performances and issues in
which they lack, which needs to be resolved on a regular basis.
III. Career Path: It allows employees and supervisors to converse goals that must be met to
grow within the company. This may encompass recognizing skills that must be acquired,
areas in which improvement is required, and additional qualification that must be
acquired.
IV. Employee Accountability: Employees are acquainted that their evaluation will take place
on a regular basis and therefore they are accountable for their job performance.
V. Communicate Divisional and Company Goals: It not only communicates employees’
individual goals but provides an opportunity for managers to explain organizational goals
and in the manner in which employees can contribute in the achievement of those goals.
Objectives of Performance Appraisal
Performance appraisal in any organization is undertaken to meet certain objectives which

may be in the form of salary increase, promotion, recognizing training and development
needs, providing feedback to employees and putting stress on employees for better
performance. An employee in an organization may think that performance appraisal is
basically used by the organization to blame employees and to take corrective actions. An
employee may feel that performance appraisal is introduced in an organization for
punishment in such a case well thought out performance appraisal may results into failure.
Thus the objective of performance appraisal should e clear and specific. Thus including
objectives into the appraisal system may draw attention to areas for improvement, new
directions and opportunities.
1. Salary Increase: Performance appraisal plays an important role in making decision about
increase in salary. Increase in salary of an employee depends on how he is performing his job.
It shows how well an employee is performing and to what extent a hike in salary would take
place in comparison to his performance.
2. Promotion: Performance appraisal gives an idea about how an employee is working in his
present job and what his strong and weak points are. In comparison to his strength and
weaknesses it is decided whether he can be promoted to the next higher position or not. If
necessary what additional training is required. Similarly it could be used for demotion,
discharge of an employee and transfer.
3. Training and Development: Performance appraisal gives an idea about strengths and
weaknesses of an employee on his present job. It gives an idea about the training required by
an employee for overcoming the limitations that an employee is having for better
performance in future.
4. Feedback: Performance appraisal gives an idea to each employee where they are, how they
are working, and how are they contributing towards achievement of organizational
objectives. Feed works in two ways. First, the person gets view about his performance and he
may try to conquer his weaknesses which may lead to better performance. Second, the
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person gets satisfied after he relates his work with organizational objectives. It gives him an
idea that he is doing a meaning full work and can also contribute in a better way.
5. Pressure on Employees: Performance appraisal puts a sort of stress on employees for better
performance. If the employees are aware that they are been appraised in comparison to their
performance and they will have positive and acceptable behaviour in this respect
Methods of Performance Appraisal
Performance appraisal methods are categorized in two ways traditional and modern
methods. Each organization adopts a different method of performance appraisal according to
the need of organization. In small organization, it may be on an informal basis where
personal opinion of a superior about his subordi-nates may consider for appraisal.
Methods of Performance Appraisal

Traditional Methods Modern Methods
Ranking method Management by Objectives (MB0)
Paired comparison Behaviorally anchored rating scales
Grading method Assessment centers
Forced distribution method 360-degree appraisal
Forced choice method Cost accounting method
Checklist method
Critical incidents method
Graphic scale method
Essay method
Field review method
1. Ranking Method: It is the oldest and simplest method of performance appraisal in which
employees’ are ranked on certain criteria such as trait or characteristic. The employee is
ranked from highest to lowest or from worst to best in an organization. Rating scales offer the
advantages of flexibility comparatively easy use and low cost. Nearly every type of job can be
evaluated with the rating scale, the only condition being that the Job-performance criteria
should he changed’ .In such a way, a large number of employees can be evaluated in a
shorter time period.
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2. Paired Comparison: In method is comparatively simpler as compared to ranking method. In
this method, the evaluator ranks employees by comparing one employee with all other
employees in the group. This method provides comparison of persons in a better way.
However, this increases the work as the large number of comparisons has to be made. For
example, to rank 50 persons through paired comparison, there will be 1,225 comparisons.
Paired comparison method could be employed easily where the numbers of employees to be
compared are less.
3. Grading Method: In this method, certain categories are defined well in advance and
employees are put in particular category depending on their traits and characteristics. Such
categories may be defined as outstanding, good, average, poor, very poor, or may be in terms
of alphabet like A, B, C, D, etc. where A may indicate the best and D indicating the worst. This
type of grading method is applied during Semester pattern of examinations. One of the major
limitations of this method is that the rater may rate many employees on the better side of
their performance.
4. Forced Distribution Method: The fundamental assumption in this method is that

employees’ performance level conforms to a normal statistical distribution. For example, 10
per cent employees may be rated as excellent, 40 per cent as above average, 20 per cent as
average, 10 per cent below average, and 20 per cent as poor. It eliminates or minimizes the
favoritism of rating many employees on a higher side. It is simple and easy method to
appraise employees. It becomes difficult when the rater has to explain why an employee is
placed in a particular grouping as compared to others.
5. Forced-choice Method: The forced-choice rating method contains a sequence of question

in a statement form with which the rater checks how effectively the statement describes
each individual being evaluated in the organization. There may be some variations in the
methods and statements used, but the most common method of forced choice contains two
statements both of which may be positive or negative.
6. Check-list Method: The main reason for using this method is to reduce the burden of
evaluator. In this method of evaluation the evaluator is provided with the appraisal report
which consist of series of questions which is related to the appraise. Such questions are
prepared in a manner that reflects the behavior of the concerned appraise. Every question
has two alternatives, yes or no.
While preparing question effort is made to establish the level of consistency of the rater by
asking the same question twice but in a different manner. This method is considered to be
easy if questions are framed properly for different categories of employees. However, one of
the disadvantages of the check-list method is that it is very difficult to accumulate, analyze
and evaluate a number of statements about employee characteristics and contributions. It is
even costly method with lot of time and efforts required by the organization.
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7. Critical Incidents Method: This method is very useful for finding out those employees who
have the highest potential to work in a critical situation. Such an incidence is very important
for organization as they get a sense, how a supervisor has handled a situation in the case of
sudden trouble in an organization, which gives an idea about his leadership qualities and
handling of situation. Its drawbacks are that too frequently they need to write down the
critical incidents which is very time-consuming and burdensome for evaluators, i.e.,
managers. Generally, negative incidents are more noticeable than positives.
8. Graphic Scale Method: It is one of the simplest and most popular techniques for appraising
performances of employee. It is also known as linear rating scale. In graphic rating scale the
printed appraisal form is used to appraise each employee. Such forms contain a number of
objectives, and trait qualities and characters to be rated like quality of work and amount of
work, job knowhow dependability, initiative, attitude, leadership quality and emotional
stability. The rater gives an estimate the extent to which subordinates possess each quality. In
general practice five-point scales is used. Graphic scale method is good for measuring various
job behaviors of an employee. But, it is bound to limitations of rater’s bias while rating
employee’s behavior at job.
9.Essay Method: In this method, the rater writes a detailed description on an employee’s
characteristics and behavior, Knowledge about organizational policies, procedures and rules,
Knowledge about the job, training and development needs of the employee, strengths,
weakness, past performance, potential and suggestions for improvement. It is said to be the
encouraging and simple method to use. It does not need difficult formats and specific training
to complete it.
10.Field Review Method: In this method of appraisal direct superior is not going to appraise
an employee but appraised by another person, usually, from personnel department .The
rater, in such a case, appraises the employee on the basis of his past records of productivity
and other information such absentee-ism, late coming, etc. It also gives information for
comparing employees from different locations and units. It reduces partiality to some extent
as personnel department person is supposed to be trained in appraisal mechanism. This
method suffers from two limitations:
1. As employees are not rated by immediate boss, the rater from other department may not
be familiar with the conditions in an employee’s work environment which may hamper his
ability and work motivation to perform.
2. The rater from other department do not get a chance to scrutinize the employee’s behavior
or performance with different time interval and in a variety of situations, but only in an
unnaturally structured interview situation which is for a very short period of time.
Modern Methods
1. Management by Objectives (MB0): The concept of ‘Management by Objectives’ (MBO)
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was coined by Peter Drucker in 1954. It is a process where the employees and the superiors
come together to identify some goals which are common to them, the employees set their
own goals to be achieved, the benchmark is taken as the criteria for measuring their
performances and their involvement is there in deciding the course of action to be followed.
The most important aspect of MBO is measuring the actual performances of the employee
with the standards set by them. It is also said to be a process that integrates organizational
objectives into individual objectives. Entire programme of MBO is divided in four major steps
i.e setting up of goal ,action planning, comparison and timely review.
Setting up of goal-In goal setting superior and subordinate together set certain goals, i.e the
expected outcome that each employee is supposed to achieve. In action planning, the
manner in which goals could be achieved is determined i.e. identifying the activities which
are necessary to perform; to achieve pr determined goals or standards. In the third step, the
goals set by the individual employee are compared with the actual goals achieved. It gives an
idea to the evaluator as why there is a variation in desired outcome and actual outcome
Finally, in the timely review step, corrective actions are taken so that actual performances do
not deviates from standards established in beginning.
The main reason for conducting reviews is not to humiliate the performer but to assist him in
better performances in future. Few advantages of MBO are a) it is outcome –oriented. It co-
ordinates the planning and control functions and provides motivation) Employees are clear
about the task that they are expected to perform and also how they may be evaluated.MBO
do have certain limitations such as it is time consuming, employees and the superiors jointly
setting the goals may lead to conflict as employee would always like to set lower goal and the
superior would like to set it on the higher side, lack of confidence in employee by
management.
2. Behaviorally Anchored Rating Scales: This method is a combination of traditional rating

scales and critical incidents methods. It consists of preset critical areas of job performance or
sets of behavioral statements which describes the important job performance qualities as
good or bad (for e.g. the qualities like inter personal relationships, flexibility and consistency,
job knowledge etc). These statements are developed from critical incidents.
These behavioral examples are then again translated into appropriate performance
dimensions. Those that are selected into the dimension are retained. The final groups of
behavior incidents are then scaled numerically to a level of performance that is perceived to
represent. A rater must indicate which behavior on each scale best describes an employee’s
performance. The results of the above processes are behavioral descriptions, such as
anticipate, plan, executes, solves immediate problems, carries out orders, and handles urgent
situation situations. This method has following advantages: a) It reduces rating errors)
Behavior is assessed over traits. c) It gives an idea about the behavior to the employee and
the rater about which behaviors bring good Performance and which bring bad performance.
3. Assessment Centres: It is a method which was first implemented in German Army in 1930.
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This is a system of assessment where individual employee is assessed by many experts by
using different technique of performance appraisal. The techniques which may be used are
role playing, case studies, simulation exercises, transactional analysis etc. In this method
employees from different departments are brought together for an assignment which they
are supposed to perform in a group, as if they are working for a higher post or promoted.
Each employee is ranked by the observer on the basis of merit . This method has certain
advantages such as it helps the observer in making correct decision in terms of which
employee has the capability of getting promoted, but it has certain disadvantages also it is
costly and time consuming, discourages the poor performers etc.
4. 360 Degree Performance Appraisals: This method is also known as ‘multi-rater feedback’,
it is the appraisal in a wider perspective where the comment about the employees’
performance comes from all the possible sources that are directly or indirectly related with
the employee on his job. In 360 degree performance appraisal an employee can be appraised
by his peers, managers (i.e. superior), subordinates, team members, customers, suppliers/
vendors - anyone who comes into direct or indirect contact with the employee and can
provide necessary information or feedback regarding performance of the employee the “on-
the-job”. The four major component of 360 degree performance appraisal are
1. Employees Self Appraisal

2. Appraisal by Superior
3. Appraisal by Subordinate
4. Peer Appraisal.
Employee self appraisal gives an option to the employee to know his own strengths and
weaknesses, his achievements, and judge his own performance. Appraisal by superior forms
the traditional part of the 360 degree performance appraisal where the employees’
responsibilities and actual performance is judged by the superior. Appraisal by subordinate
gives a chance to evaluate the employee on the basis of communication and motivating
abilities, superior’s ability to delegate the work, leadership qualities etc. It is also known as
internal customers; the correct opinion given by peers can aid to find employees’ who are co-
operative, employees who ready to work in a team and understanding towards others.
The Performance Appraisal Process
The performance appraisal system of one organization may vary from other organizations,
though some of the specific steps that an organization may follow are as follows:
1. Establish Performance Standards: It begins by establishing performance standards i.e.

what they expect from their employee in terms of outputs, accomplishments and skills
that they will evaluate with the passage of time. The standards set should be clear and
objective enough to be understood and measured. The standards which are set are
evolved out of job analysis and job descriptions. The expectation of the manager from his
employee should be clear so that it could be communicated to the subordinates that
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they will be appraised against the standards set for them.
2. Communicating the Standards Set for an Employee: Once the standards for
performance are set it should be communicated to the concerned employee, about what
it expected from them in terms of performance. It should not be part of the employees’
job to estimate what they are expected do. Communication is said to be two ways street,
mere passing of information to subordinate does not mean that the work is done.
4. Measuring of the Actual Performances: It is very important to know as how the
performance will be measured and what should be measured, thus four important
sources frequently used by managers are personal these resources gives more reliable
information. What we measure is probably more critical to the evaluation process than
how we measure. The selection of the incorrect criteria can result in serious
consequences.
5. Comparing Actual Performance with Standards Set in the Beginning: In this step of
performance appraisal the actual performance is compared with the expected or desired
standard set. A comparison between actual or desired standard may disclose the
deviation between standard performance and actual performance and will allow the
evaluator to carry on with the discussion of the appraisal with the concerned employees.
6. Discussion with the Concerned Employee: In this step performance of the employee is
communicated and discussed. It gives an idea to the employee regarding their strengths
and weaknesses. The impact of this discussion may be positive or negative.
7. Initiate Corrective Action: Corrective action can be of two types; one is instant and deals
primarily with symptoms. The other is basic and deals with the causes. Instant corrective
action is often described as “putting out fires”, where as basic corrective action gets to
the source from where deviation has taken place and seeks to adjust the differences
permanently. Instant action corrects something right at a particular point and gets things
back on track. Basic action asks how and why performance deviated. In some instances,
managers may feel that they do not have the time to take basic corrective action and
thus may go for “perpetually put out fires.
Factors Affecting Performance Appraisal
There are various factors which may influence the performance appraisal system in any
organization. There are some factors which introduce bias whereas; some other factors
hinder purposeful assessment. Such factors are as follows:
1. Value System of Evaluator: The task of evaluator is to assess the work of subordinate
and write reports of the same. They are projected to do this for some purposeful
assessment. It happens that evaluator sometime judges the performance on the basis of
their own value system. Each person has his own value system and socio-cultural
environment. This subjective element has lot of impact on final report.
2. Dominant Work Orientation: The performance Appraisal Report of a subordinate is

prepared by a superior is found to have an impact by the dominant work orientation of
the superior officer. Sometimes there is more emphasis on certain aspect of the work as
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compared to other aspect which may be equally important by the superior. It introduces
subjectivity performance appraisal
5
a) Inclination for work of dynamic nature.
b) Liking for routine work and strict maintenance of.
c) Importance on inter-personal relations and rank.
d) Emphasis on qualities which do not have much functional utility; and
e) Emphasis on consistency to some philosophy.
3. Loyalty: It plays a vital role in evaluating employee. An Employee shows loyalty due to
many reasons such as common values, objectives, emotional needs, interests, caste,
religion, language or region. Loyalty brings the superior and the loyal subordinate closer
and closer to each other, and creates distance between those employee who are not
loyal to their superior. This makes assessment of superior to be biased.
4. Level of Achievement: Subordinates evaluation may also depend on the level of

achievement of the superior. If there is a vast difference between the level of
achievement of the superior and
Subordinate, then it can create problems of adjustment and purpose for which
evaluation is done is not achieved.
5. Factors Hindering Objective Assessment: There are various factors which obstruct the
objective appraisal of the performance of the subordinates. These factors are as follows:
a) Superiority complex of the superior reporting officer.
b) Overall performance assessment do not take place only certain incidence are assessed.
c) Past-record of the subordinate.
d) Personality of the subordinate.
g) Ability of the subordinate to exercise influence at higher level.
Benefits of Performance Appraisal
1) For the Organizations:

o It leads to better performance throughout the organization, due to successful
communication of the objectives and values of the organizations, sense of being close
to the organization, loyalty and improved relationships between managers and staff.
o Overall improvement in the duties performed by each employee of the organization.
o Due to performance appraisal of employee new ideas for improvement in their work
is generated. Long-term plans can be generated.
o The need for training and development can be identified more clearly.
o A traditions of nonstop improvement and success in the organization can be formed
and maintained.
o Career development plans can be chalked out for capable employee to enhance their
performance in future.
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2) For the appraiser:
 It gives an opportunity to the appraiser to develop a general idea of individual jobs
and departments. For every new or difficult situation new idea is generated for
improvement or for overcoming that problem.
 It gives an opportunity to integrate team and individual objectives and targets with
departmental and organizational objectives.
 It gives an opportunity to explain the amount of work expected by manager from
teams and individuals.
 It gives an opportunity to focus more on targets.
 It enables to form more productive relationship with staff based on mutual trust and
understanding.
3) For the Appraisee:

 Increased motivation.
 Increased job satisfaction.
 Increased sense of personal value. Increase in morale of an employee.
 It gives an opportunity to know their strength and weaknesses. It gives an idea about
areas of their improvement.
 There will be a chance to subordinate to express his views even after performance
appraisal An employee should express his emotional needs and his value system
which is considered to be important today.
Problems of Performance Appraisal
Performance appraisal technique is very beneficial for an organization for taking decisions
regarding salary fixation, demotion, promotion, transfer and confirmation etc. In spite of
recognition that a completely error-free performance appraisal can only be idealized a
number of errors that extensively hinder objective evaluation. Some of these problems are as
follows:
1. Biasness in rating employee: It is the problem with subjective measure i.e. the rating
which will not be verified by others. Biasness of rater may include:
(a) Halo Effect: It is the propensity of the raters to rate on the basis of one trait or
behavioral consideration in rating all other traits or behavioral considerations
(b) The Central Tendency Error: It is the error when rater tries to rate each and every
person on the middle point of the rating scale and tries not to rate the people on both
ends of the scale that is rating too high or too low. They want to be on the safer side as
they are answerable to the management.
(c) The Leniency and Strictness Biases: The leniency biasness exists when some raters
have a tendency to be generous in their rating by assigning higher rates constantly. Such
ratings do not serve any purpose.
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(d) Personal prejudice: If the raters do not like any employee or any group, in such
circumstances he may rate him on the lower side of the scale, the very purpose of rating is
distorted which might affect the career of employees also.
(e) The Recent Effect: The raters usually retain information about the recent actions of the
employee at the time of rating and rate on the basis of recent action taken place which
may be favorable or unfavorable at that point of time.
2. The superiors may be unsuccessful in conducting performance appraisal of

employees and post performance appraisal interviews.
3. The performance appraisal is mostly based on subjective assessment.
4. The performance appraisal techniques have a low reliability and validity in terms of
result.
5 Ratings an employee on the negative side may disturb interpersonal relations and
industrial relations system.
6. Appraisers opinion on the performance of the employee may lead to setback on
production.
7. An organization may give emphasis to punishment if an employee has not done a
good job rather than providing training.
8. Few ratings are based on guess work.
Various other problems of performance appraisal are:
 There was a significant relationship between rating by superior and performance after
promotions.
 Appraisal reports were completed within a short period of time. The circumstances
were very unpleasant in feedback interview.
 The Subordinates were not given suggestion in a manner which may be helpful to
them.
I. “Performance appraisal is the systematic evaluation of the individual with respect to

his performance on the job and his potential for development’’. What are the options
open to you in the design of a performance appraisal system to achieve this goal?
II. Explain the Performance Appraisal System. Either suggests improvements to an
existing appraisal system in your organization or design an appraisal system which
would meet the objectives outlines in this chapter.
III. Write short notes of:
a. Management by objectives
b. Behaviorally Anchored Rating Scale
IV. “Performance appraisal is not only for appraisal but is for achievement and
improvement of performance”. Explain.
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HUMAN RESOURCE DEVELOPMENT- EMPLOYEE
UNIT 7
TRAINING
Structure of Unit:
 Objectives
 Introduction : Concept
 Need for Employee Training
 Importance
 Types of Employee Training
 Objectives and Process of Employee Training
 Advantages of On the Job Training Methods
Objectives
After completing this unit, the student would be able to:
 Understand various aspects of the training design process; Classify the various training
methods;
 Point out various factors affecting training decisions; Know about various objectives of
employee training;
 Learn and appreciate the significance of employee training;
 Understand difference between on the job and off the job training.
Introduction: Concept
Training is a process of learning a sequence of programmed behavior. It is the application of

knowledge & gives people an awareness of rules & procedures to guide their behavior. It
helps in bringing about positive change in the knowledge, skills & attitudes of employees.
Thus, training is a process that tries to improve skills or add to the existing level of knowledge
so that the employee is better equipped to do his present job or to mould him to be fit for a
higher job involving higher responsibilities. It bridges the gap between what the employee
has & what the job demands.
Training refers to a planned effort by a company to facilitate employees’ learning of job

related competencies. These competencies include knowledge, skills, or behaviors that are
critical for successful job performance. The goal of training is for employees to master the
knowledge, skill, and behaviors emphasized in training programs and to apply them to their
day to day activities. Training is seen as one of several possible solutions to improve
performance. Other solutions can include such actions as changing the job or increasing
employee motivation through pay and incentives. Today there is a greater emphasis on:
 Providing educational opportunities for all employees. These educational opportunities

may include training programs, but they also include support for taking courses offered
outside the company, self-study, and learning through job rotation.
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 An ongoing process of performance improvement that is directly measurable rather than
organizing one time training events.
 The need to demonstrate to executives, managers, and trainees the benefits of training.
 Learning as a lifelong event in which senior management, trainer manager, and
employees have ownership.
Training being used to help attain strategic business objectives, which help companies, gains
a competitive advantage.
The term training refers to the acquisition of knowledge, skills, and competencies as a result
of the teaching of vocational or practical skills and knowledge that relate to specific useful
competencies. It forms the core of apprenticeships and provides the backbone of content at
institutes of technology (also known as technical colleges or polytechnics.Training usually
refers to some kind of organized (and finite it time) event — a seminar, workshop that has a
specific beginning data and end date. It’s often a group activity, but the word training is also
used to refer to specific instruction done one on one.
Employee development, however, is a much bigger, inclusive “thing”. For example, if a

manager pairs up a relatively new employee with a more experienced employee to help the
new employee learns about the job, that’s really employee development. If a manager
coaches and employee in an ongoing way, that’s employee development. Or, employees may
rotate job responsibilities to learn about the jobs of their colleagues and gain experience so
they might eventually have more promotion opportunities. That’s employee development.
The important point here is that different activities are better for the achievement of
different results.
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. Training and development is a
subsystem of an organization. It ensures that randomness is reduced and learning or
behavioural change takes place in structured format.
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. The quality of employees and their development
through training and education are major factors in determining long-term profitability of a
small business. If you hire and keep good employees, it is good policy to invest in the
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development of their skills, so they can increase their productivity.
Training often is considered for new employees only. This is a mistake because ongoing
training for current employees helps them adjust to rapidly changing job requirements.
Reasons for emphasizing the growth and development of personnel include:-
 Creating a pool of readily available and adequate replacements for personnel who may
leave or move up in the organization.
 Enhancing the company’s ability to adopt and use advances in technology because of a
sufficiently knowledgeable staff.
 Building a more efficient, effective and highly motivated team, which enhances the
company’s competitive position and improves employee morale.
 Ensuring adequate human resources for expansion into new programs.
 Increased productivity.
 Reduced employee turnover.
 Increased efficiency resulting in financial gains. Decreased need for supervision.
Employees frequently develop a greater sense of self-worth, dignity and well-being as they
become more valuable to the firm and to society. Generally they will receive a greater share
of the material gains that result from their increased productivity. These factors give them a
sense of satisfaction through the achievement of personal and company goals.
Need for Employee Training
Training of employees takes place after orientation takes place. Training is the process of
enhancing the skills, capabilities and knowledge of employees for doing a particular job.
Training process moulds the thinking of employees and leads to quality performance of
employees. It is continuous and never ending in nature.
Training is given on four basic grounds:
1. New candidates who join an organization are given training. This training familiarizes
them with the organizational mission, vision, rules and regulations and the working
conditions.
2. The existing employees are trained to refresh and enhance their knowledge.
3. If any up gradations and amendments take place in technology, training is given to cope
up with those changes. For instance, purchasing new equipment, changes in technique of
production, computer impartment. The employees are trained about use of new
equipments and work methods.
4. When promotion and career growth becomes important. Training is given so that
employees are prepared to share the responsibilities of the higher level job.
Training needs can be assessed by analyzing three major human resource areas: the
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organization as a whole, the job characteristics and the needs of the individuals. This analysis
will provide answers to the following questions:
 Where is training needed?

 What specifically must an employee learn in order to be more productive? Who needs to
be trained?
Begin by assessing the current status of the company how it does what it does best and the
abilities of your employees to do these tasks. This analysis will provide some benchmarks
against which the effectiveness of a training program can be evaluated. Next, determine
exactly where training is needed. An internal audit will help point out areas that may benefit
from training. Also, a skills inventory can help determine the skills possessed by the
employees in general. This inventory will help the organization determine what skills are
available now and what skills are needed for future development.
Importance
Training is crucial for organizational development and success. It is fruitful to both employers
and employees of an organization. An employee will become more efficient and productive if
he is trained well. The benefits of training can be summed up as:
1. Improves Morale of Employees- Training helps the employee to get job security and job
satisfaction. The more satisfied the employee is and the greater is his morale, the more he
will contribute to organizational success and the lesser will be employee absenteeism and
turnover.
2. Less Supervision- A well trained employee will be well acquainted with the job and will
need less of supervision. Thus, there will be less wastage of time and efforts.
3. Fewer Accidents- Errors are likely to occur if the employees lack knowledge and skills
required for doing a particular job.
4. Chances of Promotion- Employees acquire skills and efficiency during training. They
become more eligible for promotion. They become an asset for the organization.
5. Increased Productivity- Training improves efficiency and productivity of employees. Well
trained employees show both quantity and quality performance. There is less wastage of
time, money and resources if employees are properly trained.
Types of Employee Training
On-the-job training takes place in a normal working situation, using the actual tools,
equipment, documents or materials that trainees will use when fully trained. On-the-job
training has a general reputation as most effective for vocational work.
Off-the-job training takes place away from normal work situations — implying that the
employee does not count as a directly productive worker while such training takes place. Off-
the-job training has the advantage that it allows people to get away from work and
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concentrate more thoroughly on the training itself. This type of training has proven more
effective in inculcating concepts and ideas.
The most frequently used method in smaller organizations that is on the job training. This
method of training uses more knowledgeable, experienced and skilled employees, such as
mangers, supervisors to give training to less knowledgeable, skilled, and experienced
employees. OJT can be delivered in classrooms as well. This type of training often takes place
at the work place in informal manner.
On the Job Training is characterized by following points
 It is done on ad-hoc manner with no formal procedure, or content

 At the start of training, or during the training, no specific goals or objectives are
developed Trainers usually have no formal qualification or training experience for
training
 Training is not carefully planned or prepared
 The trainer are selected on the basis of technical expertise or area knowledge
The four techniques for on the job development are:
1.) Coaching is one of the training methods, which is considered as a corrective method for
inadequate performance. These coaches are experts most of the time outside consultants. A
coach is the best training plan for the CEO’s because:
 It is one to one interaction

 It can be done at the convenience of CEO
 It can be done on phone, meetings, through e-
mails, chat
 It provides an opportunity to receive feedback
from an expert
 It helps in identifying weaknesses and focus on
the area that needs improvement
This method best suits for the people at the top because if we see on emotional front, when
a person reaches the top, he gets lonely and it becomes difficult to find someone to talk to. It
helps in finding out the executive’s specific developmental needs. The needs can be identified
through 60 degree performance reviews.
2.) Mentoring is an ongoing relationship that is developed between a senior and junior
employee. Mentoring provides guidance and clear understanding of how the organization
goes to achieve its vision and mission to the junior employee. Executive mentoring is
generally done by someone inside the company. The executive can learn a lot from
mentoring.
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In cases where the executive is new to the
organization, a senior executive could be assigned as
a mentor to assist the new executive settled into his
role. This method allows the mentor to determine
what is required to improve mentee’s performance.
Once the mentor identifies the problem, weakness,
and the area that needs to be worked upon, the
mentor can advise relevant training. The mentor can
also provide opportunities to work on special
processes and projects that require use of
proficiency.
Some key points on Mentoring
 Mentoring focus on attitude development

 Conducted for management-level employees
 Mentoring is done by someone inside the company It is one-to-one interaction
 It helps in identifying weaknesses and focus on the area that needs improvement
3.) An organized and helpful way to develop talent for the management or executive level of
the organization is job rotation. It is the process of preparing employees at a lower level to
replace someone at the next higher level. It is generally done for the designations that are
crucial for the effective and efficient functioning of the organization. Some of the major
benefits of job rotation are:
 It provides the employees with opportunities to broaden the horizon of knowledge, skills,
and abilities by working in different departments, business units, functions, and countries
 Identification of Knowledge, skills, and attitudes (KSAs) required It determines the areas
where improvement is required
 Assessment of the employees who have the potential and caliber for filling the position
4.) Job Instruction Technique (JIT) uses a strategy with focus on knowledge (factual and
procedural), skills and attitudes development.
JIT Consists of Four Steps:
Plan – This step includes a written breakdown of the work to be done because the trainer and
the trainee must understand that documentation is must and important for the familiarity of
work. A structured analysis and proper documentation ensures that all the points are covered
in the training program. The second step is to find out what the trainee knows and what
training should focus on. Then, the next step is to create a comfortable atmosphere for the
trainees’ i.e. proper orientation program, availing the resources, familiarizing trainee with the
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training program, etc.
Present – In this step, trainer provides the synopsis of the job while presenting the
participants the different aspects of the work. When the trainer finished, the trainee
demonstrates how to do the job and why is that done in that specific manner. Trainee
actually demonstrates the procedure while emphasizing the key points and safety
instructions.
Steps in JIT
Trial – This step actually a kind of rehearsal step, in which trainee tries to perform the work
and the trainer is able to provide instant feedback. In this step, the focus is on improving the
method of instruction because a trainer considers that any error if occurring may be a
function of training not the trainee. This step allows the trainee to see the after effects of
using an incorrect method. The trainer then helps the trainee by questioning and guiding to
identify the correct procedure.
Follow-up – In this step, the trainer checks the trainee’s job frequently after the training
program is over to prevent bad work habits from developing. There are various methods of
training, which can be divided in to cognitive and behavioral methods. Trainers need to
understand the pros and cons of each method, also its impact on trainees keeping their
background and skills in mind before giving training.
OFF THE JOB TRAINING –
There are many management development techniques that an employee can take in off the
job. The few popular methods are:
1.) Sensitivity Training is about making people understand about themselves and others
reasonably, which is done by developing in them social sensitivity and behavioral flexibility.
Social sensitivity in one word is empathy. It is ability of an individual to sense what others feel
and think from their own point of view. Behavioral flexibility is ability to behave suitably in
light of understanding.
2.) Transactional Analysis provides trainees with a realistic and useful method for analyzing
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and understanding the behavior of others. In every social interaction, there is a motivation
provided by one person and a reaction to that motivation given by another person. This
motivation reaction relationship between two persons is a transaction. Transactional analysis
can be done by the ego states of an individual. An ego state is a system of feelings
accompanied by a related set of behaviors. There are basically three ego states:
3.) Lecture is telling someone about something. Lecture is given to enhance the knowledge of
listener or to give him the theoretical aspect of a topic. When the trainer begins the training
session by telling the aim, goal, agenda, processes, or methods that will be used in training
that means the trainer is using the lecture method. It is difficult to imagine training without
lecture format.
4.) Games and Simulations are structured and sometimes unstructured, that are usually
played for enjoyment sometimes are used for training purposes as an educational tool.
Training games and simulations are different from work as they are designed to reproduce or
simulate events, circumstances, processes that take place in trainees’ job. Simulation is about
imitating or making judgment or opining how events might occur in a real situation. It can
entail intricate numerical modeling, role playing without the support of technology, or
combinations. Training games and simulations are now seen as an effective tool for training
because its key components are:
 Challenge
 Rules
 Interactivity
These three components are quite essential when it comes to learning. Some of the examples
of this technique are:
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Trainees can therefore experience these events, processes, games in a controlled setting
where they can develop knowledge, skills, and attitudes or can find out concepts that will
improve their performance.
Objectives and Process of Employee Training
The training design process refers to a systematic approach for developing training programs.
It includes the seven steps in this process. Training is one of the most profitable investments
an organization can make.
Step1 is to conduct a needs assessment, which is necessary to identify whether training is
needed. The techniques necessary for the data collection are surveys, observations,
interviews, and customer comment cards. Several examples of an analysis outlining specific
training needs are customer dissatisfaction, low morale, low productivity, and high turnover.
The objective in establishing a needs analysis is to find out the answers to the following
questions:
 “Why” is training needed?

 “What” type of training is needed?
 “When” is the training needed?
 “Where” is the training needed?
 “Who” needs the training? and “Who” will conduct the training?
 “How” will the training be performed?
By determining training needs, an organization can decide what specific knowledge, skills,
and attitudes are needed to improve the employee’s performance in accordance with the
company’s standards.
Step 2 is to ensure that employees have the motivation and basic skills necessary to master
training content. This step establishes the development of current job descriptions and
standards and procedures. Job descriptions should be clear and concise and may serve as a
major training tool for the identification of guidelines. This will standardize the necessary
guidelines for any future training.
Step 3 is to create a learning environment that has the features necessary for learning to
occur. This step is responsible for the instruction and delivery of the training program. One-
on-one training, on-the-job training, group training, seminars, and workshops are the most
popular methods. Before presenting a training session, make sure you have a thorough
understanding of the following characteristics of an effective trainer. The trainer should have:
- A desire to teach the subject being taught.

- A working knowledge of the subject being taught.
- An ability to motivate participants to “want” to learn.
- A good sense of humour.
- A dynamic appearance and good posture.
- A strong passion for their topic.
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- A strong compassion towards their participants.
- Appropriate audio/visual equipment to enhance the training session.
Step 4 is to ensure that trainees apply the training content to their jobs. Methods for
evaluation are pre-and post- surveys of customer comments cards, the establishment of a
cost/benefit analysis outlining your expenses and returns, and an increase in customer
satisfaction and profits. The reason for an evaluation system is simple. The evaluations of
training programs are without a doubt the most important step in the training process. There
are several obvious benefits for evaluating a training program. First, evaluations will provide
feedback on the trainer’s performance, allowing them to improve themselves for future
programs. Second, evaluations will indicate its cost-effectiveness. Third, evaluations are an
efficient way to determine the overall effectiveness of the training program for the
employees as well as the organization. The importance of the evaluation process after the
training is critical. Without it, the trainer does not have a true indication of the effectiveness
of the training
Advantages of On the Job Training Methods
On the job training method has the following advantages that can be considered:
 Generally most cost-effective

 Employees are actually productive Opportunity to learn whilst doing Training alongside
real colleagues.
 Training can be delivered on time and at the optimum time.
 The trainee will have the good opportunities to practice and implement. The trainee will
have feedbacks.
 Trainee builds confidence by working with own speed and productivity.
1. Explain the term training and the need of training for organizations.
2. Distinguish between training and development.
3. Explain the methods and approaches to training.
4. Explain various on the job and off the job training methods in detail.
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HUMAN RESOUCE DEVELOPMENT-EXECUTIVE
UNIT 8
DEVELOPMENT
Structure of Unit:
 Objectives
 Introduction
 Importance and Factor Influencing Executive Development
 Process
 Methods of Executive Development
 Career Planning and Development
 Objective
 Process
Objectives
After completing this unit, the student would be able to:
 Understand the methods of executive development; Point out various career

planning processes;
 Know about various pros and cons of these processes;
 Learn and appreciate the significance career planning to society;
Introduction
It is also known as ‘management development’ or ‘executive development’. It is realized that

an effective management team may be as important to the survival of an organization as any
tangible item on the balance sheet. Executive development or management development is a
systematic process of learning and growth by which managerial personnel gain and apply
knowledge, skills, attitudes and insights to manage the work in their organization effectively
and efficiently.
The program of executive development aims at achieving following purposes: -
 To sustain good performance of managers throughout their careers by exploiting their

full potential. To understand economic, technical, and institutional forces in order to
solve business problems. To acquire knowledge about problems of human resources.
 To think through problems this may confront the organization now or in the future. To
develop responsible leaders.
 To inculcate knowledge of human motivation and human relationships.
 To increase proficiency in management techniques such as work study, inventory
control, operations research and quality control.
According to Flippo “executive development includes the process by which managers and
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executives acquire not only skills and competency in their present job but also capabilities for
future managerial tasks of increasing difficulty and scope.”
The characteristics of executive development are as following: -
 Executive development is a planned and organized process of learning. It is an ongoing

and never ending exercise.
 Executive development is a long term process as managerial skills cannot be developed
overnight. It aims at preparing managers for managers.
Importance and Factors Influencing Executive Development
Executive development is more future oriented. It is more concerned with education than is
employee training. In today’s competitive environment, an organization has to be concerned
about the development of supervisors, middle level managers and top-level executive.
Executive development is important for the following reasons: -
 Executive development programmes are required to train and develop professional

managers. It helps managers to develop skills to face cut throat competition.
 It enables managers to face problems related to technology and
institution. It helps in developing better relations with the labors.
 Executives need training and education to understand and adjust to changes in socio-
economic changes.
 Executive development is required to broader the outlook of managers.
The Process of Executive Development
Stage I: The analysis of competitive environment helps the organization to decide its
competitive positioning in the market place, based on which the organizational strategy is
drawn out in an attempt to transform or reposition of the organization. The macro view is
broken down into specific organizational objectives for further dissemination to functional/
departmental, and individual level.
Stage II: This stage is most important and crucial phase of executive development process.
This stage deals analysis on the competency mapping, identification of competency gap and
career planning. In the competency stage which helps to capture the competencies of all the
employees of the organization which includes the capacities of the management also. In the
second stage, the organizational requirements and competency gap to be analyzed.
Stage III: This stage is consisting of three levels. The first level of this stage deals with the
activities involving training need assessment of individuals and of all employees based on
which Annual Training Plan (ATP) is drawn. Based on the annual training plan the employees
are chosen to expose to either corporate training program, for internal training programs and
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external organizations. While deciding the venue and types and nature of the training
program the personnel department and training facilitator should consider the various issues
like no of executives, cost, outsourcing and availability of technical expertise in the
organizations. In case of organizational development related exercises, the combination of
internal and external training programs should be arrange for the all employee of the
organization.
The process of executive development is as follows:
1. Analysis of Development Needs: First of all the present and future development needs
of the organization are ascertained. It is necessary to determine how many and what
type of executives are required to meet the present and future needs of the enterprise.
2. Appraisal of the Present Managerial Talent: A qualitative assessment of the existing
executives is made to determine the type of executive talent available within the
organization.
3. Planning Individual Development Programmes: Each one of us has a unique set of
physical, intellectual and emotional characteristics. Therefore, development plan should
be tailor-made for each individual.
4. Establishing Training and Development Programme: The HR department prepares
comprehensive and well conceived programmes.
5. Evaluating Developing Programs: Considerable money, time and efforts are spent on
executive development programmes. It is therefore natural to find out to what extent
the programme’s objective has been achieved.
Evaluation of Executive Development
The evaluation of the process assumes importance from the following perspectives:
o Improving the quality of the training and development process. Improving the efficiency and
competency of the trainers.
o Making improvements in the system to make it more responsive and realistic. Aligning the
training activities to the organizational objectives.
o Building the cost implications of the training into the organizational budget.
o Evaluating the ROI on account of training and development to justify further investments.
o Changing the perception of the management on training as expenditure to more as an
investment for the future growth of the organization.
Methods of Executive Development
Management development programs help in acquiring and developing managerial skill and
knowledge. A varity of methods of management development have come into prominence
these days. Different types of techniques are used to acquire and develop various types of
managerial skill and knowledge as given in the table below:
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S. Competency Development Area Methods
No.
1. Decision-making skill In-basket, Business games, Case study
2. Interpersonal skill Role plying, Sensitivity Training
3. Job Knowledge On-the-Job experiences, Coaching, Understudy
4. Organizational Knowledge Job Rotation, Multiple Management
5. General Knowledge Special course, Special Meeting, Specific Reading
6. Specific Individual Needs Special Projects, Committee Assignments
1. On the Job Techniques: It is delivered to employees while they perform their regular jobs.
In this way, they do not lose time while they are learning. After a plan is developed for what
should be taught, employees should be informed of the details.On-the-job techniques include
orientations, job instruction training, apprenticeships, internships and assistantships, job
rotation and coaching. It consists of: -
Coaching-Coaching is a one-to-one relationship between trainees and supervisors which

offers workers continued guidance and feedback on how well they are handling their tasks.
The coach assigns the task, monitors the trainee behavior, and provides reinforcement and
feedback.
Under Study- An understudy may be assistant to someone or special assistant to some
supervisory or executive positions. He learns by experience, observation, guidance and
coaching.
Position Rotation-This involves the movement of the trainee from one job to another. This
helps him to have a general understanding of how the organization functions. Such cross-
trained personnel offer a great deal of flexibility for organizations when transfers, promotions
or replacement become inevitable.
Multiple Management- It provides knowledge about the organization to the junior and
middle managerial personnel. Here the members are exposed to all types of the decision
taken at higher level.
2. Off-the-Job Technique: It consists of :
Lectures- It is a traditional and direct method of instruction. The instructor organizes the
material and gives it to a group of trainees in the form of a talk. To be effective, the lecture
must motivate and create interest among the trainees. An advantage of this method is that it
is direct and can be used for a large group of trainees. The major limitation of this method is
that it does not provide for the transfer of training effectively.
Case Studies- It presents the trainees with a written description of a business or
organizational problem. The object of the case method is to teach the trainees how to
analyze information, generate alternative decisions, and evaluate the alternatives.
Group Discussions- This method is a direct discussion on a specific topic conducted with a
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relatively small group of trainees. This method is useful for teaching and exploring difficult
conceptual materials, and for changing attitudes and opinions. It provides opportunity for
feedback, reinforcement practice, motivation, and transfer, largely due to the active
interchange of ideas between the participants.
Role Playing- In most of role-playing assignments, each of the student takes the role of a
person affected by an issues on human life and effect the human activities all around us from
the perspective of that person.
Management Games- Verities of business and management games have been devised and
are being used with the varying degree of success in the developing programmes. A
management game is classroom exercise in which a number of team of trainees competes
against each other to achieve certain objectives.
Career Planning and Development
Career development is an organized approach used to match employee goals with the
business needs of the agency in support of workforce development initiatives. The purpose of
career development is to:
 Enhance each employee’s current job performance.

 Enable individuals to take advantage of future job opportunities. Fulfil agencies’ goals for
a dynamic and effective workforce.
Career planning is a lifelong process, which

includes choosing an occupation, getting a job,
growing in our job, possibly changing careers, and
eventually retiring. The Career Planning Site offers
coverage of all these areas. Managers are
responsible for linking the organization’s needs to
employee career goals, and can assist employees in
the career planning process. Human Resources is
responsible for designing career paths and
employee development programs that help
employees reach their goals. Each employee is
responsible for planning and managing his/her career.
The career management process begins with setting goals/objectives. A relatively specific
goal/objective must be formulated. This task may be quite difficult when the individual lacks
knowledge of career opportunities and/or is not fully aware of their talents and abilities.
Utilizing career assessments may be a critical step in identifying opportunities and career
paths that most resonate with someone. The time horizon for the achievement of the
selected goals or objectives - short term, medium term or long term - will have a major
influence on their formulation.
I. Short term goals (one or two years) are usually specific and limited in scope. Short term
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goals are easier to formulate. Make sure they are achievable and relate to your longer
term career goals.
II. Intermediate goals (3 to 20 years) tend to be less specific and more open ended than
short term goals. Both intermediate and long term goals are more difficult to formulate
than short term goals because there are so many unknowns about the future.
III. Long term goals (more than 100 years), of course, are the most fluid of all. Lack of life
experience and knowledge about potential opportunities and pitfalls make the
formulation of long term goals/ objectives very difficult. Long range goals/objectives,
however, may be easily modified as additional information is received without a great
loss of career efforts because of experience/knowledge transfer from one career to
another.
IV. Making career choices and decisions – the traditional focus of careers interventions. The
changed nature of work means that individuals may now have to revisit this process
more frequently now and in the future, more than in the past.
V. Managing the organizational career – concerns the career management tasks of
individuals within the workplace, such as decision-making, life-stage transitions, dealing
with stress etc.
VI. Managing ‘boundary less’ careers – refers to skills needed by workers whose
employment is beyond the boundaries of a single organization, a work style common
among, for example, artists and designers.
VII. Taking control of one’s personal development – as employers take less responsibility,
employees need to take control of their own development in order to maintain and
enhance their employability.
1. What do you mean by the importance of executive development?

2. Analyze the process involved in the designing and development programmes?
3. Explain the importance and process of career planning?
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UNIT 9 EMPLOYEE MOBLITY
Structure of the Unit:
 Introduction
 Promotions
 Demotion
 Transfers
 Separation
 Absenteeism
 Labour Turnover
Objectives:
After the completion of the unit the student will be able to:
 Explain Employee Mobility- Internal and External

 Explain the Different Types of Promotion
 Understand the Basis of Promotion and Explain a Promotion Policy
 Understand the Conditions for Demotions
 Explain the Policy and Procedure of Transfer
 Know the Different Types of Transfers
 Explain What is Meant by Separation
 Explain the Measures to Control Absenteeism
 Understand What is Labour Turnover
Introduction
The movement of the employee (within an organization) from one role to another role, from
one job to another, or from one place to another is called internal mobility. There are various
kinds of internal mobility. They are:
 Promotions(movement to higher hierarchical level)

 Transfer( movement to similar hierarchical level)
 Demotion( movement to lower hierarchical level)
Promotion:
According to Scott and Clothier, “A promotion is the transfer of an employee to a job which
pays more money or one that carries some preferred status.”
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According to Prof Mamoria, “Promotion is a term which covers a change and calls for greater
responsibilities, and usually involves higher pay and better terms and conditions of service
and, therefore, a higher status or rank.”
According to Arun Monappa and Saiyadain, “Promotion is 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.”
From the above definitions, we can say that

promotion usually implies several things to the
person concerned—higher status, both at work and
in the community outside, more pay and fringe
benefits, perhaps greater job security and a more
senior position from which a person renders better
service to his organization. Employees expect to be
informed about ladders of promotion, how they can
prepare themselves for advancement and what will
be expected of them from the higher rated jobs.
Types of Promotion
(a) Limited Promotion

Limited promotion is also known as upgrading. It is the movement of an employee to a more
responsible job within the same occupational unit and with a corresponding increase in pay.
Thus, upgrading means an increase of pay on the same job or moving to a higher scale
without changing the job.
(b) Dry Promotion

Dry promotion is a promotion as a result of which there is no increase in the employee’s
salary. Dry promotions are those which are given in lieu of increases in compensation. It is
usually made decorative by giving a new and longer title to the employee.
(c) Multiple Chain Promotion

Multiple chain promotion provide for a systematic linking of each position to several other
positions. Such promotions identify multi-promotional opportunities through clearly defined
avenues of approach to and exist from each position in the organization.
(d) Up and Out Promotion

Up and Out Promotion often leads to termination of services. In this type of promotion, a
person must either earn a promotion or seek employment elsewhere.
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BASIS OF PROMOTION
Different promotion systems are used in different organizations. Of them the following are
considered the most important:
I. Promotion Based on Seniority
Seniority based promotion systems are based on the length of service of an employee in an
organization. Seniority systems put a premium on length of service and job experience. In the
case of promotion based on seniority, the employees are promoted to higher positions purely
based on their length of service irrespective of their qualifications, experience, performance
and track record.
Trade unions prefer seniority as a basis of promotion because by-offs, recalls and discharges
are usually based on seniority. The
seniority promotion plan is as old as
civilization itself. In business, however, it
is not always dependable as a promotional
policy Normally, this method of promotion
policy is seen in Government services and
in services of quasi Governmental
organizations. Unless the official has a
very poor and bad work record, he is
automatically promoted to higher position
based on his service seniority.
Advantages of Promotion by Seniority
 All employees are assured of promotion which will come automatically when it is due.
 Seniority is a factor which can be measured quantitatively; it is easily explained and
understood and therefore, escapes charges of favoritism and discrimination.
 The management will have a known man. This reduces the risk associated with
bringing an unknown person from outside.
 Seniority as a criterion for promotion makes its impact on reduction in employee
turnover.
 Seniority is considered to contribute to the employees’ ability on the assumption that
the longer a person does a job, the more he learns about it.
 Promotion by seniority satisfies the personal aspirations of the employees. This results
in better morale of the employees.
Disadvantages of Promotion by Seniority
 If the seniority principle is adopted, capable young men are likely to become
impatient and will look for better prospects elsewhere.
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 The internal sources may be inadequate to meet the growing requirements of the
organizations.
 If the worth of an employee is not appreciated and given due recognition, it results in
frustration and low morale of the employees.
 Promotions by seniority leads to capable young men looking for better prospects
elsewhere. Consequently, the organization comes to be run by second-grade people,
who have stayed because they do not have sufficient calibre to move elsewhere.
 With the fast changing world of technology it is necessary to infuse new blood into the
organization. This is denied when the policy of promotion is by seniority.
II. Promotion Based on Merit
Under promotion based on merit, employees are promoted to higher positions purely on
their performance and work record. Here, the management will look into the qualifications,
experience, previous work record, performance capability etc. The service seniority of the
employee would not be considered for promotion. In principle, it is felt that promotion
should be based on merit. However, the use of merit as a basis for promotion can cause
problems because what management regards as merit, trade unions may see as favouritism.
Promotion by merit method is normally followed in majority of commercial and industrial

enterprises where the main consideration for assessment is efficiency and work performance.
The argument in favour of using merit or ability as a criterion for promotion is that it
enhances organizational efficiency, and maximizes utilization of talent, since only deserving
employees are promoted after a thorough assessment of their abilities for the next job of
higher responsibility and status.
Arguments for Promotion by Merit:

 Promotion by merit brings rewards for meritorious work. This encourages an
employee to work hard and advance in the organization.
 Promotion by merit enhances organizational efficiency and maximizes utilization of
talent.
 Promotion by merit acts as a motivator. This leads to increased productivity.
Arguments against Promotion by Merit:

 When management adopts merit as a basis for promotion, it must evolve controls to
recognize merit objectively which will refute the allegations of favouritism. This is very
difficult to achieve.
 Trade unions regard merit as favouritism. They distrust the sincereity of management
when it claims the right to promote solely on merit.
 Efficiency in the present job does not necessarily predict ability to do well in a job with
greater responsibility.
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 The devices used for judging ability such as performance appraisal ratings and
confidential reports are not above subjectivity. It is this problem of bias in judging
merit that makes employees oppose merit as a base for promotion.
III. Merit cum Seniority Promotion
Promotion based on “Merit cum Seniority” would have a blend of the advantages of both the
systems discussed above. Both the service seniority and work efficiency will be taken into
account in promoting an employee. These two possibly conflicting factors – seniority and
merit - frequently pose problems in considering employees for promotion. From the point of
view of organizational efficiency, merit seems to be the logical basis of promotion and
therefore, management would like it to be the only factor. Trade unions want seniority to be
considered as the basis for promotion since it is an objective and impartial method of judging
employees for promotion. A sound management will pursue a policy of properly balancing
these two factors i.e., seniority and merit. An employee who has service seniority with the
desired level of merit and efficiency would be given priority in promotion to the next cadre as
compared to others having only one of them. Merit cum seniority method has been
considered as the best method of promotion as it gives due weightage to the skill efficiency
and better service record of the employee.
IV. Promotion by Selection
Promotion by selection is a process through which employees are promoted after undergoing
rigorous test and screening. The service records of all the employees due for promotion are
screened and scrutinised by a committee appointed for that purpose. The Committee will
scrutinise the past records, merit, qualification and experience of the employees due for
promotion to a cadre. Under this system employees with service seniority or better
qualifications and experience need not be promoted automatically. The employees are put to
various tests and interviews before a final selection is made and some employees are
promoted.
V. Time Bound Promotion Scheme
Under this method, employees would be promoted according to standards of time set for
promotions to higher cadre subject to the condition that they possess the minimum
qualifications required for entry into a higher position. Neither seniority nor merit will be
considered here. The employees may have to pass some departmental examinations or tests
for being considered for such a promotion.
VI. Temporary Promotion Scheme
Also known as officiating promotion scheme, under the temporary promotion scheme,
officials are promoted temporarily to higher positions in case there are vacancies and if they
are due for promotion. Such temporary promotion is no guarantee for a permanent
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promotion, though normally temporary promotions are automatically made permanent if the
service of the employee during the officiating period is satisfactory. It is like keeping the
employee under some sort of probation at the higher position before he is confirmed.
Promotion policy
Whatever may be the type of promotion followed by the management, there should be a
definite promotion policy which should be effective and protect the interests of the
employees due for promotion. A concrete, comprehensive and realistic promotion policy
should be evolved covering the following points:
(a) Promotion Policy Statement: A corporate policy on promotion helps to state formally the
organization’s broad objectives, and to formulate both the organization’s manpower and
individual career plans.
(b) Ratio of Internal Promotion Vs External Recruitment: A promotion policy statement must
state the ratio of internal promotions to external recruitment at each level. Such a statement
will help manpower planners to project numbers of internally available candidates for
vacancies.
(c) Decide the Basis for Promotion: A promotion policy statement must decide the basis on
which promotions are to be given. Usually promotions are decided on the basis of
performance appraisals.
(d) Decide the Routes for Promotion: We have to identify the network of related jobs. Such
an exercise will help in succession planning and also help aspirants to acquire the necessary
formal qualifications or on-the-job training. Once it is finalised, it should be made known to
the employees concerned.
(e) Communicate the Promotion Policy: The organization should communicate its promotion
policy to its employees. Such an exercise will help aspirants to acquire the necessary formal
qualifications, encourage them to attend suitable external development programmes etc.
(f) Lack of Promotional Avenues: There may be some deserving candidates who will not get
promoted due to lack of available positions. In such cases where employees perform
adequately in their present jobs, wage increments should be forthcoming.
(g) Determination of Seniority: A ticklish area in the formation of a promotional policy is the
determination of an employee’s seniority. Should the seniority be plant-wise, unit-wise or
occupation-wise? Generally, seniority is unit wise.
(h) Relationship of Disciplinary Action to Promotion: Another area to look into while
formulating a promotional policy is whether there is a relationship between any disciplinary
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action taken against an employee and promotion. Does a disciplinary action cause a loss in
employee seniority? If yes, then to what extent?
Advantages of a promotion policy
The following are the benefits of a good promotional policy:

- A good promotion policy provides an incentive to work more effectively as it recognizes
an employee who comes out with better work. It must however tell employees in advance
what avenues exist for advancement.
- It develops employee loyalty by rewarding him and placing him in a higher position in the
organization for his efficiency.
- It facilitates and increases job satisfaction.
- It increases work effectiveness in the organization.
- It also attracts efficient employees to the organization.
- It increases employee interest in training and self-development.
- A promotion policy makes employees believe that their turn too will come and so they
remain with the company. This reduces labour turnover.
DEMOTION
Demotion is a process by which the employee is downgraded and sent to a lower position
from the one he is holding at present. When an employee is moved to a job with less
responsibility, status or compensation he is said to be demoted. Demotion is the reverse of
promotion. It is more a punishment for inefficiency or incompetence.
According to D.S Beach, Demotion is “the

assignment of an individual to a job of lower
rank and pay usually involving lower level of
difficulty and responsibility”.
According to Arun Monappa and Saiyadain

Demotion “is a downward assignment in the
organization’s hierarchy to a lower level job
which has less responsibility, pay and status.
Because of this hierarchical repositioning it has a
negative connotation and may lead to employee
dissatisfaction”.
Demotions, being a serious penalty, must be handled tactfully. The usefulness of demotion as
a punitive measure is questioned on many grounds. A demoted employee will be disgruntled
and his dissatisfaction may spread to co-workers which will adversely affect morale,
productivity and discipline of the workforce.
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Causes of Demotion
 Demotion may be used as a disciplinary weapon.
 Demotion may be resorted to when employees, because of ill health or personal reasons,
cannot do their job properly.
 If a company curtails some of its activities, employees are often required to accept lower-
level position until normally is restored.
 If an employee finds it difficult to meet job requirement standards, following his
promotion he may be reverted to his old position.
Conditions for Demotion
Demotions serve a useful purpose in the sense that they keep the employees alert and alive
to their responsibilities and duties. Demotion will serve its purpose if it satisfies the following
conditions:
 Violations of rules and regulations of the organization would subject an employee to

demotion. Here it should be noted that serious violations if rules and regulations would
only warrant such a drastic action. Demotion should never be made as penalty for
violation of the rules of conduct, poor attendance record or insubordination.
 There should be a proper and detailed investigation of any alleged violation of rules and
regulation.
TRANSFER POLICY
It is clear that transfers are made for a number of reasons and are initiated by either the
supervisor or the subordinate. If transfers are left entirely to the discretion of supervisors or
employees, a number of problems are likely to occur such as favouritism or victimization. To
avoid these problems it is necessary that every organization evolve its transfer policy. Every
organization should have a just and impartial transfer policy which should be known to each
employee.
The absence of a well-formulated transfer policy will breed a state of uncertainty amongst
the employees. For a successful transfer policy, proper job description and job analysis should
be done. Further, care should be taken to ensure that frequent or large-scale transfers are
avoided by laying down adequate procedures for the purpose. A systematic transfer policy
should provide for the following:
 A transfer policy should clarify the types and circumstances under which transfers will be
used. The organization should specifically clarify the types of transfers and the conditions
under which these will be made.
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 The transfer policy must locate the authority that may initiate and implement the
transfer. In other words, it should indicate who would be responsible for initiating and
approving the transfers.
 A transfer policy should indicate whether the transfer could be made only within a sub-
unit or also between departments, divisions and plants.
 The transferability of both jobs and individuals needs should be examined in terms of job
descriptions, streams of specialization and individual background and training.
 A transfer policy should indicate the basis for transfer. Should it be on the basis of
seniority or skill and competence?
 A transfer policy should prescribe whether, when an employee is transferred, his previous
seniority credit will be retained.
 The transfer policy should indicate to the transferee the pay scales, the exact wages and
perquisites that he would receive in the transferred job. If there is any difference, it
should be specified.
 A transfer policy should provide for timely communication of the transfer decision.
 The transferee should be intimated of the transfer well in advance.
 A transfer should be in writing and duly communicated to all concerned.
 Transfers should not be made frequently.
Transfer Procedure
(a) Intra-departmental Transfers

Transfers may be from one section to another in the same department. Such cases of transfer
are decided upon by the Plant Manager and oral order is enough there is no need to issue a
transfer letter to the employee. It is however desirable that the personnel manager be
informed of such transfers.
(b) Inter-departmental Transfers

Transfers may be from one department to another within the same organization. Such
transfers are known as Inter-departmental transfers. These are made by mutual consultations
between the Plant managers concerned. If such a transfer is permanent, a letter of transfer
should be issued communicating to the employee concerned that he has been transferred.
Written orders, signed by the personnel manager are issued to the employee.
(c) Branch Transfers

Transfers may be from one branch to another or from head office to branch or from branch
to head office. Since this type of transfer involves transferring a worker to a new working
environment, they should be discouraged. Branch transfers involves a considerable change in
working conditions for the employees. It is also very costly from the point of view of the
organization. In case of such a transfer, advance notice should be served to the employee.
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SEPARATION
Separation means cessation of service of agreement with

the organization. Separation can be the result of:
(a) Resignation
When a termination is initiated by the employee himself,

it is termed a resignation. Resignations may be put in
voluntarily by the employees on grounds of marriage
especially in case of young girls, health, physical disability, better opportunities elsewhere, or
maladjustment with company policy and affairs. A study of exit interviews over a period of
time may disclose a fiscal pattern suggesting improvements in the personnel management
functions. Resignation may also be compulsory when an employee is asked to put in his
papers if he wants to avoid termination of services on the ground of gross negligence of duty
or some serious charge against him.
(b) Discharge
A discharge involves permanent separation of an employee from the organization because of

poor performance, violation of rules or poor code of conduct. A discharge becomes necessary
when
o The business volume is reduced thereby reducing the employment opportunities in the
organization,
o The employee fails to work according to the requirements of the job
o The employee forfeits his right to a job.
Discharges are generally made in accordance with the standing orders. The action taken
should be bonafide and nor a punitive measure or a case of victimisation.
(c) Dismissal
When the termination is initiated by the organization, it is termed as dismissal. A dismissal is

the termination of the services of an employee by way of punishment for some misconduct,
or for prolonged absence from duty. A dismissal is a drastic step. Therefore, it must be
supported with a just and sufficient cause. It is generally done as a last resort after all
attempts at reconciliation have failed. Before an employee’s services are terminated, he
should be given an opportunity to explain his conduct and show cause why he should not be
dismissed.
The principle of natural justice should be followed to ensure that the punishment is in
proportion to the offence. As a safeguard, responsibility for dismissal should not rest on the
immediate supervisor. The approval of the next higher authority should generally be taken
and the personnel manager should be consulted. Dismissals can be on the ground of
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unsatisfactory performance, misconduct, or want of qualifications for the job, or excessive
absenteeism.
(d) Golden Handshake
It is a method of retrenchment wherein the employees with a certain minimum service can
opt for voluntary retirement. Golden handshake is usually offered by the Government to
reduce the size of the bureaucracy and close down chronically loss-making public sector
enterprises.
(e) Retirement
In India, the retirement age is 58 or 60 years. Some employers may extend the age upward or
downward from this base. For those employees who retire, it is a significant milestone.
Regardless of the age at which retirement occurs, workers may need preparation through
counselling. They should be informed about pension choices and insurance benefits after
retirement. Employees at retiring age often feel they could continue to work effectively and
there is a strong resistance from many to give up employment.
ABSENTEEISM
Absenteeism means unauthorized absence of the worker from his job or the absence of
worker when work is available. In other words, it signifies the absence of an employee from
work when he is scheduled to be at work; it is unauthorised, unexplained, avoidable and
willful absence from work.
According to Webster’s Dictionary, “absenteeism is the practice or habit of being ‘absentee’,

and an ‘absentee’ is one who habitually stays away.”
According to the Labour Bureau, Simla, “absenteeism is the total man-shifts lost because of
absences as a percentage of the total number of man shifts scheduled to work.”
The Indian Labour Journal defines it as, “Absence is the failure of a worker to report for work
when he is scheduled to work. A worker is to be considered as scheduled to work when the
employer has work available for him and the worker is aware of it”.
Causes of Absenteeism
There are various reasons for which a worker remains absent from work. They can be
classified as under:
(a) Maladjustment with Factory Conditions

Urban life has no attraction for workers. They are pushed, not pulled to the city. The
insanitary conditions prevailing in the cities coupled with strict discipline which was unknown
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to them in the villages makes life difficult for them. Therefore, workers go back to the villages
frequently resulting in increased rate of absenteeism.
(b) Social and Religious Functions

Social and religious functions divert workers from work to social activities. In a large number
of cases, workers are absent from work on occasions of social and religious festivals. In all
concerns, absenteeism is high during local festivals. The problem is compounded if the
workers are from villages as they want to join their families on such occasions for which they
take long leave.
(c) Stress
Due to fast technological changes, the pace and pressure of life has increased. The need for a
behavioural adjustment to this changing life and work style produces stress. “Stress out of the
work” refers to a physical or psychological deviation from the normal human state of mind as
a result of work environment. External pressures on day-to-day life also effects the individual
reaction to the work for instance, a conflict with a co-worker or supervisor may result in job
stress. Many studies have indicated that stress disorders result in increased rate of
absenteeism.
(d) Alcoholism and Drug Abuse

Alcoholism has long been recognised as a major problem at the work spot which results in
increased rate of absenteeism. The habit of alcoholism among workers is a significant cause
of absenteeism especially during the first week of each month when they receive their wages.
The workers rush to liquor shops and pleasure spots and drink liquor to forget their
immediate worries.
(e) Unsatisfactory Housing Conditions

Workers experience severe housing difficulties in urban areas. Due to lack of houses, workers
prefer to leave their families in villages and stay alone in cities. The lack of balance between
family involvement and job responsibility is the principal cause of absenteeism. They
frequently go to the villages to unite with the family.
(f) Sickness
The sick and old remain absent from work for reasons of ill health, weak constitution, chronic
disease or old age. Sickness is responsible for a considerable part of absenteeism in most
industries. The workers who come to towns experience housing difficulties. Forsaken places
like the slopes along the railway lines, waste land adjoining dirty localities in towns and open
spaces earmarked for dumping the town refuse are chosen by them. Health conditions are
naturally bad, leading to high morbidity and consequent ill health.
(g) Unhealthy Working Conditions

Working conditions like heat and moisture, noise and vibrations, bad lighting conditions dust
and fumes and over-crowding etc, keep the workers under constant strain. In order to escape
from these unhealthy working conditions they remain absent for a long time.
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(h) Rural Exodus
Workers go back to the villages during the sowing and harvesting seasons. This is an
important cause of high absenteeism among rural labour force.
(i) Absence of Adequate Welfare Facilities

Absenteeism is also due to the inadequate welfare facilities available to workers. The
statutory welfare amenities which include sanitation, washing and bathing facilities, first aid
appliances, drinking water, canteens, shelters, rest rooms etc., have not been properly and
adequately provided. Fed up with the inadequate absent basic facilities, the workers often
migrate to his rural home.
(j) Managerial Attitude

A traditional manager treats workers in a sub-human condition. This attitude of the
management also contributes to absenteeism as a close affinity with organization is lacking
(k) Over-identification with Family Affairs

The lack of balance between family involvement and job responsibility is the principal cause
of absenteeism. Chronic illness of one or other family member, litigation, delinquency,
working wife etc., force the workers to be absent from work.
(l) Desire for Money, Status and Power

Some workers desire money, status and power, but are unwilling to work for their
achievement. The discrepancy between their aspirations and abilities invariably results in
withdrawals or make-believe situations. Work is a frustrating experience and they seek to
avoid it as much as posible. This is another desire for absenteeism.
Measures to Control Absenteeism
For the industry, it stops machines, disrupts processes, creates production bottlenecks,
results in production losses etc. Frequent absenteeism adversely affects the worker. It
reduces his earnings and adds to his indebtedness, makes it difficult for him to meet
necessities of life and in many cases may also lose his employment. Thus, loss due to
absenteeism is two-fold. The loss to the employer is still greater as both discipline and
efficiency suffer. Hence measures should be taken for control of absenteeism.
R.A Seligman is of the opinion that “Absenteeism is a serious problem for management
because it involves heavy additional expenses. Reserves and understudies are kept in
readiness to take the place of the absentees, failing which the overhead cost of idle
equipment has to be faced. Industrial employees do not usually ask for leave of absence in
advance or even give notice during their absence as to how long they would be away. The
management is generally uncertain about the probable duration of an employee’s absence
and cannot take appropriate measures to fill the gap.”
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LABOUR TURNOVER
Labour turnover, is the rate of change in the number of employees of a concern during a
definite period. Labour turnover is the cause and effect of instability of employment, apart
from being a measure of the morale and efficiency or otherwise of workers. Labour turnover
studies are helpful in indicating that something is wrong with the organization.
According to Frederick J Gaudet, “Just as the high reading on a clinical thermometer is sign to
the physician that something is seriously wrong with the human organism, so is a high index
of labour turnover rate a warning to management that something is wrong with the health of
the organization. But just as the clinical thermometer merely indicates that something is
wrong - not what is wrong - so does the turnover rate merely warn not diagnose. A high
turnover rate may mean poor personnel practices, poor supervisory practices, or poor
company policies. Nor should we forget that too low a rate of turnover, like a below normal
reading on the thermometer, can also be a danger signal”.
According to Pigors and Myers, “Labour turnover involves costs not only in human values but
also in money. These include:
o Costs incurred in hiring and training each new employee.

o Costs of overtime work required from regular workers in order to maintain the required
levels of production until the new employee can do his share.
o Loss of production in the interval between separation of the former employee and the
time when his replacement is fully broken in.
o Expense in equipment or facilities not being fully utilised during the training period.
Measures to Reduce Labour Turnover
Unfortunately, the majorities of employers ignore the effects of labour turnover and prefer to
play off one labourer against another with a view to obtaining cheap labour; many of them
prefer a constant change of labour force if it gives them an opportunity to reduce their wage
bill. They do not realize that new workers are less efficient than old workers. The following
actions may be taken to reduce labour turnover:
 Increase pay levels to meet competition.
 Introduce procedures for relating rewards to performance.
 Provide better career opportunities.
 Workers organizations should be encouraged to maintain contact with the workers and
redress their grievances.
 Reorganize work and arrangement of offices or workshops to increase group
cohesiveness.
 Improve working conditions, adopt an enlightened policy of management in respect of
welfare, sickness insurance and pension which will contribute to make the labour force
more stable.
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 Improve recruitment and selection procedures to ensure that job requirements are
specified accurately and the selected employees fit the specifications.
 Provide adequate training or adjustment periods when working conditions change.
1. What do you mean by internal mobility of human resources? Why is internal mobility
required?
2. What are different types of promotion? Discuss the need for promotion in an
organization.
3. What is demotion and why is it needed? Discuss the requirements of a proper demotion
policy.
4. What are the causes of employee absenteeism? Discuss the measures to overcome high
rate of absenteeism.
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UNIT 10 WAGE AND SALARY ADMINISTRATION
Structure of Unit:
 Objectives
 Introduction
 Principles of Wage and Salary Administration
 Essentials of Sound Wage and Salary Administration
 Factors Affecting Wage and Salary Administration
 Methods of Wage Payments
 Process of Wage Determination
Objectives
After Completing the unit, the student would be able to:
 Understand the significance of Wage and Salary Administration in the organization:

Learn about principles of Wage and Salary Administration;
 Know some of the prerequisites for sound compensation management;
 Understand major factors affecting Wage and Salary determination in an organization;
Know in detail methods of wage payments;
 Learn how wages are determined in an organization.
Introduction
Employees’ compensation is one of the major determinants of employee satisfaction in an

organization. The compensation policy and the reward system of an organization are viewed
by the employee as indicators of the management’s attitude and concern for them. A good
wage and salary administration should be able to attract and retain employees, give them fair
deal, keep the organization competitive and motivate employees to perform their best.
Wage and salary determination and its administration has always remains sensitive issue for
an organizational management, since employees moral, motivation, productivity and their
relationship with the management more or less associated with the compensation
management system. Furthermore compensation has always remain as a major yardstick for
the success or failure or concern for the employees by an organization.
Today organization tries more to assess the worth of an individual in terms of his
performance and contribution to the organization. With the growing demands of the
workforce and the constant challenges in the business environment, organizations have to
evolve an accurate system for evaluating jobs and assessing their worth. Job evaluation helps
to determine the relative worth of job in an organization in a systematic, consistent and
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accurate manner. It also helps in estimating the basic pay for each job in accordance with the
importance of the job in the organizational hierarchy. Once basic pay is determined, the
rewards, incentives and benefits attached with the pay, position and performance are also
determined. The basic wage, incentives and rewards and benefits, together from
compensation package of an employee.
Principles of Wage and Salary Administration
1) There should be a definite plan and system to ensure that differences in pay for jobs are
based upon variations in job requirements, means maintaining equity in the distribution
of wages and salaries in the organization.
2) Maintaining competitiveness in the wage market means the general level of wage and
salary should be reasonably in line with that prevailing in the market.
3) Matching employees’ expectations and it should avoid unjustified discrimination by
providing equal pay for equal work.
4) Reinforcing positive employee behavior and contribution to the organization, differences
in the compensation package should be based on contribution, productivity, job
performance, achievement etc.
5) Devising a system that is the most efficient for the organization, as far as possible it must
eliminate any discrepancies or exploitation of the employees.
6) The compensation system should formulate and define rules and regulations for
determining, changing, adjusting wages in the organization.
7) The compensation package must ensure fairness, should maintain harmonious
relationship between the employee and employer.
8) Compensation system should be flexible enough so that future changes can be
incorporated.
9) The wage and salary administration should take care of and comply all the rules and
regulations laid down by the legislator for protecting the employees’ interest.
10) Optimization of management and employee interests.
Essentials of Sound Wage and Salary Administration
Sound Wage and salary administration demands some essentials to satisfy, so that one who is
shoulder with the responsibility of designing administrative aspects with this regards, may
come out with efficient system for managing the issues related with it. Some of the pre
requisites for the sound compensation system are:
I. Rational Job Analysis: It is an important exercise with regards to each category of jobs. It
reveals detailed aspects of the job, like duties, responsibilities associated with the
performance, performance standards as a fair parameter for evaluation of the
performance. It gives fair idea about job specification i.e. qualification, experience, skill
and other essential requirements that job performer must satisfy. Thus rational job
analysis always put policy decider in a better condition to lay down appropriate content
in policy design.
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II. Proper Job Evaluation: Job evaluation is a systematic process of analyzing and evaluating
jobs to determine the relative worth of job in an organization. It forms the basis for
designing the sound compensation system in an organization. Since wage and salary
administration and the perceived fairness of approach adopted under it have a immense
influence on employee morale, motivation and satisfaction, proper job evaluation
exercise demands sensible consideration.
III. In Depth Knowledge About an Organization and Market Factors: Apart from job
evaluation, the various other factors that determine the administrative aspects for wage
and salary administration are the size and structure of the organization and the industry
in which it operates, the strength of employees union, position of a person and his
importance to the organization, demand and supply for particular skill sets in the
industry, organizational ability and capacity to pay and its economic condition like
profitability, and legislative aspects related with wage determination. Sound system for
compensation management demands detail knowledge about all these factors in order
to its sound framework and operation in the organization.
IV. Clarity of Objectives or Purposes of Wage and Salary Administration : Last but not the
least in terms of its significance, in order to have effective and efficient administration of
compensation as an area in the organization, one must have accurate clarity about the
purposes that it may tries to satisfy through policy decisions .objectives may be attracting
talented resources; retaining and motivating employees; financial management of an
organization; satisfying legal requirement; and many more. Sometimes these objectives
are conflicting in nature also. So it is very essential that one, who is going to carry out this
responsibility of designing the compensation system in the organization, should have
reasonable clarity for objectives to be satisfied with the design.
Factors affecting Wage and Salary Administration
The term employees remuneration includes both wages and salaries. Wages are commonly
considered as the price of labor paid to the workers for the services rendered to the
organization employing them. Where quantum of services rendered is difficult to measure
the payment is called salary. Normally, payment made to workers is referred to as wages, and
remuneration paid periodically to persons whose output cannot be measured such as clerical,
supervisory and managerial staff, is called salary. Wage and salary administration is affected
by so many factors and most of them are uncontrollable in nature so probably, this decision
is more crucial and critical. Major factors affecting wage and salary administration are
discussed as under:
1) Demand and Supply: Demand for and supply of labor and its availability will have great
influence on the determination of wage rates. If there is a shortage of labor, the wages
demanded will be high. If, on the other hand labor is plentiful, workers will be too willing
to work at low rates of wages. However, wages cannot be regarded today merely a price
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for services rendered. In recent years therefore, both management and labor has been
becoming less and less dependent on this factor as a basic factor. An employee will not
hesitate to accept lower wages if he has opportunities for growth in the organization.
Today, the money which is paid as compensation should enable a worker to buy goods
and services which will enable him and his family to live a better and fuller life and satisfy
his hierarchical needs.
2) Organization’s Ability to Pay: This is a major affecting factor in determining wage and
salary structure of an organization. Financial position and soundness of an organization
can put it in a position to offer attractive compensation package. Some of the reputed
economically sound organizations are offering good compensation package and thereby
successful in obtaining and maintaining talented workforce. Good compensation package
helps in attracting and retaining quality talent in an organization. Generally wages in
most of the organization decide through collective bargaining and , organization’s ability
and capacity to pay attractive wages depends upon over all financial soundness and
economic condition of an organization.
3) Prevailing Market Rate or “Going Wage Rate”: This is practically the major factor that
induces any organization to take it as a base while determining wage and salary structure
for it. Prevailing market rate is also known as ‘most comparable rate of wage’, and most
popular method for wage rate determination, especially for lower cadre positions. There
are many reasons for an organization to pay wages at a market rate like competition and
a practice of ‘Brain Drain’ prevails in the market. Further more certain laws framed laid
down principal of’ minimum wages’, ‘equal wage for equal work’. In addition to this trade
unions are also prefer to bargain upon and in accordance with market rate of wages.
4) Productivity: Productivity is measured in terms of output per man hour. It a result of

several factors such as technology, labor efforts, method of doing work, management
contribution and support and so on. However, productivity has always remained as base
for wage differences since it a base which is apparently justifiable and acceptable to all in
the organization. Many a time this as base is not acceptable to many trade unions as it is
very difficult to have accurate measurement and is has always remain at a discretion of
management policies.
5) Cost of Living: It is always expected that there has to be adjustment in pay rates in
accordance with prevailing cost of living. The changes in the cost of leaving affect
purchasing power of the person. Trade union also considers this as a base for collective
bargaining on wage issues.
6) Trade Union’s Bargaining Power: Generally the mechanism for fixing of wages for
majority of workers is collective bargaining or negotiation, and collective bargaining and
negotiations depends upon the trade union’s strength. If there is a strong union operates
in the organization, it may dictate its terms on wage fixation and revision over a period of
time and vice versa. The strength and power of the trade union depends upon its
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membership, financial strength and leadership it may have, for its functioning.
8) Job Requirements: From the organizational perspective appropriate job analysis and job
evaluation exercise is a base for the wage determination and revision. It is quite obvious
also that wages to be paid to the workers should be in accordance with the duties,
responsibilities and the efforts likely to be put for job performance. Wage or
compensation package very in accordance with job description and job specification.
9) Management Attitude: Attitude of employer or management towers the working

community of the organization does influence in wage determination and revision at an
appropriate time. Some reputed and professional organization does prefer to pay wage
in accordance with their reputation or prestige of an organization in the market. They
may give participation to workers in sharing profits. On the other hand conservative
organizations do not prefer to go for such profit sharing.
10) Psychological and Social Factors: Psychologically person perceive wages and
compensation package as sole parameter for success or failure in the life. Compensation
package plays significant role in the employees pride, moral, motivation and
psychological engagement and involvement in the work. Therefore such variable should
not be overlooked by the organization while determining wage and salary structure.
Socially and ethically also people feels that “equal work should carry equal pay “ i.e.
wage should be in accordance with efforts and workers should not be felt like being
cheated. Compensation policy should not make any discrimination on the basis of caste,
color, Sex or region, and must try to satisfy condition for fairness equity and justice.
11) Legislative Considerations: Legislative provisions do provide protection to the working

community by fixing bottom line for wage payments. Many a time it was found that the
bargaining power of the workers was not strong enough to ensure fair wages.
Consequently, the state legislative frame work stepped in to regulate wages and provide
for certain benefits to the workers. Legislation like Minimum Wages Act, 1936, provides
for statutory minimum wages to be prevails in the industrial organization so that workers
can satisfy their bare requirements and maintain their minimum living standard. These
aspects are also considered while deciding compensation policy for an organization.
Methods of Wage Payments
Wage plans are mainly micro plans and each company may devise any of the wage plans.
Basically there are two methods for wage payments, viz. (1) Time rate wage system; and (2)
Piece rate wage system. The wage paid to labor has to perform important functions in the
economic system. It should be such as to make the worker capable and willing to be efficient
and involved in the job. There should be link, wherever feasible between emoluments and
productivity; and fair parity between wage differentials and skill differential. The plan should
act as an incentive to improve the efficiency, and it should attract the worker wherever
demanded or needed. Whatever may be the method of wage payment but the wage plan
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should contain following ingredients:
 It should be simple and understandable

 It should be capable of easy computation
 It should be capable of motivating the employees
 It should be attractive enough for new talent in the organization.
 It should be fair, just and stable to all the employees.
The fundamental plans of wage payment are:
I. Time Rate Wage System: It is the oldest and the simplest form of wage fixing. Under this
system, workers are paid according to the work done during a certain period of time at a
rate of per hour, per day, per week, per fortnight, or per month or any other fixed period
of time. According to the section4 of the Payments of Wages Act,1936, not more than
one month must elapse between two wage period. Time wage system adopts time as the
basis of worker remuneration without taking in to account the units produced. The
worker is guaranteed a specified sum of money for a fixed period of his time taking no
account of the quality or quantity of the work done. Evaluation on the basis benefits and
weaknesses is as under:
Merits:
o It is simple and understandable and easy for calculation of wages, since wages under this
system is equal towage per hour* numbers of hours worked by an employee.
o There is no time limit for completion of job, workman are not in hurry to finish it and this
may mean that they may pay p enough attention to the quality of work, effective
handling of machinery and utilization of resources in an optimum manner.
o All workers are given same treatment in terms of equal wage payment, so grievances, ill
will; jealousy can be avoided among them.
o Time rate system provides regular and stable income to workers, so they can adjust and
manage their budget accordingly.
o It requires less administrative attention as this system provide good faith and mutual
understanding and trust between employer and employee.
Demerits:
o It does not take in to account the ability and capacity of the workers so the skilful and
more capable workers who have higher production efficiency will demoralize.
o Time rate system is unrelated to the productivity and does not provide extra motivation
for extra efforts by the workers.
o The labor charges for a particular job do not remain constant. This put the management
in a difficult position in the matter of quoting rates for a particular piece of work.
o There is a possibility of systematic evasion of work by the workers, since there is no

specific target or demand for specific quantity of work by the management.
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o Time rate system does not ask for maintaining individual workers record, it becomes
difficult for the employer to determine his relative efficiency for the purpose of
performance evaluation for future promotion or rewards. Thus it does injustice to the
outstanding employees.
Suitability: Time rate system is suitable when the output contributed by the worker is
difficult to measure and cannot be recorded in an individual basis. It is also suitable when by
cultivating mutual trust and confidence and by giving fair and equal treatment to all the
employees, management can get the work done in an appropriate manner
II. Piece Rate Wage System: Under this system, workers are paid according to the amount
of work done or numbers of units produced or completed, the rate of each unit being
settled in advance, irrespective of the time taken to do the work. This does not mean
that the workers can take any time to complete a job because of his performance far
exceeds the time which his employer expects he would take, the overhead charges for
each unit of article will increase.
Merits:
o The main advantage of this system is recognition of merit, as efficient is rewarded, It is

therefore more equitable then time rate system.
o It pays workers as per their efficiencies, ability, capacity or performance, so it gives direct
stimulus and motivation to the employees for extra efforts, which may result into more
productivity.
o It requires less managerial supervision as total remuneration depends upon units

produced, and not on time spent in an organization.
o Being interested in continuity of his work, a workman is likely to take greater care to
prevent breakdown in the machinery or in the work shop. It is a gain to the management
since it reduces maintenance expenditure in an organization,.
o As the direct labor cost per unit of production remains fixed and constant, calculation of
cost while filling tenders and estimates becomes easier.
o It results in to not only increase in the output and wages ,but the methods of production
too are also improved, as workers demand material and tools free from defects and
machinery in perfect operating condition.
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Demerits:
o If rates of wages are not scientifically fixed and acceptable to the workers, would result
into workers exploitation and may prove counterproductive
o As workers are interested in completion of the job with a greatest speed, may damage
the machinery, quality of output or may increase rate of hazards in an organization.
o Trade unions generally do not like this system of wage payment; they may not have full
support and acceptance. It may be the major issue for industrial dispute.
Suitability: It can be introduced generally in jobs of a repetitive nature, when task can be
easily measured, inspected and counted. It is practically suitable for standardized processes,
and it appeals to skilled and efficient workers who can increase their earnings by working to
their best capacity.
III. Balance and Debt System: This system combines time rate and piece rate. Under it a
minimum weekly wage is guaranteed for a full weeks’ work, with an alternative piece-
rate determined by the rate fixed on the assumption that the worker would put enough
effort to earn his minimum wage. If the wages calculated on piece bases are in excess of
the time rate, the worker earns the excess. If the piece rate wages are less than the time-
rate earnings, he would still get weekly wage, but on the condition that he shall have to
make good the excess paid to him out of the subsequent wage he would earn. So it a
hybrid system producing the same benefits and limitations of both the time rate and
piece rare system.
Process of Wage Determination
Practically how wages are determined and maintained or administered in an organization is

very organization to organization. Ideally speaking it depends upon sole discretion that what
procedure an organization follows for wage and salary administration. More or less an
attempt is made by every organization to follow the principles suggested for sound
compensation management.
Organization tries to inculcate systematic procedure for wage determination and their
revision at an appropriate time. Process of wage determination includes job analysis and job
evaluation, survey of wages in the environment, determining wage structure, and deciding
rules for wage administration. Briefly these steps are discussed as under:
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Job Determining
Analysis Job Performance
Evaluation Standard
Rules, Deciding
Policies for Wage Wage
Wage & Structure Survey
Salary
Job Analysis
1. Job Analysis and Job Evaluation: This may be the primary exercise that an organization
needs to carefully carry out with an intention to create base for wage determination. Job
analysis reveals information about tasks, duties, responsibilities and standards with
proposed job is to be performed by the employees. It also guides in terms of job
specification i.e. skills, ability. Qualification and experiences needed to perform the job
with requisite performance standards. Another important exercise that an organization
needs to carry out is ‘Job Evaluation’. It is nothing but finding out relative worth of a job,
in terms its contribution and significance to the overall organizational objectives.
2. Determining Performance Standard and Wage Surveys: Having understood the job in
considerable detail an attempt is made to determine expected performance standard to
be carried out by the performer. Then, an organization must survey wage rates prevails
in the market for the same job or its similar type, so that attractive compensation
package can be designed to induce good quality of candidature to apply for the job in an
organization. Here care should be taken that wage structure should be in accordance
with the complexity and efforts needed in the performance.
3. Deciding Wage Structure and Rules for Its Administration: Based on collection of
relevant information and taking in to account some of the influencing factors, an
organization should design wage structure which includes slab for basic or minimum
wages, incentives, and/or increment over a period of time to gather with other financial
and nonfinancial perquisites to be offered to an employee. Attempt should be made to
follow principles of fairness, equity and justice to gather with transparency while
designing wage structure and deciding rules for its administration.
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1. Why Wage and Salary Administration is considered as a significant Human Resource

Management function? What principles an organization is require keeping in mind while
deciding compensation policy?
2. Discuss in detail different factors that generally affect compensation decision of an
organization.
3. What are the methods generally available to an organization for making wage payments?
Discuss their suitability together with their merits and demerits.
4. Elaborate standard procedure or mechanism that an organization follows for
determining Wage and salary structure together with the rationality attached with each
step
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UNIT 11 COMPENSATION AND INCENTIVES
Structure of Unit:
 Meaning and Definition of Compensation

 Objectives of Compensation Planning
 Factors Affecting Compensation Planning
 Various Modes of Compensation
 Kinds of Incentives
 Kinds of Fringe Benefits
Objectives
After reading this chapter, you will be able to understand:

 The objective of compensation planning.
 Various factors affecting compensation planning.
 Various modes of compensation.
 Concept of Incentives.
 Identify types of fringe benefits .
Introduction
One of the most difficult functions of personnel management is that of determining rates of
monitory compensation. It is not only duty for organisation but also equally important to
both the organisation and the employee. It is significant to organisation, because wages and
salaries constitute the greatest single cost of doing business and it important to the employer
because the earning is the only means of economics survival; it is the mean that influence the
standard of living, status in society, work as motivational factor, loyalty and productivity.
Compensation is a tool used by management for a variety of purpose to further the existence
of the company. It is a remuneration that an employee receives in return for his or her
contribution in the organisation. So, the employee compensation programs are designed to
attract capable employees to the organisation, to motivate them towards superior
performance and to retain their services over an extended period of time.
Meaning and Definition of Compensation

The word compensation may be defined as money received in the performance of work, plus
the many kinds of benefits and services that organization provides their employee. It refers to
wide range of financial and non-financial rewards to employee for their service rendered to
the organization. It is paid in the form of wages, salaries , special allowance and employee
benefits such as paid vacation, insurance, maternity leaves, free travel facility , retirement
benefits etc.
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According to Wendell French,” Compensation is a comprehensive term which includes
wages, salaries and all other allowance and benefits.”
Wages are the remuneration paid for skilled, semi-skilled and unskilled operative workforce.
Salary is the remuneration of those employees who provides mental labour to the employer
such as supervisor, office staff, executive etc wages are paid on daily or hourly basis where as
salary is paid on monthly basis.
Objectives of Compensation Planning
The basic purpose or objective of establishing sound compensation is to establish and

maintain an equitable rewards system. The other aim is the establishment and maintenance
of an equitable compensation structure i.e an optimal balancing of conflicting personnel
interest so that the satisfaction of employees and employers is maximised and conflicts
minimized, the compensation management is concerned with the financial aspect of
employees need, motivation and rewards. A sound compensation structure tries to achieve
these objectives:
 To attract manpower in a competitive market.
 To control wages and salaries and labour costs by determining rate change and
frequency of increment.
 To maintain satisfaction of employees by exhibiting that remuneration is fair
adequate and equitable. To induce and improved performance, money is an effective
motivator.
a) To Employees:
I. Employees are paid according to requirement of their jobs i.e highly skilled jobs are
paid more compensation than low skilled jobs. This eliminates inequalities.
II. The chances of favoritism are minimized.
III. Jobs sequence and lines of promotion are established wherever they are applicable.
IV. Employee’s moral and motivation are increased because of the sound compensation
structure.
b) To Employers:
I. They can systematically plan for and control the turnover in the organization.
II. A sound compensation structure reduces the likelihood of friction and grievance over
remunerations.
III. It enhances an employee morale and motivation because adequate and fairly
administrative incentives are basis to his wants and need.
IV. It attracts qualified employees by ensuring and adequate payment for all the jobs.
V. In dealing with a trade union, they can explain the basis of their wages programme
because it is based upon a systematic analysis of jobs and wages facts.
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Factors Affecting Compensation Planning
Factors determining compensation of an employee

considerable amount of guess word and negotiation are
involved. But following are the certain factors which have
been extracted as having an important bearing upon the
final decision:
a) Supply and Demand of Labour: Whatever the

organization produces as commodity they desire services and it must pay a price that of
workers acting in concert. If more the labour is required, such as at war time prosperity,
there will be tendency to increase the compensation; whereas the situation when
anything works to decrease the supply of labour, such as restriction by a particular labour
union, there will be a tendency to increase the compensation. The reverse of each
situation is likely to result in a decrease in employee compensation, provided, labour
union, ability to pay, productivity, government do not intervene
b) Ability to Pay: Labour Unions has often demanded an increase in compensation on the
basis that the firm is prosperous and able to pay.
c) Management’s Philosophy: Management’s desire to maintain or improve moral, attract
high calibre employees, reduce turnover, and improve employees standard of living also
affect wages, as does the relative importance of a given position to a firm.
d) Legislation: Legislation related to plays a vital role in determining internal organization
practices. Various acts are prescribed by government of country for wage hours laws.
Wage-hour laws set limits on minimum wages to be paid and maximum hours to be
worked.
Various Modes of Compensation
a) Wages and Salary- Wages represent

hourly rates of pay and salary refers to monthly
rate of pay irrespective of the number of hours
worked. They are subject to annual increments.
They differ from employee to employee and
depend upon the nature of jobs, seniority and
merit.
b) Incentives- These are also known as
payment by results. These are paid in addition to
wages and salaries. Incentive depends upon
productivity, sales, profit or cost reduction
efforts. Incentive scheme are of two types:
 Individual incentive schemes.
 Group incentive schemes.
c) Fringe Benefits- These are given to
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employees in the form of benefits such as provident fund, gratuity, medical care, hospitalization,
accident relief, health insurance, canteen, uniform etc.
d) Non- Monetary Benefits- They include challenging job responsibilities, recognition of merit,
growth prospects, competent supervision, comfortable working condition, job sharing and flexi
time.
Incentives
Incentives are monetary benefits paid to workmen in lieu of their outstanding performance.
Incentives vary from individual to individual and from period to period for the same individual. They
are universal and are paid in every sector. It works as motivational force to work for their
performance as incentive forms the part total remuneration. Incentives when added to salary
increase the earning thus increase the standard of living. The advantage of incentive payment are
reduced supervision, better utilisation of equipment, reduced scrap, reduced lost time, reduced
absenteeism and turnover & increased output.
According to Burack & Smith, “An incentive scheme is a plan or programmes to motivate individual
or group on performance. An incentive programme is most frequently built on monitory rewards
(incentive pay or monetary bonus), but may also include a variety of non monetary rewards or
prizes.
Kinds of Incentives
Incentives can be classified under the following categories:
1) Individual and Organizational Incentives- According to L.G. Magginson, “Individual incentives

are the extra compensation paid to an individual for all production over a specified magnitude
which stems from his exercise of more than normal skill, effort or concentration when accomplished
in a predetermined way involving standard tools, facilities and materials.” Individual performance is
measured to calculate incentive where as organizational or group incentive involve cooperation
among employees, management and union and purport to accomplish broader objectives such as
an organization-wide reduction in labour, material and supply costs, strengthening of employee
loyalty to company, harmonious management and decreased turnover and absenteeism.
I) Individual Incentive System is of two types:
 Time based System- It includes Halsey Plan, Rowan Plan, Emerson Plan and Bedeaux Plan
 Production based System- it includes Taylor’s Differential Piece Rate System, Gantt’s
Task and Bonus Plan
II) Group Incentive System is of following types
Some important these plans of incentive wage payments are as follows:
Halsey Plan
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Under this plan a standard time is fixed in advance for completing a work. Bonus is rewarded to the
worker who performs his work in less than the standard time and paid wages according to the time
wage system for the saved time.
The total earnings of the worker = wages for the actual time + bonus
Rowan Plan
Under this method minimum wages are guaranteed given to worker at the ordinary rate for the
time taken to complete the work. Bonus is that proportion of the wages of the time taken which the
time saved bears to the standard time allowed.
Emerson Plan
Under this system, wages on the time basis are guaranteed even to those workers whose output is
below the standard. The workers who prove efficient are paid a bonus. For the purpose of
determining efficiency, either the standard output per unit of time is fixed, or the standard time for
a job is determined, and efficiency is determined on the basis of a comparison of actual
performance against the standard.
Bedeaux Plan
It provide comparable standards for all workers. The value of time saved is divided both to the
worker and his supervisor in the ratio of ¾ and ¼ respectively. A supervisor also helps a worker in
saving his time so he is also given some benefit in this method. The standard time for each job is
determined in terms of minutes which are called Bedeaux points or B’s. Each B represents one
minute through time and motion study.
Taylor’s Differential Piece Rate System
F.W. Taylor, founder of the scientific management evolved this system of wage payment. Under this
system, there is no guarantee of minimum wages. Standard time and standard work is determined
on the basis of time study. The main characteristics of this system are that two rates of wage one
lower and one higher are fixed. Those who fail in attaining the standard, are paid at a lower rate and
those exceeding the standard or just attaining the standard get higher rate. Under this system, a
serve penalty is imposed on the inefficient workers because they get the wages at lower rates. The
basic idea underlying in this scheme is to induce the worker at least to attain the standard but at the
same time if a worker is relatively less efficient, he will lose much.
Gantt’s Task and Bonus Plan
In this, a minimum wage is guaranteed. Minimum wage is given to anybody, who completes the job
in standard time. If the job is completed in less time, then there is a hike in wage-rate. This hike
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varies between 25% to 50% of the standard rate.
Profit Sharing
It is a method of remuneration under which an employer pay his employees a share in form of
percentage from the net profits of an enterprise, in addition to regular wages at fixed intervals of
time.
2) Financial and Non-financial Incentives- Individual or group performance can be measured in

financial terms. It means that their performance is rewarded in money or cash as it has a great
impact on motivation as a symbol of accomplishment. These incentives form visible and tangible
rewards provided in recognition of accomplishment. Financial incentives include salary, premium,
reward, dividend, income on investment etc. On the other hand, non-financial incentives are that
social and psychological attraction which encourages people to do the work efficiently and
effectively. Non-financial incentive can be delegation of responsibility, lack of fear, worker’s
participation, title or promotion, constructive attitude, security of service, good leadership etc..
3) Positive and Negative Incentives- Positive incentives are those agreeable factors related to work
situation which prompt an individual to attain or excel the standards or objectives set for him,
where as negative incentives are those disagreeable factors in a work situation which an individual
wants to avoid and strives to accomplish the standards required on his or her part. Positive
incentive may include expected promotion, worker’s preference, competition with fellow workers
and own‘s record etc. Negative incentives include fear of lay off, discharge, reduction of salary,
disapproval by employer etc.
Fringe Benefits
Employees are paid several benefits in addition to wages, salary, allowances and bonus. These
benefits and services are called ‘fringe benefits’ because these are offered by the employer as a
fringe. Employees of the organization are provided several benefits and services by the employer to
maintain and promote employee’s favorable attitude towards the work and work environment. It
not only increases their morale but also motivate them. These provided benefits and services forms
the part of salary and are generally refereed as fringe benefits.
According to D. Belcher, “Fringe benefits are any wage cost not directly connected with the
employee’s productive effort, performance, service or sacrifice”.
According to Werther and Davis, “Fringe embrace a broad range of benefits and services that
employees receive as part of their total compensation, package-pay or direct compensation and is
based on critical job factors and performance”.
According to Cockman, “Employee benefits are those benefits which are supplied by an employer
to or for the benefits of an employee and which are not in the form of wages, salaries and time
rated payments”. These are indirect compensation as they are extended condition of employment
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and are not related to performance directly.
Kinds of Fringe Benefits
The various organizations in India offer fringe benefits that may be categorized as follows:
1. Old Age and Retirement Benefits - these include provident fund schemes, pension schemes,
gratuity and medical benefits which are provided to employee after their retirement and during
old age as a sense of security about their old age.
2. Workman’s Compensation - these benefits are provided to employee if they are got ignored or
die under the working conditions and the sole responsibility is of the employer.
3. Employee Security- Regular wage and salary is given to employee that gives a feeling of security.
Other than this compensation is also given if there is lay-off or retrenchment in an organization.
4. Payment for Time Not Worked – Under this category of benefits, a worker is provided payment
for the work that has been performed by him during holidays and also for the work done during
odd shifts. Compensatory holidays for the same number in the same month are given if the
worker has not availed weekly holidays.
5. Safety and Health – Under this benefit workers are provided conditions and requirements
regarding working condition with a view to provide safe working environment. Safety and Health
measures are also taken care of in order to protect the employees against unhealthy working
conditions and accidents.
6. Health Benefits – Employees are also provided medical services like hospital facility, clinical
facility by the organization.
1. Describe compensation and its various modes?

2. Explain various factors affecting compensation planning?
3. What do you understand by individual and group incentive? Discuss them with their
relative advantage and demerits?
4. What do you understand by fringe benefits? What are its essential features?
Page - 120
UNIT 12 GRIEVANCE HANDLING
Structure:
 Introduction
 Nature of Grievance
 Forms of grievances
 Sources of grievances
 Grievances and arbitration
 Recording of grievances
Objectives
After reading this chapter, the student will be able to understand:

 The objective of Grievance handling
 Various sources and forms of grievances.
 Procedure to handle grievances
Introduction:
Grievance is all about violation of the contract, practices, rules and regulations. As human beings
are different there is bound to be grievances among employees leading to conflicts at the workplace.
To avert any kind of conflicts within the organization, there is need for a proper grievance procedure
so that the employees feel that their grievances are addressed and redressed.
Meaning of Grievance:
According to Michael Jucius, “ A grievance can be any discontent or dissatisfaction, whether

expressed or not, whether valid or not, and arising out of anything connected with the company that
an employee thinks, believes, or even feels as unfair, unjust, or inequitable.”
A grievance means any discontentment or dissatisfaction in an employee arising out of anything

related to the enterprise where he is working. It may not be expressed and even may not be valid.
It arises when an employee feels that something has happened or is going to happen which is unfair,
unjust or inequitable. Thus, a grievance represents a situation in which an employee feels that
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something unfavorable to him has happened or is going to happen. In an industrial enterprise, an
employee may have grievance because of long hours of work, non-fulfillment of terms of service by
the management, unfair treatment in promotion, poor working facilities, etc.
Nature of Grievance:
While dealing with grievances of subordinates, it is necessary to keep in mind the following points:
 A grievance may or may not be real.
 Grievance may arise out of not one cause but multifarious causes.
 Every individual does not give expression to his grievances.
Forms of Grievances:
Grievances can be identified in three forms.
1. Factual:
 When an employee is dissatisfied with his job, for genuine or factual reasons like a breach of
terms of employment or any other reasons that are clearly attributed to the management,
he is said to have a factual grievance.
 Thus, factual grievances arise when the legitimate needs are unfulfilled.
 The problem that he has is real and not virtual
2. Imaginary:
 When an employee’s grievance or dissatisfaction is not because of any factual or valid reason
but because of wrong perception, wrong attitude or wrong information he has.
 Such a grievance is called an imaginary grievance.
 Though it is not the fault of management, the responsibility of dealing with it still rests with
the management.
 So the problem is not real. It is in the mind or just a feeling towards someone or something.
One has to be careful to understand that a grievances could be very much imaginary.
3. Disguised:
 An employee may have dissatisfaction for reasons that are unknown to himself.
 This may be because of pressures and frustrations that an employee is feeling from other
sources like his personal life.
Sources of Grievances:
For a real grievance to have occurred there must have been a violation of an employee's rights on
the job. Also, it must have been the employer or one of his/her agents like a supervisor or manager
who has violated these rights, directly or indirectly. If an employee makes a complaint that doesn't
involve the employer in some way, one may still have to deal with it, but it won't be a grievance.
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Most grievances are "real" in the sense that we are sure the employer has violated someone's rights
but this doesn't mean we will always win the case. We are limited by the contract, by our skills, or
by how much union power we have. So a grievance can turn out to be no more than an "alleged
violation" or even just a complaint. The kinds of grievances that may occur under the contract are:
a. Wage Grievance – grievances resulting because of failure to pay the amount which was
agreed upon. This may include:
 starting pay
 automatic increase merit increase
 improper classification of job employee wrongly classified shift premium
 vacation pay or bonus call-in pay
 improver incentive or piece rate
b. Wage Inequities : Such grievances are usually handled through collective bargaining
negotiations or through supplementary wage agreements
c. Assignment and Placement of Workers

 improper transfer (violation of seniority clause) improper promotion
 improper allocation of work (as in overtime)
 improper layoff or recall
d. Disciplinary Action because of:

 unreasonable rule
 penalties without just cause
 employees not properly notified of rule or penalties reprimand (recording warning)
 disciplinary layoffs discharge
e. Physical Working Conditions : grievances resulting because of unsafe or unhealthy working

conditions (could be a violation of provincial, state or federal safety laws or workplace rules).
f. Supervisory Practices
 abuse of authority intimidation or coercion over-supervision (snooping)
 inadequate supervision (failure to instruct properly)
 supervisor working on bargaining unit jobs discrimination
 favoritism
g. Personal Rights and Privileges

 leaves of absence
 failure to accord equal treatment (discrimination)
i. Violation of Union Rights

 failure to give proper representation undermining the union
 undermining grievance procedure
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j. Other Contract Violations some contracts may contain clauses not covered by the
above lists
Who is aggrieved?
We can classify grievances according to where they come from and how they arise, but we can
also look at them according to who is affected.
• Individual grievances
Most grievance affect only a single individual. It is in the interests of everyone in the union
that the grievance is handled properly, bearing in mind the interests of the union as well as
the griever. And, when an individual's rights have been violated and he or she refuses to file
a grievance, one should file the grievance on behalf of the union especially if the contract
specifically permits
 Group grievances
This is where several employees have the same complaint. Usually one files the grievance
on behalf of the group (who must be clearly named or defined) though there is nothing
wrong with filing a series of individual grievances dealing with the same issue.
• Union grievance or policy grievance

The union grievance is one that is filed by the union on behalf of a group of individuals or
the whole bargaining unit or on behalf of an individual who refuses to file it. Invariably, a
union grievance is one in which the union considers its rights to have been violated, and
not just the rights of individuals in the bargaining unit.
When is a complaint not a grievance?
If the management has not violated anyone's rights, there is no grievance. But, there may
be a real complaint, and if you are a good steward you will deal with complaints as seriously
as you would a grievance. Here are some types of complains:
• Personal troubles and requests for advice : You will often find that people want to
confide in you. Treat them sympathetically; try to help them and keep confidences
strictly to yourself.
• Complaints about fellow workers : These need a lot of tact, diplomacy and moral
authority on your part. This sort of complaint becomes a grievance if management
gets involved when it shouldn't, ac-cording to the contract or past practice -- or it
doesn't get involved when it should.
• Complaints against management not covered by the contract: There may be cases
you have to face which do not involve an injustice, do not violate past practice and
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are not covered by the contract. It still may be possible to remedy these complaints
by informal discussions between the union (you) and the employer.
• Borderline cases : You should seek advice from the superior or the grievance
committee before taking these up as grievances. Report back to the person
complaining as soon as possible, explaining what you are doing and why.
Recording the grievance
When an employee comes to you with a complaint you should always make a note for your
files listing the person, problem, date, supervisor and workplace. Also you should request the
employee to write down the facts and keep an ongoing log of events that take place
pertaining to the complaint. This is a safeguard in the event the complaint becomes a
legitimate grievance and proceeds through the various steps of the grievance procedure.
Trying to recall times, places and actions from memory is highly ineffective in grievance
handling. Should you fail to settle the grievance at the first, informal step, the union will need
these records in drafting the formal grievance statement. It is important for the union to keep
records of grievances handled at the informal step, so send your documentation to your
union representative if it is resolved.
A complaint formally enters the grievance procedure when it is presented in writing. The
steward, who normally has the responsibility for submitting the grievance for writing to the
union, should do so only after completing Step I of the grievance procedure. When
submitting the grievance to the union the steward should check carefully to make sure the
Six W's - WHO, WHEN, WHERE, WHY WHAT and WITNESSES of the grievance form are
covered.
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WHO: Refers to the employee filing the grievance and the supervisor (if any) involved.
WHEN: Refers to the time element. Often information regarding more than one date is
needed to complete the form properly: (1) the date on which the grievance is officially
written; (2) the time and date on which the grievance actually happened; (3) the date on
which the grievance was submitted to the immediate supervisor (first or informal step of the
grievance procedure); and, (4) the date on which the immediate supervisor gave a decision.
WHERE: Refers to the exact place where the grievance took place - the department, aisle,
office, terminal or plant.
WHY: Refers to the reason the complaint is considered a grievance. The WHERE and WHY
are described under the section "Statement of Grievance" and must be clearly stated to
obtain a clear picture of the facts. It is important to remember that it is possible to have a
legitimate grievance without being able to point to a violation of a specific clause of the
contract.
WHAT: Refers to what should be done about the grievance - the corrective action desired
and what adjustment is expected.
WITNESSES : If a particular incident took palace which gave rise to the grievance, the
names of any witnesses who say what occurred should be listed on the grievance form.
This should include the address and phone number of all witnesses.
Both the employee and the steward should sign the grievance form. The employee's
signature verifies the facts of the grievance.
Understanding the quality of information
As one begins to investigate a grievance one will realize that the information one gathers
usually falls into two categories:
a. specific measurable information; and,

b. non-specific or un measurable information.
Both types of information will surface; however, non- specific information has little use in
grievance handling. Although "specific" information seems to be fairly cut and dry on the
surface, it can be very misleading. For example, take the area of absenteeism. If the
grievance involves employee absenteeism, check for reasons, don't rely on the numbers
alone. A person out for three weeks due to hospitalization would show 15 days absent from
work. Whereas an employee who is down and out about one day a month for general illness
might not show but 8- 10 days absent. If reasons are not examined, the person with the
Page- 126
most days absent could be wrongly labeled as "excessively absent."
The investigator must also make sure that the information is clear. A worker has had
production problems on his/her record which look pretty bad. Investigator may find that the
supervisor ordered him/her to do non-productive work during his/her regular operation.
Additional investigation must take place to determine the importance of this information.
A frequently used piece of information is years of education. Some questions that might be
raised include: How good was the education or training? Does his/her education help a
worker to do a better job? Will any subject taken in school help a worker to do the job that is
now open? After answering these kinds of questions, investigating officer can, then,
determine the value of education in a union member's record. Years of education alone do
not help very much.
The same can be said for absenteeism, tardiness and medical records. An investigating officer
must find out how long ago they happened, reasons for the occurrences, whether the
reasons apply to present situations, whether the record looks poor in comparison to records
of other workers.
Information that is non-specific and cannot be measured is some words frequently used to
describe a person or his/her behaviors have little or no use in processing grievances. They
include the following:
 Ability
 Attitude
 Personality
 Character
 Disability
The word "ability" can be defined in terms of production, quality of work, and possibly
attendance and medical records. But the word "ability' alone has very little meaning.
Supervisors have said, "I can tell that one worker has more ability than another." If it cannot
be measured and has no clear meaning, this statement is nothing more than a supervisor's
opinion may be accurate, may be inaccurate. The skilled investigating officer must require
proof for the statement, proof that is measurable and has clear meaning.
One person's opinion about another person's attitude may be very different from other
peoples' opinions. There is no way to specifically compare people's personalities and
character. How do you know that one worker is more pleasant than another or one worker
is more honest than another? And, even if we did, what does that have to do with a
worker's ability to produce for his/her employer? Should a person be punished because
he/she does not smile as frequently as another, or disagrees with his supervisor? The
Page- 127
investigating officer must know the circumstances surrounding the sour disposition or
disagreement.
A series of disagreements may involve the worker's rights under their union contract or
refusal to accept the improper procedure demanded by their supervisor. The emphasis on
proof helps cut through the main accusations made against workers that are accepted
without challenge.
Authority of supervisor
The degree to which grievances are successfully handled at the first step is largely dependent
on the authority granted the supervisor. In some cases the supervisor is only the
"messenger" for the management representative in the next step of the grievance
procedure. If this situation exists, few settlements will take place at the first level.
It is important to observe the steps in the grievance procedure even if the supervisor has
limited authority. "Leapfrogging" to a higher step may have several undesirable effects. The
supervisor may resent this and may be more difficult to deal with the next time, or
management may seek to get the grievance thrown out because the proper steps were not
followed. Even the best investigating officer will, from time to time, have trouble in settling
grievances because of various tactics used by the supervisor.
Failure to reach agreement
If the steward is unable to obtain a settlement, he/she should tell the supervisor that the
grievance will be taken to the next step in the grievance procedure. The steward should
inform the employee of what has happened. In addition, the steward should brief the chief
steward or the union representative who is involved in the next step of the grievance
procedure, as to the main line of argument taken by the supervisor.
The way in which the steward has handled and documented the grievance up to this point
will have quite an impact on the way the union representative at the next step will proceed.
The union representative has very little to go on other than the background information
received from you - the first line representative.
The steward should be careful never to guarantee the employee a successful settlement of
the problem. What appears to be an airtight case is sometimes completely destroyed upon
further investigation. It may be difficult to convince the employee why the case was lost.
The steward should be prepared to process vigorously the grievances of all the employees
he/she represented regardless of their personal feelings about them. This should be done
both as a matter of justice and as a method of ensuring that dangerous precedents involving
contract violations are not established.
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Since the employee wants their grievance settled "today," or "tomorrow at the latest," it is
important that he/she be kept informed on the progress of the case. Sometimes it may take
months before a grievance is completely processed. Therefore, an employee should be in-
formed of the various time limitations in the procedure which make a more rapid settlement
impossible.
1. What is grievance procedure? Bring out its merits and demerits.

2. What is arbitration? How does it help resolve industrial conflict?
3. How does arbitration differ from grievance procedure? Bring out the respective roles in
resolving disputes
Page- 129
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MINISTRY OF COMMERCE & INDUSTRY

INTEGRATED PROGRAM IN RETAIL

HUMAN RESOURCE MANAGEMENT

PREPARED BY: MS. AASTHA GARG

FDDI SCHOOL OF RETAIL MANAGEMENT

Sr. No. Content Page Number

1 Introduction to Human Resource management 3

2 Human Resource Planning 17

3 Job Analysis and Job Design 29

7 Human Resource Development- Employee Training 73

8 Human Resource Development-Executive Development 83

10 Wage and salary Administration 104

11 Compensation and Incentives 114

12 Grievance Handling 121

After studying this unit, the student will be able to:

 Understand the basic concepts of human resource management (HRM).

What is Human Resource Management?

HRM is the study of activities regarding people working in an organization. It is a managerial

Human resources management (HRM) is a management function concerned with hiring,

HRM is the personnel function which is

e) Organizational Development: This is an important aspect whereby “Synergetic effect” is

g) Employee Assistance: Each employee is unique in character, personality, expectation and

i) Personnel Research and Information System: Knowledge on behavioral science and

2) Organizational Objectives: it recognizes the role of HRM in bringing about organizational

3) Functional Objectives: is to maintain the department’s contribution at a level

4) Personnel Objectives: it is to assist employees in achieving their personal goals, at least

Human Resources management has an important role to play in equipping organizations to

Additionally, external forces—legal, economic, technological, global, environmental,

o Equal Employment Opportunity: Compliance with equal employment opportunity (EEO)

o Likewise, HR development and succession planning of employees and managers is necessary

o Performance appraisal includes encouraging risk taking, demanding innovation, generating

a. To develop a thorough knowledge of corporate culture, plans and policies. To act as an

Current Classification of HR roles

2. Operational and Employee Advocate Role for HR

3. Strategic Role for HR

HRM in the New Millennium

1. HR Can Help in Dispensing Organizational Excellence: To achieve this paradigm shift in

HR should be a representative of the employees and should help the organization in

2. Human Resource Should be a Strategy Partner: HR should also become a partner in

3. HR Accountability Should be Fixed to Ensure Employee Commitment: HR must be held

6. Change in Employment Practices: The balance sheet of an organization shows human

7. Benchmarking Tool Must be Mastered by HR Professionals: HR professionals must

UNIT 1 REVIEW QUESTIONS

a) Define HRM? What are its functions and objectives?

After studying this unit, the student will be able to:

 Understand the nature and need of HRP

Staffing an organization is an HR activity that is both strategic and operational in nature. As

Human Resource Planning (HRP)

Definition of Human Resource Planning

According to Vetter, “HRP is the process by which

According to Gordon Mc Beath, “HRP is concerned

Simply HRP can be understood as the process of forecasting an organization’s future

HRP is a Four-Phased Process.

Objectives of Human Resource Planning

1. To ensure optimum utilization of human resources currently available in the

 To link manpower planning with the Organizational planning

HR needs are computed by subtracting HR supplies or number of the employees available

The objectives of human resource planning may be summarized as below:

Need for HRP in Organizations

Major reasons for the emphasis on HRP at the Macro level: