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FChapter 1 Introduction to human resource management

• Definition of HRM

• Features

•

Scope / functions of HRM• Definition of Personnel mgmt

• Evolution of HRM / Trends in HRM

• Difference b/w HRM & PM

• Challenges before the HR manager

• Role of HR manager

• Traits / characteristics of workforce

• Personnel Philosophy

• Personnel Mannual

Introduction:

The advent of the era of liberalization and globalization along withthe advancements in information technology (IT) has transformedthe world around us. It has brought to centre stage the importanceof HR, more than ever before. The purpose of HRM is to enableappropriate deployment of HR.

In a competitive scenario, effective utilization of HR has becomenecessary and the primary task of organizations is to identify, recruitand channel competent HR into their business operations forimproving productivity and functional efficiency.

Effective utilization of HR would lead to both accomplishment of individual and organizational goals and creation of assets at thenational level.

Meaning of HRM:

HRM is a part of the management process which is primarilyconcerned with human constituents of an organization, so as toachieve objectives of the organization and potential of employees.Growth of organizations can partly be stopped or hampered as theycan’t maintain an efficient and enthusiastic HR functions. Like- wisethe procurement, development compensation, integration andmaintenance of human factor in the organization is highly importantfor organization’s success. HRM looks after all these functions andare part of HRM.

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Objectives of HRM:

• To contribute to strategic business goals.

• To acquire right men at right jobs at right time in right number.

•

To train and develop the procured people adequately.• To compensate and reward them adequately.

• To motivate, satisfy and maintain high morale of employees.

• To ensure respect to these employees and establishharmonious relations.

• To integrate them into the organization by achievingemployees and organization goals.

• To develop value based organization culture towardsorganization development and high performance.

Definition: (concept for 3 marks) - Edwin Flippo defines HRM as“planning, organizing, directing, and controlling of procurement,development, compensation, integration, maintenance andseparation of human resources to the end that individual,organizational and social objectives are achieved.”

Features of HRM or characteristics or nature (3 or 4 marks)

1. HRM involves management functions like planning, organizing,

directing and controlling

2. It involves procurement, development, maintenance of humanresource

3. It helps to achieve individual, organizational and socialobjectives

4. HRM is a multi-disciplinary subject. It includes the study of management, psychology, communication, economics and

sociology.

5. It involves team spirit and teamwork.

Scope of HRM

The scope of HRM refers to all the activities that come under thebanner of HRM. These activities are as follows

1. Human resources planning: -

Human resource planning or HRP refers to a process by whichthe company identify the number of jobs vacant, whether the

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company has excess staff or shortage of staff and to deal withthis excess or shortage.

2. Job analysis & design: -Another important area of HRM is job analysis. Job analysisgives a detailed explanation about each and every job in thecompany. Based on this job analysis the company preparesadvertisements.

3. Recruitment and selection:Based on information collected from job analysis the companyprepares advertisements and publishes them in thenewspapers. This is recruitment. A number of applications arereceived after the advertisement is published, interviews are

conducted and the right employee is selected thus recruitmentand selection are yet another important area of HRM.

4. Orientation and induction: -Once the employees have been selected an induction ororientation program is conducted. This is another importantarea of HRM. The employees are informed about thebackground of the company, explain about the organizationalculture and values and work ethics and introduce to the otheremployees.

5. Training and development: -Every employee goes under training program, which helps himto put up a better performance on the job. Training program isalso conducted for existing staff that has a lot of experience.

This is called refresher training. Training and development isone area where the company spends a huge amount.

6. Performance appraisal: -Once the employee has put in around 1 year of service,

performance appraisal is conducted that is the HR departmentchecks the performance of the employee. Based on theseappraisal future promotions, incentives, increments in salaryare decided.

7. Compensation planning and remuneration: - There are various rules regarding compensation and otherbenefits. It is the job of the HR department to look intoremuneration and compensation planning.

8. Motivation, welfare, health and safety: -

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Motivation becomes important to sustain the number of employees in the company. It is the job of the HR departmentto look into the different methods of motivation. Apart fromthis certain health and safety regulations have to be followedfor the benefits of the employees. The HR department alsohandles this.

9. Industrial relations: -Another important area of HRM is maintaining co-ordinalrelations with the union members. This will help theorganization to prevent strikes lockouts and ensure smoothworking in the company.

Challenges before the HR manager/before modern personnel

management

INTRODUCTION

Globalization of Indian economy is compelling organizations torethink their future strategies. It is now widely recognized thattransformation is a pre-requisite to their survival and growth.Business organization in India especially public enterprises areexperiencing winds of change. For the HR function, there would notbe a more existing and challenging opportunity than managing the

complexities of change and transformation. HR today is playing alead role along with business functions in creating the necessarymomentum and internal capabilities. Also, globalization has elevatedthe importance of HRM development in organization. These changeshave led to the notion of the HR system as a strategic asset.1. Corporate reorganizations:

The last 2-3 decades have been characterized by acquisition andmergers of almost unbelievable proportions as well as other forms of corporate reorganization. There have been instances of onecorporation purchasing another, two corporations joining forces,

companies undergoing massive reorganization. Virtually in everymajor industry, the number of major players is shrinking. Thereorganization continues in an effort to improve competitiveness,either by cutting layers of managers and restructuring the workforces or by gaining economies through combining efforts.

It is difficult to imagine circumstances that pose a greater challengefor HR management. Large mergers also involves overlappingcompanies (HP & Compaq), seeking economies of scale thrucombined efforts.

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Even, sometimes complexity of the situation may slow down theentire process. In the meantime, employees are left wonderingwhat, if any, role they will play in the “new organizations.”Employees may face these potential changes: (jet airways – airsahara merger)

• Loss of job, pay, benefits.

• Job changes, including new roles and assignments.

• Transfer to a new geographic location.

• Changes in compensation and benefits.

• Staff changes, including new bosses, colleagues, andsubordinates.

• Change in corporate culture, loss of identity.

2. Workplace flexibility: It is expected to be on the rise as thefuture workplace, the ‘virtual office’ is characterized by creative andflexible work arrangements. As more employees work off-site-up,there will be an increase in emphasis on performance and resultsas opposed to the number of hours worked. In addition, off-siteemployees can expect to attend fewer meetings. Specified work willbecome much more collaborative and management will spendnearly all its time managing cross-functional work teams (A cross-functional team is a group of people with different functionalexpertise working toward a common goal. It may include peoplefrom finance, marketing, operations, and human resourcesdepartments.), which will enjoy a lot of autonomy. In essence, therewill be a movement, a trend towards a decentralized model of HR.

HR managers will have to accommodate employees in their virtualwork locations and find ways to manage corporate culture,socialization and employee orientation. In order to obtain andmaintain a competent workforce, they must act as organizationalperformance experts and shape employees behavior without face toface meetings. (HRM Review – May 2010 pg.16)

3. Retention of the employees: -One of the most important challenge the HR manager faces isretention of labor force. Earlier was the time, when an employeewould join the organization for a longer period of time. But withample opportunities available to a candidate, he/she may not havesuch a long time vision to be with the organization. This may affectthe company and its productivity apart from harming the candidateon his personal front. Due to this, many companies have a very high

rate of labor turnover therefore HR manager are required to take

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some action to reduce the turnover. Higher the rate of turnover,lower the good will of the organization.

4. Retrenchment during recession and other face: The recentrecessionary face was very challenging for HR managers across theworld. In many places companies reduced the work force due tochanging economic situations. Workers / employees who weredisplaced faced severe problems. Such a situation also leads to anegative atmosphere and attitude among other employees. It leadsto fear and increasing resentment against the management. Thechallenge before the HR manager lies in implementing theretrenchment policy without hurting the sentiments of the workers,without antagonizing the labor union and by creating positiveattitude in the existing employees. (HRM Review may 2010- pg 15,

“innovative practices of cost-cutting) 5. Women in the work force: -

The number of women who have joined the work force hasdrastically increased over a few years. Women employees facetotally different problems. They also have responsibility towards thefamily. The organization needs to consider this aspect also. Thechallenge before the HR manager lies in creating gender sensitivityand in providing a good working environment to the womenemployees. (6 months leave for central/state govt.. women

employees) (woman child example, journalism example-time shifts,facilities to pregnant woman) (may not be a part of policy, worktiming flexibility) (HRM Review May 2010, pg12, “second careerinternship program”, May 2010, pg 12)

6. Handicapped employees: - This section of the population normally faces a lot of problems onthe job, very few organization have jobs and facilities speciallydesigned for handicapped workers. Therefore the challenge beforethe HR manager lies in creating atmosphere suitable for such

employees and encouraging them to work better.

Significance/importance/need of HRM (5/10mks)

HRM becomes significant for business organization due to thefollowing reasons.

1. Objective: -HRM helps a company to achieve its objective from time

to time by creating a positive attitude among workers.

Reducing wastage and making maximum use of resources etc.

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2. Facilitates professional growth: -Due to proper HR policies employees are trained well and

this makes them ready for future promotions. Their talent canbe utilized not only in the company in which they are currentlyworking but also in other companies, which the employeesmay join in the future.

3. Better relations between union and management: -Healthy HRM practices can help the organization to

maintain co-ordinal relationship with the unions. Unionmembers start realizing that the company is also interested inthe workers and will not go against them therefore chances of going on strike are greatly reduced.

4. Helps an individual to work in a team/group: -Effective HR practices teach individuals teamwork andadjustment. The individuals are now very comfortable whileworking in team thus teamwork improves.

5. Identifies person for the future: -Since employees are constantly trained, they are ready tomeet the job requirements. The company is also able toidentify potential employees who can be promoted in thefuture for the top-level jobs. Thus one of the advantages of

HRM is preparing people for the future.

6. Allocating the jobs to the right person: -If proper recruitment and selection methods are followed, thecompany will be able to select the right people for the right

job. When this happens the number of people leaving the jobwill reduce as the will be satisfied with their job leading todecrease in labor turnover.

7. Improves the economy: -

Effective HR practices lead to higher profits and betterperformance by companies due to this the company achieves achance to enter into new business and start new ventured thusindustrial development increases and the economy improves.

Personnel Vs Human Resources at Various levels

Human Resources denotes the total sum of all the components -skills, creative ability etc. - with all the people (employed, self-employed, unemployed, employers, owners etc.) whereas personnel

are limited to employees of organizations only.

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Human Resources, even at the organization level, includes allresources of all the people who contribute their services to theachievement of organizational goals and also others who contributetheir services to create hurdles in the achievement of the said goals.

Functions of Human Resources Management:.

There are two broad functions of H R M. They are:

1. Managerial Functions2. Operational Functions

Managerial Functions:Managerial functions of Personnel management include planning,

organizing, directing, co-ordinating and controlling.

Planning:It is the charting out of programmes and changes in advance in theachievement of organizational goals. Hence, it involves planning of human resources requirements, recruitment, selection, training etc.It also involves forecasting of personnel needs, changing values,attitudes and behaviour of their employees and their impact on theorganization.

Organizing:In the words of J.C. Massie, an organization is a "structure andprocess by which co-operative groups of human beings allocated itstasks among its members, identifies relationships and integrates itsactivities towards a common objective." Given the complexrelationships that exist between specialized departments and thegeneral departments, many top managers seek the advice of personnel manager. In this manner, the organization establishesrelationships among the employees so that they can togethercontribute to the achievement of organizational goals.

Directing:After planning and organizing comes the execution of the plan. Thewilling and effective co-operation of employees towards theachievement of organization’s goal has to be brought about byproper direction. Identifying and utilizing maximum potentials of people is possible through motivation and command. Direction,therefore, is an important managerial function in ensuring optimumemployee contribution.

Co-ordinating:

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It is the task of matrixing various employees’ efforts to ensuresuccessful goal achievement. The Personnel manager co-ordinatesvarious managers at different levels as far as the personnelfunctions are concerned.

Controlling:After planning, organizing, directing and coordinating, the variousactivities, the performance is to be verified in order to know, atvarious points of time, whether the activities are performed as perplans and directions. It involves checking, verifying and comparingactual with the plans, identification of deviations if any andcorrecting the deviations. Auditing training programmes, analyzinglabor turnover, overseeing morale surveys, conducting exitinterviews are some of the controlling functions of personnel

management.

Operative Functions: The operative functions of H R M relate to employment,development, compensation and relations. All these are interactedby managerial functions. Also, they are to be performed inconjunction with management functions.

Human Resources PlanningRecruitment

EMPLOYMENT SelectionInduction

Placement

Performance Appraisal Training

HUMAN RESOURCE Management DevelopmentDEVELOPMENT Career Planning &

DevelopmentOrganization Change &Organization Development

Job EvaluationCOMPENSATION Wage & Salary Administration

MANAGEMENT Fringe Benefits

Motivation

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MoraleHUMAN RELATIONS Job Satisfaction

CommunicationGrievance & Disciplinary

ProceduresQuality of Work Life & QualityCircles

Definition of Personnel Management:

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Role of HR Manager:

The role of the HR manager must parallel the needs of his or herchanging organization. Successful organizations are becoming moreadaptive, flexible, quick to change direction and customer-centered.Within this environment, the HR professional, who is considerednecessary by line managers, is a strategic partner, an employeesponsor or advocate and a change mentor.

Strategic Partner

In today’s organizations, to guarantee their viability and ability to

contribute, HR managers need to think of themselves as strategicpartners. In this role, the HR person contributes to the developmentof and the accomplishment of the organization-wide business planand objectives.

The HR business objectives are established to support theattainment of the overall strategic business plan and objectives. Thetactical HR representative is deeply knowledgeable about the designof work systems in which people succeed and contribute. Thisstrategic partnership impacts HR services such as the design of workpositions; hiring; reward, recognition and strategic pay; performancedevelopment and appraisal systems; career and successionplanning; and employee development.

Employee Advocate (support)

As an employee sponsor or advocate, the HR manager plays anintegral role in organizational success via his knowledge about andadvocacy of people. This advocacy includes expertise in how to

create a work environment in which people will choose to bemotivated, contributing, and happy.

Fostering effective methods of goal setting, communication andempowerment through responsibility, builds employee ownership of the organization. The HR professional helps establish theorganizational culture and climate in which people have thecompetency, concern and commitment to serve customers well.

In this role, the HR manager provides employee developmentopportunities, employee assistance programs, gain sharing and

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profit-sharing strategies, organization development interventions,due process approaches to problem solving and regularly scheduledcommunication opportunities.

Change Champion

The constant evaluation of the effectiveness of the organizationresults in the need for the HR professional to frequently championchange. Both knowledge about and the ability to execute successfulchange strategies make the HR professional exceptionally valued.Knowing how to link change to the strategic needs of theorganization will minimize employee dissatisfaction and resistanceto change.

The HR professional contributes to the organization by constantlyassessing the effectiveness of the HR function. He also sponsorschange in other departments and in work practices. To promote theoverall success of his organization, he champions the identificationof the organizational mission, vision, values, goals and action plans.Finally, he helps determine the measures that will tell hisorganization how well it is succeeding in all of this.

The HR manager’s role is very delicate otherwise, as he is caught

between the conflicting interests of management and labor. He hasto be loyal to the management but also should honor his duties tothe workers.

PERSONNEL VS HUMAN RESOURCES MANAGEMENT

PersonnelManagement

Human ResourcesManagement

1. Personnel meanspersons employed.

Personnel managementis the management of people, skills employed.

1. Human Resourcesmanagement is the

management of employees’ knowledge,abilities, talents,aptitudes, creativeabilities etc.

2. Employee in personnelmanagement is mostlytreated as an economicman as his services areexchanged for wage /

salary.

2. Employee inhuman resourcemanagement is treatednot only as economicman but also as social

and psychological man. Thus, the complete man

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is viewed under thisapproach.

3. Employee is viewed asa commodity or tool or

equipment which can bepurchased.

3. Employee is treated asa resource.

4. Employees are treatedas cost centres andtherefore managementcontrols the cost of labor.

4. Employees are treatedas profit centres andtherefore, invests capitalfor human resourcedevelopment and futureutility.

5. Employees are usedmostly for the

organizational benefit.

5. Employees are usedfor the multiple benefits

of the organisation,employees and theirfamily members.

6. Personnel function istreated as only asecondary function.

6. Human resourcesmanagement is aStrategic Managementfunction.

EVOLUTION OF HRM

HRM emerged during the 1970s. People continued to refer to it byits older, more traditional title such as personnel management.

With the change in time, even the trend of calling PM changed toHRM. The concern for the welfare of workers in the management of business enterprises has been in existence since ages. Kautilya’sArthashastra states that there existed a sound base for systematicmanagement of resources during as early as the 4th century BC.

Elsewhere, HR in organizations received the management’sattention much earlier. As early as in 1800 BC itself, ‘minimum wagerate’ and ‘incentive wage plan’ were included in the BabylonianCode of Hammurabi.

Experts of HRM in our country have tried to chronicle the growth of the subject only since the 1920s. This was the period when stateintervention to protect the interests of workers was felt necessarybecause of the difficult conditions which followed the First WorldWar (1914 – 1918), and the emergence of trade unions. The royal

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Commission (1931) recommended the appointment of labor-welfareofficers to deal with the selection of workers and to settle theirgrievances. The factories act 1948, made appointment of welfareofficers compulsory in industrial establishments employing 500 ormore workers each.

In course of time, two professional bodies, the Indian Institute of Personnel Management (IIPM) and the National Institute of LaborManagement (NILM), were set up. IIPM had its headquarters atKolkata and NILM at Mumbai. These two places were the premiercenters of traditional industry (jute and cotton respectively) in pre-independent India.

The aftermath of Second World War (1939 – 1945) and the country’s

political independence witnessed increased awareness andexpectations of workers. During the 1960s the personnel functionbegan to expand beyond the welfare aspect, with labor welfare. IRand personnel administration integrating into the emergingprofession called personnel management (pm). Simultaneously, themassive thrust given to the heavy industry in the context of plannedeconomic development, particularly since the 2nd Five year plan andthe accelerated growth of the public sector in the national economyresulted in a shift in focus towards professionalization of management.

By the 1970s, a shift in professional values was visible. It shiftedfrom a concern for welfare to a focus on efficiency. In the 1980s,professionals began to talk about new technologies, HRM challengesand HRD. The two professional bodies, IIPM & NILM, merged in 1980to form the National Institute of Personnel Management (NIPM).

In the 1990s, the emphasis shifted to human values and productivitythrough people. Reflecting this trend, the American society forpersonnel administration (ASPA) was renamed as the Society for

Human Resource Management (SHRM). Thus, beginning in the1920s, the subject of HRM has grown into a matured profession.

TRAITS/CHARACTERISTICS OF THE WORKFORCE:

In every country, working population occupies a prominentposition in all aspects including industry, commerce, servicesand so on. It comprises persons who are actively engaged inany productive work/activity.

Workforce or working class is a class of wage workers/earnersearners who do not have their own means of production and

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who earn a living by selling their labor to the employer.Workforce consists of three main forces, industrial workers,farm / agricultural workers and office or shop employees.Each category has its own professional skill, development andchanges in numerical strength and composition. Theindustrial workers, being the core of the working class, remainas the most powerful, numerous and influential workforce.

The present workforce in India includes unskilled, semi-skilledand skilled workers. In addition, it also includes technicians,engineers as well as experts in the field of telecommunication, computer programming and so on. Weare mainly concerned with industrial labor force whichfunctions in the field of industrial production.

Important Characteristics of Today's Workforce are asfollows:

(1) Composition of Workforce: According to National SampleSurvey Organization (1999 - 2000), the total employment inboth organized and unorganized sector in India was 397 million.Of this, 28 million (7.1 percent) were in the organized sectorand the remaining 369 mn (92.9 %) were in the unorganizedsector i.e. in agriculture, construction, trade, transport,communication and manufacturing, etc.

Out of a total of 28.1 million worker in the organized sector,19.4 million (69%) were employed by the public sector andnearly 8.7 million (31%) were employed by the private sector.

This suggests that the share of the organized private sector intotal employment was barely 2.2 per cent of totalemployment. At present, private sector is given ample scopeto expand activities. As a result, large scale employmentopportunities will be available in the organized private sectorin India in the near future.

(2) Employment in Factories: In 1999, the employment infactories (Under Factories Act, 1948) was of the order of 7.44million. Taken together (factories, mines and plantations) itaccounted for 9 million in 1999 which is just 2.2 per cent of the totalworkforce estimate of 402 million. In short, factory workforce is avery small portion of total labor force in the country. However, thisindustrial laborforce/workforce is given special attention by thegovernment because of its contribution in the industrial production.

This category of workforce is growing rapidly.

(3) Roots in villages: Industrial workforce has its roots in

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villages. Workers have left their traditional occupations and havemigrated to cities and urban areas for employment. Many of them have still retained their attachment to land and rurallife. However, the situation is fast changing in recent years.

The migratory character of industrial workforce has practicallyended in recent years. Now, we have industrial workers wellsettled in big cities for two or more generations. A new classof industrial laborforce (without roots in villages andagriculture) is emerging in our towns and cities. This is visiblein cities like Mumbai, Kolkata, Ahmadabad and so on. Directrecruitment, provision of training facilities to employees etc.are, now, possible due to stable and urban based industrialworkforce.

(4) Limited education: Industrial workforce in India was largelyuneducated over years. As a result, they were paid less and alsoexploited. Their participation in management was practicallyabsent. The general trend was to organize strike for meetingtheir demands. However, the situation has changed due to theirlong period stay in cities. The labor force is now educated. Theyalso take the benefit of training facilities provided by theemployer. Workers, even, demand training opportunities forpromotions and responsible positions within the organisation.Due to training programmes, they get higher salaries, quick

promotions and responsible positions. In certain sectors,workforce includes even diploma holders, engineers and softwareand hardware experts. Indian labor force is now better equippedto face the challenges of new technology, new productiontechniques and other challenges of globalisation.

5) Labor turnover among industrial workforce: Thisproblem was serious in the olden days due to rural socio-economic background, easy availability of jobs, wage paymentdifference and so on. However, turnover is now reducing amongindustrial workforce. This is due to non-availability of new jobs,training needs of new jobs and more or less uniform pay scalesand working conditions in industrial townships. As a result,shifting of jobs is difficult and also not attractive. Mobility of laboris no more a serious problem in many organized industries.

In brief, rapid changes are taking place in industrial workforce inIndia. This relates to magnitude, structure, sectoral compositionand earnings. These changes indicate that the position of

industrial workforce is much better today as compared to what itwas previously. At present, industrial workforce is improving as

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regards educational background, social status, earnings andurbanization. Workforce is now united in regard to variousproblems faced by them. In the near future, industrial workforcewill increase in number and will make substantial contribution inraising industrial production and productivity. This workforce willalso share fair benefits of industrial growth and prosperity.

A NOTE ON PERSONNEL PHILOSOPHY:

Personnel policies, procedures and actions in any company ororganization are guided by the philosophy of personnelmanagement which the company may agree for dealing withthe people. Such philosophy exists for every company butmay or may not be available in written form. Sometimes,

documents of the company (e.g. M/A or A/A), personnelmanual or annual reports may refer to this personnelphilosophy. However, the top management and topmanagers of the company are aware of the basic aspects of such philosophy and follow the same while framing personnelpolicies and while dealing with· various personnel problems.

Personnel philosophy of a company has different sides and itcovers different aspects of personnel management of acompany. For example, employees working in the company

may be viewed as a technical factor, which may passively oractively oppose managerial leadership. It is always a desirablepolicy to mould the attitude of employees and see that theyoffer willing co-operation for achieving the objectives of thecompany. Developing such co operative outlook among theemployees is beneficial to employees and the organization.Company's personnel philosophy should be for treatingemployees with dignity and securing their willing co-operation. In short, management's attitude towardsemployees is one major area which relates to the personnel

philosophy of the company.

The attitude of progressive/professional managements isnormally favorable to employees. They are not treated likeother material resources or as a commodity of exchange.Employees are regarded as partners in the production or as aprecious asset with constructive potentials. An enlightenedmanagement can utilize this manpower resource fully for thebenefit of the organization through progressive personnelpolicies. Such policies relate to the personnel philosophy.accepted by the management. Such management gives fair

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treatment to employees with liberal opportunities to grow, todevelop and to reach to higher positions in the organization.In brief, the importance attached to labor force is based onthe personnel philosophy of the management.

The personnel philosophy of the management is reflected inits outlook as regards the manner in which work is to becompleted. Management means getting the work done by andthrough others i.e. employees. Here, management may forcepeople to work and see that results are achieved. Autocraticleadership will be introduced and the production activity willbe completed as per target/ requirement but by using force.

The other alternative is to achieve the organizationalobjectives with the support, co operation and involvement of

the people. Here, democratic leadership will be introduced. There will be delegation of authority, motivation of employeesthrough suitable measures and effective control within theorganization. Out of the two, which alternative is to be useddepends on the philosophy of personnel managementaccepted. In fact, the personnel philosophy of themanagement will be reflected in the personnel policiesintroduced by the management from time to time.

FACTORS INFLUENCING PERSONNEL PHILOSOPHY:

(1) Top management philosophy: The personnel philosophy of abusiness organization is reflected in the overall policy statementsissued by the top level management of the company. Such policystatements are given in the annual reports, personnel manuals andso on. One example of TISCO may be quoted here. The personnelmanagement philosophy of TISCO is based on the views of itsfounder Shri. J.N. Tata whose concerns for the man and his welfarehave been prime. The personnel philosophy of TISCO is reflected inthe following statement." (i) Realistic and. generous understanding

and acceptance of their needs, rights and on enlightened awarenessof the social responsibility of industry; (ii) Adequate wages, goodworking conditions, job security, an effective machinery for speedyredressal of grievances and suitable opportunity for promotion andself-development; (iii) Promoting feelings of trust and loyaltythrough a humane and purposeful awareness of their needs andaspirations; (iv) Creating a sense of belonging and team spiritthrough their closer association with management at various levels".

(2) Motivation of employees: Managers have to motivate

employees and get the expected results from them. Differentmethods of motivation are available and can be used. These

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methods directly or indirectly influence the personnelphilosophy.

(3) Basic assumption about people (i.e. employees): The top

management has certain well accepted assumptions aboutpeople i.e. employees working in the organization. Thepersonnel philosophy of the management is based on theassumptions accepted. Even the personnel policies areadjusted accordingly.

(4) Changes in the environment: The personnel managementphilosophy is influenced by the changes in the environmentwithin which people/ employees are required to be treatedby the management. Such environmental factors include

changes in the labor laws, basic work values, requirementsof new life styles accepted by the people, difficulties in themotivation of people and so on. The personnel philosophy of the company is adjusted by the top management as per suchenvironmental changes.

What is a personnel policy??

A personnel policy is a pre-determined course of action set in orderto guide personnel to perform their work so as to meet theobjectives of the organization. Personnel policies furnish generalstandards.

Personnel Policy Manual:

A personnel policy manual is a booklet, which contains acomprehended form of the organizations policies regardingpersonnel. These policies deal with different aspects like employeebenefits, employee discipline, company policies regarding unions

etc. These policies prove to be guidelines for the functioning of anemployee as an individual and also the functioning of theorganization in totality. These policies avoid any sort of confusionwhen they are in written form. A personnel manual acts a guide toemployees, managers and supervisors. A personnel manual shouldbe provided to all managerial employees as a reference book fortheir task performance.

CONTENTS OF THE PERSONNEL MANUAL

1. Organization goals and objectives.

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2. Personnel Policy.3. The role of the Personnel Department.4. Human Resource Planning.5. Job Design, Job Analysis, Job Evaluation.6. Recruitment and Selection.7. Orientation, Induction and Placement.8. Training and Development.9. Performance Appraisal.10. Remuneration, Rewards, Incentives.11. Employee Benefits and Services.12. Promotions, Transfers, Separations.13. Employee Welfare/Employee Relations.14.Safety and Health, Counseling.15. Employees Participation.

16. Industrial Relations.

BENEFITS OF PERSONNEL POLICY MANUAL

1) Clear explanation of existing policies:One major benefit is that a written manual of policy provideseveryone in management with a clear explanation of all existingcompany policies and practices. This acts as an invaluable asset tocommunications. Policy manual acts as a self-explanatory document

2) Useful tool in supervisory training:Personnel policy manual provides excellent material that can beused in conducting supervisory training courses for new supervisorsand for refreshing their understanding of past company policy.Results of supervisory training will be available if company developa comprehensive and integrated company policy manual and use itas a basis for supervisory training programme, personnel policymanual acts as a cornerstone of supervisory training programmed inhuman relation case studies, role playing, and other problem solving

techniques can be designed around the policy manual. Discussionamong supervisors in the context of the company’s policy manualgenerates comment and criticism that are invaluable feedback forconsideration of further modification.

3) Document to company’s faith on fair personnel polices:Personnel policy manual serves as written documentation of acompany good faith in providing fair employment practices andequal employment opportunities for present employees and future

job applicants of the company.

4) Readymade guide or personnel policies and procedures:

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A company needs well-trained and properly qualified managers whoare capable of administering company’s policy in fair and aconsistent manner. For this managers should know how to interpretcompany policy effectively clearly and promptly personnel policyacts as a guide to supervisory staff in regard to personnel policiesand procedures.

5) Training manual for supervisory staff: Personnel policy manual act as a training manual for all ranks of supervision and key personnel officers in clearly understanding thepersonnel policies firmly, fairly equally to all employees regardlessof their race color religion. Members of management can supportthe personnel policies and practices towers providing equalemployment opportunities only to the degree of understanding of

such policies and practices.

6) Avoid indecision on personnel matters: Personnel policy manual avoids indecision in regard to personnelmatters. This reduces the tension on the part of management. It isin a position to reach to decisions in relation to operating personnelpolicies and practices.

7) Avoids unfair employment practices:

Supervisors are suppose to know how to interpret companiespersonnel policies effectively and correctly so that employees ortrade union will not be able to charge management with unfairemployment practices. This manual provides with necessaryinformation explanation and guidance to managers and avoidmisinterpretation of personnel policies and practices of the companyby the managers and supervisors. This protects goodwill andreputation of the company.

8) Act as a communication tool:

Personnel policy manual is useful as a tool of communication withthe users it act as two-way communication tool in developmentstage and an authorized announcement method after policy hasbeen approved. The view of supervisors can be collected andstudied before changing the policies incorporated in the manual. Theofficial announcing of the new policy is made through the manual.

This provides the details that answers question before they areasked. In brief policy manual acts as a useful communication devicewithin the organization.

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CHAPTER 2 – PERSONNEL PLANNING,

Importance of Human resource:

Human resources are one of the most important features of manybusinesses - especially in an economy where there is an increasingshift towards service-based industries. Human resources account fora large proportion of many businesses' costs and it is the peoplethat invariably drive a business. Management of these resourcestherefore is an integral part of business success.

Background

There is no doubt that a business which does not plan its human

resource requirement for current and future will experience anumber of problems and may not be able to achieve abovementioned performance standard.

Personnel / Human Resource Planning:Like corporate and strategic management, human resourcemanagement has a role to play in the continuity and longevity of theorganisation. It does this by ensuring that the company’s corporatefunctions (such as marketing, production, etc.) are staffed – and thatthese staff is able to contribute to corporate success. HRM facilitates

this by systematic human resource planning. Human resourceplanning (HRP) has been defined as a technique to facilitate theacquisition, utilization, development and retention of a company’shuman resources. These resources are considered by some to bethe organization’s most valuable asset and, therefore, need to bedeployed with the maximum efficiency and effectiveness.

The term “Manpower planning” or “Human resource planning” aresynonymous. HRP or MPP is the process by which a managementdetermines how an organization should move from its currentmanpower position to its desired manpower position. Throughplanning, the organization strives to have the right number and theright kinds of people at the right places, at right time to do thingswhich results in both the organization and the individual receivingthe maximum long-range benefit.Why is Human Resource Planning Important?

• It allows your business’ strategic plan to be carried out.• Reflects the emphasis on people in organization’s Mission

Statement.

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Maintaining stable manpower through attractive pay packagesand other facilities.

IMPORTANCE OF HRP: (should be understood keeping inlight the broad areas mentioned above)

The penalties for not being correctly staffed are costly. Understaffingloses the business economies of scale and specialization, orders,customers and profits. Overstaffing is wasteful and expensive, if sustained, and it is costly to eliminate because of modern legislationin respect of redundancy payments, consultation, minimum periodsof notice, etc.

Very importantly, overstaffing reduces the competitive efficiency of

the business. Staffing level planning requires that an assessment of present and future needs of the organization be compared withpresent resources and future predicted resources.

The following points outline the importance of humanresource planning:

1. Solves problem of over / under staffing: Successfulplanning helps determining and satisfying future personnelneeds. Surplus or deficiency in staff is the result of the

absence of or defective planning. Many public sectorenterprises have found themselves overstaffed and themain cause of this is poor / lack of planning by them. Theoutcome was that many organizations had to resort to theVRS i.e. “Voluntary retirement schemes”. In PSUs the hiringprocess went on without proper planning until late 1980 andthen a ban came which was very late.

2. Able to cope change: the external environment for anyorganization is never static. Changes taking place incompetitive forces, markets, technology, products and

government regulations. Successful planning enablesorganization to cope with such changing externalenvironment.

3. Creating a pool of talented employees : with the adventof globalization and 3 faced competitions, it has becomealmost challenging for companies to attract and retainqualified and skilled personnel. For e.g. L&T an enggcompany has MBAs, Engineers and technicians whocollectively constitute 70% of the total employee strength.

These people are also known for job hopping, thereby

creating frequent shortages in the organization. The HR

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manager must use his skills to attract & retain qualified andskilled people.

4. It provides a base for Personnel Functions: Onlyproperly done man power planning provides essentialinformation for designing and implementing personnelfunctions such as recruitment, selection, transfer,promotion, training and development.

5. Organization increases its assets: The organizationmakes an investment for an employee in terms of eithertraining or job assignment and in turn it leads to theemployee gradually developing in his skills and abilities.When such employee is retained in the organization he/sheproves to be an asset to the organization.

6. Leading to reduction in cost of production: Due to

proper HRP, the organization gets best possible employeeswho are highly skilled, experienced (in some cases), andwell trained. The proposed turnover rate of labor alsoreduces. Stability is one of the factors leading to reductionin the cost of production.

Thus, HRP is a double-edged weapon. If used properly then itleads to

The maximum utilization of human resources

Reduces the problem of over employment / underemployment.

Reduces excessive labor turnover and high absenteeism.

Improves productivity and helps achieving organizationobjectives.

FACTORS AFFECTING HRP

HRP is influenced by several considerations. The important ones areas follows:

1. Type of Organization: The very important factor affectingthe Human Resource Planning is what type of organization is it?Whether the organization has Manufacturing – cum – MarketingUnit? Or just Manufacturing Unit? Or just marketing Unit? The HRPlanning structure of any organization having Manufacturing Unit ismore complex than the other types.

2. Strategy of Organization: What strategy has theorganization designed for itself? Is another important question

pertaining to HRP. For e.g. if the organization has planned a strategyof Acquisition or Merger, then, it will need to plan for layoffs, since

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mergers tend to create duplicate or overlapping positions that canbe handled more efficiently with fewer employees.

The other part of planning is, whether the organization wants to beproactive or reactive? The proactive strategy carefully anticipatesthe needs and systematically plans them to fill them far in advance.

The reactive strategy may lead organization to react to needs asthey arise.

Some organizations may have a broad focus in planning. They selectall aspects of Human Resource Management such as recruitment,selection, training, development, promotion, transfer etc. whereas,some organizations may adopt to narrow aspect such as justplanning one or two areas such as recruitment, selection etc. andleave the rest for time to come.

Whatever may be the focus of organization in the area of HRP, themost important part here, which every organization should take intoconsideration while planning the resources is that flexibility – theability of the plan to deal with contingencies so as to reduceuncertainty.

3. Organization Cycle: Like every human being, theorganization has life cycle, thru which it passes. The introduction

(Birth) stage, growth stage, maturity stage and decline stage.

Small organizations, during the introduction stage may not give dueimportance to planning. Need for planning is felt when theorganization enters the growth stage. HR forecasting becomesessential. Internal development of people also begins toreceive attention in order to keep up with the growth.

During the maturity period of the organization, the growth slowsdown, the work force becomes old, and few young people are hired.

Planning during this stage becomes more formalized. Issues likeretirement and possible retrenchment dominate planning.

Finally, in the declining stage, HRP takes a different focus. Planningis done for layoffs, retrenchment and Voluntary Retirement.

4. Environmental Uncertainties: In very rare cases, theorganization has the privilege to operate under stable environment.Every organization is affected by external environmental factorssuch as change in the policy of government, technological changes,

and socio-economic changes. The organization requires planning

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very carefully its recruitment, selection, training & development,promotion and retirement policies.

There are plans either for short term i.e. for upto 3 years or forlonger term i.e. from 3 years to 20 years. Companies operatingunder uncertain environment should always plan for shorter period.Plans for others where environment is fairly stable, may be for alonger term.

In short, the greater the uncertainty, the shorter the plan’s timehorizon and vice versa.

5. Type of Vacancies: in an organization, job vacancies arisedue to separations, promotions, and expansion strategies. It is easyto employ shop-floor workers, but a lot of sourcing is necessary forhiring managerial personnel. Therefore, the personnel departmentshould always anticipate vacancies, as far as in advance, to providesufficient lead time to ensure that suitable candidates are recruited.

6. Off-loading the work: Many organizations off-load part of their activities in the form of sub-contracting. If so, the HR planningshould consider this aspect also. For e.g. company like HLL hasgiven the subcontract for manufacturing of many of its products tolocal manufacturer. This saves cost on investment as well as

employee recruitment.

The following example explains how HR planning is done atShopper’s Stop.

In order to determine the number of personnel required for itsnew stores, the company takes the look at the operations of itsprevious stores. It considers the number of people, thequantum of sales activity.

It also considers the size of the stores, which it plans to set up.

Depending upon the size of the store, the number of CustomerCare Associates (CCA) required is calculated.

On an average, there should be 1 CCA for every 50 sq. ft. of store area.

It takes into consideration, the number of counters forconcessional brands. These are the brands offered by othercompanies such as Avon, maybeline etc. Shopper’s Stop doesnot have to plan its HR for concessional brands.

Within the selling area of Shopper’s Stop brands there are

some sales counters which do not require many salesassistance, e.g. readymade garment counters.

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There are a few counters such as jewellery it requires at least2-3 CCAs at all 11 hours that the store function.

Apart from the CCAs every store that is set up will havefollowing personnel:

o Unit Heado HR Personnelo Person in-charge of maintenanceo Electriciano Accountanto Cashier

Features of MPP:

1. Facilitates the control of manpower cost:

a. Manpower cost is very imp to organizationb. Proper HRP avoids overstaffingc. Recruitment is done as per the requirement of

organization

2. Enables proper placement to the right jobs

a. Placement is made as per the qualities of the personsand the requirements of different jobs.

3. Filling up of vacancies

a. Due to retirement, turnover

4. Facilitates growth of the employees

a. Due to proper training and development

Objectives of HRP:

1. To ensure optimum use of human resource

a. Current and future thru…i. Proper placement, training and development prog,

2. Meeting future manpower needs3. Ensure availability of adequate manpower as per diff dept.4. Development of Manpower: Manpower development is

possible through manpower planning.

Needs of MPP:

1. To meet the manpower needs of business enterprise2. To arrange for the replacement of existing manpower

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a. In the event of retirement, transfer, removal, turnover of employees.

3. To meet growing manpower requirement of the orgn:

a. In the event of modernization, expansion undertaken by

orgn, additional manpower requirement has to be done.4. To meet challenges of changing technological env5. To place an employee at correct position.6. To avoid surplus/shortages of employees.

Advantages of MPP:

1. Enables proper recruitment and selection policy2. Ensures orderly working and growth of orgn

3. Regulates cost factor4. Motivates existing employees5. Prevents sudden shortage of employees

Limitations of Personnel Planning:

1. Future manpower needs are uncertain2. Time-consuming and process3. Surplus manpower makes HRP redundant: HRP exercise is

useful in countries where manpower available is less than

requirement. In India, due to over-population, manymanagement (conservative ones) do not give muchimportance to HRP.

4. Shortage of skilled labor and labor turnover

Role of Human Resource Planning

The prime role of HRP is to ensure that an organisation has the rightquantity and quality of employees doing the right things in the rightplace at the right time and at the right cost to the organisation. Inachieving this, HRP has a number of more specific roles, as follows:

• To determine and facilitate the levels and types of recruitmentthat may be required

• To assess current levels and attributes of staffing anddetermine whether reductions are

• Necessary (redundancy)• To assess whether redeployment can be used as an alternative

to downsizing• To identify the need for training and development

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• To assess current employment costs in relation to otherorganizational costs (wage costs account for over 60% of anorganization’s expenses)

HRP plays a vital role in the formulation of strategy within theorganisation. An organisation cannot function without people; thusthe human resource planning activities become all the moreimportant because they forecast how many employees are requiredto carry out the organization’s activities and help it to meetcustomer demand for its products or services. HR directors areusually members of the board and, as such, they have a specific roleto play in the formulation of HR objectives, policies, procedures,plans and strategy. These highlight the type of plans that contributeto the overall corporate and strategic plan and, along with the

finance plan, operational plan, marketing plan, etc, help in theformulation of the overall corporate and strategic plan.

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What Does Human Resource Planning Involve?

• A comprehensive look at Human Resources covering everythingfrom:

• Strategy - Outline how your organization’s HR strategy willintegrate with your overall business strategies;

• Organizational Design - Define the organizational design.

• Recruitment and Orientation - Create objectives for therecruitment and orientation of your team that will address all of thedetails of recruiting sources, interviewing techniques, etc.

• Retention Plan - Indicate how your organization will retain andmotivate its employees;

• Performance Management – Outline how your organization willmanage the performance of its employees.

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PROCESS OF HRP The process of HRP is one of the most crucial, complex andcontinuing managerial function. The process involves many stepsmainly involving forecasting personnel needs (demand), assessingpersonnel supply and matching demand-supply factors throughpersonnel related programmes. The HRP process is influenced byoverall organizational objectives. The process has gainedimportance in India with the increase in the size of businessenterprises, complex production technology, and the adoption of professional management technique.

HRP Steps / Process / How organizations plan for their HReffectively:

E N V

OrganizationObjective &

Policy

HR Needs(DD) Forecast HR SS Forecast

Control & Evaluationof prog.

HRPimplementation

HRprogramming

Shortage Rec. -Selection

Surplusrestricted hiring,reduced HRs,VRS layoff,etc.

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Explanation of the above stated diagram:

Environmental Scanning:

It refers to the systematic monitoring of the external forcesinfluencing the organization. These factors are:

• Economic Factor

• Technological changes

• Demographic changes

• Social concerns, including child care, educational facilities

By scanning the environment, for changes that will affect an

organization, managers can anticipate their impact and makeadjustments early.

1. Organizational objectives and Policies:

HR plans need to be based on organizational objectives. Objectivesof HR plans must be derived from organizational objectives. Even,number and characteristics of employees should be derived fromthe organizational objectives.

Organizational objectives are defined by the top management andthe role of HRP is to subserve the overall objectives by ensuringavailability and utilization of human resources.

Once the organizational objectives are specified, the HR departmentmust specify its objectives with regard to HR utilization in theorganization. In developing these, specific issues as stated belowmust be addressed to:

• Are vacancies to be filled by promotions from within or hiring

from outside?• What union constraints are encountered in HRP and what

policies are needed to handle these constraints?

• How to enrich employee’s job?

• How to downsize the organization to make it morecompetitive?

• To what extent production and operations be automated?What can be done about those displaced?

2. HR needs (Demand) forecast: Needs forecasting is the

process of estimating the future quantity and quality of peoplerequired. The basis of the forecast must be the annual budget and

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long term corporate plan, translated into activity levels for eachfunction and department. It is done by translating the corporate planinto activity levels for each function and department.

• For e.g. in a manufacturing company, the sales budget wouldbe translated into a production plan giving the number andtype of products to be produced in each period.

• From this information, the number of hours to be worked byeach skilled & unskilled category to make the quota for eachperiod would be calculated.

• Once the hours are available, determining the quality andquantity of personnel will be logical step.

Demand forecasting must consider several factors – both

external as well as internal.External Internal

a. Domestic and internationalcompetition.

b. Lawsc. Changes in technology

d. Socio-economic factor

a. budget constraintsb. New products and

services.

c. Organizationalstructure (flat / tall)

Demand forecasting helps organizations

• To qualify the jobs necessary for producing a given number of goods or offering services.

• Determine what staff-mix is desirable in future;

• Assess appropriate staffing levels in different parts of theorganizations so as to avoid unnecessary costs;

• Prevent shortages of people where and when they are neededthe most; &

•

Monitor compliance with legal requirements with regard toreservation of jobs.

2.a. Forecasting techniques:

Organizations generally follow more than one technique to forecastits HR requirements. These techniques vary from simple tosophisticated ones. Some of them are:

2.a.I. Managerial Judgement: This techniques being the

simplest, here, the managers sit together, discuss and arrive at afigure which would be further demand for labor.

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• The technique involves a “bottom-up” or a “top-down”approach.

• In case of “bottom-up” approach line managers submittheir departmental proposals to top managers who arrive

at the company forecast.• In other case, top managers prepare company and

departmental forecasts.

• These forecasts are reviewed with dept heads and agreedupon.

• In both techniques, while implementing the same, thedept heads are provided with broad guidelines.

• With the help of guidelines and in consultation with theHRP section in the HRM dept, dept managers can prepareforecasts for their respective depts.

• HR managers prepare the company forecasts and thusarrive at overall forecast.

• A committee comprising dept managers and HRmanagers will review the two sets of forecasts; arrive at aunanimity, which is then presented to top managers foretheir approval.

• This technique is used in smaller organizations.

2.a.II. Ratio-trend analysis:

• This is the quickest forecasting technique.

• The technique involves studying past ratios, and forecastingfuture ratios, making some allowance for changes in theorganization or its methods.

• The following table shows how an analysis of actual andforecast ratios, between the number of routine proposals to beprocessed by an insurance company’s underwritingdepartment and the number of underwriters employed couldbe used to forecast future requirements.

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Year No of employees Ratio

Actual

No. of Proposals

Underwriter

Underwriter:Proposal

-3 1500 150 1:10-2 1800 180 1:10Last yr 2000 180 1:11

ForecastNext yr 2200 200 1:11+2 2500 210 1:12+3 2750 230 1:12

2.a.III. Work-study Technique:

• Work-study technique can be used when it is possible to applywork measurement to calculate the length of operations andthe amount of labor required.

• For e.g. starting point of any manufacturing unit will of coursebe production unit. The production budget of the unit isprepared in terms of volumes of saleable products for thecompany as a whole, or volumes of output for individualdepartments.

• The budgets of productive hours are then compiled using

standard hours for direct labor.• The standard hour per unit of output are then multiplied by the

planned volume of units to be produced to give the totalnumber of planned hours for the period.

• This is then divided by the number of actual working hours foran individual operator to show the number of operatorsrequired.

• Following is an example in terms of numbers.

Planned output for next year 20,000 Units

b) Standard hours per unit 5 hoursc) Planned hours for the year 1,00,000 (20,000 * 5)d) Productive hours per man/year (allowingabsenteeism, normal overtime and idletime)

2000

e) Number of direct workers required (c/d) 50

Organizations follow more than one technique for forecasting theirpeople’s needs. L&T, for e.g. follows “bottom-up” of management

judgement and work-study technique for demand forecasting.

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Forecasting process in L&T begins during November of every year. The department heads prepare their personnel estimates based ondetails of production budget supplied to them and submit theestimates to the respective personnel managers. (L&T has around

11 plants in the country). The personnel heads will review theestimates with the departmental heads and will send final reports tothe Mumbai office where a centralized HR department is located.Estimates are reviewed by the HR department and final figures aremade known to those personnel managers who initiate steps t hirethe required number of people in the following year. The forecast ismade for a period of 5years, nut is broken down to yearlyrequirement.

3. HR Supply forecast:

• Personnel demand analysis provides the manager with themeans of estimating the number and kind of employees thatwill be required.

• The next logical step for the management is todetermine whether it will be able to procure therequired number of personnel and the sources for suchprocurement.

• This information is provided by supply forecasting. As itmeasures the number of people likely to be available fromwithin and outside an organization, after making allowance forabsenteeism, internal movements and promotions, etc.

HR Programming:

Once an organization’s personnel demand and supply are forecast,the two must be reconciled or balanced in order that vacancies canbe filled by the right employees at the right time. HR programmingis a very important step and therefore assumes greater importance.

HR Plan implementation:

Implementation requires converting an HR plan into action. A seriesof action programmes are initiated as a part of HR planimplementation. Some such programmes are recruitment, selectionand placement; training and development; retraining & successionplan.

Control & Evaluation:

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Control & Evaluation represents the fifth and final phase in the HRPprocess. The HR plan should clarify responsibilities forimplementation and control, and establish reporting procedurewhich will enable achievements to be monitored against the plan. If there is surplus of employees, then strategies such as restrictedhiring, VRS, Layoffs etc can be implemented. If there is shortage of employees, then recruitment and selection can be implemented.

FACTORS AFFECTING HR PLANNING

OR

WHY HR PLANNING DOES NOT WORK?OR

LIMITATIONS OF HR PLANNING

Effective HR Planning is a pre-requisite for successful HRM practices.However, there are certain factors – internal as well as externalwhich affect the effectiveness of HR planning adversely.

1. Improper linkage between HRP and corporate strategy. (HRstrategies always follows corporate strategies)

2. Inadequate importance to HRP

3. Environmental uncertainty.4. Rigidity in attitudes5. Inappropriate HRIS6. Conflict between long term and short term HRP

PART – II HR PLANNING

• HRIS

• Downsizing

• VRS

• Outsourcing

• Demotion

• Separation

• Layoff

• Retrenchment

• Discharge / termination

• Pink slip

• Contracting & subcontracting

• Promotion

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• Transfer

Human Resource Information System (HRIS)

Human Resource Information System (HRIS) is basically a softwareor online solution for managing the day-to-day needs of the humanresource department, including payroll management, andaccounting functions within a business. It is an integration of HRMand information technology and is managed by a group of technology professionals. Tannenbaum (1990) defines HRIS as “atechnology-based system used to acquire, store, manipulate,analyze, retrieve, and distribute pertinent information regarding anorganization's human resources.” Furthermore, HRIS merges thediscipline of HRM and the basic HR policies and the activities with

information technology. Thus, HRIS not only includes the system andsoftware applications but also includes the people, policies, data andprocedures required to manage the HR function. It is a new world of technology used to manage human resources in the organization. Atypical HRIS can aid the companies in:

• Management of all the information related to the employees• Recruitment• Tracking employee attendance• Tracking employee pay

• increments, positions held• Benefits administration• Tracking improvement employees• Tracking training received by the employees• Talent management

An effective HRIS is one that provides all the informationthat a company needs to track and analyze the employees,former employees and applicants. This system should help thecompany to plan and manage the HR costs, increase the efficiency

of the HR function and produce reports that are capable of improving decision-making. The HRIS so developed must be alignedwith the business goals and the data available with the systemshould be accurate and must be integrated with all the otherfunctions in the organizations.

The HRIS must have an integrated database and must serve as apowerful reporting and analyzing power so that it serves therequirements of managers to manage the workforce.

Peoplesoft is one of the well-known software on HRIS

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SEPARATIONS

Separation occurs when an employee leaves the organization.Reasons for separations may be voluntary or involuntary. Involuntary separation, initiation is taken by the employeehimself/herself. Where the employer initiates separation for anemployee, it becomes involuntary separation. Here, employeeentertains the feeling of injustice and seeks legal protection to undoit.

Voluntary separation, as stated above, occurs when theemployee decides to terminate the relationship with theorganization. An employee decides to quit when he/she is at a levelof dissatisfaction with the present job or a lucrative offer isawaiting..

During economic boom when jobs are available in plenty, quitsbecomes quite common.

Involuntary Separation:

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Organization often encourage quits through cash incentives.Popularly called VRS, these separations are resorted to whenorganizations experience losses. They resort to cost saving.

VRS schemes were introduced in banks for downsizing thestaff. This was necessary due to extensive use of computers.

It may be noted that downsizing is one challenging job beforeHR personnel. This problem is complicated as managementwants downsizing while employees oppose to such downsizingas it leads to retrenchment of staff.

VRS is a popular form of downsizing. In India, downsizingstrategy is normally implemented through VRS in whichattractive compensation package is offered to employees

opting for VRS. HR personnel should help the topmanagement while preparing a compensation package whichwill be attractive and beneficial to both-organization andemployees.

VRS is also called Golden Hand Shake Plan. This practice of removing indirectly unwanted/surplus employees (officersand workers, etc.) is followed in the public sector as well as inthe private sector organizations. Here, the organizationannounces the voluntary retirement scheme and interestedemployees are asked to submit applications for voluntaryretirement from the organization. They are relieved from the

job as per the terms and conditions mentioned in the scheme.VRS involves separation of employees from the organizationon the basis of mutual agreement between the two. Manybanks, state governments and private sector organizationshave introduced such schemes in the recent period. Voluntaryretirement is different from dismissal, removal andretrenchment of employees.

Under VRS, handsome compensations are paid to those whoopt to leave/retire. Thus, surplus employees are offeredmonetary incentives for early retirement. The incentives maybe in the form of:

(a) Pension and lump sum gratuity, (b) Loyalty bonus,(c) Employee Stock Ownership Plans (ESOPs),(d) Prizes and rewards for long service in the organization.

VRS is advocated on the following grounds:

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(a) To reduce financial burden on the organization.(b) To reduce surplus labor.(c) To ensure optimum utilization of operating manpower in anorganization.(d) To introduce new technology in manufacturing process andalso in corporate office management.(e) To introduce extensive use of computers and newtechniques in information technology (IT).

Discharge: It takes place when the employer discovers that it is nomore desirable to keep an employee any longer, discharge, alsocalled as termination, and should be avoided as far as possible. Anytermination is reflection on the company’s HR system. Also, it isexpensive as the firm must seek replacement, hire and train thenew hiree.

Discharge is initiated by the employer. It is a drastic step and shouldbe taken after careful thought. This step needs to be supported by

just and sufficient reasons.

The following reasons lead to the dismissal of an employee:

• Excessive absenteeism

• Serious misconduct

• False statement of qualification at the time of employement.

• Theft of company’s property.

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Layoff is a temporary separation of an employee by the employerunder specific circumstances. A lay-off may be for a definite periodand on the expiry of the period, an employee will be called back andthe separation comes to an end. Such lay-off may be due to variousreasons such as shortage of raw materials, accumulation of stocks,and breakdown of machinery and so on.

Retrenchment is a sort of permanent separation by an employerwith due notice as per statutory provisions. The employee is alsopaid compensation.

Retrenchment of an employee for economic reason is quitecommon in India at present. The Industrial Disputes Act 1947defines retrenchment as the "termination by the employer of the services of workmen for any reason." It may be noted that

termination of services as a punishment given or disciplinaryaction or retirement either voluntarily or on reaching the ageof superannuation or continued ill-health or on the closure andwinding up of a business, does not constitute retrenchment.

The term is applied to continuing operations where a part of the work force is found to be superfluous (surplus). Theprinciple in the procedure of retrenchment is that the lastperson employed in each category must be the first person tobe retrenched i.e. "last come, first go." As and when vacanciesarise after retrenchment, the employer given an opportunity

to the retrenched worker to offer themselves for re-employment; and they are given preference. Such vacanciesare generally notified at least 10 days before they are filledup. Retrenchment is unfortunate for concerned worker as hebecomes unemployed till Securing new job. It createshardships to him as well as to his family members. However, itis inevitable when the organization is facing serious problems.

Downsizing:

Organization Downsizing: In any business organization, thereshould be adequate staff (employees) as per the need.Excess employees or inadequate employees are undesirableas both the situations are harmful. The term downsizing isused to indicate reduction of excess manpower by suitablemeasures. Downsizing of an organization means reducing thenumber of employees and adjusting the manpower as perneed of the organization so that the problem of excessmanpower will be solved smoothly /peacefully. In order to

overcome the problem of surplus staff, downsizing strategy is usedextensively.

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The objective of downsizing strategy is to achieverightsizing. This means to adjust manpower as per the needof an organization. The excess manpower (over-staffing) inan organization may be due to:

(1) Faulty human resource planning because of whichassessment of manpower requirement proves faulty.

(2) Change in the man-machine ratio due to technologicaladvances. Use of computer technology creates the problemof surplus manpower in many service organizations includingbanks.

Outsourcing of certain business functions leads to surplusmanpower in an organization.

Downsizing plan prepared will indicate:

(I) Who is to be made redundant and where and when,

(II) Steps to be taken to help redundant employees find new jobs,

(III) Policy for declaring redundancies and makingredundancy payments, and

(IV) Programme for consulting unions or staff associationsand informing those likely to be affected.

For reducing surplus employees, some other methods can alsobe used. Such methods are:

(1) To retain all existing employees but to reduce the workhour for reduction in the total salary payment.

(2) To transfer or reassign employees in other units of theorganization where there is need of additional employees.

(3) To offer incentives for early retirement in the form of VRS.(4) To declare lay-off for dealing with surplus staff.

Downsizing also becomes necessary when market demandreduces or when new technology is introduced (in banks,surplus staff is due to extensive use of computer technology)or when certain business activities are closed down.

The term downsizing is normally used in the case of excess

jobs/employees. However it is also used in regard toproduction activities. For example, recently, Century Textiles

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and Industries (Worli, Mumbai) is planning to downsize itsproduction capacity through downsizing of spinning andspindle capacity. Ultimately, this will lead to pruning of itsworkforce by almost 2,000 out of the present workforce of about 6,000 odd people.

OUTSOURCING:

The term outsourcing is used extensively in the presentbusiness world. Since 1980s, there is a clear trend towardsvertical disintegration in the USA and other countries. Suchoutsourcing is done on large scale in the production as well asservice sector. Outsourcing is very common in the IT sector.Many Indian IT companies get the benefit of such outsourcing

from foreign companies. Similarly many automobile companiesget components by others. Such components are assembledby the automobile company.Here, automotive manufacturers have out sourcedcomponent 'l1anufacturing that was previously conducted inhouse. Outsourcing is becoming popular in the present globalbusiness.

The term outsourcing has been defined in different ways asmentioned below:

Make or buy practice is quite old in business. Make meansdoing things internally. Buy means getting things doneexternally. The latter aspect is becoming more common inthe present large scale business in the form of outsourcing.

Outsourcing means sending work outside the organization tobe done by individuals not employed full time with theorganization. In various business activities, the practice of outsourcing is popular and used extensively. The concept of outsou rcing has entered in a big way in HRM in overseascompanies. This trend has now entered in the Indian business.

Right from recruitment, training profiling, compensationmanagement and pay roll outsourcing also form a part of HRoutsourcing. Outsourcing of HRM functions in India has bigscope. It may be noted that all HRM functions cannot be outsourcedas HR service outsourcing is not like the product outsourcing.

This is because HRM functions require certain confidentiality.However, all HR functions are not of the same confidentialnature. Those HR functions which are not confidential can beor may be outsourced. Similarly, functions with less criticality

can also be outsourced. In brief, confidentiality and criticalityare two factors which need careful consideration before going

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for outsourcing. Every organisation has to decide what tooutsource and what not to outsource because all HRMfunctions cannot be outsourced safely. For example,preliminary work relating to recruitment and selection,administrative work relating to employee benefits, employeewelfare services, pay role and compensation management,staff training and the HRM functions which are not performedon regular basis such as human resource planning,preparation of appraisal forms, job design, job evaluation,installation of safety measures, etc can be outsourced easily,economically and without any adverse effect onconfidentiality.

BENEFITS OF OUTSOURCING:

(1) By transferring or outsourcing non-critical HRM functions,the organisation can concentrate on critical HRM functionsand perform them efficiently. HR professionals will not losesight of critical HRM functions when routine and non-criticalfunctions are outsourced.

(2) Performing non-critical HRM functions internally is not costeffective as such functions prove costly.

(3) BPO (HR) vendors with infrastructure and requisite skillscan provide efficient services at much less cost. This givesbenefit to companies in regard to outsourcing.

(4) Outsourcing results into higher return on investmentthrough significant savings on operational and capital costs.

(5) It enables organisations to focus on "core" activities. Theydm shift their policies from tactical control to strategic

planning.

(6) Outsourcing enables organisations to exploit moreadvance technologies available· with the supplies. Thisimproves quality of production and creates marketreputation.

(7) It helps to undermine the power of trade unions.

(8) Outsourcing simplifies organisation structures and makesthem flatter and more agile.

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DEMERITS OF OUTSOURCING:

(1) Outsourcing leads to job loss in the organisation. Large

scale outsourcing leads to unemployment to people withinthe country and outflow of funds from the country in the formof fees and service charges.

(2) Outsourcing brings creeping privatization in the publicsector organisations.

(3) Difficulty in deciding what and how much to outsource.

(4) Dependence on supplier for vital components is

undesirable and may prove dangerous to the mainorganization where outsourcing is substantial.

(5) Difficulties in managing new relationships with theoutsource agencies.

Due to recent recession in the USA and European countries,the general opinion was unfavorable to large scaleoutsourcing. The Obama Administration has imposedrestrictions and financial pressure on companies which areoutsourcing to countries like India. However, companiesfrom many countries including USA continued the practice of outsourcing because it proved economical to them. India isfavorable to outsourcing because our IT and othercompanies get business as well as high profit due tooutsourcing practice. India has immense potential as morethan 80 per cent of fortune 1,000 companies are discussingHR outsourcing as a way to cut costs and increaseproductivity.

Demotion is the exact opposite of promotion wherein anemployee is demoted to the post at a lower level. Forexample, a manager may be demoted as supervisor.Demotion is lowering of status, salary and responsibilities of an employee. It is a type of punishment for serious mistakesor irregularities on the part of an employee. It is a lesserpunishment as compared to dismissal. Demotions are givenin companies, banks and government departments.Promotions are very common but demotions are rare andused as a method of last resort. Moreover, demotion

creates adverse psychological effects on the employee.

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Pink Slip: It is an American term that refers to being fired orlaid off from one's job. It is an official notice sent to anemployee informing him that you have been fired from your

job. Synonyms to pink slip are: dismissal or dismission. Thismeans the person is removed from his job. It is as good asdischarged, dismissed, dropped or terminated removed fromthe service.

In the USA, companies used to dismiss employees bydistributing notices printed on pink slips of paper. Americanworkers from all walks of life fear of one day receiving "PinkSlips" from their employers. These are notices printed on pinkpaper (usually distributed with paychecks) informing

employees that their services are no longer required.

Pink slips have long since become symbolic rather than literal.Perhaps the "pinkslip" doesn't have anything to do with colorat all. It only indicates a practice followed by companiessince long while removing him from the service.

CONTRACTING AND SUB-CONTRACTING:

Along with outsourcing, contracting and sub-contracting are

two methods / techniques used for transferring certain jobsto outside agencies on contract basis. The purpose is toreduce cost and to get the routine and simple type of workdone from other agencies so that time of internal will not beused for such less important as well as repetitive type of work.

The practice of contracting and sub-contracting are used inproduction sector as well as in services sector. In buildingconstruction work, such contracting is quite common when

the construction project is very big and is required to becomplete within specific time limit. For example, a buildermay give contract of coloring or tiling work or plumbing workto a contractor. He has to complete the work as perspecification and will be paid as per amount fixed. Supposedthe contractor has taken a plumbing work contract of tenidentical building. He may appoint a sub-contractor forplumbing work of five buildings. Here, sub-contractor willwork as per the instructions of the main contractor and willbe paid as per the amount decided between the contractor

and sub-contractor. This briefly suggests how contractingand sub-contracting practice is followed in the building

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construction activity. Large housing construction projects arecompleted quickly due to the practice of contracting and sub -contracting. We observe plastering, tiling, plumbing,electrification work going on simultaneously in the housingcomplex due to this practice of contracting and sub-contracting. This practice reduces the cost, brings division of work and specialization, speeds up the work and also givesrelief and convenience to the builder who finds it difficult togive attention to each and every work relating to a housingcomplex. Contractors may operate as independentcontractor, general contractor or sub-contractor.

An independent contractor is a natural person, business orcorporation that provides goods or services to another entity

under terms specified in a contract or within a verbalagreement. Unlike an employee, an independent contractordoes not work regularly for an employer but works as andwhen required. Independent contractors are usually paid ona freelance basis. Contractors often work through a limitedcompany, which they themselves own, or may work throughan umbrella company.

A sub-contractor is an individual or in many cases abusiness that signs a contract to perform part 'or all of the

obligations of another's contract.

A sub-contractor is hired by a general contractor to performa specific task as part of the overall project. Such sub-contractors are most common in building works and civilengineering.

A general contractor is a group or individual that contractswith another organization or individual (the owner) for theconstruction, renovation or demolition of a building, road or

other structure.In addition to building construction work, contractors andsubcontractors also operate in the field of industrialproduction and services. They are appointed for providingcertain services or contract is given to them for supplyingcertain components or services. The following examples areworth noting in this regard.

A manufacturing of automobiles may not manufacture eachand every component required at its plants. It may decide togive contract to an outside agency or agencies for the supplyof components as per its specification. A regular contract will

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be made and the contractor will start supplying componentsas per the terms and conditions agreed in the contract. Thisis contracting for the supply of components. The automobilecompany makes such contract for its benefits andconvenience. The contractor also gets new job work and alsoearns out of such contract. He may even appoint a sub-contractor for some service, etc. This is an example of contracting for supply of products/ components.

One more example of a service organization can be given.XYZ is one IT company doing good work. It may be engagedin outsourcing. The company may have more than 1,000qualified employees. However, this manpower is inadequatedue to increase in the volume of work. Here, the IT companymay select some less important, simple and repetitive work

and decide to get it done from other IT service providers.Regular contract will be made for providing the requiredservices and the contractor will start supplying the servicesaccordingly. In this case also sub contracting is possible.

It may be noted that the concept of contracting, sub-contracting and outsourcing are rather identical Humanresource outsourcing (HRO) is gaining ground among Indiancorporates who are looking at expanding the scope of theirservice. HR is getting outsourced to third party providers whocan offer the benefit of their special skills. Contracting/ sub-

contracting offers benefits to both the parties.As a result, this practice is followed extensively in the businessworld including the construction activities of varied type.

JOB TRANSFER

A Job Transfer involves a change in the job accompanied by achange in the place of the job of an employee without a change inresponsibilities or remuneration. A transfer differs from a promotion

in that the latter involves a change in which a significant increase inresponsibility, status and income occurs, but all these elements arestagnant in former.

Reasons for transfer:

The reasons for transfer vary from organization to organization.Following are the tentative reasons for Job Transfer.

1. Shortage of employees in one department and surplus in the

other department.

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2. Correction of faulty initial replacement of an employee.

3. To break monotony of work.

4. Change of climate may be required for better health of anemployee.

5. Family related issues such as marriage of female employee.

Principles of transfer:

1. The frequency of transfer & minimum period between 2consecutive transfers.

2. The authority which would handle transfers is to be decided

upon. The usual practice is that the person in charge of thatdepartment handles transfers in each department. The best courseis to centralize the authority handling transfers, and make the HRdepartment responsible for that.

3. The criteria for entertaining transfer need to be laid down andstrictly adhere to.

4. The area of the organization over which transfers can be madeneed to be defined.

5. The effect of transfer on seniority of the transferred employeemay be clearly evaluated.

6. It should be clearly defined as temporary or permanent.

7. The interests of the organization are not to be forgotten inframing a policy of transfer.

TYPES of Transfer:

1. Production Transfer: (As mentioned earlier) a shortage orsurplus of the labor force is common in different departments in aplant. Surplus employees in a dept have to be laid off, unless theyare transferred to another department. Transfer affected to avoidsuch imminent lay-offs are called production transfers.

2. Replacement transfer: Replacement transfers are made forsuitable adjustments of employees in different departments. Areplacement transfer’s purpose is to give protection to senior

employee (long service employee) as long as possible. Here, a junioremployee may be replaced by a senior employee who is

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excess/surplus in some other department. This also avoids lay-off of such senior employee. Replacement transfers are quite commonduring the period of recession.

3. Versatility Transfers: It is affected to make employee versatileand competent in more than one skill. Versatile operations arevaluable assets during rush periods and periods when work is dull. Itmay be used as a preparation for production or replacementtransfers.

4. Shift transfer: (industrial establishments operating under morethan one shift)

5. Remedial Transfer: They are affected at the request of anemployee therefore also known as personal transfer. It may alsotake place because initial placement of an employee may have beenfaulty. Some times a worker may not be getting comfortable with his/ her colleague / boss. In other incident the worker may be gettingtoo old to continue the regular job or the type of job or workingcondition may not be well adapted to the present health record. Inall such circumstances remedial transfer is adopted as a transferstrategy.

University Questions:

1. Transfer (2006) (Concept Question)2. Job Rotation and Job Transfer (2003) (Short Notes)3. Job Rotation (2002, 2006), (Concept Question)

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i. Promotion by seniority: Here, promotion is given onseniority base i.e. the period/length of service of employeein the organization. The date of appointment serves as thebase of promotion. Here, the merits (qualification, qualitiesetc) are not given any consideration as promotions aregiven exactly as per the seniority. This is a general practicein government departments, banks, and so on. Evenworkers and trade unions generally prefer this method. Forpromotion by seniority employees are arranged exactly asper the date of appointment and promotions are givenexactly as per this fixed order.

Merits:

Easy to administer.

Less scope for arbitrariness in fixing seniority. Labor unions welcome this.

Seniority and experiences go hand to hand.

Subordinates are more willing to work under an elderboss who has given many years to the service.

Loyalty is rewarded.

Demerits:

• Seniority is no indication of competence.

• No encouragement to learning and growth

• Affects morale of meritorious workers.

• Management not favorable for this method• Leads to labor turnover.

• Efficient and inefficient workers are treated at par.

ii) Promotion by merits:

This is an alternative to the above given method. Here promotion isgiven as per the merits of workers such merits include educational

background, experience and qualities such as honesty, sincerity andinvolvement in the work. Here seniority is not given importance.Management always prefers promotion by merits where asemployees and their union demand promotions by seniority.

In order to introduce promotion by merits, it is necessary to keep up-to-date records of each employee, production records, specialachievements, merit awards, late coming, leave records etc.whenever a promotion decision is challenged, these records can beproduced to prove the objectivity an impartiality of the management

and the decision taken. Although this system compared to above isdifficulty to implement, as employee are convinced about the

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objectivity of system of performance appraisal, much of theiropposition to merit as a criterion for promotion would disappear

Merits:

Promotion given to capable to capable person Efficiency is encouraged, recognized and rewarded.

Competent people are retained

Productivity increases.

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Demerits:

Discontentment among senior employees.

Scope for favoritism.

Loyalty is not rewarded.

Opposition from union leader.

C) To promote the employee against vacancies or non vacancies:

In many organization employees are promoted on a non-vacancybasis after they complete a minimum period of service. Suchpromotions are time-bound and not based on vacancies or merit.

The other practice is to link promotions to vacancies.

d) When promotion is based on competence, opening for promotion

should be displayed prominently at several places to enable peopleto reply.

TYPES OF PROMOTION

As noted above, a promotion involves an increase in status, pay andresponsibilities. But in certain cases only the pay increases andother elements remain stagnant. In other cases, only the statusincreases without a corresponding increase in pay or responsibilities.

Depending on which elements increase and which remain stagnant,promotions may be classified into the following types:

a. Horizontal Promotion: This type of promotion involves anincrease in responsibility and pay, and a change in designation. Fore.g. a lower division clerk is promoted as an upper division clerk. thistype of promotion is referred to as “upgrading” the position of anemployee.

b. Vertical Promotion: This type of promotion results in greaterresponsibility, prestige and pay, together with a change in thenature of the job. A promotion is vertical when a canteen employeeis promoted to an unskilled job.

c. Dry Promotion: Dry promotions are given as an alternative toincrease in remuneration. Here, the promotee may be given one ortwo annual increments.

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Importance / Uses of job Analysis

Initially, the concept of job analysis was limited to operative jobs andit used to be undertaken for providing information to the recruitmentof operatives. However, over the period of time, job analysis hasextended to managerial analysis jobs. Therefore, in the presentcontext, the uses of job analysis have extended beyond recruitmentof personnel, which are as follows:

a. Organizational Design :

Organizational design involves building a network of relationshipamong various functions and positions. The steps involved inorganizational design are identification of various jobs to be

performed, grouping these jobs together on the basis of similarity,and assigning these jobs to a position. Since assignments of jobscreates responsibility, commensurate authority is delegated so thatthe relevant information for completing the total steps of organizational design. It provides the bas4e for identifying thecontents of different jobs, their interrelationship andinterdependence, responsibility involved in a job, andinterdependence, responsibility involved in a job, and authority thatmay be required to perform the job.

b. Acquisition of Personnel:

Acquisition of personnel involves human resource planning,recruitment and selection, and orientation and placement. In eacharea, job analysis helps in the following ways:b.1. Human Resource planning: Human resource planning, asdiscussed earlier, involves determination of number and type of personnel required in future by the organization. The basis of thisdetermination is the types of jobs that may be required to beperformed in order to achieve organizational objectives. Job analysis

provides information for forecasting human resource needs in termsof knowledge, skills and experience. It also provides help in planningfor promotions and transfers by indicating lateral and verticalrelationship among different jobs.

b.2. Recruitment and Selection: Recruitment and selection, takentogether, involve the identification of sources from where thepersonnel will be acquired, motivating them for making themselvesavailable for selection and selecting those who meet the criteria asprovided in job description and job specification. The total process of

recruitment and selection is based on the principle of matching jobsand individuals. In this process, various job-related factors in the

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form of tasks and responsibilities and individual- related factors inthe form of knowledge, skills and experience are matched. Bothtypes of information are provided by jobs analysis.

b.3. Orientation and placement: Job analysis helps in orientationand placement of personnel by further matching between jobs andindividuals. This further matching is required when personnel areselected for a group of jobs rather than for specific jobs. In manycases, individuals are selected for a group of jobs such asmanagement trainees, consultants, etc. Their match with jobrequirements determines their placement in specific jobs. Jobanalysis helps in providing information about such job requirement.

c. Human Resource Development: In the dynamic environment,

human resource development (HRD) is undertaken as a continuousprocess to match individuals and job requirements. Such matching isindicated by the information provided by job analysis. Thus, jobanalysis helps in the following areas of human resourcedevelopment:

c.1. Career Planning: Career planning involves determination of pathof upward movement of individuals in the organization. Theindividuals join the organization at a particular level and makeupward progression at various levels in their career. Job analysis

provides information about the opportunities in terms of careerpaths and jobs availability in the organization. In the light of thisinformation, both individuals and organization make suitable effortsfor career planning and development.

c.2. Training and development: Career planning itself is notsufficient but it requires the efforts in the form of training anddevelopment so that the individuals are equipped to meet therequirements of their jobs to be performed at valuable informationto identify training and development needs of various individuals. A

clear idea of what is required on the job help in deciding what islearnt and developed in order to be effective.

d. Job Evaluation and compensation: Job evaluation is the processof determining the relative worth of different jobs in an organizationwith a view to link compensation, both basic and supplementary,with the worth of the jobs. The worth of a job is determined on thebasis of job analysis provides both in the forms of job descriptionand job in the forms of job description and job specification.

e. Performance Appraisal: Performance appraisal involvesassessment of actual job performance by an employee in the light of

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what is expected of him. Such an assessment is used for promotion,pay increase, and identification of training needs. Job analysis helpsin determining performance standards against which the actual jobperformance is measured.

f. Safety and Health: Job analysis helps in taking preventivemeasures for maintaining safety and health of employees at theworkplace by providing information about unhealthy and hazardousenvironmental and operational conditions in various jobs. Heat,noise, fumes, etc. are examples of such conditions, which causeoccupational diseases if proper preventive measures are notadopted.

The process of the job analysis

The following figures illustrate the process of job analysis. The figurealso points out the use of information about jobs. As may be seenfrom the figure, job analysis is useful for several purposes, such aspersonnel planning, performance appraisal and the like. Each phasein the process of job analysis is as follows: -

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Strategic Choices

Gather Information

Process

Information

Job Description

Job Specification

Strategic Choices

With regards to job analysis, an organization is required to make atleast five choices

• The extent of employee involvement in the job analysis

• The level of details of the job analysis

• Timing and frequency of analysis

• future oriented job analysis

Uses of Job Description & Job Specification

o Personnelo Planningo Performance Appraisalo

Hiringo Training &

Developmento Job Evaluation &

Compensationo Health & Safetyo Employee Disciplineo Work Schedulingo Career Planning

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Employee Involvement

As was stated above, the job analysis involves collecting job relatedinformation duties, responsibilities, skills and knowledge required toperform their jobs. It may be stated that in job analysis, informationabout a job is collected and not about incumbent, however, the

jobholder is consulted. Employees are often asked to supply vitalinformation about the content of jobs given the familiarity of it.

To what extent involvement is needed to be in is an important point. Too much involvement may result in biased Decision making, as theemployee is likely to inflate the duties and responsibilities of hisdrops, just to make it appear more important than it actually is. On

the other hand, if employees are not involved or only minimalinvolvement, they tend to become suspicious about the motivebehind the talk analysis. Besides, lack of involvement fromemployees may eat to in at a rate and incomplete information. Theextent to which employees are involved depends upon the needs of both the organization and the employees.

The Level of Details

The level of the details required in job analysis also depends upon

the purpose for which job related details are being collected. Forexample, if the primary purpose for analyzing the job is of massinput for intensive training programmes or an input for assessinghow much the job is worth, the level of the details required may begreat. However, if the job analysis is being done to add clarificationto the rules and responsibilities of the less detailed job analysis isneed.

When And How Often

Under the strategic choice relates to the timing and frequency of conducting the job analysis is generally conducted when(1) The organization is

newly established and that job analysis is initiated for the firsttime.

(2) A new job is createdin an established company.

(3) A job is a changed significantly due to change in technology,methods, procedures or system.

(4) The organization is considering a new remuneration plan.

(5) The employees or managers feel that there exist certaininequities between job demands and the remuneration it carries.

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Future Oriented

If an organization is changing rapidly due to fast growth ortechnological change, a more future oriented approach to jobanalysis may be desired. Traditional job analysis informationdescribes how the job has been done in the past and the manner inwhich it is being currently done. If necessary, a future orientationcan be given to the job analysis and predictions may be made as tohow the job will be done in the future and the way it should be done.

This will allow organizations to begin hiring and training people forthese jobs prior to the actual changes. For example, personalcomputers began to replace electronic typewriters, thus changingthe characters of many typist jobs. Many companies anticipatedthese changes and began retraining their typist before changing

over to PC's.

(1) Gather Information:

Information Collection: After defining the uses of job analysis,relevant information is collected to ascertain the variouscharacteristics of the job. Various aspects on which information iscollected are activities involved in the job, responsibilities associatedwith the job, the type of environment in which in the person who willperform the job. The relevant information may be collected through

a number of present employees performing similar job, criticalincidents involved, checklist prepared for analyzing the job, andquestionnaire.

METHODS OF COLLECTING JOB DATA

The methods of collecting job-related data are presented in thediagram given below:

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Observation: In this method, the Job analyst carefully observes the job holder at work and records what she does, how she does andhow much time is needed for completion of a given task. Thismethod has both, positive and negative side. On the positive side,the method is simple, and the data collected are accurate becauseof direct observation. On the flip side, the method is time consumingand inapplicable to jobs which involve high proportion of unobservable mental activities and those which do not have

complete and easily observable job cycles. The analyst needs to betrained to carefully observe and record the competence of a jobincumbent (officer). Training also means additional cost, consideringall these, the observation method may be used for analyzingrepetitive, short-cycle, unskilled and semi-skilled jobs. Better resultswill be available when the observation method is used along withthe other method/s of job analysis.

Interview: In this, the analyst interviews the job holder and hissupervisor to elicit information about the job. Usually, a structured

interview form is used to record the information. During theinterview, the analysts must make judgment about the informationto be included and its degree of importance. The interview methodis time consuming. The time problem will be compounded if theinterviewer talks with two or more employees doing the same job.Also, professional and managerial jobs are more complicated toanalyze and usually require a longer interview. There is also aproblem of bias on the part of the analyst and the job holder maycloud the accuracy and objectivity of the data obtained. The positivefeature of this method is, it involves talking to the job holders who

are in a good position to describe what they do, as well as the

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qualifications needed to perform their duties in a competentmanner.

Questionnaire: Job holders fill in the given structuredquestionnaires, which are then approved by their supervisors. Thefilled-in-questionnaires offer enough data on jobs. Standardquestionnaires are available or they may be prepared for thepurpose by the analysts. Standard or prepared questionnairesshould contain the following information:

a. The job title of the job holder;b. The job title of the job holder’s manager or supervisor;c. The job titles and numbers of the staff reporting to the job

holder ;

d. A brief description of the overall role and purpose of the joband;e. A list of the main task or duties that the job holder has to carry

out.

On positive side,

• This method provides comprehensive information about the job which makes job analysis complete and satisfactory.

• This method enables the analyst to cover large number of jobs

within a short time.• This method gives opportunity to all job holders to participate

in the method and express themselves freely.

On negative side;

• It is very costly and at times time consuming method.

• There is no direct contact between the analyst and job holders.

• Due to the above factor, the co-operation and response of the

respondents tend to be low. Checklist method:

This is similar to questionnaire method, but the response sheetcontains fewer subjective judgements and tends to be either-yes-or-no variety. It may cover as many as 100 activities and jobholder tickonly those tasks those are included in their jobs. Preparation of checklist is a challenging job. The work should preferably be given tospecialists. Well prepared checklist is sent to the job holder. He is

asked to check all listed tasks and indicate the amount of time spenton each task as well as the training and experience required in order

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to be proficient in each task. The holder may also be asked to writeadditional task which performs but is not mentioned in the checklist.On positive side:

• It is useful in large organizations that have large number of

people assigned to one particular job;On negative side:

• It is lengthy and costly. Also, not suitable for small organizationwith limited manpower employed.

Technical Conference Method: In this method, services of supervisors (who are experts) who possess extensive knowledgeabout a job are obtained. Here, a conference of supervisors is used.

The analysts initiate discussion which provides details about jobs. Though a good method of data collection, it lacks accuracy as actual job holders are not involved in collecting information.

Diary Method: this method requires the job holders to record indetail their activities each day. If done faithfully, this technique isaccurate and eliminates errors caused by memory lapses, the jobholder makes while answering questionnaires and checklists. Thismethod is also time consuming because recording of tasks mayhave to be spread over a number of days. Diary method is not usedmuch in practice.

C. Information Processing:

The last step in job analysis process is information processing whichinvolves editing and classifying information in to different relevantcategories. Based on this exercise, job description and specificationare prepared which are used for various purposes as identified in thebeginning of job analysis.

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(d)

JOB ANALYSIS

A Process of obtaining all pertinent job facts.

Job Description.

A statement containsitemsSuch as: -

o Job Titleo Locationo Job Summaryo Dutieso Hazardso Machines, Tools

&Equipments

o Materials &

Forms usedo Supervision

given orReceived.

Job Specification.

• A statement of humanqualifications necessary

to do the job. Usuallycontains such item as:-

• Education

• Experience

• Training

• Judgment

• Initiative

• Physical efforts

•

Physical skills• Responsibilities

• Communication skills

• Emotional characteristics

• Usually sensory demandssuch as sight, smell,hearing etc.

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Chapter- 3 - Job Analysis, Design and Evaluation

The chapter HRP has given as an appropriate idea on how to planhuman resources effectively. Now, in order to achieve effective HRP,the duties involved and the skills required for performing all the jobsin an organization have to be taken care of. This knowledge isgained through the analysis of work, popularly called job analysis.

JOB ANALYSIS

An organization requires personnel of different types so thatdifferent jobs are performed effectively. In other words, there is anattempt to match the jobs and jobholders. For achieving thismatching, detailed knowledge of the nature and the requirements of

different jobs is essential. Job analysis provides this knowledge. Jobanalysis is essentially a process of collecting and analyzing relevantfacts of a job with a view to identify its contents and thecharacteristics of the person who is likely to perform the job. USLabor Department has defined job analysis as follows:

“Job analysis is the process of determining, by observation andstudy, and reporting pertinent information relating to the nature of aspecific job… It is the determination of the tasks which comprise the

job and of the skills, abilities and responsibilities required of the

worker for a successful performance and which differentiates one job from all others.”

Flippo has offered a more comprehensive definition of job analysiswhich is as follows:

“Job analysis is the process of studying and collecting informationrelating to the operations and responsibilities of a specific job. Theimmediate products of this analysis of this analysis are jobdescriptions and job specification.”

Thus, job analysis involves the process of identifying the nature of a job (job description) and the qualities of the likely job holder (jobspecification).

Importance / Uses of job Analysis

Initially, the concept of job analysis was limited to operative jobs andit used to be undertaken for providing information to the recruitmentof operatives. However, over the period of time, job analysis hasextended to managerial analysis jobs. Therefore, in the present

context, the uses of job analysis have extended beyond recruitmentof personnel, which are as follows:

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a. Organizational Design :

Organizational design involves building a network of relationshipamong various functions and positions. The steps involved inorganizational design are identification of various jobs to beperformed, grouping these jobs together on the basis of similarity,and assigning these jobs to a position. Since assignments of jobscreates responsibility, commensurate authority is delegated so thatthe relevant information for completing the total steps of organizational design. It provides the bas4e for identifying thecontents of different jobs, their interrelationship andinterdependence, responsibility involved in a job, andinterdependence, responsibility involved in a job, and authority that

may be required to perform the job.

b. Acquisition of Personnel:

Acquisition of personnel involves human resource planning,recruitment and selection, and orientation and placement. In eacharea, job analysis helps in the following ways:b.1. Human Resource planning: Human resource planning, asdiscussed earlier, involves determination of number and type of personnel required in future by the organization. The basis of this

determination is the types of jobs that may be required to beperformed in order to achieve organizational objectives. Job analysisprovides information for forecasting human resource needs in termsof knowledge, skills and experience. It also provides help in planningfor promotions and transfers by indicating lateral and verticalrelationship among different jobs.

b.2. Recruitment and Selection: Recruitment and selection, takentogether, involve the identification of sources from where thepersonnel will be acquired, motivating them for making themselves

available for selection and selecting those who meet the criteria asprovided in job description and job specification. The total process of recruitment and selection is based on the principle of matching jobsand individuals. In this process, various job-related factors in theform of tasks and responsibilities and individual- related factors inthe form of knowledge, skills and experience are matched. Bothtypes of information are provided by jobs analysis.

b.3. Orientation and placement: Job analysis helps in orientationand placement of personnel by further matching between jobs and

individuals. This further matching is required when personnel areselected for a group of jobs rather than for specific jobs. In many

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cases, individuals are selected for a group of jobs such asmanagement trainees, consultants, etc. Their match with jobrequirements determines their placement in specific jobs. Jobanalysis helps in providing information about such job requirement.

c. Human Resource Development: In the dynamic environment,human resource development (HRD) is undertaken as a continuousprocess to match individuals and job requirements. Such matching isindicated by the information provided by job analysis. Thus, jobanalysis helps in the following areas of human resourcedevelopment:

c.1. Career Planning: Career planning involves determination of pathof upward movement of individuals in the organization. The

individuals join the organization at a particular level and makeupward progression at various levels in their career. Job analysisprovides information about the opportunities in terms of careerpaths and jobs availability in the organization. In the light of thisinformation, both individuals and organization make suitable effortsfor career planning and development.

c.2. Training and development: Career planning itself is notsufficient but it requires the efforts in the form of training anddevelopment so that the individuals are equipped to meet the

requirements of their jobs to be performed at valuable informationto identify training and development needs of various individuals. Aclear idea of what is required on the job help in deciding what islearnt and developed in order to be effective.

d. Job Evaluation and compensation: Job evaluation is the processof determining the relative worth of different jobs in an organizationwith a view to link compensation, both basic and supplementary,with the worth of the jobs. The worth of a job is determined on thebasis of job analysis provides both in the forms of job description

and job in the forms of job description and job specification.

e. Performance Appraisal: Performance appraisal involvesassessment of actual job performance by an employee in the light of what is expected of him. Such an assessment is used for promotion,pay increase, and identification of training needs. Job analysis helpsin determining performance standards against which the actual jobperformance is measured.

f. Safety and Health: Job analysis helps in taking preventive

measures for maintaining safety and health of employees at theworkplace by providing information about unhealthy and hazardous

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environmental and operational conditions in various jobs. Heat,noise, fumes, etc. are examples of such conditions, which causeoccupational diseases if proper preventive measures are notadopted.

The process of the job analysis

The following figures illustrate the process of job analysis. The figurealso points out the use of information about jobs. As may be seenfrom the figure, job analysis is useful for several purposes, such aspersonnel planning, performance appraisal and the like. Each phasein the process of job analysis is as follows: -

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Strategic Choices

Gather Information

Process

Information

Job Description

Job Specification

Strategic Choices

With regards to job analysis, an organization is required to make atleast five choices

• The extent of employee involvement in the job analysis

• The level of details of the job analysis

• Timing and frequency of analysis

• future oriented job analysis

Uses of Job Description & Job Specification

o Personnelo Planningo Performance Appraisalo

Hiringo Training &

Developmento Job Evaluation &

Compensationo Health & Safetyo Employee Disciplineo Work Schedulingo Career Planning

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Employee Involvement

As was stated above, the job analysis involves collecting job relatedinformation duties, responsibilities, skills and knowledge required toperform their jobs. It may be stated that in job analysis, informationabout a job is collected and not about incumbent, however, the

jobholder is consulted. Employees are often asked to supply vitalinformation about the content of jobs given the familiarity of it.

To what extent involvement is needed to be in is an important point. Too much involvement may result in biased Decision making, as theemployee is likely to inflate the duties and responsibilities of hisdrops, just to make it appear more important than it actually is. Onthe other hand, if employees are not involved or only minimal

involvement, they tend to become suspicious about the motivebehind the talk analysis. Besides, lack of involvement fromemployees may eat to in at a rate and incomplete information. Theextent to which employees are involved depends upon the needs of both the organization and the employees.

The Level of Details

The level of the details required in job analysis also depends upon

the purpose for which job related details are being collected. Forexample, if the primary purpose for analyzing the job is of massinput for intensive training programmes or an input for assessinghow much the job is worth, the level of the details required may begreat. However, if the job analysis is being done to add clarificationto the rules and responsibilities of the less detailed job analysis isneed.

When And How Often

Under the strategic choice relates to the timing and frequency of conducting the job analysis is generally conducted when(6) The organization is

newly established and that job analysis is initiated for the firsttime.

(7) A new job is createdin an established company.

(8) A job is a changed significantly due to change in technology,methods, procedures or system.

(9) The organization is considering a new remuneration plan.

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(10) The employees or managers feel that there exist certaininequities between job demands and the remuneration it carries.

Future Oriented

If an organization is changing rapidly due to fast growth ortechnological change, a more future oriented approach to jobanalysis may be desired. Traditional job analysis informationdescribes how the job has been done in the past and the manner inwhich it is being currently done. If necessary, a future orientationcan be given to the job analysis and predictions may be made as tohow the job will be done in the future and the way it should be done.

This will allow organizations to begin hiring and training people forthese jobs prior to the actual changes. For example, personalcomputers began to replace electronic typewriters, thus changingthe characters of many typist jobs. Many companies anticipatedthese changes and began retraining their typist before changingover to PC's.

(2) Gather Information:

Information Collection: After defining the uses of job analysis,relevant information is collected to ascertain the various

characteristics of the job. Various aspects on which information iscollected are activities involved in the job, responsibilities associatedwith the job, the type of environment in which in the person who willperform the job. The relevant information may be collected througha number of present employees performing similar job, criticalincidents involved, checklist prepared for analyzing the job, andquestionnaire.

METHODS OF COLLECTING JOB DATA

The methods of collecting job-related data are presented in thediagram given below:

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Observation: In this method, the Job analyst carefully observes the job holder at work and records what she does, how she does andhow much time is needed for completion of a given task. Thismethod has both, positive and negative side. On the positive side,the method is simple, and the data collected are accurate becauseof direct observation. On the flip side, the method is time consumingand inapplicable to jobs which involve high proportion of unobservable mental activities and those which do not have

complete and easily observable job cycles. The analyst needs to betrained to carefully observe and record the competence of a jobincumbent (officer). Training also means additional cost, consideringall these, the observation method may be used for analyzingrepetitive, short-cycle, unskilled and semi-skilled jobs. Better resultswill be available when the observation method is used along withthe other method/s of job analysis.

Interview: In this, the analyst interviews the job holder and hissupervisor to elicit information about the job. Usually, a structured

interview form is used to record the information. During theinterview, the analysts must make judgment about the informationto be included and its degree of importance. The interview methodis time consuming. The time problem will be compounded if theinterviewer talks with two or more employees doing the same job.Also, professional and managerial jobs are more complicated toanalyze and usually require a longer interview. There is also aproblem of bias on the part of the analyst and the job holder maycloud the accuracy and objectivity of the data obtained. The positivefeature of this method is, it involves talking to the job holders who

are in a good position to describe what they do, as well as the

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qualifications needed to perform their duties in a competentmanner.

Questionnaire: Job holders fill in the given structuredquestionnaires, which are then approved by their supervisors. Thefilled-in-questionnaires offer enough data on jobs. Standardquestionnaires are available or they may be prepared for thepurpose by the analysts. Standard or prepared questionnairesshould contain the following information:

f. The job title of the job holder;g. The job title of the job holder’s manager or supervisor;h. The job titles and numbers of the staff reporting to the job

holder ;

i. A brief description of the overall role and purpose of the joband; j. A list of the main task or duties that the job holder has to carry

out.

On positive side,

• This method provides comprehensive information about the job which makes job analysis complete and satisfactory.

• This method enables the analyst to cover large number of jobs

within a short time.• This method gives opportunity to all job holders to participate

in the method and express themselves freely.

On negative side;

• It is very costly and at times time consuming method.

• There is no direct contact between the analyst and job holders.

• Due to the above factor, the co-operation and response of the

respondents tend to be low. Checklist method:

This is similar to questionnaire method, but the response sheetcontains fewer subjective judgements and tends to be either-yes-or-no variety. It may cover as many as 100 activities and jobholder tickonly those tasks those are included in their jobs. Preparation of checklist is a challenging job. The work should preferably be given tospecialists. Well prepared checklist is sent to the job holder. He is

asked to check all listed tasks and indicate the amount of time spenton each task as well as the training and experience required in order

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to be proficient in each task. The holder may also be asked to writeadditional task which performs but is not mentioned in the checklist.

On positive side:

•

It is useful in large organizations that have large number of people assigned to one particular job;On negative side:

• It is lengthy and costly. Also, not suitable for small organizationwith limited manpower employed.

Technical Conference Method: In this method, services of supervisors (who are experts) who possess extensive knowledgeabout a job are obtained. Here, a conference of supervisors is used.

The analysts initiate discussion which provides details about jobs. Though a good method of data collection, it lacks accuracy as actual

job holders are not involved in collecting information.

Diary Method: this method requires the job holders to record indetail their activities each day. If done faithfully, this technique isaccurate and eliminates errors caused by memory lapses, the jobholder makes while answering questionnaires and checklists. Thismethod is also time consuming because recording of tasks mayhave to be spread over a number of days. Diary method is not usedmuch in practice.

C. Information Processing: The last step in job analysis process is information processing whichinvolves editing and classifying information in to different relevantcategories. Based on this exercise, job description and specificationare prepared which are used for various purposes as identified in thebeginning of job analysis.(d)

JOB ANALYSIS

A Process of obtaining all pertinent job facts.

Job Description.

A statement containsitemsSuch as: -

o Job Titleo Locationo Job Summaryo Dutieso Hazardso Machines, Tools

&Equipments

o Materials &Forms used

o Supervisiongiven orReceived.

Job Specification.

• A statement of humanqualifications necessary

to do the job. Usuallycontains such item as:-

• Education

• Experience

• Training

• Judgment

• Initiative

• Physical efforts

•

Physical skills• Responsibilities

• Communication skills

• Emotional characteristics

• Usually sensory demandssuch as sight, smell,hearing etc.

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JOB DESCRIPTION

Job description is a written statement showing job title, tasks, dutiesand responsibilities involved in a job. It also prescribes the workingconditions, hazards, stress that it can produce and the relationshipwith other jobs. Job description is necessary to do the jobsatisfactorily.

Flippo has defined job description as follows:“A job description is an organized, factual statement of duties andresponsibilities of a specific job. In brief, it should tell

• what is to be done,

• how it is done and

• Why.

It is a standard of function, in that it defines the appropriate andauthorized content of a job.”

Generally, a job description contains the following information:1. Job title, code number, department / division.2. Job contents in terms of activities or tasks performed.3. Job responsibilities towards effective performance of the job.4. Working conditions specifying specific hazards.5. Social environment prevailing at the workplace.6. Machine tools and equipments.

7. Extent of supervision given and received.8. Relationship with other jobs-vertical, horizontal and diagonal.

The following figure gives an example of a Job Description.Once the job description has been written and finalized with the linemanager (who will be responsible for the post-holder), the nextstage in the recruitment process is the drafting of the personnelspecification.

JOB DESCRIPTION

Job Title: Human Resources ManagerReports to: Human Resources DirectorImmediate Subordinates: Human Resources Officer

Safety Officer Training and Development OfficerOccupational Health Nurse

Purpose of the Job:Within the limits of human resources policies, to provide a fullhuman resources service to line management and to provide aframework for maintaining good relationships between managementand staff (including staff representatives).

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Responsibilities:1. Ensuring the efficient recruitment and selection of suitable andsufficient employees to meet vacancies identified by departmentmanagers.2. Implementing the company’s remuneration policy in accordancewith laid-down procedures.3. Advising line managers on employee relations and legal mattersduring negotiations with trade union representatives, at branch andlocal level.4. Establishing and maintaining a regular programme of jointconsultation with employee representatives and seniormanagement.5. Providing adequate training programmes for the induction of new

recruits and training and development for managers and employees.6. Advising department managers on management developmentprogrammes.7. Maintaining adequate records for employees.8. Providing a routine health and welfare service for all employeesincluding arrangements for giving first aid.

Economic Conditions:Salary will be commensurate with the grade and scope of the post,as laid out in the contract of employment.

37 hours per week with five weeks’ holiday per year.Company car will be provided.

Qualifications Required:Over 3 years’ experience in human resources management.Previous experience of negotiating with trade union representatives.Professional qualifications (including membership of the Institute of Personnel and Development) essential.

Uses of Job Description:. 1. Job grading and job classification

2. Providing base for preparing job specification, leading torecruitment and selection.

3. Procurement and placement of employees.4. Developing career path.5. Training and development.6. Setting performances standards and appraisal.7. Promotion and transfer.8. Developing work procedures and processes.

9. Taking preventive measures to minimizes the impact of hazardous conditions

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JOB DESIGN

Definition

Work arrangement (or rearrangement) aimed at reducing orovercoming job dissatisfaction and employee alienation arising fromrepetitive and mechanistic tasks. Through job design,organizations try to raise productivity levels by offering non-monetary rewards such as greater satisfaction from a sense of personal achievement in meeting the increased challenge andresponsibility of one's work. Job enlargement, job enrichment, job rotation, and job simplification are the various techniques used in a

job design exercise.

Job design has emerged as important area for work motivationbecause the traditional job design has produced job unfriendlinessresulting into monotony, powerlessness, meaninglessness,employee absenteeism, and employee turnover. Any person whoworks for living speeds a significant amount of his time at theworkplace executing the requirement, duties, and activities involvedin jobs.

The basic objective of a job design is to find fit between a job and job holder so that job is performed well and the job holder

experiences satisfaction and puts his best effort for job

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performance. Job design involves integration of tasks, duties, andresponsibilities in to a unit of work to achieve certain objectives.

Mathis and Jackson have defined job design as follows:“Job design integrates work content (tasks, functions, relationships),the rewards (extrinsic and intrinsic), and the qualifications required(skills, knowledge, abilities) for each job in a way that meets theneeds of employees and the organization.

FACTORS AFFECTING JOB DESIGN

Job design is dependent upon the following factors:1. Organizational Factors2. Environmental Factors3. Behavioral factors

Organizational Factors:This includes characteristics of task, workflow, ergonomics and work

practices.

Characteristics of Tasks: Job design depends upon the task to becarried out. The designs may differ if one person carries varioustasks or if the task is to be performed by together

Work Flow: The flow of work in an organization strongly influencedby the nature of product or service. Jobs must be designed in such away the flow of work is not obstructed and the employee movementis least.

Ergonomics: Ergonomics is the study of people’s efficiency in theworking environment. Ergonomics helps the employer to design jobsin such a way that the workers physical abilities and job demandsare balanced.

Work Practices: Work Practices are the set of ways of performing a

task. Work practices develop over a period of time. Therefore all the jobs must be designed so as to confer to the existing practices.

Environmental Factors

Environmental factors include employee abilities and availability,social and cultural expectations.

Employees’ Abilities and Availability:

Efficiency consideration must be balanced against the abilities and

availability of the people who are to do the work to be doneefficiently.. Also the design depends upon the availability of persons

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to do a particular job. For example an organization, which does nothave employees with the knowledge to operate a computer, cannotdesign a job, which requires the employee to necessarily work onthe computer and therefore in order to do the same amount of workin time it must employ additional employees. Another example canWhen Henry Ford made use of the assembly line, for e.g., he wasaware that most potential workers lacked any automobile – makingexperience. So, jobs were designed simple and required littletraining.

Social and Cultural Expectations:

With the inflow of globalization the expectations of the employeeswith regards to their jobs has raised. Hence it is necessary to createor design jobs that fulfill their expectations. Hence it is necessary tocreate or design jobs that fulfill their expectations. Also theemployees respect certain social needs like religious beliefs,sophistication in the work etc…such needs must keep in mind whiledesigning jobs.

Behavioral Factors

Behavioral factors include feedback, autonomy, and use of abilities,variety.

Feedback:

Ideally a job must be designed such that a single person mustbe able to do it completely or at least a significant part of it.

This helps him to get meaningful feedback, which in turnhelps him to do the job better.

Autonomy:

Every job must be designed in such a way that the concernedperson has a certain amount on autonomy to take his owndecisions. This makes him feel responsible for the job thusincreasing his self-esteem and his performance.

Use of abilities:

The job must be designed in such a way that the abilities of the employees are used to there fullest. This will not onlyimprove the quality of the job but also give the employee

self-satisfaction.

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Variety:

Monotony of work causes boredom, which is directly relatedto their performance and also employee turnover. Thusemployees must be given an opportunity to try theirabilities at different jobs depending upon skills.

MAIN APPROACHES TO JOB DESIGN:

1. Job Rotation: Job Rotation is the movement between different jobs. One day a person may be working in one part of the factoryand the next day they may work in a different part. This avoids theemployee becoming bored as with Job Rotation they are doingdifferent jobs all the time and learning new skills. Multi skilling is

when people have many skills so they are able to carry out manydifferent jobs. Multi skilling benefits the employer as if they are shortof staff in one area, they can move people across.

Job Rotation is closely related to Job Transfer. Transfer of employeesfrom one job to the other or from one department to the other isquite common in all organizations. Management can transfer theservices of employees as per the requirements of the organization.

The effect of Job Transfer and rotation is similar. Both bringmovement of worker from one job to the other but the background

is different.

Thus, Job Rotation implies systematic movement of employees fromone job to the other. Job remains unchanged but employeesperforming them shift.

With Job Rotation, an employee is given an opportunity to performdifferent jobs, which enriches his skills, experience and ability toperform different jobs.

A D V A N T A G

E S RENEWAL: Reduction of boredom, making new

contacts, thinking about new options,change viewpoint

EXPLORATION: Trying new things, developing newrelationships, testing administrative skills.

SPECIALIZATION: Re-education, in-depth exploration, usingspecial skills, meeting a need that wasunderserved.

BALANCE: Time allocation, taking time from regularassignment, balancing workload.

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D I S A D

V A N T A G E S CLARITY: Lack of information needed to be

successful, lack of clear plans and goals,

ORIENTATION: Lack of structured instructions to specialassignments, new skills not being taughtproperly, difficulties in learning newassignments,

2. Job Enlargement : It means expanding the number of tasks,or duties assigned to a given job. Adding more tasks or duties to a

job does not necessarily mean that new skills and abilities areneeded. There is only horizontal expansion. It is with same skillstaking additional responsibilities like increasing the number of machines operators under a supervisor from 10 to 15. Job

enlargement may involve breaking up of the existing work systemand redesigning a new work system. For this employees also need tobe trained to adjust to the new system. Job enlargement is said tocontribute to employee motivation but the claim is not validated inpractice.

3. Job Enrichment : Job enrichment is to add a few moremotivators to a job to make it more rewarding. A job is enrichedwhen the nature of the job is exciting, challenging, rewarding andcreative or gives the job holder more decision-making, planning andcontrolling powers. An enriched job will have more authority,responsibility, autonomy (vertical enrichment), more variety of tasks(horizontal enrichment) and more growth opportunities. Theemployee does more planning and controlling with less supervisionbut more self-evaluation. For example: transferring some of thesupervisor’s tasks to the employee and making his job enriched. Asper Hertzberg, who was the father of this term, an enriched job haseight characteristics:

(a) Direct Feedback : Employee should be able to getimmediate knowledge of the results they are achieving as itacts as motivator.

(b) Client Relationship : An employee who serves a clientor customer directly has an enriched job.

(c) New Learning : An enriched job allows its incumbent to feelthat he is growing intellectually.

(d) Scheduling Own Work : Freedom to schedule own work(autonomy) is job enrichment. Deciding when to tacklewhich assignment is an example of self-scheduling.

Employees who perform creative work have more

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opportunity to schedule their assignments than those whoperform routine jobs.

(e) Unique Experience : An enriched job has some uniquequalities or features.

(f) Control over Resources : One approach to Job enrichmentis for the each employee to have control over his or herresources and expenses. For e.g. he/she must haveauthority to order supplies necessary for completing his job.

(g) Direct Communication Authority : An enriched joballows worker to communicate directly with people who usehis or her output.

(h) Personal Accountability : An enriched job holds theincumbent responsible for the results. He or she receivespraise for good work and blame for poor work.

Problems with Job Enrichment(a) Job enrichment is not a substitute for good governance. If other environmental factors in the business are not right,mere job enrichment will not mean much.

(b) Job enrichment may have short term negative effects till theworker gets used to the new responsibility.

(c) Job enrichment itself might not be a great motivator since itis job-intrinsic factor. As per the two-factor motivationtheory, job enrichment is not enough. It should be precededby hygienic factors etc.

(d) Job enrichment assumes that workers want moreresponsibilities and those workers who are motivated byless responsibility, job enrichment surely de-motivates them

(e) Workers participation may affect the enrichment processitself.

(f) Change is difficult to implement and is always resisted as job enrichment brings in a changes the responsibility.

Autonomous or Self-Directed Teams : Empowermentresults in self-directed work teams. A self-directed team is a group

of employees responsible for a whole work segment. They worktogether, handle day-to-day problems, plan and control, and arehighly effective team.

There are some limitations of such empowered teams. Forexample, the union response to self directed teams may notbe positive. Secondly, getting worker co-operation for workteams may not be encouraging, as there is psychologicalunwillingness to accept responsibilities. Even managers andsupervisors doubt the role of empowered teams as they are

losers in terms of status, authority and power. Implementation

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of work team technique is difficult.

Advantages of Teams:(a) Greater employee involvement and motivation.(b) Higher productivity.(c) Improved sense of responsibility among team members.(d) Wide learning opportunities to team members.(e) Management can meet new challenges through specialteams.

Disadvantages of Teams:(a) Compensating team members as per their contributions isdifficult.(b) Decisions may be delayed.

(c) Not suitable for individual-oriented employees. (d) Team performance is difficult to measure. This advocates of self-directed teams claim that such teams

give better results as compared to benefits available fromindividual motivation through job rotation, job enlargementand job enrichment.

EXAMPLE

Job Design Around the World

Many contemporary breakthroughs and innovations to job designwere developed and pioneered abroad. As far back as 1951, forexample, researchers at the London Tavistock Institute conductedimportant pioneering studies of jobs in the coal-mining industry inEngland. They examined a wide variety of work arrangements andfound the fact that flexibility in the manner in which jobs wereperformed improved interpersonal relationships among employeescould be a critical part of organizational effectiveness. Anotherresearch, conducted in textile units in India, focused on the

relationship between people and technology. The findings ledmanagers to better appreciate the importance of both technicalsystems and social systems in organizations.

But, perhaps, the most ambitious experiment in job design tookplace in Sweden. In, the early 1970s, Volvo was planning to build anew assembly plant near the town of Kalmar. In designing the newfactory, the firm's managers decided to see if they could change thetraditional approach to jobs in the automobile industry to make upfor many of the negative factors associated with traditional

assembly-line work. They constructed the entire facility to promote abetter job design and a more pleasant work environment for Volvo

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employees. For example, each worker was assigned a space that feltlike a small workshop rather than a large factory. Natural lightingwas emphasized, and each area had a separate lounge and restfacilities for the workers assigned there.

Instead of using a traditional assembly line, the firm installedcomputer-guided trolleys that rolled along the floor. The workersmoved around the trolleys to perform their tasks rather thanstanding stationery, while the car moved past them. This gave themthe flexibility to move the trolley off the line when a serious problemarose with the car on that particular trolley. Thus, the problem couldbe attended to without slowing down the entire line.While construction costs in the factory are about 10 per cent morethan a traditional automobile plant, Volvo management believed

that improvements in the quality of both work life and products thatresulted, compensated for at least some of the additional costs.

MECHANISM OF JOB DESIGN

Every work undergoes constant modification because of the impactof mechanization and automation. Some jobs become redundantwhile others are created and still others are altered in content. Thisnecessitates different types of education, experiences and otherattributes. Also for effecting job design, the organization needs to

respects the unions, who otherwise may stall the move on oneground or the other. While designing a job, management must alsobe concerned with the practical considerations of quantity andquality available personnel (both within the organization and in thelabor market). Personality conflict and friction, problem of thehuman relations, boredom, obsessive thanking, etc, also needs to betaken care of.

Mechanism of job design considers two aspects of a job-number of tasks in a job complexity of task, a job containing few specific tasks

is a simple one; job containing many tasks becomes difficult. Taskcomplexity is the factor associated with the performance of a job. A

job is less complex when considering a limited number of factors canperform it; a more complex job requires the considerations of largenumber of factors. Considering these two factors taken together, thenature of a job is important because it determines the skillrequirement in performing the job. A job with a few tasks of similarnature of a job is a routine one and requires fewer skills, forexample, the job of a nurse. On the other hand, a job with a varietyof tasks of different nature requires high skills, for example, the job

of an executive at higher level in the organization. Each job offersvariety, responsibility.

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JOB EVALUATION

Job evaluation is the process of determining the worth of one job in

relation to that of another without regard to the personalities. Itanalyses and assesses the content of jobs, to place them in somestandard rank order. The end result is used as the basis for a fairand logical remuneration system. A properly devised job evaluationscheme provides management with definite, systematic and reliabledata for working out wage and salary scales. Thus, logical wagenegotiation reduces wage grievances and dissatisfaction with wagedifferentials and ensures fair treatment for each employee. It alsoprovides a logical basis for promotion. A survey of British institute of Management indicated the following reasons for its use:

1. To reduce layout turnover,2. To increase output,3. To improve morale,4. To reduce loss of time due to wage negotiation and disputes,5. To reduce the complaints regarding wages,6. To reduce wage and salary anomalies.

Steps in Job Evaluation1. Thorough examination of the job (job assessment),

2. Preparation of job description (recording its characteristics tosuit assessment of method).3. Preparation of job analysis to set out the requirements of the

job under various factor headings,4. Comparison of one job with another,5. Arrangement of jobs in a progression,6. Relating the progression of jobs to a money scale.

LIMITATIONS OF JOB EVALUATION

Job evaluation alone cannot establish a wage scale. For wagefixation, we need to take into cognizance statutory requirements,like minimum wages Act, 1948. Similarly, other factors of wagefixation like capacity to pay, inter-industry wage variation, inter-regional wage variation, collective bargaining agreement, if any,also need to be given importance. Job evaluation is highly subjective(being based on judgmental estimate). Similarly, it cannot take intoaccount the cyclical effect of market value of occupations. Forexample, finance jobs were highly priced in the market at one pointof time (now IT and marketing has taken its place). Despite such

limitations, job evaluation technique is considered very useful forreasons explained earlier.

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Methods of job evaluation

1. Ranking Method

This is one of the simplest methods of job evaluation, Each job is compared to every other job in the organization,

Based on overall worth of the job to the organization, The ‘worth’ of a job is usually based on the judgments of skill,efforts, responsibility and working condition.

2. Classification method

Jobs are categorized into existing grade/category structure of hierarchy

Each level in the grade/category structure has a descriptionand associated job title

Each job is assigned to the category providing closest match tothe job

The classification of position is decided by comparing thewhole job with the appropriate job grading standards

To ensure equity in job grading and wage rates, a common setof job grading standards and instructions are used

3. Factor Comparison Method :-

This is the more scientific and systematic method of Job Evaluation.Here instead of ranking complete jobs, each job is ranked accordingto the series of factors such as skill, responsibilities, workingconditions and efforts. Pay will be assigned by comparing theweights of the factors required for each job.

4. Point Method: -

Each organization identifies its “key factors” and points are assignedto each factor in order of importance. The points are summed up todetermine the wage rate for the job. Jobs with similar point’s totalsare placed in similar pay grades.

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PROCEDURE OF JOB EVALUATION

Finding jobs to be evaluated and analyzing andpreparing job description

Selecting the method and classifying the jobs accordingly

Installing the program

Review periodically

Gaining acceptance and creating jobevaluation committee

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(1) Securing acceptance from employees: Beforeundertaking job evaluation, top management of thecompany must explain the purpose and uses of the jobevaluation programme to the employees and theirunions. In order to bring clarity to the programme, oralpresentations could be made. Letters, circulars andbooklets could also be used to classify all relevantaspects of the job evaluation programme. This will avoidpossible misunderstanding and confusion amongemployees about the job evaluation programme/ processwhich company desires to introduce. There will be overallacceptance to the programme by the employees andtheir unions. This will also avoid possible opposition fromthem in the near future.

(2) Finding / deciding the jobs to be evaluated: Every jobavailable in an organization need not be evaluated. Suchexercise may prove too taxing, costly and time-consuming.Here, certain key jobs in each department may beidentified. While selecting jobs for evaluation purpose, careneeds to be taken to ensure that they (jobs selected)represent the type of work performed in that department.

(3) Analyzing and preparing job description: In this stage of

job evaluation process, the job selected for evaluation will bestudied / analyzed in detailed. This is necessary for thepreparation of a job description and also for an appropriateanalysis of job needs for successful performance.

(4) Selecting the method of evaluation: Here, the method of job evaluation will be selected. The most appropriate methodof evaluating the jobs must be identified here, keeping the jobfactors as well as organizational demands in mind. This stagein the job evaluation process is important as the benefits of

job evaluation will be available only when the method of jobevaluation selected is appropriate.

(5) Installing the programme: Once the job evaluation process isover and a plan of action is ready, the management must explain itto employees and put it into operation in the whole organization.

This step is essential in order to clear the doubts, etc of theemployees and union leaders. It is important to note that the jobevaluation programme will be acceptable to employees when the

prograrrune is explained to them properly.

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(11) Periodical review: The \jobs in an organization needperiodical review in the light of changes in environmentconditions (technology, products, services, etc.) which maychange from time to time. For example, the traditional clericalfunctions have undergone a rapid change in various sectorssuch as banking, insurance, railways and finance aftercomputerization. New job descriptions need to be written andthe skill requirements of new jobs need to be dulyincorporated in the evaluation process. In the absence of suchperiodical review, employees may feel that all the relevant jobfactors have not been evaluated properly, based on whichtheir pay scale has been determined. This suggests theimportance of periodical review in the process of jobevaluation.

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CASE STUDY: 3 Global Services - BPO

3 Global (3G) is a subsidiary of Hutchison Essar group andoperates back-office work of 3G mobile services in Australia.

In India it is located in Mindspace, Malad. In this country thissector thrives on the availability of quality HR. Hence, thiscompany is the best example for knowing about theapplication of techniques like job analysis, job evaluation, and

job design.

Job Analysis at 3G

An operations manager heads each and every process in 3G.He analyses the process and then lists down his requirementswith regards to manpower, both technical and non-technical.He then works with the HR department and selects theemployees from their database of job applicants. Therecruitment is then done for various designations like CCE, TL,QL, training personnel etc , but a major chunk i.e. about 90%of it is done for the position of CCE. The minimumrequirements for the post of CCE as given out by theoperations manager are as follows:

1. Should be above 18 yrs of age.

2. Should have at least completed HSC.

3. Knowledge of Excel and basic computing is preferred.

4. People with prior experience in this field are an addedadvantage.

Once the job applicants are recruited, the HR department

imparts the necessary training and within a span of two tothree weeks the employees become ready to take calls.

Job Design at 3G

3G mainly practices ‘job rotation’ as a part of job design. Thisis because many of their employees complain about themonotonous nature of work. Suppose the main job of anemployee at 3G is taking customer calls; but for some daysthe operations manager shifts him to some other work like

assisting the team leader. This kind of movement among jobsensures that the morale of employees is always high and also

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increases employee efficiency. Promotions are a part of jobdesign, but this is done only after the employee hascompleted at least 2 yrs at 3G.

Job Evaluation at 3G

In any company remuneration has to be paid according to thework done by the employee. For this, evaluation of the workdone becomes important. Here the employees are paid theirbasic salary according to their designations and add-ons andperformance incentives and attendance incentives are alsopaid. The quality management department mainly does the

job evaluation in this company and later it gives the report tothe HR department and then the salaries are given according

to the reports given to them.


1. Define the term “Job Evaluation” Explain the process of JOBevaluation. (2007)

2. State Bank of India has lost a lot of customers in the last fewyears to multinational banks that adopt a modernoperational style preferred by customers. As part of anorganizational revamp, State Bank of India authorities have

decided to study all existing jobs and redesign the workcontent, if necessary. Describe any three techniques thatState Bank of India can use to collect information foranalysing jobs. (2005)

Short Notes:1. Job Evaluation (2002, 2004)2. Job Description (2006)3. Objectives of Job Evaluation (2003)

PittanceConcept Questions:

1. Job Analysis (2201, 2003, 2004)2. Job Design (2001)

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RECRUITMENT, SELECTION & INDUCTION

HR Planning determine the number and type of people a firm needs. Job analysis and job design specify the tasks and duties of jobs andthe qualifications expected from prospective job holders. After JobAnalysis & HR planning, the next logical step is to hire the rightnumber of people of the right type to fill the jobs.

The procurement function in the human resource department of acompany includes the following major sub-functions.

1. Recruitment: It means search of the prospectiveemployee to suit the job requirements as represented by

job specification – a technique of job analysis.2. Selection: Out of the prospective applicants, right type of

persons is selected to match the jobs.

Recruitment involves attracting and obtaining as many applicationsas possible from eligible job seekers. Theoretically, recruitmentprocess is said to end with the receipt of applications, in practice theactivity extends to the screening of applications so as to eliminatethose who are not qualified for the job.

Need for recruitment:

The need for recruitment may be due to the followingreasons/situations:

(a) Vacancies due to promotions, transfers, retirement,termination, permanent disability, death and labor turnover.

(b) Creation of new vacancies: due to growth, expansion,merger, diversification etc activities of business.

Recruitment forms the first stage in the process, which continueswith selection and ceases with the placement of the candidate.Meaning and Definition:

“The process of attracting individuals on a timely basis, in sufficientnumbers, and with appropriate qualifications, and encouraging themto apply for jobs with an organization.”

“It is the process of finding and attracting capable applicants foremployment. The process begins when new recruits are soughtand ends when their applications are submitted. The result is apool of applicants from which new employees are selected.”

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Practically, recruitment process extends to the screening of applications so as to eliminate those who are not qualified for the

job.

Purpose / Importance of Recruitment

The method of recruitment that an organization uses directlyaffects the efficiency of its selection and placement programmein following ways.

• It determines the present and future requirements of theorganization in conjunction with its personnel planning and job-

analysis activities.• Increase the pool of job candidates

• Helps increase the success rate of the selection process byreducing the number of visibly under qualified or overqualified

job applicants.

• Begins identifying and preparing potential job applicants whowill be appropriate candidates.

• Increases organizational and personal effectiveness in theshort and long term.

Something important about recruitment:

• Recruitment represents the first contact that a companymakes with potential employees. It is through recruitment thatmany individuals will come to know a company, and eventuallydecide whether they wish to work for it.

• A well-planned and well-managed recruitment effort will resultin high-quality applicants, whereas, a haphazard andpiecemeal effort will result in mediocre ones.

• High quality employees cannot be selected when bettercandidates do not know of job openings, are not interested inworking for the company, and do not apply.

• The recruitment procedure should inform qualified individualabout employment opportunities, create a positive image of the company and provide enough information about the jobsso that applicants can make comparisons with theirqualifications and interests.

The failure to generate an adequate number of reasonably qualified

applicants can prove costly in several ways.

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• Poor quality of selection means extra cost on training andsupervision.

• When recruitment fails to meet organizational needs for talent,a typical response is to raise entry-level pay scale.

FACTORS GOVERNING RECRUITMENT

Recruitment is subject to influence several factors. These includeexternal as well as internal forces.

External Forces

a. SS & DD of specific skills in the labor market: if the dd for aparticular skill is high relative to the supply, an extraordinary

recruiting effort may be needed. For e.g. the dd for programmers islikely to be higher than their supply as opposed to the dd-ssrelationship for non-technical employees.

b. Unemployment rate: when unemployment rate in a given areais high, the company’s recruitment process may be simpler. Thenumber of unsolicited applicants is usually greater, and theincreased size of the labor pool provides better opportunities forattracting qualified applicants. As the unemployment rates drops,recruiting efforts are increased and new sources are explored.

c. Political and legal consideration: Reservations of job for SC, ST,minorities and other backward classes is a political decision. There isa strong case for giving preference to people hailing from less-advantaged sections of the society. Reservation has been acceptedas inevitable by all sections of the society. The Supreme Court hasalso agreed upon 50% reservation of seats and jobs.

d. Company’s image: It also matters in attracting large number of job seekers. Blue Chip companies attract large number of

applications. Often, it is not the money but the perception of the job-seekers about the company also matters in attracting qualifiedprospective employees.

Internal Forces

a. Recruitment Policy:

Organizations may have an internal recruitment policy (to recruitpeople from within the organization - its own employees) or external

policy. Generally, internal policy is given more preference due tomany advantages.

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b. Temporary and Part-Time employees: An organization hiringtemporary or part-time employees have less advantage in attractingsufficient applications.

c. HRP: Whether company has implemented proper HRP or not isalso another important factor. The positions cannot be filled upovernight; it takes time to examine the alternative regarding theappropriate sources of recruitment. If organization believes in HRPthen, it can well in advance determine its requirement andimplement recruitment process accordingly.

d. Size of organization: Another internal factor having itsinfluence on the recruitment process. An organization with onethousand employees will find it less problematic to recruit than an

organization with lesser number of employees.

e. Cost of recruiting: Yet another factor that has to be considered.Recruiting costs are calculated per new hire and the figure isconsiderable now a days. Recruiters must, therefore, operate withinbudgets. Careful HRP can minimize recruitment costs. The bestsolution is to use proactive personnel practice to reduce employeeturnover, thus, minimizing the need for recruiting.

Although it is not easy to control attrition rate or to ensure that a

person who has appeared for an interview will be a happy employeelater, certain strategy can help organization from avoidingappointment of candidates who will choose to leave organization ina very short span of time after being appointed. Genpact, the BPOpioneering uses a pre-hiring process to aid in arresting attrition. Theorganization brings people before they join and have them look atthe workplace. If the people choose not to join, that reducespotential attrition. The company also offers education at theworkplace as young recruits tend to leave the organization forhigher education. The attrition levels are half now for those

personnel who have made use of this opportunity.

SOURCES / METHODS OF RECRUITMENT:

DIAGRAM: SOURCES OF RECRUITMENT

Internal Sources:

• Promotion

• Transfer

• Internal notification• Retirement (renewal of the contract of the person retiring.)

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• Former employees (rehiring or re-employment)

There is no surity in the organizations that only non-performersleave the organization. Even the star performers may leave theorganization for greener pasture. For organizations, holding on totheir former employees (best ones) is one way. For eg. Quatrro BPOSolutions has nurtured a concept of keeping in touch with highperformers who leave the organizations and give them anopportunity whenever they want to come back.

External Sources:

• Press advertisement

• Employment exchange

•

Walk-ins• Consultants

• Contractors

• Mergers and acquisition

• Competitors

• E-recruiting

Former employees: WIPRO (SCIP), Holding on to employees

Evaluation of Internal sources of recruitment

Advantages

• Economical

• Develop loyalty towards firm

• Acts as a motivator

• Security and continuity of employment

• Reduce labor turnover

• People recruited internally, does not require induction.

Disadvantages:

• A feeling of discontent among those who are not promoted.

• Prevents entry of young blood in the organization

• Promotion to key post may not turn possible due to non-availability of competent persons.

• May encourage favoritism and biasness.

EXTERNAL SOURCES:

Press Advertisements:

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• Concept

• Blind ads

It is the one, in which there is no identification of the firm is

mentioned in the ad. Respondents are asked to reply to a post boxnumber or to a consulting firm that is retained by the organization.Large companies will seldom/maynot use blind ads to fill vacancies(generally at lower level). However, when organization doesnot wishto publicize the fact that it is seeking to fill an internal position, orwhen it seeks to recruit for a position in the place of a person likelyto be displaced, a blind ad may be appropriate. Also, company needto respond to only those individuals the company wishes to see.Other applications are ignored as if they were never received.

Getting low response for blind ad has many reasons to it includingthe goodwill of the organization.

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Employment Exchanges: Employment exchanges have been setup all over the country in deference to provisions of the Employment

Exchanges (Compulsory Notification of Vacancies) Act, 1959. TheAct applies to all industrial establishments having 25 workers ormore each. The Act requires all the industrial -establishments tonotify the vacancies before they are filled. The major functions of the exchanges are to increase the pool of possible applicants and todo preliminary screening. Thus, employment exchanges act asbetween the employers and the prospective employees. Theseoffices are particularly useful in recruiting blue collar, white-collarand technical workers. As on today, there are 965 exchanges acrossthe country with 46 million people registered seeking jobs. Till now,

all these exchanges have found jobs for only 260,000, a successrate of 0.56%.Walk-ins: the most common and least expensive approach forcandidates is direct application, in which job seekers submitunsolicited application letters or resumes. Direct applicationscan also provide a pool of potential employees to meet futureneeds. From employees' viewpoint, walk-ins are preferable asthey are free from the hassles associated with other methods of recruitment. Direct applications are particularly effective infilling entry-level and unskilled vacancies.

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Consultants: ABC Consultants, Ferguson Associates,Human Resource Consultants, Head Hunters, Batliboi Co,Analytic Consultancy Bureau, Aims Management Consultantsand The Search House are some among numerous recruitingagencies. These and other agencies in the profession areretained by organizations for recruiting and selectingmanagerial and executive personnel.Consultants are useful in as much as they have nation-wide contactsand lend professionalism to the process. They also keep prospectiveemployer and the employee anonymous. But, the cost can be adeterrent factor. Most consultants charge fees ranging from 20 to 50per cent of the first year salaries of individuals placed.Contractors : Contractors are used to recruit casualworkers. The names of the workers are not entered e

company records and, to this extent, difficulties experiencedin maintaining permanent workers are avoided.

Acquisitions and Mergers: Another method of staffing firms is aresult of the merger or acquisition process. When organizationscombine into one, they have to handle a large pool of employees,some of who may no longer be necessary in the new organization.Consequently, the new company has, in effect, a pool of qualified

job applicants (although they are current employees). As a result of the merger or acquisition, however, new jobs may be created aswell. Both new and old jobs may be readily staffed by drawing the

best-qualified applicants from this employee pool.

In contrast to the other external methods, this one can facilitate theimmediate implementation of an organization’s strategic plan. Thisready pool may enable a firm to pursue a business plan, such asentering a new product line that would otherwise be unfeasibleusing standard recruiting methods.Competitors: Rival firms can be a source of recruitment. Popularlycalled poaching' or 'raiding', this method involves identifying theright people in rival companies, offering them better terms andluring them away. Firms poach on right people in rival companies byoffering better terms and lure them away. Poaching has legalimplication in as much as the employee needs to obtain clearancefrom his/her employer before hopping on to another.

E-Recruiting

This is one of the fastest growing methods of recruitment. Employercan electronically screen candidates’ attributes. Companies benefit

immensely through cost savings, speed enhancement and extendedworld-wide candidate reach which the internet offers. From the job-

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seekers perspective, the internet allows for searches over a broaderarray of geographic than was possible before.

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SELECTION

After recruitment, selection is the next logical step in the HRprocess.

Selection is the process of picking individuals (out of the pool of the job applicants) with requisite qualifications and competence to fill jobs in the organization. Thus,

“Selection is the process of differentiating between applicants inorder to identify and hire those with a greater likelihood of successin a job.”

Selection of suitable candidates is a matter of special importance inpersonnel management. It is the starting point of the whole humanresource management process. Inefficiency, low productivity, highwastages, industrial accidents, ineffective execution of trainingprogrammes, etc are due to faulty selection of candidates.

Importance of Scientific selection process:

Unsuitable candidate becomes a permanent problem as long as heis in the organization. This is because he has no liking to the job, nointerest, no initiative in the job and finally, no capacity to handle the

job independently. For progress and prosperity a company needs ateam of efficient, loyal, capable and co-operative young workers and

managers. Such team is available only when the selection is madesystematically. Selection of unsuitable persons finally brings thefuture of a company in danger. Unsuitable employees becomeliability of a company. They create problems and remain asobstacles. This suggests the significance of scientific selection inpersonnel management.

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IMPORTANCE OF “RIGHT” SELECTION

Work performance depends on individuals. The best way toimprove performance is to hire people who have thecompetence and the willingness to work.

Cost incurred in recruiting and hiring personnel speaksvolumes about the role of selection.

Objective of right man for right job is achieved.

Labor turnover is minimized.

Expenditure on frequent selection of candidates is avoided.

Training provided to properly selected candidates givespromising results.

Example:

Pepsi had gone on a crash recruitment drive. Six people from thecompany took over the entire Oberoi Business Centre in Mumbai forsix days; 3000 applications in response to an advertisement issuedearlier were scanned; applicants were asked to respond by faxwithin 100 hours; finally, the shortlisted persons were flown in andinterviewed. In the US, it is much more expensive. The cost of searching for and training a top level executive may run into $2,50,000.

As was pointed out above, consultants charge fees ranging from 20to 50 per cent of the first year's salary of an employee selected.Assuming a manager is assured of a compensation of Rs 2 lakh theretainer's fee works out to be Rs 40,000 to Rs 1,00,000.

Costs of wrong selection are much greater. Figure below shows fourpossible outcomes of a selection decision.

DIAGRAM: OUTCOMES OF SELECTION DECISION

Success

False NegativeError

True Positive

Failure True NegativeFalse PositiveError

Failure SuccessPredicted Predicted

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two of the above – “true positive” & “true negative” are rightselection. The other two outcomes represent selection error. In

“False negative error” an applicant who would have succeeded isrejected based on predictions of failure. Whereas, in case of “False

positive error”

a decision is made to hire an applicant based onpredicted success.

Most false negative error go unnoticed. Cost associated with thistype of error is generally difficult to predict.

A company with a false positive error incurs three types of costs.

• Employment cost: production or profit losses, damaged

company reputation, accidents due to negligence, absenteeism, andthe like.

• Training cost, transfer or termination cost.

• Replacing cost (again hiring, training etc)

A careful selection will help a firm avoid costs associated with both,false positive error and false negative error.

Selection Process

Selection being very long process commences from the preliminaryinterview of the applicants and ends with the contract of employment. In practice, the process differs among organizationsand between two different jobs within the same company. Selectionprocedure for senior managers will be long-drawn and rigorous, butit is simple and short while hiring shop-floor workers.

The following figure shows generalized selection process. In thepractice, the process differs from organization to organization.

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INTERNALENVIRONMENT

PRELIMINARY INTERVIEW

SELECTION TEST

EMPLOYMENT INTERVIEW

REFERENCE & BACKGROUND

ANALYSIS

SELECTION DECISION

PHYSICAL EXAMINATION

JOB OFFER

EVALUATION OFSELECTION PROGRAM

REJECTED

APPLICANTS

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Environmental Factors affecting selection

Selection is influenced by several factors. Supply and demand of specific skills in labor market always influences this process. Otherfactors are unemployment rate, legal and political considerations,company’s policy, HRP and cost of hiring.

1. Preliminary Interview: The purpose of Preliminary Interview ismore or less the same as scrutiny of applications, that is,elimination of unqualified applications. Scrutiny enables the HRspecialists to eliminate unqualified job seekers based on theinformation supplied in their application forms. PI helps rejectmisfits for reasons, which did not appear in the applicationforms.

2. Selection Tests: The applicants who pass the PreliminaryInterview are called for tests. Different types of tests may beadministered, depending upon the job and the company. Generallytests are used to determine the applicant’s ability, aptitude andpersonality. Ability Test helps in determining how well anindividual can perform tasks related to the job. For e.g. An aptitudetest is designed to measure the candidate’s capacity to perform atask in a particular way. Personality Test can be used to get a

generalized overview of an individual's character, for example theiranxieties, whether they are sociable, assertive, extroverted orintroverted. Their suitability for the job can be judged from theirresponses. For example successful sales staff should be outgoing,financially motivated, confident and persuasive. Graphology Test:Graphology is a test that seeks to predict success or failure throughone's handwriting. It is vastly used in the U.S. but is yet to make itspresence felt in India.

3. Employment Interview: The next step in the selection process

is employment interview. This interview is formal, in-depthconservation conducted to evaluate the applicant’s acceptability.Often the first interview is carried on telephone. This interviewprocess gives a company to meet the applicants personally.

Typically conducted in-person, this is an in-depth meeting to discussthe specific areas of expertise of a candidate.

Based upon a two-way dialogue, this interview is designed to predictperformance and is driven by a series of questions that validate theknowledge of each candidate in his/her specialty disciplines.

E.g.

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At Essar, the selection process depends on the level of the position acandidate is applying for. For entry-level positions, they assess theperson through aptitude tests, group discussions and personalinterviews. At the senior level, the selection process consists of

discussions with the human resources head, functional expertswithin Essar and sometimes the promoter-directors.

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Types of interviews:

• Structured Interview

• Unstructured Interview

• Mixed (a blend of structured and unstructured)

• Group interview (Group Discussion)• Panel Interview

• Behavioural (hypothetical situation)

• Stress

4. Reference / Background check

Many employers request names, addresses, and telephone numbers

or references for the purpose of verifying information and, perhaps,gaining additional background information on an applicant. Whenthe labor market is very tight, firms sometimes hire applicantsbefore checking references.

Previous employers, known public figures, university professors,neighbors or friends can act as references. Previous employers arepreferable because they are already aware of the applicant'sperformance. But, the problem with this reference is thetendency on the part of the previous employers to over-rate

the applicant's performance just to get rid of the person.

Reference checks cover the following:

• Criminal record checks

• Previous employment check

• Educational record checks

• Credit record checks

• Union affiliation checks

• Character reference check

Background checks and fraud detection have become easy as thereare agencies which specialize in the task. KPMG India, for example,has a 130-strong team to detect frauds. Similarly, E&Y has a 40-member team.

Reference checks serve two important purposes. One purpose is togain insight about the potential employee from the people who havehad previous experience with him or her. This is a good practiceconsidering the fact that between 20 to 25 per cent of job applicants

there is at least one fraudster

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The second purpose for reference checks is to assess the potentialsuccess of a prospect. Who else can give an objective assessment of an individual than his or her previous employer or a person knownto him or her?

But one should guard against the following while considering toemploy a prospect:

• The prospect is likely to approach those persons whowould speak well about him or her.

• People may write favorably about the candidate in orderto get rid of him or her.

• People may not divulge the truth about a candidate, lest itmight damage or ruin his or her career.

5. Selection Decision: The final decision is to be made from poolof individuals who pass the tests, interviews, and reference checks.(our experience – Infosys-BLR - 2003 for 10,000 jobs – received 1 mnapplications.) the opinion of Line manager is also considered here,while hiring the employees as he is going to be responsible for theperformance of the new employee.

6. Physical Examination:

• To detect if the individual carries any infectious diseases.• The test assists in determining whether an applicant is

physically fit to perform the work.

• The physical examination information may be used todetermine if there are certain physical capabilities whichdifferentiate successful and less successful employees.

• Medical check-up protects applicants with health defects fromundertaking work that could be detrimental to themselves.

• Such examination will protect the employer from worker’s

compensation claims that are not valid because the injuries orillness were present when the employee was hired.

7. Job Offer: The next step in the selection process is job offer tothose applicants who have crossed all the previous hurdles. Joboffer is made through a letter of appointment. Such a lettergenerally contains a date from which the appointee must report onduty. The appointee must be given reasonable time for reporting.

This particularly necessary when he or she is already inemployment, in which case the appointee is required to obtain a

relieving certificate from the previous employer. Again, a new jobmay require movement to another city which means considerable

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preparation. 8. Evaluation of Selection Program: It is very important to haveevaluation of selection program. The selection program if doneproperly will ensure availability of proper employees. Periodic auditshould be done to ensure evaluation of selection program. Auditmust be done by people who work independent of the HRdepartment.

BARRIERS TO EFFECTIVE SELECTION

Certain barriers defeat the purpose of selecting right kind of people. The obstacles which check effectiveness of selection are perception,fairness, reliability and pressure.

Perception: The inability to understand others accurately is themost fundamental barrier to selecting the right candidate. Right kindof selection demands to assess and compare the respectivecompetencies of others, with the aim of choosing the right personsfor the jobs. But our views are highly personalized. We perceive theworld differently. Our limited perceptual ability is obviously astumbling block to the objective and rational selection process.

Fairness: This requires that no individual should be discriminatedagainst on the basis of religion, race or gender. But the low numbersof women and other less-privileged sections of the society in middleand senior management positions and open discrimination on thebasis of age in job advertisements would suggest that all the effortsto minimize inequity have not been very effective.

Reliability: A reliable method is one which will produce consistentresults when repeated in similar situation. Even sometimes areliable test may fail to predict job performance with precision.

Pressure: Pressure is brought on the selectors by politicians,bureaucrats, relatives, friends and peers to select particularcandidates. Candidates selected because of compulsions areobviously not the right ones. Appointments under public sectorundertaking generally take place under such pressures.The Halo Effect

This is where the interviewer or interviewers see the person in an“exalted” way because they have the same hobbies or interests,belong to the same golf club, went to a top school, are smartly

dressed, etc. These perceptions often cloud the mind and judgement

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of the interviewer and the candidate gains a halo whether they aregood or bad at doing their job.

The Horns Effect This is the opposite of the halo effect. The interviewer takes a disliketo the candidate, their personality, the way they dress, etc. Thisalters the interviewer’s perception of the candidate and, no matterhow good that candidate may be at doing the job, s/he gains a set of “horns”! Once the interviewer adopts this perception of thecandidate, it is very difficult to shake off. This is why it is oftenimportant to have more than one person interviewing; it helps toavoid scenarios such as the halo and horns effect happening.

Stereotyping

This is where the interviewer’s perception of a candidate altersbecause the individual is awoman, black, Asian or disabled, etc. Some common societalstereotypes or preconceptions about the above groups are:(i) That a woman’s place is in the home(ii) That it will be difficult to get a group of white workers to workunder a black or Asian team leader/supervisor(iii) That disabled people are difficult to employ

ORIENTATION

After an applicant is hired, he/she must be oriented and placed onthe chosen job.

Orientation / Induction:

It is designed to provide a new employee with the information he orshe needs to function comfortably and effectively in theorganization.

“Orientation is planned introduction of employees to their jobs, theirco-workers and the organization.”

Orientation covers three types of information:

• General information about the daily work routine;

• A review of the organization’s history, founders, objectives,operations and products or services, contribution of employee’s job towards organization’s needs

• A detailed presentation about company’s policies, work rules

and employee benefits.

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PURPOSE

• Induction / orientation program is conducted to make the newemployees feel ‘at home’ at the same time to introduce thenew employee to the organization in a systematic way.

• It is a process of welcoming of a new worker and creating asense of understanding and confidence in his mind.

• Effective induction program reduces the anxiety of newemployees by providing them information on the jobenvironment and on co-workers and supervisors.

• It gives adequate information about the organization, rules andregulations at the work place and incentives for self development.

• It helps the employee in gaining the confidence in his work,and organization he has joined.

Induction at TCS:

After the employee has joined the organization, this is the time forthe organization to carry out the alliance and build the realrelationship. Induction is the time to set up expectations and

capture critical potential indicators.

Good induction program: A good induction program is aboutcommunication. Treat the new recruit with respect and as a matureand responsible individual. Welcome him and make sure that he iscomfortable. Introduce him to all relevant people individually.

Present the organization: The induction program is the time tomanage the inductees’ expectations. Make the presentations asprofessional and business like as possible. The expectations you set

here will come back to haunt you later.

Lay down the organization’s expectations: This is also the time foryou to lay down your expectations in terms of performance,professionalism and other values you want to espouse.

Clarity on organization values and policies: Walk the inducteethrough every policy and rules manual, this will help him know theorganization better and not feel lost once he goes to work.

Lay down the PMS system: Clearly say your PerformanceManagement System. It is very critical for an employee to know

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what is expected out of him and what the performance parametersare.

Also invest in soft skill programs (preferably in-house to get the rightflavor). It shows an inductee the focus of your organization’s way of doing things. i.e. communication and team building.

Buddy scheme: Design a Buddy or Mentoring scheme (they are twodistinct approaches) to help understand the new inductee into yourorganization smoothly.

Outsourcing (or contracting out) is often defined as thedelegation of non-core operations or jobs from internal production toan external entity (such as a subcontractor) that specializes in thatoperation. Outsourcing is a business decision that is often made tofocus on core competences. A subset of the term (offshoring) alsoimplies transferring jobs to another country, either by hiring localsubcontractors or building a facility in an area where labor is cheap.It became a popular buzzword in business and management in the1990s.

The areas that can be covered under induction program:

• The basics involved in the functions / operations including a

broad perspective of the technological aspects, if any;• The administrative and operational policies, practices and the

business goals of the employing organization.

• Coverage of organization’s products and clientele portfolio;

• Codes of conduct and protocols adopted by employers &

• Career path and advancement prospects.

http://en.wikipedia.org/wiki/Business_Operations

http://en.wikipedia.org/w/index.php?title=Internal_production&action=edit

http://en.wikipedia.org/wiki/Subcontractor

http://en.wikipedia.org/w/index.php?title=Business_decision&action=edit

http://en.wikipedia.org/wiki/Core_competence

http://en.wikipedia.org/wiki/Offshoring

http://en.wikipedia.org/wiki/Buzzword

http://en.wikipedia.org/wiki/Business

http://en.wikipedia.org/wiki/Management

http://en.wikipedia.org/wiki/1990s

http://en.wikipedia.org/wiki/Business_Operations

http://en.wikipedia.org/w/index.php?title=Internal_production&action=edit

http://en.wikipedia.org/wiki/Subcontractor

http://en.wikipedia.org/w/index.php?title=Business_decision&action=edit

http://en.wikipedia.org/wiki/Core_competence

http://en.wikipedia.org/wiki/Offshoring

http://en.wikipedia.org/wiki/Buzzword

http://en.wikipedia.org/wiki/Business

http://en.wikipedia.org/wiki/Management

http://en.wikipedia.org/wiki/1990s

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Different Types of Orientation programs

A firm needs to make four strategic choices before designing itsorientation program. They are:

1. Formal or Informal: An orientation can be either formal orinformal. In case of formal orientation, the management hasstructured program which is executed when new employee joins theorganization. In contrast, in case of informal orientation, newemployee is directly put on the jobs and he/she is expected to adjusthim/her self with the work and the organization.

The choice between formal and informal will depend upon themanagement’s goals. If the orientation is formal, then the newentrant is more likely to acquire a known set of standards and actlike an executive, a trainee etc. but in case of informal program, it isdesirable to maintain individual indifferences.

2. Individual or collective: Another choice to be made by themanagement is whether the new hires should be inducedindividually or in groups. Individual orientation is more likely topreserve individual differences and perspectives. Orienting eachperson separately is an expensive and time-consuming process. Italso denies the new hire the opportunity of sharing anxieties withfellow appointees.

Whereas, collective orientation of the new hires solves the problemsstated above. Most large organizations tend to have collectiveorientation approach. But small firms which have fewer newappointees to socialize use the individual approach frequently.

3. Serial or Disjunctive: Orientation becomes serial when anexperienced employee inducts the new entrant. When new hire donot have predecessor available to guide him the orientationbecomes disjunctive. Serial orientation maintains traditions andcustoms. On the other side, disjunctive induction is likely togenerate more inventive and creative employees as the new hire isnot burdened by traditions.

Both these options have its’ own advantage and disadvantage.Serial orientation maintains traditions and customs. Consistent useof this strategy will ensure a minimum amount of change within thefirm over time. On the contrary, if the experienced employee is

frustrated and apathetic towards work and organization, it is likelythat he or she would pass on the same to the new hire.

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If the organization follows disjunctive induction, it is very muchpossible that the individual is more likely to fail to understand howtheir job is to be done – due to an inadequate role model.

REQUISITES OF AN EFFECTIVE ORIENTATION PROGRAM

Orientation program, to be effective, must be based on seriousconsideration to attitudes, behaviour, and information that the newemployee need. Following are some of the requisites of an effectivesystem.

1. Prepare for new employees: New employees must, feel initiallythat they belong to the organization and are important. Therefore,the organization and the dept unit must be prepared to receive thenew employee. In addition, co-workers must be ready and be awareof new employee. The management must take the presentemployees into confidence and convince them about the need forhiring the new employee. This is to be done generally when thearrival of new employee is likely to erode the position and statusenjoyed by the current employees.

2. Determine following information:

• What things would new employees need to know about their

work environment that would make them more comfortable?• What impression and impact would the employer want to make

on a new employee on the first day?

• Which key policies and procedures must new employees beaware of on the first day?

• What positive experiences can the employer provide for newemployees, which they could discuss with their families?

3. Determine how to present information: Line managers and HRrepresentatives should determine the most appropriate way to

present the orientation information. Presentation could be in theform of policy manual, verbal or anything that could serve thepurpose.

4. Completion of paper work: All paper work of new employeemust be completed when he is in orientation status, so that he getspaid on time. Various tax and insurance forms as well as other itemssuch as his Identity card should be done on time. There is nothingmore agonizing for a new employee than to miss the first paycheque or to be paid improperly because the correct forms were not

completed accurately.

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Benefits of induction program:

• Reduction in degrees of uncertainty in the employee’s mind.

• Increase in the level of employee’s mental comfort.

•

Quicker adaptation of suitable behavior and attitude;• Reduction in employee turnover / absenteeism.

• Increased productivity of the workforce.

• Creates a positive perception of the organization and anunderstanding of the corporate values and culture in theemployees.

• Increase the commitment level of the employees.

• Improves communication within the employees.

PLACEMENT

Immediately after selection and appointment, a newlyselected employee is sent to a particular department foractual work. This is called placement. It is a process of placingthe right man on the right job. A worker should be placed on aposition where he can use his knowledge, education, skills,etc. in the best possible manner. Wrong placement means notusing the qualities of a newly appointed person for the benefit

of the organization. A misplaced employee is a frustratedperson and may leave the job as the job is not as per hiseducation, skills and liking. His morale will be low. Properplacement reduces labor turnover, absenteeism and accidentsto the lowest level. It also ensures full utilization of thecapacity and ability of an employee.

Placement is allocation of people to jobs. It is placement orassignment of an employee to a new job. Placement isnecessary when

•

A new candidate is selected and appointed.• It is required after promotion, transfer or demotion of an

existing employee.

Placement should be always based on the qualifications andqualities of the candidate selected. It should also be basedon the staff requirement of different departments. Placementis basically the responsibility of the Personnel Department. Inother words, right man for the right job within anorganization is possible through proper placement of selected/appointed candidates.

DEFINITION OF PLACEMENT:

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(1) According to Dale Yoder, placement means "Thedetermination of the job to which an accepted candidate is to beassigned and his assignment to that job".

The placement arrangement should be ready before the joining date of newly selected candidates. For this, allnecessary details about selected candidates should becollected and employee's profile should be constructed forreview and placement. Placement should be always scientificand fair. It should be beneficial to the organization as well asattractive and agreeable to selected candidates. It need notbe done quickly and in a casual manner. Moreover, faultyplacement may prove costly to the organization itself. Theplacement in the initial period may be temporary as changes

are likely after the completion of training.

IMPORTANCE OF PLACEMENT:

• The capacity of an employee can be utilized fully if thecandidate is placed in the most suitable department.

• Wrong placement affects the morale of anemployee. He may even leave the job and theorganization if he is given the work which is not as per hisqualifications, qualities and liking.

• Proper placement ensures full utilization of capacityof every employee for the benefit of the company.

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CHPT – 5 - TRAINING AND DEVELOPMENT

After the selection of people for various jobs, the next function of management is to arrange for their training and development. Thisis because a person, however carefully selected is not molded tospecifications and rarely meets the demands of his job adequately.Workers must be trained to operate machines, reduce scraps andavoid accidents. It is not that only workers need training.Supervisors, managers and executives also need to be developed inorder to enable them acquire growth and maturity in thinking andactions. Formerly it was thought that the training of personnel wasunnecessary on the ground that the new techniques of productionare becoming more and more complicated, it is being increasinglyrealized that the formal training is important not only for new

recruits but also for existing employees. Training function, in fact,has become the corner stone of sound management. Thus, trainingis an ongoing process. It is the act of increasing the knowledge andskills of an employee for doing a particular job. It is concerned withimparting specific skills for the particular purposes.

Two terms: Training and Development

Training is a process of learning a sequence of programmed

behavior. It is application of knowledge. It gives people anawareness of the rules and procedures to guide their behavior.

Development is a related process. It covers not only those activities,which improve job performance but also those, which bring aboutgrowth of the personality; help individuals in the progress towardsmaturity and actualization of their potential capacities so that theybecome not only good employees but also better men and women.

Definition of Training: According to Edwin Flippo, “training is the act

of increasing the knowledge and skills of an employee for doing aparticular job.”

Thus:

Training is short-term process utilizing a systematic and organizedprocedure by which non-managerial personnel learn technicalknowledge and skills for a definite purpose. Whereas development isa long-term educational process utilizing a systematic and organizedprocedure by which managerial personnel learn conceptual and

theoretical knowledge for general purpose."

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Training is not given only once to new employees. Every employeein the organization requires training throughout his or her stay in theorganization. Thus we can say that a systematic training program:

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• Increases the productivity

• Improves quality of work

• Helps a company fulfill its future personnel needs.

• Improves safety by reducing accidents in organizations

• Obsolescence prevention: fostering the initiative and creativityof employees and help to prevent manpower obsolescence,which may be due to age, temperament or motivation or theinability of a person to adapt himself to technologicalchanges."

Need for training programme

I. An increased use of technology in production;

II. Labor turnover arising from normal separations due to death orphysical incapacity, for accidents, disease, voluntaryretirement, promotion within the organization and change of

job.III. Need for additional hands to cope with an increased production

of goods and services;IV. Employment of inexperienced labor requires detailed

instruction for an effective performance of a job.V. Old employees need refresher training to enable them to keep

abreast of the changing methods, techniques and use of

sophisticated tools and equipment;VI. Training enables employees to do the work in a more

effective way, to reduce learning time, reduce supervisiontime, reduce waste and spoilage of raw material and producequality goods and develop their potential.

The need for training and development is determined by theemployee’s performance deficiency, computed as follows:

We can make a distinction among training, education anddevelopment. Such distinction enables us to acquire a betterperspective about the meaning of the terms. Training, as wasstarted earlier, refers to the process of imparting specific skills.Education, on the other hand, is confined to theoretical learning inthe classrooms.

Training and Development need = Standard performance – Actual

performance.

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TRAINING AND EDUCATION DIFFERENTIATED:

Training Education

Application oriented Job experienceSpecific tasks

Narrow perspective

Theoretical oriented

Classroom learning

General concepts

Broad perspective

Development refers to those learning opportunities designed to helpemployees grow. Development is not primarily skill-oriented.

Instead, it provides general knowledge and attitudes, which will behelpful to employees in higher positions. Efforts towardsdevelopment often depend on personal drive and ambition.Development activities, such as those supplied by managementdevelopment programmes, are generally voluntary.

Management development as a process is usually considered to besomething for senior management in the organization. Of course,the development of managers is part of the general training anddevelopment processes ensuring competence at all levels in theorganization, but the development of senior management isgenerally a little different. Significantly, it is less about thedevelopment of managers than the development of “management”.

This implies a strong corporate focus and a team approach as wellas the concern for individual effectiveness. Thus, three dimensions may be seen:

At the personal level – the ongoing acquisition of the skills and

abilities necessary for the management of oneself and others, alliedat this senior level with effective performance in respect of teamworking, high level communication skills (both within and outsidethe organization) and, importantly, working with boards andcommittees in both formal and informal structures in the interplay of policy and decision making;

In respect of the management team – the need to build andconsolidate strong, innovative working relationships which providefor mutual respect and allow for individual abilities and aptitudes to

be recognized and brought to bear as appropriate in corporatedecision making;

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From the organizational perspective – the definition anddevelopment of the purposes and ethos of management itself withinthe organization, and the structures and processes through whichthese may be effected.

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Training Development Training is skills focused Development is creating

learning abilities

Training is presumed to have aformal education Development is not educationdependent Training needs depend uponlack or deficiency in skills

Development depends onpersonal drive and ambition

Trainings are generally needbased

Development is voluntary

Training is a narrower conceptfocused on job related skills

Development is a broaderconcept focused on personalitydevelopment

Training may not include

development

Development includes training

wherever necessary Training is aimed at improving job related efficiency andperformance

Development aims at overallpersonal effectiveness(including job efficiencies)

Types of Employee Training:

1. Induction (Orientation) Training: Induction training is basicallyfor introducing the organization to newly appointed employees. Thepurpose is to give them “birds eye view” of the organization. It is

very short informative type of training. It creates a feeling of involvement in the minds of newly appointed employees. All MNCsand big Indian companies arrange of this training program for itsemployees. This training creates favorable impression on the newlyappointed employees and this impression remains in their mind overa long period. It is a simple, economical and quick method, whichintroduces the company to newly, recruited employees in an orderlymanner.

2. Job Training: Job training relates to specific job which workerhas to handle. It gives information about machines, process of production, instructions to be followed, methods to be used andprecautions to be taken while performing the job. This trainingdevelops skills and confidence among the workers and enables themto perform the job efficiently.

3. Training for promotion: Promotion means giving higherposition. Training must be given for performing duties at a higherlevel efficiently. This facilitates easy and quick adjustment with the

new job and also develops new insight into duties and

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responsibilities assigned. For this, training is given after promotionand before actually joining the new assignment.

4. Refresher Training: The purpose of refresher training is torefresh professional skills, information and experience of personsoccupying important executive positions. It gives information aboutnew developments and techniques to trainees and enables them touse new methods, techniques and procedures for raising efficiency.

This training is of short duration and is given byprofessionals/institutions.

Advantages of employee training:

a. Advantages to Employer / Management / Company:

1. Improves efficiency2. Improves quality of production3. Reduces industrial accidents4. Lesser expenditure on supervision5. Provide stable labor force6. Provides skilled manpower7. Creates cordial industrial relations8. Reduces labor absenteeism9. Facilitates the introduction of new management

techniques

10. Creates a pool of capable employees

b. Advantages to managers/employees:1. Creates confidence among employees2. Develops skills among employees3. Quick promotion4. Offers monetary benefits5. Creates adaptability among employees6. Facilitates self-management7. Updates knowledge

8. Creates positive attitude9. Creates a pool of trained personnel

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THE TRAINING PROCESS

(1) ORGANIZATIONAL OBJECTIVES AND S TRATEGIES: The first step in the training process in an organization is theassessment of its objectives and strategies. What business are wein? At what level of quality do we wish to provide this product orservice? Where do we want to be in the future? It is only afteranswering these and other related questions that the organizationmust assess the strengths and weaknesses of its human resources.

(2) ASSESSMENT OF TRAINING NEEDS:Organizations spend vast sums of money on training anddevelopment. Before committing such huge resources, organizationswould do well to assess the training needs of the employees.Organizations that implement training programmes withoutconducting needs assessment may be making errors.

Organizational

Ob ectives and

Assessment of Training

Needs

Establishment of

Trainin Goals

Devising Training

Pro ramme

Implementation of

Training programme

Evaluation of Results

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Needs assessment occurs at two levels:a) Individualb) Group

Individual:An individual obviously needs training when his or her training fallsshort of standards, that is, when there is performance deficiency.Inadequacy in performance may be due to lack of skill or knowledgeor any other problem. The problem of performance deficiency iscaused by absence of skills or knowledge can be remedied bytraining. Faulty selection, poor job design, uninspiring supervision orsome personal problem may also result in poor performance.

Transfer, job redesign, improving quality of supervision, or dischargewill solve the problem.

Individuals may also require new skills because of possible jobtransfers. Although job transfers are as common as organizationalpersonal demands vary, they do not necessarily require elaboratetraining efforts. Employees commonly require an orientation to newfacilities and jobs. Recently, however, economic forces havenecessitated significant retraining efforts in order to assurecontinuous employment for many individuals.

Group:Assessment of training needs occurs at group level too. Any change

in the organization’s strategy necessitates training groups of employees. For example, when the organization decides tointroduce a new line of products, sales personnel and productionworkers have to be trained to produce, sell and service the newproducts. Training can also be used when high scrap or accidentrates, low morale and motivation, or other problems are diagnosed.

(3) ESTABLISHMENT OF TRAINING GOALS:Once the training needs are assessed, training and developmentalgoals must be established. Without clearly set goals, it is not

possible to design a training and development programme and, afterit has been implemented, there will be no way of measuring itseffectiveness. Goals must be tangible, verifiable, and measurable.

This is easy where skill training is involved. For example, thesuccessful trainee will be expected to type 55 words per minute withtwo or three errors per page. But behavioral objectives likeattitudinal changes can be more difficult to state. Nevertheless,clear behavioral standards of expected results are necessary so thatthe programme can be effectively designed and results can beevaluated.

(4) DEVISING THE TRAINING AND DEVELOPMENT PROGRAMME

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Every training and development programme must address thefollowing vital issues:

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Who are the trainees?

Trainees are selected on the basis of:

Self Nomination

Recommendations of the Supervisor

By the HR Department itself Whatever is the basis, it is advisable to have two or more targetaudiences. For example, rank-and-file employees and theirsupervisors may effectively learn together about a new process andtheir respective roles. It also helps facilitate group processes such asproblem solving and decision – making.

1. Who are the trainers? Training and development may be done by:

Immediate Supervisors

Co – workers Personnel Staff

Specialists in other parts of the company

Outside Consultants

Industry Associations

Faculty Members at Universities

Who among these are selected to teach, often depends on wherethe program is held and the skill that is being taught.

What Methods and Techniques of Training should be used?A multitude of methods and techniques is used to train employees.

Training techniques are the means employed in the trainingmethods. Training methods are categorized into two groups – on-the-job methods and off-the-job methods. The most commonly usedtechniques are shown in the table given below.

Who are thetrainees?

Who are thetrainers?

What methods& techniques?

Where toconduct theprogram?

Whatprinciples of

learning?

What should bethe level of training?

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On-the-Job Method (OJT):

Majority of industrial training is on the job training type. OJTmethod is mainly adopted while orienting new employees,introducing innovations in products & services and in special skills

training. OJT is conducted at the work site and in the context of the job. Often, it is informal, as when an experienced workershows a trainee how to perform the job tasks.

Off-the-Job Training Method:Off-the-job training is mainly adopted for orienting newemployees, introducing innovations in products and services,special skills training, safety education, creative, technical &professional education and sales, administrative, supervisory andmanagerial education. The advantages and disadvantages of

some of the important techniques of off-the-job methods arelisted below:

a) Lectures :Lecture is a verbal presentation of information by an instructor toa large audience. This method can be made effective whencombined with other means of training.

b) Audio-Visuals : These include television slides, overheads, video-types, films and

LCD Projectors.c) Programmed Instruction (PI) :

METHODS & TECHNIQUES OF TRAINING

On-the-Job MethodOff-the-Job Method

Simulation • Lecture

• Films & Television

• Conference/Discussion

• Programmed

Instruction

Case Study

VestibuleRole Play

Orientation

Counseling

Understudy assignment

Job Rotation

Delegation

Appointment as “Assistance to”

Project assignment

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Training is offered without the intervention of the trainer.Information is provided to the trainee in blocks, either in a bookform or through a teaching machine. PI involves:1. Presenting questions, facts, or problems to the learner.2. Allowing the person to respond.3. Providing feedback on the accuracy of his or her answers.4. If the answers are correct, the learner proceeds to the next

block.d) Simulations :

A simulator is any kind of equipment or technique that duplicatesas nearly as possible the actual conditions encountered on the

job. It is an attempt to create a realistic decision – makingenvironment for the trainee. The advantage of simulation is theopportunity to ‘create an environment’ similar to real situations

the managers incur, but without the high costs involved shouldthe actions prove undesirable.

The other techniques of training are:

Leadership games: exercises to teach different styles of leadership.

Skill Games: Tests to develop analytical skills.

Communication Games: exercises to build bias – free listeningand talking.

Strategic Planners: Games to test ability to plan ahead.

Team – building games: Exercises requiring collaborative efforts. Lateral Thinking: thinking randomly to come up with new ideas.

Cross – cultural training: Programmes to teach specifics of variedcultures.

2. What should be the level of learning? The inputs passed on to trainees in training and developmentprogrammes can be taught at three basic levels.Level I The trainee must acquire fundamental knowledge. This

means developing a basic understanding of a field andbecoming acquainted with the language, concepts andrelationships involved in it. E.g. Orientation Training

Level II The goal is skill development, or acquiring the ability toperform in a particular skill area.

LevelIII

Aims at increased operational proficiency. This involvesobtaining additional experience and improving skills thathave already been developed.

All the inputs of training can be offered at the three levels. How

effectively they are learned depends upon several principles of learning.

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3. Where to conduct the programme?A training and development programme can be conducted:i. At the job itself ii. On site but not the job – for example, in a training room in the

company.iii. Off the site, such as in a university or college classroom, hotel, a

resort, or a conference center.

(5) IMPLEMENTATION OF THE PROGRAMME:Once the training programme has been designed, it needs to beimplemented. Implementation is beset with certain problems:a) Most managers are action oriented and frequently say they are

too busy to engage in training efforts.

b) Availability of trainers is a problem. In addition to possessingcommunication skills, the trainers must know the company’sphilosophy, its objectives, its formal and informal organizations,and the goals of the training programme. Training requires ahigher degree of creativity than, perhaps, any other personnelspecialty.

c) Scheduling training around the present work is another problem.

Programme implementation involves action on the following lines:a) Deciding the location and organizing training and other

facilitiesb) Scheduling the training programmec) Conducting the programmed) Monitoring the progress of trainees

(6) EVALUATION OF THE PROGRAMME: The last stage in the training and development process is theevaluation of results. Since huge sums of money are spent intraining and development, how far the programme has beensuccessful must be judged or determined. Evaluation helps

determine the results of the training and development programme.In practice, however, organizations either overlook or lack facilitiesfor evaluation.

Objectives of Training and Development

Staying ahead in today's business world is more challenging thanever. Building trust and promoting teamwork are just twoexpectations of any business leader.

Training and development programs are designed to keep anorganization at the front of its industry maximize performance and

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energize every level of the organization. Training and Developmentis also seen to strengthen the tie between employee developmentand strategic operation objectives.

The objectives of Training and Development are as follows: - Efficiency: Employees

become efficient after undergoing training. Efficient employeescontribute to the growth of the organization.

Fewer accidents: Accidents,scrap and damage to machinery and equipment can be avoided orminimized through training. Even dissatisfaction, complaints,absenteeism, and turnover can be reduced if employees aretrained well.

Meeting manpower needs:

Future needs of employees will be met through training anddevelopment programmes. Training serves as an effective sourceof recruitment. Training is an investment in human resource withpromise of better returns in future.

Improves quality: Better-informed workers are likely to make less operational mistakes.Quality of products or services will definitely increase. This can bewell measured through the reduction in rejections.

Personal growth: Trainingprogrammes also deal with personality development of the

employees (through goal setting, motivation, leadership skills, etc.)thus they personally gain through exposure to trainingprogrammes.

Obsolescence prevention: Training and development programs foster the initiative and thecreativity of the employees and help to prevent the manpowerobsolescence, which may be due to age, temperament, or theinability of the person to adapt himself to technological changes.

• Versatility in operations: Training makes the employees

versatile in operations. All rounder can be transferred to any job. Flexibility is therefore ensured. Growth indicatesprosperity, which is reflected in profits every year.

• Employee stability: Training contributes to employee stabilityin at least 2 ways. Employees become efficient afterundergoing training. Efficient employees contribute to thegrowth of the organization. Growth renders stability to thework force. Further trained employees tend to stay with the

organization.

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Criteria for effective training program

1. Employee Motivation-motivation to learn is the basic requisite tomake training and development programmes effective. Motivationcomes from awareness that training fetches some rise in status andpay. Motivation alone is not enough; the individual must have theability to learn.

2. Recognition of individual differencesRegardless of individual differences, and whether a trainee islearning a new skill or acquiring knowledge of a given topic, thetrainee should be given the opportunity to practice what he istaught. Practice is essential after individual is successfully trained.

3. Schedule of learningDuration of practice sessions, duration of rest sessions andpositioning of rest pauses are the three schedules, which must becarefully planned and executed for an effective training programme.

Besides, Training can be made effective, if action on the followinglines is initiated: -

1. It should be ensured that the management commits itself toallocate major resources and adequate time to training. This is what

high performing organizations do. For example XEROX, invest 300 $million annually or about 2.5% of its revenue on training. SimilarlyHewlet Packard spends about 5% of its annual revenue to train87000 workers.

2. It should be ensured that training contributes to competitivestrategies of the firm. Different strategies need different HR skills forimplementation. Let training help employees at all levels acquire theneeded skills.

3. Ensure that a comprehensive and systematic approach to trainingexists, and training and retraining are done at all levels on acontinuous and ongoing basis.

4. Training can be made effective by making learning as one of thefundamental values of the company. This philosophy shouldpercolate down to all employees in the organization.

5. It should be ensured that there is proper linkage amongorganizational, operational and individual training needs.

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6. And finally to make training effective a system to evaluate theeffectiveness of training needs to be prepared so that the shortfallscan be easily looked at.

Why Training Fails? The benefits of training are not clear to the top management.

The top management hardly rewards the supervisors for carryingout effective training.

The top management rarely plans and budgets systematically fortraining

The middle management, without proper incentives from topmanagement does not account for training in productionscheduling

Without proper scheduling from above, first line supervisors havedifficulty in production norms if employees are attending trainingprogrammes.

Trainers provide limited counseling and consulting services to therest of the organization.

Methods of training

A. On-the-job training (OJT)

The most common, most widely used and accepted and m0stnecessary method of training. Trainees earn as they learn under thewatchful eyes of a master mechanic or crafts man, receiveimmediate feedback, practice in the actual work environment andassociate with the same people they will work after training.Employees are coached and instructed by skilled co-workers, bysupervisors etc. They learn the job by personal observation andpractice as well as occasionally handling it. It is learning by doingand it is most useful for jobs that are either difficult to stimulate orcan be learned quickly by watching and doing.

Merits: Trainee learns on the actual equipment in use and in the trueenvironment of his job. He gets a feel of actual working conditionsand requirements. This method is highly economical since noadditional personnel or facilities are required. Trainee learns therules, regulations procedures by observing their day-to-dayapplications.

Demerits:

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• Instruction is often highly disorganized and haphazard and notproperly supervised due to inability of experienced employeeto impart skills to the trainee.

• Learners are more often subjected to distractions of a noisy

shop or office.• This further leads to low productivity, mainly when the

employee is unable to fully develop his skills.

• Most suitable for supervisors and executives.

B. Vestibule training (Training Centre Training)It is a classroom training, which is often imparted with the help of the equipment and machines, which are identical with those in usein the place of work. This technique enables the trainee toconcentrate on learning the new skill rather than on performing an

actual job. Theoretical training is given in the classroom, whilepractical work is done on the production line.It is very efficient method of training semi-skilled personnel,particularly when many employees have to be trained for the samekind of work at the same time. It is often used to train machineoperators, typists etc.

Merits: as training is given in a separate room, distractions areminimized.A trained instructor, who knows how to teach, can be more

effectively utilized. The correct method can be taught without interrupting production.It permits trainee to practice without fear of supervisor'sobservation.

Demerits:

Splitting of responsibilities leads to organizational problems.An additional investment in equipment is necessary.

Training situation is somewhat artificial.However, when number of trainees is large, vestibule schools aregenerally utilized; but when the number is small, on-the-job trainingis preferred.

C. ApprenticeshipFor training in crafts, trades, and in technical areas, apprenticeshiptraining is the oldest and most commonly used method, especiallywhen proficiency in a job is the result of a relatively long trainingperiod of 2 years to 3 years. In the fields of draughtsman, a

mechanist, tool-maker, carpenters etc this type of training is given.

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Advantages: a skilled workforce is maintained. The workmanship is good.It increases opportunities for growth very frequently.

OFF-THE-JOB METHODSUnder this method of training, the trainee is separated form the

job situation and his attention is focused upon learning the materialrelated to his future job performance. Since the trainee is notdistracted by job requirements, he can place his entireconcentration on learning the job rather than spending his time inperforming it. There is an opportunity for freedom of expression forthe trainees. Off-the-job training methods are as follows:

a) VESTIBUTE TRAINING :-In this method, actual work conditions are simulated in a class room.

Material, files and equipments those are used in actual jobperformance are also used in training. This type of training iscommonly used for training personnel for clerical and semi-skilled

jobs. The duration of this training ranges from days to a few weeks. Theory can be related to practice in this method.

b) ROLE PLAYING :-It is defined as a method of human interaction that involves realisticbehaviour in imaginary situations. This method of training involvesaction, doing and practice. The participants play the role of certaincharacters, such as the production manager, mechanical engineer,

superintendents, maintenance engineers, quality control inspectors,foreman, workers and the like. This method is mostly used fordeveloping interpersonal interactions and relations.© LECTURE METHOD:-

The lecture is a traditional and direct method of instruction. Theinstructor organizes the material and gives it to a group of traineesin the form of a talk. To be effective, the lecture must motivate andcreate interest among the trainees. An advantage of lecture methodis that it is direct and can be used for a large group of trainees.

Thus, costs and time involved are reduced.

c) CONFERENCE OR DISCUSSION :-It is a method in training the clerical, professional and supervisorypersonnel. This method involves a group of people who pose ideas,examine and share facts, ideas and data, test assumptions, anddraw conclusions, all of which contribute to the improvement of the

job performance. Discussion has the distinct advantage over thelecture method, in that the discussion involves two-waycommunication and hence feedback is provided. The participantsfeel free to speak in small groups. The success of this methoddepends on the leadership qualities of the person who leads the

group.

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EVALUATING THE EFFECTIVENESS OF TRAININGPROGRAMME

Evaluation of training programme is necessary in order to

find out the extent to which training objectives areachieved. Even the cost effectiveness can be estimatedthrough evaluation.

Finally, evaluation of training is needed in order to raise theeffectiveness of training. Remedial measures can beadopted in regard to weak points in the training process.Credibility of training is considerably enhanced when it isproved that the organization got good dividend out of itstraining and development programme.

The evaluation of training programme should be based onobjective methods and standards. Evaluation should bespecific and also continuous. Such evaluation should bemade immediately after the training programme is over.Evaluation of training need not be treated as routine activity.Scientific evaluation requires the services of experts andtheir services should be used. Suitable data need to becollected for such evaluation. Such data may be related to

behavior change, organizational results and reactions of trainees. The data collected are useful for assessing theresults of training on the work group or the entire company.One simple method/technique of evaluation is to send aquestionnaire to the trainees after the completion of trainingprogramme and to collect their opinions about differentaspects of the programme. Their interviews can also bearranged for data collection (for evaluation). Analysis of suchdata gives broad conclusions about the effectiveness of training. Follow-up action is required to ensure

implementation of evaluation report at every stage of training.

HR manager of any organization (manufacturing company,airways, insurance company, hospital or any other serviceorganization) can design training programme for itsemployees as per the guidelines noted above. Training willbe effective only when it is planned, implemented andevaluated in a systematic manner. Attention needs to begiven to these three aspects while designing a training

programme / package for employees of an airways or staff of the hospital. Initially, the training needs need to be

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examined properly. For this, organizational analysis andmanpower analysis will be necessary. Thereafter, trainingobjectives need to be decided. The objectives decided maybe innovative, problem solving or regular. This will befollowed by selecting the methods suitable for trainingpurpose. The methods selected will be used for giving actualtraining to employees.

Finally, evaluation of training programme will beundertaken. Here, the contribution of training in achievingtraining objectives will be analyzed for the introduction of remedial measures, if required.


1. What is training? Explain its importance. (2001)2. Explain the training process in brief. (2001)3. What is training? How would you conduct a training programme?

(2003)4. Suggest some of the on-the-job training and off-the-job training

methods and their features. (2003)5. How does one evaluate a Training Programme? (2004)6. As an HR Manager of Hinduja Hospital design a Training

programme for hospital staff. (2007)

7. Define management development. Explain any 5 methods of Management Development programme. (2004)

Short Notes:

1. Principles of Training (2005)2. Employee Training (2006)

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CHAPTER – 6 - PERFORMANCE APPRAISALOnce the employee has been selected, trained and motivated he isthen appraised for his performance. P.A. is the step where themanagement finds out how effective it has been at hiring andplacing employees. If any problems are identified, steps are taken tocommunicate with the employee and to remedy them. A “P.A. is theprocess of evaluating an employee’s performance of a job in termsof its requirements.”

A Performance Appraisal is an objective assessment of anindividual’s performance against well defined benchmark.

Relationship of Performance Appraisal & Job Analysis

Needs / Importance and purposes:

P.A. has been considered as a most significant and indispensabletool for an organization, for the information it provides is highlyuseful in making decisions regarding various personal aspects suchas promotions and merit increases. Formal P.A. plans are designedto meet three needs, one of the organization and the other two of the individual, namely:

a. They provide systematic judgments to back up salaryincreases, transfers, demotions or terminations.

b. They are means of telling a subordinate how he is doing, andsuggesting needed changes in his behavior attitudes, skills or

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job knowledge. They let him know “where he stands” with theboss.

c. They are used as a base for coaching and counseling theindividual by the superior.

Main objectives of employee performance appraisal are:

a. To enable an organization to maintain an inventory of thenumber and quality of all managers and to identify and meettheir training needs and aspirations;

b. To determine increments rewards, and provide a reliable indexfor promotions and transfers to positions of greaterresponsibility.

c. To maintain individual and group development by informing

the employee of his performance standard;d. To suggest ways of improving the employee’s performancewhen he is not found to be up to the mark during the reviewperiod.

e. To identify training and development needs.

What should be rated?

The criteria for assessing performance are:1. Quality: the degree to which the process or result of carrying

out an activity approaches perfection.2. Quantity: the amount produced, expresses in monetary terms,

number of units.3. Timeliness:4. Need for supervision5. Interpersonal impact: the degree to which a performer

promotes feelings of self-esteem, goodwill and co-operationamong co-workers and subordinates.

6. Training: need for training for improving his skills knowledge(whether he requires any training further)

The above criteria relate to past performance and behavior of anemployee. There is also the need for assessing the potential of anemployee for future performance, particularly when the employee islikely to be promoted.

Who should evaluate the performance?

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In the principles mentioned below, it is clearly suggested that atlesttwo raters should ideally carry out the performance of an employee.

The individuals who are given the responsibility of performanceappraisal are known as raters. Following are the ideal suggestedraters.

Individual supervisor: supposed to be most appropriate candidate toappraise the performance of his subordinates. Since he is closelyassociated with his subordinates and is familiar with thesubordinate’s performance, he can give correct picture of hissubordinate’s performance. The supervisor is not also useful forcorrect PA but also can decide correctly the immediate requirementfor training and development just after the PA.

Subordinates: Can assess the performance of their superiors. This

method may be useful in assessing an employee’s ability tocommunicate, delegate work, allocate resources, disseminateinformation, resolve conflicts and deal with employees on a fairbasis.

Peers: are in a better position to evaluate certain facts of jobperformance, which the superiors and subordinates cannot do. Suchfacts include contribution to workgroups, projects, interpersonalskills, reliability, and initiative and communication skills. They are inbetter position to act as raters due to their closeness of working

relationship and amount of personal contact with the ratee.

Clients

Peers

Subordinates

Individualsupervisor

Who shouldevaluate

employee’sperformance???

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Clients: are seldom used for rating employee performance. Clientsmay be members within the organization who have close and directcontact with the ratee and make use of an output this employeeprovides. Service providers such as Hutch make use of client forrating employee performance.

Principles of Effective P.A.

Systematic P.A. should be accurate and reliable one. Following arethe principles of a good or effective P.A.

1. Single employee should be rated by two raters. Thencomparison should be made to get accurate rating.

2. Continuous and personal observation of an employee isessential to make effective P.A.

3. The rating should be done by immediate superior of anysubordinate in an organization.

4. A separate dept may be created for effective P.A.

5. The rating should be conveyed to the concerned employee asit helps him to understand his position where he stands and

where he should go.

6. The plus points of employees should be recognized and minuspoints should not be too highlighted but they should be told tothe employees by taking him into confidence.

MULTIPLE PURPOSES OF PERFORMANCE ASSESSMENT

General Applications Specific Purpose

Developmental Uses • Identification of individual needs

• Performance feedback

• Determining transfers and jobassignments

• Identification of individualstrengths & developmental needs

Administrative Uses /Decisions

• Salary

• Promotion

• Retention or termination

• Recognition of individual

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performance

• Lay-offs

• Identification of poor performersOrganizational

maintenance / Objectives

• HR Planning

• Determining organization trainingneeds

• Evaluation of organizational goalachievement

• Information for goal identificationDocumentation • Helping to meet legal

requirements

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(1) Establishing Performance Standards: The first step in theperformance appraisal process is to set performancestandards for appraising the performance of an employee.

This step is finalized with the help of job analysis whichreveals the contents of a job. The standards decided shouldbe clear, objective and noted in writing also it should bediscussed with the supervisors to ensure that all the relevantfactors have been properly included. Performance criteriawill be clear when it is in the form of output which can

be measured in precise terms. If work performancecannot be measured in quantitative form, the personalcharacteristics such as work quality, honesty, reliability, co-operation and team work, job knowledge, leadership,initiative, safety consciousness, etc. which contribute toemployee performance must be determined. Thesestandards should be indicated on the Performance AppraisalForm.

(2) Communicating the standards to employees: In thissecond step in the performance appraisal process, the

Performance Appraisal Process

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performance standards specified in the first step arecommunicated and explained to the employees so that theywill know precisely what is expected of them. In the absenceof such communication, the employees will find it difficult toguess what is expected of them. The reactions of employeesto the standards decided should be obtained. If necessary,the standards decided should be revised/modified in the lightof feedback obtained from the employees. This is necessaryfor avoiding possible sharp reactions from the employees indue course.

(3) Measuring actual performance: In this third step in theperformance appraisal process, actual performance of employees is measured in the light of the standards decided

and communicated to employees. Such measurementrequires selecting the right technique of measurement,identifying the internal and external factors influencingperformance and collecting information on results achieved.Data on performance of employees are collected throughdifferent means such as personal observations, writtenreports and face to face communication. The performance of different employees should be recorded in such a way thatthe data collected will be easily comparable. Here, what ismeasured is as important as how it is measured for appraisal

purpose.

(4) Comparing actual performance with the standardsdecided:In this fourth step of performance appraisal process, actualperformance of the worker is compared with the pre -determined performance standards. This type of comparisonbetween actual performance with standard performance willclearly reveal the deviations which may be negative or evenpositive. Positive deviations occur when actual performance

exceeds the standards fixed. Negative deviations occur whenactual performance is below the standards fixed. Positiveand negative deviations are exactly opposite. Positivedeviations are good and favorable to workers while negativedeviations are bad/undesirable and also unfavorable toworkers. Through comparison, the employee is appraisedand judged of his potential for growth and advancement.

(5) Discussing actual performance: In this fifth step of performance appraisal, the results of appraisal arecommunicated to and discussed with the employees. The

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deviations and the reasons behind such deviations areanalyzed in full and discussed. Such discussion is importantas it enables an employee to know his weaknesses andstrengths (weak and strong points). This will motivate him toimprove his performance in future. The impression which thesubordinate worker received about his performance has apositive impact on his subsequent performance. In fact, theinformation which the subordinate receives about hisperformance assessment has a great impact on his self-esteem and on his subsequent performance. The impactshould be position. However, actual impact (positive ornegative) depends on how the appraisal feedback ispresented and discussed with the employee. Here, the role of rater/superior is important and crucial 'Conveying good news

about performance is considerably less difficult for both themanager and the subordinate than when performance hasbeen below expectations. ..\VIDEOCLIP\Performance Appraisals - Be Prepared-GOOD.flv

(6) Offering guidance/taking corrective actions: In this sixthand the last step of performance appraisal process, thecorrective steps required to be taken (remedial measures)for improving performance are identified and initiated. Forthis or prior to this, mutual discussion with concerned

employee is essential as remedial measures will give positiveresults only when they are introduced after full and fairdiscussion with the employee. For this, appraisal interview isnecessary and should be conducted properly by the rater.Follow-up measures for self development will be takenproperly by the ratee if this interview is conducted properly.It should be a problem-solving interview. Employee will takeinitiative and interest in the corrective measures if he hasnoted the importance and positive benefits of appraisalinterview. Corrective measures may be in the form of special

training, counseling, coaching and offering guidance in thework assigned. This will improve the performance of workerbefore next round of performance appraisal Improvement inthe performance will give good dividend to worker as well asto the organization in due course.

HOW PERFORMANCE APPRAISAL CAN CONTRIBUTE TO FIRM’SCOMPETITIVE ADVANTAGE (SELF STUDY)

http://opt/scribd/conversion/My%20Documents/VIDEOCLIP/Performance%20Appraisals%20-%20Be%20Prepared-GOOD.flv




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Ensuring legal compliance: promotions made on factors otherthan performance might land up a firm in a legal battle, thusdiverting its focus on non-productive areas. Companies canminimize costly performance-related litigation by using appraisalsystems that give fair and accurate ratings.

Procedure of Employee Performance Appraisal a. Supervisory Responsibilities

1. Clear Performance Standards: Each supervisor is responsible forsetting and communicating clear performance standards for his/heremployees at the beginning of, and throughout, the review period.

b. In evaluating employees, supervisors shall consider factors suchas the experience and training of the employee, the job description,and the employee’s attainment of previously set goals andobjectives.

2.Informal AppraisalsEach supervisor is also responsible for observing and discussing withhis/her employees both positive and negative aspects of theemployee’s performance throughout the review period. Writtenrecords of each significant incident requiring supervisory input shall

be kept by all supervisors.

Improvingperformance

Markingcorrect

decisions

Ensuring legalCompliance

Minimizing jobdissatisfaction

& turnover

Strategy &behaviour

CompetitiveAdvantage

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3. Formal AppraisalsOn a regular basis and as described in this policy, each supervisor isresponsible for conducting formal performance appraisals on eachsubordinate employee. Performance appraisals shall include asummary of all past discussions related to performance during thereview period and future performance goals.

4. AccountabilitySupervisors will be held accountable for the performance of theiremployees and for the negligent retention of an employee thatconsistently performs below City standards.

B.Timing:

1. FrequencyEmployee Performance Appraisals: Regular employees will receive amid-point review and an annual appraisal each calendar year.Midpoint reviews will be conducted halfway through the calendaryear and annual appraisals will be conducted at the end of thecalendar year. All forms must be completed, approved, andsubmitted to the Human Resources Department following theperformance appraisal discussion.

2.

Timely Processing The Human Resources Department will maintain a system to assistsupervisors to complete performance appraisals on time. The timelyprocessing of performance appraisals is one of the most importantleadership responsibilities for those in supervisory positions.

C.Self EvaluationsIn addition to regular and periodic review by supervisors, eachemployee is asked to perform an annual evaluation of their own

performance during the proceeding year. In this regard:

1. Employees are asked to submit to their supervisors a signed self-evaluation form.2. A copy of the self-evaluation form can be obtained from theHuman Resources Department.

D.ApprovalsPerformance appraisals shall be reviewed with the next level of

management before a supervisor may discuss and review theperformance appraisal with the employee.

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EPerformance Appraisal Discussion1.Supervisors will hold a discussion with the employee regarding theperformance appraisal. The purpose of the discussion is to reviewpast performance, address any questions about the performancereview, and to set goals and objectives for the period ahead.

2. The discussion should be held at a prearranged time in a privatelocation free from interruptions.

F.Employee Signature

1. The employee will be asked to comment on the appraisal andacknowledge it by signing and dating the form.

GInformation derived from the performance review may beconsidered when making decisions affecting training, pay,promotion, transfer, or continued employment.

Methods (Types / Kinds) of P.A.

Traditional methods1. Ranking method:

This is the oldest and simplest method. An employee is rankedis ranked one against the other in the working group under thismethod.

For e.g. If there are 10 workers in the working group, the mostefficient worker is ranked as number 1 and least efficient isranked as number 10.

A small organization can get maximum benefits through thismethod.

2. Grading method:

Under this system, the rater considers certain features andmarks them accordingly to a scale.

Categories are established earlier and carefully defined.

An organization can select features such as ability to get thework done, friendliness, co-operativeness, and dependability,self-expression, job knowledge, leadership etc.

The grading may be a – outstanding, b- very good, c- good, d –average, e-poor etc.

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The actual performance of an employee is then compared withthese grade definitions.

3. Check list method

The appraisal of the ability of an employee thru gettinganswers for a number of questions is called C.L. Method.

A person (s) is / are appointed as rater who indicates theanswers of an employee against each question by putting atick mark. There are two columns provided to each question asyes or no. Following is the model.

Checklist Yes no

A. Is the employee satisfied with job?

B. Does he finish the job accurately?C. Is his attitude friendly with other

Staff members?D. Is he ready to accept responsibility?

4. Forced choice method

A series of statements are prepared positively or negatively,both statements describes characteristics of employee.

The rater is forced to tick any one of the statements either outof positive statements or of negative statements:

Few statements:a) Completes target on time.b) Willingly accepts additional responsibility.c) Is dishonest and disloyal.d) Is overbearing and disinterested in work.

The favorable terms earn a plus credit while unfavorable termsget no credit.

This method is not very favorable, trained technicians arerequired to prepare sets of series for each occupational group.

5. Free essay method.

Under this method, the supervisor makes a free form, open-ended appraisal of an employee in his own words and putsdown his impressions about the employee. Following factorsare considered:

Relationship with fellow members and seniors.

General ability.

Job knowledge and potential;

Employee attitudes;

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evaluation forms the final appraisal. The method has beensuccessfully employed by over 90% fortune 1000 companies overthe past decade. The fact, that in India also several well-knowncompanies like Hughes software systems, ITC, Escotel, etc., haveadopted this technique validates its popularity as an hr tool. It hasbeen used in making decisions relating to promotions, terminations,pay hikes, etc, in identifying training and developmental needs of the employees or validating ongoing training programme.

It's effective...

The concept, by and large, is most democratic as it takes intoaccount the perception of not only your supervisors, but also of several others. The employee also perceives an element of impartiality here. However, its greatest strength lies in designingfuture development programme for employees. "Our 360-degreeprogramme is just one year old, but we have begun to noticesignificant changes in employee-personalities and their way of functioning," reveals Rajan Dutta, chief, hr & quality, Escotel mobilecommunications. "It’s a powerful tool for employee growth andbuilding a positive work culture," he adds. Adesh Goyal, VP (H.R.),Hughes software systems, agrees. "The concept has been verysuccessful in providing developmental inputs to managers in ourorganization," he says.

But...

The implementation is not so easy. "Organizations need a minimumlevel of maturity to adopt this concept," says T. Sridhar, executivedirector - TMI network, whose company embraced 360-appraisal ayear ago. There is also the culture factor. "Indian society does notencourage criticism of authority figures. Therefore, the feedback tothe boss is also not always unbiased," says Kris Lakshmikanth, CEO -Prizedjobs.com. The biggest stumbling block, however, lies

somewhere else - in the unwillingness of the top management toaccept feedback from the rank. "it takes courage and extremecandidness to accept that," says Dutta.

The pros definitely outweigh the cons. While traditional feedbackprocesses have failed miserably, the 360-degree feedback hasproved to be magical. As opposed to the conventional appraisalsystem, wherein the immediate supervisor provides the employeewith unidirectional comments, the 360-degree relies on a multi-dimensional feedback.

How does it work?

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The most popular model used, namely the skill model, lists the skillsand behavior necessary for effective job performance. The employeerecommends eight to twelve people, for his 360-degree review. Theycan be direct reports, peers, bosses, internal customers or anyindividual who could provide relevant performance feedback on theemployee. Some companies also ask external customers to rate theindividual’s performance. The supervisor then selects six to tenparticipants from the list for appraisal. The employee is alsorequired to assess himself.

The employee is rated in each of the requisite skill areas and thesurvey responses are compiled accordingly. The individual receivesa report summarizing others’ perceptions of his performance,highlighting his strengths and development needs.

How to implement 360 degree?

Firstly, human resource personnel and senior management need todetermine the usefulness of this feedback. Then they have to

• Define the skill model to be used.• Explain the purpose of the process, the use of the data

collected, and the steps involved to everyone concerned.• Distribute questionnaires.•

Complete questionnaires.• Process questionnaires.• Meet with employee to discuss results and plan future

development.• Provide feedback.

Warning

For the absolute success of this system care need to be taken, as towho rates the employee? Also, caution is advised during compilation

of the data. Design and development of the model must alsodependent on several factors such as in-house technology,confidentiality safeguards, and time frame required to complete thefeedback and the applicability.

Outcome

The 360-degree feedback allows better understanding of others’perspectives of the employee’s strengths and weaknesses.Employee development efforts are more focused and effective.

Feedback being anonymous is more honest. Thus a better

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communication between supervisor and employees is a substantialresult of this system.

2. Assessment Centre methods:

Assessment Centres: Mainly used for executive hiring, assessmentcentres are now being used for evaluating executive or supervisorypotential. An assessment centre is a central location wheremanagers may come together to have their participation in job-related exercises evaluated by trained observers. The principal ideais to evaluate managers over a period of time, say one to threedays, by observing (and later evaluating) their behaviour across aseries of select exercises or work samples. Assessees are requestedto participate in in-basket exercises, work groups (without leaders),computer simulations, role paying, and other similar activities whichrequire the same attributes for successful performance, as in theactual job. Raters, after recording their observations, meet todiscuss these observations. The decision regarding the performanceof each assessee is based upon this discussion of observations. Self-appraisal and peer evaluation are also thrown in for final rating.

The characteristics assessed in a typical assessment centre includeassertiveness, persuasive ability, communicating ability, planningand organizational ability, self-confidence, resistance to stress,energy level, decision-making, sensitivity to the feelings of others,administrative ability, creativity, and mental alertness. It is quitedifficult to measure these activities accurately over three days,though there would be sizeable number of trained observers andpsychologists.First developed in the US and the UK in 1943, the assessment centreis gaining popularity in our country. Crompton Greaves, Eicher, HUL

and Modi Xerox are using the technique with results being highlypositive. The problem with the assessment centres is their cost. Not only arethe assessees away from their jobs while the company pays for theirtravel and lodging, but the evaluators are often company managerswho are assigned to the assessment centre for short durations.

These managers are often supplemented by psychologists and HRspecialists who run the centre and also make evaluations. Hencethis approach is cost-effective only in large organizations.

• Employees who receive a poor report from the centre may

react in negative ways. Ideally, a rejected employee wouldreturn to his / her former job, satisfied that he / she would not

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be promoted to a job he / she could not handle. However, agood performer at one level may leave the organization inorder to remove the bad assessment report from his / her workrecord.

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Assessment centre: a practical look:

• Ranbaxy retained the services of a team of psychologists fromthe UK-based Kelly & King to take executives (of Ranbaxy) through

an assessment center. 20 star managers went through the exercise.• Santrupt Misra, Director- Birla Management Corporation hadplans for a similar exercise to be held at Gyanodaya, the Aditya Birlalearning centre. Misra first used the assessment centre concept 4yrs ago on 150 middle and senior level managers.

• Tatas have created their own assessment centers, and so havethe talent centric companies like Wipro and Cognizant.

• SHL, a HR consulting firm has worked with over 100companies conducting close to 1,000 assessment centres.

• ICICI bank uses assessment centre as a recruitment and

selection tool to find the best talent, while GE India subsidiaryGECIS has used it on 20% of its middle managers.

Management by Objective: (MBO)

Management By Objectives term was first popularized by PeterDrucker in 1954 in his book 'The Practice of Management'.

How MBO works can be described in four steps:

The first step is to establish the goals each subordinate is to attain.In some organizations, superiors and subordinates work together toestablish goals. In others, superiors establish goals for subordinates.

The goals typically refer to the desired outcome to be achieved. These goals can then be used to evaluate employee performance. The second step involves setting the performance standard for thesubordinates in a previously arranged time period. As subordinatesperform, they know fairly well what there is to do, what has beendone, and what remains to be done.In the third step, the actual level of goal attainment is compared

with the goals agreed upon. The evaluator explores reasons for thegoals that were not met and for the goals that were exceeded. Thisstep helps determine possible training needs. It also alerts thesuperior to conditions in the organization that may affect asubordinate but over which the subordinate has no control. The final step involves establishing new goals and, possibly, newstrategies for goals not previously attained. At this point,subordinate and superior involvement in goal-setting may change.Subordinates who successfully reach the established goals may beallowed to participate more in the goal-setting process the nexttime. The process is repeated.

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Psychological Appraisals: Large organizations employ full-timeindustrial psychologists. When psychologists are used forevaluations, they assess an individual’s future potentials and notpast performance. The appraisal normally consists of in-depthinterviews, psychological tests, discussions with supervisors and areview of other evaluations. The psychologists then writes anevaluation of the employee’s intellectual, emotional, motivationaland other-related characteristics that suggest individual potentialand may predict future performance. The evaluation by thepsychologists may be for a specific job opening for which the personis being considered, or for an assessment of his future potential.From these evaluations, placement and development decision maybe made to shape the person’s career.

Limitations or problems of P.A.

The ideal approach to performance evaluation is that in, whichthe evaluator is free from personal biases, prejudices.

However, a single foolproof evaluation method is not available.Inequalities in evaluation often destroy the usefulness of theperformance system – resulting in inaccurate, invalidappraisals, which are unfair too.

The halo effect or error: when employee’s performance is

appraised on the basis of halo effect the evaluation is generallynot free from error.

Leniency or strictness in evaluation: some supervisors are veryfree where as some may be very strict in evaluating the sameperson. When an evaluator is positively lenient in his appraisal,an individual’s performance becomes overstated, i.e. ratedhigher than it actually should. Similarly, under the negativetendency, performance is understated than what it should be.

The central tendency problem: the most commonly founderror. It assigns “average ratings” to all the employees with a

view to avoiding commitment or involvement or when rater isin doubt or has inadequate information or lack of time at hisdisposal. Such tendency seriously distorts the evaluations,making them most useless for promotions, salary etc

Similarity error: this error occurs when the evaluator ratesother people in the same way he perceives himself. For e.g. If the evaluator perceives himself as aggressive may evaluateothers by looking for aggressiveness. Those who show thischaracteristic may be benefited while others may suffer.

Miscellaneous biases: bias against employees on the ground of sex, race, and religion etc.

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Why appraisal techniques prove failure?

The dual and conflicting role of supervisor.

Too many objectives often cause confusion.

The supervisor feels that subordinate appraisal is notrewarding.

A considerable time gap exists between two-appraisalprogrammes.

Poor communication keeps employees in the dark about whatis expected of them.

Feedback on appraisal is generally unpleasant for bothsupervisor and subordinate.

Unwillingness on the part of supervisors to tell employeesplainly how to improve their performance.


1. What are some of the commonly used techniques of performance appraisal system? Write about their merits anddemerits. (2003)

2. “Assessment centers are more accurate than supervisionary judgment in predicting the potentiality.” Explain the statementwith emphasis on the aim and process of Assessment Center.(2004)

3. (a) “Regular feedback improves the performance of employees”. Explain the importance of performance appraisal.(b) Discuss any one-performance appraisal technique used atmanagerial level. (2005)

4. Describe in detail performance appraisal. (2006)1. “Participative management results in improved Performance”.

Explain (2007)

Concept Questions:

1. 360 degree PA (2001, 2007)2. Assessment Centre (2005)

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CHAPTER 8COMPENSATION MANAGEMENTMEANING OF WAGE / COMPENSATION PAYMENT /COMPENSATION PACKAGE:Wage is a monetary payment/compensation made by the employerto his employee for the work done or services rendered. A workermay be paid Rs. 100 per day or 6,500 per month. This is wagepayment. It is like give and take. The workers give services andtakes payment called wage payment. Industrial workers are paidremuneration for their services in terms of money called wagepayment. Wages are usually paid in cash at the end of one day, oneweek or one month. Money wage is the monetary compensation orprice paid by the employer to his employee for the servicesrendered. Such compensation is also called wage or salary or reward

given by organization to a person in return to a work done.Normally, compensation payable to an employee includes thefollowing components:(a) Basic compensation for the job (wage/salary);(b) Incentive compensation for the employee on job (D.A., profitsharing, bonus, etc;(c) Supplementary compensation paid to employees (fringe benefitsand employee services).IMPORTANCE OF WAGE PAYMENT TO EMPLOYEES/WORKERS:Wages payment is important to all categories of workers. It is the

income earned by hard work. It provides bread (if not butter) to theworker and his family members. Wage is a matter of life and deathto workers/ employees. Their life, welfare and even social statusdepend on wage payment. It is the only source of income to largemajority of workers. They and their unions always demand higherwages and other monetary benefits. This rule is applicable to factoryworkers and also to other categories of workers including bankemployees, government servants, teachers, and so on.Majority of labor problems and disputes are directly related to wagepayment. The efficiency of workers and their interest and

involvement in the work depend on wage payment. Even theirattitude towards employer/management depends on the wagepayment. In brief, wage payment is a matter of greatest importanceto workers. Wage problem is the most pressing and persistentproblem before the entire labor force.

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Minimum Wage: Providing for sustenance of life plus for preservation of the efficiency of worker.

Fair Wage: Equal to the rateprevailing in the same trade and inthe neighborhood or equal to thepredominant rate for similar workthroughout the country.

Living Wage: Higher than fair wage.Provides for bare essentials plusfrugal comforts.

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IMPORTANCE OF WAGE PAYMENT TO EMPLOYER:Wage payment is equally important to employers as their profitdepends on the total wage bill. An employer, in general, isinterested in paying low wages and thereby controls the cost of production. However, low wages are not necessarily economical. Infact, they may prove to be too costly to the employer in the longrun. An employer has social responsibility to pay fair wages to hisworkers as they are equal partners in the production process. Heshould introduce fair wage payment system which will give benefitsto both the parties. Employees will offer full co-operation to themanagement when they are paid attractive wages. On the otherhand, strikes and disputes are likely to develop when workers arepaid low wages or when they are dissatisfied and angry due to lowwage rates. It is possible to earn more profit by paying attractive

wages to workers.IMPORTANCE OF WAGE PAYMENT TO GOVERNMENT:Government also gives special importance and attention to wagespaid to industrial workers as industrial development, productivity,industrial peace and cordial labor - management relations largelydepend on the wage payment to workers. Government desires togive protection to the working class and for this Minimum Wages Actand Other Acts are made. In India, wages are now linked with thecost of living. This is for the protection of workers. Government isthe biggest employer in India and the wage rates of government

servants and employees of public sector organizations are decidedby the government only. Revision of pay scale of governmentemployees is made for adjusting their wages as per the cost of living. For this "Pay Commission" is appointed. And pay scales areadjusted as per the recommendations made.In India, wage payment is a very critical, controversial and delicateissue for all categories of work force. This is due to poverty, risingprices, mass unemployment and rising population. In India, allcategories of workers (a factory worker drawing Rs. 4,000 salary anda bank manager drawing Rs. 15,000or more as total salary) demand

higher wages. Due to rising prices and new life styles, such demandis unavoidable. Majority of industrial disputes move around the wagepayment. Wage payment is indeed a problem and needs to betackled from economic, social and humanistic angles. It is a humanproblem and certainly not a simple arithmetic exercise.FACTORS INFLUENCING/DETERMINING WAGE RATES:(1) Demand and supply position in the employment/labormarket: If the demand for labor is more, wages paid are higher andwhen the demand for labor is less, the rates of wage payment arealso low. In Western countries, wage rates are high, while in India,

they are comparatively low due to demand supply similarly, wagerates are high during the period of inflation and prosperity and they

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are low during the period of depression. In brief, demand for andsupply of labor influence wage and salary fixation. .(2) Nature and features of the job (Job Requirement): Thewage rate depends on the qualities and qualifications required forperforming the job. When the nature of job is hard, higher wages arepaid. Similarly, wage rate is high in the case of jobs where specialqualifications and experience are required. For example, anengineer is paid more than a typist/clerk. Jobs are graded accordingto the skills required for performing them and accordingly, wagerates are fixed.(3) Cost of living: Wage rates are raised when the price levelincreases. This is necessary for adjusting wages as per the cost of living. At present, wages of central government employees or of factory workers are raised when the cost of living index goes up. The

rate of D. A. increases or decreases as per the movement of theconsumer price index (PI). Linking of wages with the cost of living isnecessary for the protection of life and welfare of the workers. Theliving wage criterion is quite suitable for determining wage rate asliving wage enables an employee to maintain himself and his familyat a reasonable level of existence.(4) Bargaining power of workers:. When the trade union isstrong, the workers get the benefit of higher wages. This is becauseof the bargaining power of the trade union leadership. Strong tradeunions organize strikes, etc. for raising the wage rate. Unorganized

workers are even paid less than the minimum wage as they are notunited and do not have bargaining power.(5) Efficiency and productivity of work force: Efficient workersare paid more as they give more production. The wage paymentincreases along with the increase in the productivity of work force.(6) State regulations: Wage rate depends on the law regardingwage payment i.e. Minimum Wages Act and linking of wages withthe cost of living. Wages must be paid as per the legal provisionsmade by the government from time to time. This is applicable toorganized workers as well as to workers from the unorganized

sector. (e.g. agricultural workers, etc.) In brief, labor laws have theirpositive influence on wage rates. Such laws are for the benefit andprotection of working class.(7) Ability of the employer to pay: Wage rage depends on theability of the employer to pay. Such ability depends on the profitsearned, financial position of the company and so on. This is oneimportant factor that determines the wage rate. Wage rate dependson the ability of the employer to pay. Workers are paid attractivewages when company gets huge profit (e.g. Software Company). Anorganization will not be able to pay more than its ability to pay.

(8) Wage rates in other enterprises in the same locality:Prevailing wage rate in the locality is the most widely used criterion

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for determining the wage rate at the organization’s levels. In India,wage rates are related to region-cum-industry base.Normally, wage rates in a specific area or locality are identical. Thewage rates in two or more textile mills are rather identical.(9)The present stage of economy: The wage rates are related tothe position of national economy. High wage rates are not possiblewhen there is recession. There will be increase in the labor supply ina depressed economy. This, in turn, should serve to lower the goingwage rates. Wage rates are normally high during the period of prosperity. Inflation leads to increase in wage payment.(10) Internal factors determining wage rates: Such factors

include business strategy of the company, job evaluation andperformance appraisal and employee related factors such asindividual performance, seniority, experience and potential. When

the strategy of the enterprise is to achieve rapid growth,remuneration should be higher than what competitors pay. Whenthe strategy is to maintain and protect current earnings, theremuneration level needs to be average or even below average.COMPONENTS OF EMPLOYEE REMUNERATION/COMPENSATION PACKAGE:

(Wage / salary & Incentives Direct, Perquisites & Fringe benefits

indirect)

FINANCIAL BENEFITS1. Wage/Salary: Wage is the payment as per the pay scale decidedby the employer. Wage represents hourly-rate of day while salary

refers to the monthly rate of pay, irrespective of the number of hours put in by an employer. Salary payment includes dearness andother approved allowances payable to employees. There is aprovision of annual increment in the pay scale given to employees.Salary payment is made regularly on the specific day decided by themanagement. Salary payment is not uniform to all employees as itdepends on the nature of the job, responsibilities assigned, meritsavailable, status of the post, and seniority of the employee and soon. Salary payment is now made attractive to all categories of workers. It constitutes major source of regular income to largemajority of industrial and other categories of employees. Wages are

REMUNERATION PACKAGE

WAGE/SALAR

Y

Incentives Fringe B. Perquisite

s

Non-

MonetaryBenefits

Total Compensation Payable

Financial Benefits

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now linked with the cost of living. The term 'Take Home Pay' is alsoused to indicate the quantum of money available to an employeeafter statutory deductions (income tax, P.F., etc.) are made.2. Incentives: Also called “payment by results”, incentives are paid in addition towages and salaries. Incentives depend upon productivity, sales,profit or cost reduction efforts. There are:

• Individual incentive schemes &

• Group incentive schemesIndividual incentives are applicable to specific employeeperformance. Where a given task demands group effort forcompletion, incentives are paid to the group as a whole.3. Fringe Benefits: these include employee benefits such asprovident fund, gratuity, medical care, hospitalization, accident

relief, health and group insurance, canteen, uniform, recreation andthe like.4. Perquisites:

These are allowed to executives and include company car, clubmembership, paid holidays, furnished house, stock option programand the like. They are offered to retain competent executives.Non-monetary benefits (related to job content): These includechallenging job responsibilities, recognition of merit, growthprospects (career development), competent supervision,comfortable working conditions (job design), job sharing and flexi-

timing.

A NOTE ON SALARY SLIP:

An employee is given full details of compensation payment ona printed small slip called salary slip.

The Salary slip is given to every worker along with salary. This slip gives full details of salary payment. This includesbasic pay, allowances, incentive payments, house rent and so

on. The slip indicates the total salary payable (gross amount)to an employee. In addition, the deductions made from salarypayment an account of P.F., loan repayment, tax deducted, if any, etc. are also shown. The net amount payable is alsoshown in the slip and accordingly. The payment is made. Thisslip is one useful document and useful to workers forinformation, record and reference.

The primary part of pay package is basic pay. Along withbasic salary, allowances are given to employees. Allowances

include the following:(a) Dearness Allowance (DA): It is as per the cost of living.

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It is paid as a percentage of basic pay.

(b) House Rent Allowance (HRA): It is paid to employeesto whom living accommodation is not provided. It iscalculated as a percentage of basic pay.

(c) City Compensatory Allowance (CCA): It is paid toemployees in metros and big cities.

(d) Transport Allowance (TA): Some employers pay suchallowance. It is a fixed amount payable every month.

Salary payment is not uniform to all employees as it dependson the nature of the job, responsibilities assigned, meritsavailable, status of the post, and seniority of the employeeand so on. Salary payment is now made attractive to allcategories of workers. It constitutes major source of regular

income to large majority of industrial and other categories of employees. Wages are now linked with the cost of living. Theterm 'Take Home Pay' is also used to indicate the quantum of money available to an employee after statutory deductions(income tax, P.F., etc.) are made. The details of salarypayment are given in pay slip which is given to everyemployee along with salary payment.

FRINGE BENEFITSAccording to William B. Werther and Keith Davis, "fringesembrace a broad range of benefits and services that employees receive as

part of their total compensation package... pay or direct compensation... isbased on critical job factors and performance. Benefits and services,however, are indirect compensation because they are usually extended as acondition of employment and are not directly related to performance".

In addition to regular wages, allowances and bonus payment,industrial workers are given other benefits and services calledfringe benefits. They are called so because they are offered

by the employer as a fringe. This means such benefits aresupplementary to regular wages and allowances. They alsosupport regular wage payment to employees.

The purpose of fringe benefits is to retain efficient & capablepeople in the organization. They foster loyalty and act as asecurity base for the employees.

Such benefits include benefits such as provident fund,gratuity, medical care, hospitalization, paid vacation,pension, accident relief, health and group insurance,

canteen, uniform, recreation, and the like. Such benefits arebased on critical job factors and performance. They

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constitute indirect compensationas they are usually extended asa condition of employment and not directly related toperformance of concerned employee.

Characteristics of Fringe Benefits:

IMPORTANCE / RELEVANCE OF OFFERING FB:

TYPES OF FRINGES

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OTHER USEFUL SERVICES (AT NO COST OR MINIMUM COST)

INCENTIVES / PERFORMANCE BASED INCENTIVES: (PLI)Incentives are variable rewards granted to employees according tovariations in their performance. The other name for incentives is

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“payment by results”. But the word incentive is most appropriatedue to its motivational content.Incentives are monetary benefits paid to workmen in recognition of their outstanding performance. Popularly called variable pay,incentives are defined as, “variable rewards granted according tovariation in the achievement of special results.” Unlike salaries and wages which are relatively fixed, incentivesgenerally vary from person to person and from time to time for thesame person.

HALSEY PREMIUM PLAN: Under Halsey plan, standard time isfixed for the completion of a job and the rate per hour is thendetermined. If the worker takes the standard time or more tocomplete the job, he gets paid at the standard time rate. In otherwords, time wages are guaranteed even if the output of the workeris below standard. Where the work is done in less than the standardtime, he gets paid for the actual time, at the time-rate plus a bonuswhich is calculated at a specified percentage of the saved time. Thepercentage varies from 30-70 %. The usual rate is 50%.

e.g.

TYPES OF

INCENTIVEPLANS

Individual incentive plan

Halsey PremiumRowan PlanTaylor’s Differential Piece ratesystemEmerson’s efficiency bonusplanBedeaux point premium planGnatt task & bonus plan

Plan

Group incentive plan

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standard time: 10 hrsRate per hour: Re 1Case (i)

Time taken: 10 hrsEarnings: 10 * 1 = Rs. 10.00Case (ii)

Time taken: 12 hrsEarnings: 12 * 1 = Rs. 12.00Case (iii)

Time taken: 8 hrsEarnings:

Time wages: 8 * 1 = Rs. 8.00Bonus: ½ * 2 * 1 =Rs. 1.00

========

Rs. 9.00

Advantages of PLI

• Motivating

• Improve standard of living

• Improves productivity of workers

• Increase quantity of production/employee performance

• It is attractive and profitable.

• Due to above advantages,o Limited supervision of employeeso Reduction in wastageso Reduction in labor turnover / absenteeismo Cordial labor relationshipo Increased output

FEATURES/REQUISITES OF A GOOD INCENTIVE PLAN:(1) Simplicity: A good incentive plan is one which is easy tounderstand and simple to operate. An average worker must be ableto know the incentive offered and what is expected to do. Themonetary as well as non-monetary benefits offered must be made

clear to all workers.2) Encourages Initiative: A good incentive plan should createinitiative among workers to work more and to earn more. It mustoffer more income to workers and more profit/production to the firmor company.3) Definiteness and flexibility: A good incentive plan should bedefinite. This means frequent changes should not be made asregards rates, etc. as such changes create confusion and doubts inthe minds of workers. Such plan must give clear benefits to workers.In addition, an ideal incentive plan should be flexible. It should take

care of technological and other changes taking place from time-to-

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time. There should be suitable provision for such adjustment.Flexibility makes incentive plan adaptable.4) Prompt payment: Incentive payment must be made in cash andalso regularly and promptly. Extra payment for extra effort shouldbe made soon after the work is completed. Employees are always inneed of money (cash). Naturally, the promptness in payment raisesthe popularity of an incentive plan. .5) Properly communicated to employees: A good incentive planneeds effective publicity. It should be communicated properly to allemployees. This will lead to their effective participation. A goodincentive plan may not get popular support unless it iscommunicated properly to employees. The wider, the exposure, thebetter will be the support from the employees.6) Wide coverage and equitable: A good incentive plan should

not be for employees in certain sections/ departments only. It shouldhave wide coverage and almost all employees should be covered insuch plan. Such wide coverage makes the plan popular at all levelsand among all categories of workers.An incentive plan should be equitable. This means it should provideequal opportunity to all employees to show efficiency and earnmore. This avoids dissatisfaction among employees and makes theplan just and fair to all employees.(7) Guarantee of minimum wage payment: An incentive wageplan should include certain minimum wage payment to every worker

per month. This should be irrespective of the production he gives.Such provision of guarantee payment creates a sense of securityand confidence among workers.(8) Scientific fixation of standard workload: Under theincentive plan, extra payment is given for the extra work i.e. workwhich is over and above certain standard quality. Such standardwork-load must be clear, specific and fixed with scientific timestudies so that majority of the employees will be able to give extraproduction for extra payment. Incentive wage plan will bemeaningless if majority of workers remain away from its benefits.

(9) Justice to employer and employees: A good incentive planshould do justice to both parties. The employer must get additionalproduction along with extra profit and the workers must get extrapayment for extra production given.(10) Direct efforts-reward relationship: In a good incentivewage plan, direct efforts reward relationship should be established.Every worker must get extra payment in proportion to extra effortsmade by him, Such payment must be recorded correctly and paidpromptly. This is necessary as workers will not take interest in thework if the benefit (in terms of money) is made available after a long

period.

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(11) Acceptable to workers: A good incentive plan is one which isprepared after consultation with workers and their representatives.

The benefits of incentive will be available only when workers acceptand support it.(12) Grievance procedure: In a good incentive plan, recordsregarding extra production and payment should be maintainedproperly. In addition, suitable grievance procedure should beintroduced so as to enable every worker to place his complain asregards wage payment and get it solved to his full satisfaction. Thiscreates sense of confidence among workers.

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CHPT – 8 - CAREER PLANNINGINTRODUCTION:-

The term career planning is frequently used in relation young boysand girls studying at the college level. College students areexpected to consider their qualities (physical and mental),psychological make-up, likes and dislikes, inclinations, etc. anddecide what they want to be in their life. In other words, they shoulddecide what they want to achieve in their life and adjust theireducation and other activities accordingly. This means they have toplan their career. In such career planning, parents, family membersand college teachers offer helping hand and guide young boys andgirls in selecting the most suitable career. Lot of literature,psychological tests etc. are also available on career planning. Evenlectures, workshops and TV programmes are arranged for guiding

students on career selection (particularly after the declaration of HSC results). Career planning enables them to use theirabilities/qualities fully and make their life happy, prosperous andrich in quality. At present, even experts are available to help youthin their career planning. IQ and other tests are also conducted forthis purpose.

The term career planning and development is used extensively inrelation to business organizations. It is argued that if theorganizations want to get the best out of their employees, they mustplan the career development programmes in their organization

effectively. Such programmes offer benefits to employees and alsoto the organizations. The employees will develop new skills will beavailable to the organization. This type of career planning can bedescribed as organizational career planning.

MEANING OF CAREER (WHAT IS CAREER?):-

A career is a progress or general course of action of a person insome profession or in an organization. Further, career includes thespecific jobs that a person performs, the kinds of responsibilities that

comprise those jobs, movements and transitions between jobs andan individual’s overall assessment of and feeling of satisfaction withthese companies of his / her career.

According to Edwin B. Flippo “a career is a sequence of separatebut related work activities that provide continuity, order andmeaning to a person’s life”. Career of an employee representsvarious jobs performed by him during the course of his working life.

This is described as career path. In the case of an ordinary worker,the career path includes the following job positions:

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Unskilled worker – Semi-skilled worker – Skilled worker – Highlyskilled worker – Assistant foreman – Foreman.

Employees (of all categories) want to grow in their careers as thisprovides more salary, higher status and opportunity to useknowledge, education and skills effectively. An individual withpotentials joins a firm not for job but for career development. Anorganization has to provide better opportunities to its employees intheir career development and also use their efficient services for thebenefit of the organization.

MEANING OF CAREER PLANNING (WHAT IS CAREERPLANNING?):-Career planning is a process whereby an individual sets career goals

and identifies the means to achieve them. Where the organizationintervenes in planning, it becomes organizational careerplanning. In other words, organizational career planning isthe planned succession of jobs worked out by a firm todevelop its employees.

Career planning is one important aspect of human resource planningand development. Every individual who joins an organization desiresto make a good career for himself within the organization. He joinsthe organization with a desire to have a bright career in terms of

status, compensation payment and future promotions. From thepoint of view of an organization, career planning and developmenthave become crucial in management process. An organization hasto provide facilities/opportunities for the career development of individual employees.

If the organizations want to get the best out of their employees, theymust plan regularly the career development programmes in theirorganizations. In brief, career planning refers to the formalprogrammes that organizations implement to increase the

effectiveness and efficiency of the human resources available.Career planning and development is the responsibility of the HRdepartment of the organization. As already noted, every person

joining an organization has a desire to make career as per hispotentiality, ability, skills and so on.

NEED/PURPOSE/OBJECTIVES OF CAREER PLANNING:-1) To map out careers of employees as per their ability and

willingness and to train and develop them for higher positions.2) To attract and retain the right type of persons in the

organization.

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3) To utilize available managerial talent within the organizationfully.

4) To achieve higher productivity and organizationaldevelopment.

5) To provide guidance and assistance to employees to developtheir potentials to the highest level.

6) To improve employee morale and motivation by providingtraining and opportunities for promotion.

SCOPE OF ORGANISATIONAL CAREER PLANNING:- The following activities/areas are covered within the scope of organizational career planning:

a) HUMAN RESOURCE FORECASTING AND PLANNING :-Here, efforts will be made to identify the number of employeesrequired in future. In addition, the selection procedure will be

adjusted with the overall strategic goals of the organization.

b) CAREER INFORMATION :-Here, information relating to career opportunities (promotions,training for self development, etc) will be supplied to employees.Supplying career information/opportunities has special significanceas this motivates employees to grow and reach to higher position.

c) CAREER COUNSELLING :-Such counseling is next to supplying career information. Career

counseling is possible by senior executives through periodicdiscussions with their subordinates. Such career guidanceencourages subordinate employees to take interest in certain areaswhere suitable opportunities of career development are available. Itis a type of internal guidance and motivation of employees for theselection of possible career paths. Such counseling is needed whenemployees have to plan their own careers and develop themselvesfor career progress.

d) CAREER PATHING :-

Management now plans job sequences for transfers and promotionsof their employees. This makes transfers and promotionssystematically with advance information to employees. Career pathcreates suitable mental makeup of employees for self-development.

e) SKILL ASSESSMENT TRAINING :- Training is essential for career planning and also for manpowerdevelopment. Along with job analysis, organizational and jobmanpower requirement analysis should be undertaken by the

management. This prepares proper background for the introductionof career planning programmes for employees.

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ADVANTAGES OF CAREER PLANNING:-A properly designed system of career planning can provide the

following benefits:i. Career planning helps an employee to know the career

opportunities available in an organization.ii. Career planning encourages him to avail of the training and

development facilities in the organization so as to improve hisability to handle new and higher assignments.

iii. Career planning involves a survey of employee abilities andattitudes. It becomes possible, therefore to group togetherpeople talking on a similar wavelength and place them undersupervisors who are responsive to that wavelength.

iv. Career planning anticipates the future vacancies that may

arise due to retirement, resignation, death, etc. at manageriallevel. Therefore, it provides a fairly reliable guide formanpower forecasting.

v. Career planning facilitates expansion and growth of theenterprise. The employees required to fill job vacancies infuture can be identified and developed in time.

DISADVANTAGES/LIMITATIONS OF CAREER PLANNING:-The main problems in career planning are as follows:

i. Career planning can become a reality when opportunities forvertical ability are available. Therefore, it is not suitable for a

very small organization.

ii. In a developing country like India, environmental factors suchas government policy, public sector development, growth of backward areas, etc. influence business and industry.

Therefore, career plans for a period exceeding a decade maynot be effective.

iii. Career planning is not an effective technique for a largenumber of employees who work on the shop floor, particularly

for illiterate and unskilled workers.

iv. In family business houses in India, members of the familyexpect to progress faster in their career than their professionalcolleagues. This upset the career planning process.

v. Systematically career planning becomes difficult due tofavoritism and nepotism in promotions, political intervention inappointments and reservations of seats for scheduledcastes/tribes and backward classes.

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HOW TO INTRODUCE CAREER-PLANNING PROGRAMME?(PROCESS OF CAREER PLANNING)

It is not easy to introduce career development programme at thelevel of an organization. Moreover, such career developmentplanning is a continuous activity. What is happening in most of theorganizations is that this concept is given only lip service andtheoretical importance. If the organization wants to get the best outof their employees, it must plan the career developmentsprogrammes continuously and effectively in its organization.

DIAGRAM: STEPS IN CAREER PLANNING

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PROCESS OF / STEP IN CAREER PLANNING:-1) ANALYSIS OF PERSONEL SITUATION :-

This is the first step, which needs to be completed before theintroduction of career planning programme. This relates to a timefrom which career planning is to be introduced. Here, the base linewill be prepared to help the planners to make projections for theplanning period and to help in the evaluation of plans. In order toanalyze the present career situation, the following information willbe required:

i. Total number of employees – their age distribution,qualifications, positions, specializations, etc.

ii. Structure – broad as well as detailed and the qualificationsrequired for each grade.

iii. Personnel need of the organization. (Category wise)iv. Span of control available within the organization.v. Field staff at head office with necessary details, andvi. Facilitates available for training and development within and

outside the organization.

The information collected on these aspects serves as the base forthe preparation of career development plan for the future period.

2) PROJECTION OF PERSONNEL SITUATION :-

In this second step, an attempt is being made to find out thesituation likely to develop after the completion of careerdevelopment plan. This can be done on the basis of assumption,which can predict what is likely to happen at the close of the careerdevelopment plan.

3) IDENTIFYING OF CAREER NEEDS :-In this third step of career development plan, efforts are made tofind out precisely the career development needs of the futureperiod. It is possible to identify the scope and limitations of careerdevelopment needs on the basis of the data collected (through

personnel inventory of the organization, employee potentials, andappraisal of employees).

4) SELECTION OF PRIORITIES:-It is rather difficult to meet all the needs of the employees and theorganization for career development immediately i.e. through onecareer development plan. Naturally, there is a need to select thepressing and urgent problems of employees and organization. Inaddition, other factors such as technical, financial andadministrative must be taken into consideration while finalizing the

priorities.

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5. DEVELOPMENT OF CAREER PLAN:- This is the most important step in the whole process of careerdeveloping plan. Such plan must describe the following in concreteform/forms:

a. The employees involved,b. The department in which the proposed plan will operate;c. The length of time required the achieving the goals.

In order to execute the career development plan, the organizationshould:

a) Introduce systematic policies and programmes of staff training and career development for all categories of employees so as to enable them to:I. Improve their level of skill and knowledge;

II. Gain wider experiences; andIII. Assume higher responsibilities.b) Establish and effectively implement a system of

study leave;c) Develop the experience of the employees by

encouraging their rotation from one region toanother;

d) Take positive steps to encourage careerdevelopment, such as:

I. Providing within the organization;

II. Giving priorities in the filling of vacancies inthe following order for:

1. promotion within the organization;2. Transfer within the organization;3. Outside recruitment.

III. Removing artificial barriers to promotion;IV. Establishing a register of employees for

promotion on merit-cum-seniority basis;6) WRITE-UP OF FORMULATED PLAN :-

After deciding the priorities of career development plan, the next

major step is to prepare a write up (brief report) of the career plan. This writ-up should contain all necessary details such as schedule(time sequence of plan), procedures and other details so that theevaluation of the plan will be easy and meaningful.

7) MONITORING PLANNING i.e. MONITORING OF CAREERDEVELOPMENT PLAN:-

Monitoring of the plan is essential for its effective execution.Expected results/benefits will be available only when the plan isimplemented properly. Planned (expected) targets and targets

actually achieved can be compared through suitable monitoring of the plan. The gap between the two (i.e. short falls) can be located

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quickly. In addition, suitable remedial measures can be taken torectify the shortfalls.

8) IMPLEMENTATION (OF CAREER DEVELOPMENT PLAN) :-Implementation/execution of the plan is an integral aspect of planning process itself. For effective implementation, co-operationand co-ordination at all levels is necessary. The implementationneeds proper monitoring so as to avoid possible shortfalls.

9) REVIEW AND EVALUATION OF CAREER PLANS :-A plan needs periodical review. Such evaluation avoids mistakes,deficiencies, etc during the implementation stage. It is built-indevice to measure the effectiveness of the plan. Actual benefitsavailable will be known only through such review and evaluation.Such evaluation should be done by experts. It should be conductedsystematically and also impartially.

10) FUTURE NEEDS :- This is the last step/stage of the current career development planand the first step/stage of the next plan. Here, on the basis of theachievements of the current plan, the career needs of the futureperiod (of employees and also of the organization) are estimated.

The new priorities are decided and the details of the new careerdevelopment plan are prepared. Planning is a continuousprocess/activity. This rule is applicable to career development plansof an organization.

CAREER STAGES:-Education is thought of in terms of employment. People go forschool and college education and prepare for their occupation. Veryfew people stick to the same job throughout their life. Most of themswitch job either within the organization or in some otherorganization. Chances are they change jobs, depending on availableopportunity, several times before retirement. Where opportunity isrestricted they continue with the same job. They go through thefollowing stages:

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1) EXPLORATION :-Almost all candidates who start working after college education startaround mid-twenties. Many a time they are not sure about futureprospects but take up a job in anticipation of rising higher up in thecareer graph later. From the point of view of organization, this stage

is of no relevance because it happens prior to the employment.Some candidates who come from better economic background canwait and select a career of their choice under expert guidance fromparents and well-wishers.

2) ESTABLISHMENT :- This career stage begins with the candidate getting the first jobgetting hold of the right job is not an easy task. Candidates are likelyto commit mistakes and learn from their mistakes. Slowly andgradually they become responsible towards the job. Ambitiouscandidates will keep looking for more lucrative and challenging jobs

elsewhere. This may either result in migration to another job or hewill remain with the same job because of lack of opportunity.

3) MID-CAREER STAGE :- This career stage represents fastest and gainful leap for competentemployees who are commonly called “climbers”. There iscontinuous improvement in performance. On the other hand,employees who are unhappy and frustrated with the job, there ismarked deterioration in their performance. In other to show theirutility to the organization, employees must remain productive at thisstage. “climbers” must go on improving their own performance.

Authority, responsibility, rewards and incentives are highest at this

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stage. Employees tend to settle down inn their jobs and “jobhopping” is not common.

4) LATE CAREER :- This career stage is pleasant for the senior employees who like tosurvive on the past glory. There is no desire to improve performanceand improve past records. Such employees enjoy playing the role of elder statesperson. They are expected to train younger employeesand earn respect from them.

5) DECLINE STAGE :- This career stage represents the completion of one’s career usuallyculminating into retirement. After decades of hard work, suchemployees have to retire. Employees who were climbers andachievers will find it hard to compromise with the reality. Othersmay think of “life after retirement”.

CONCEPT/INTRODUCTION TO CAREER DEVELOPMENT:-Career development consists of the personal actions one undertakesto achieve a career plan. The terms ‘career development’ and‘employee development’ need to be differentiated at this stage.Career development looks at the long-term career effectiveness of employees where as employee development focuses of effectiveness of an employee in the immediate future. The actions

for career development may be initiated by the individual himself orby the organization.

a. INDIVIDUAL CAREER DEVELOPMENT:-Career progress and development is largely the outcome of actionson the part of an individual. Some of the important steps thatcould help an individual cross the hurdles on the way ‘up’may include:

I. PERFORMANCE :- Career progress rests largely on

performance. If the performance is sub-standard, evenmodest career goals can’t be achieved.

II. EXPOSURE :- Career development comes throughexposure, which implies becoming known by thosewho decide promotions, transfers and other career

opportunities. You must undertake actions that would

Performance Appraisal is an important part of a career development system, since it

identifies how well employee’s performance. The information can be used to plan that

employee’s career path.

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attract the attention of those who matter most in anorganization.

III. NETWORKING : Networking implies professional andpersonal contacts that would help inn striking gooddeals outside (e.g., lucrative job offers, business deals,etc.). for years men have used private clubs,professional associations, old-boy networks to gainexposure and achieve their career ambitions.

IV. LEVERAGING :- Resigning to further one’s career withanother employer is known as leveraging. When theopportunity is irresistible, the only option left is toresign from the current position and take up the new

job (opportunity in terms of better pay, new title, anew learning experience, etc.). However, jumping the

jobs frequently (job-hopping) may not be a goodcareer strategy in the long-run.V. LOYALTY TO CAREER :- Professionals and recent

college graduates generally jump jobs frequently whenthey start their career. They do not think that career-long dedication to the same organization may helpthem further their career ambitions. To overcome thisproblem, companies such as Infosys, NIIT, WIPRO (allinformation technology companies where the turnoverratios are generally high) have come out with

lucrative, innovative compensation packages inaddition to employee stock option plans for those whoremain with the company for a specified period.

VI. MENTORS AND SPONSORS :- A mentor is, generallyspeaking, an older person in a managerial role offeringinformal career advice to a junior employee. Mentorstake junior employees under their charge and offeradvice and guidance on how to survive and get aheadin the organization. They act as role models. Asponsor, on the other hand, is someone in the

organization who can create career developmentopportunities.

ORGANISATIONAL CAREER DEVELOPMENT:- The assistance from managers and HR department is equallyimportant in achieving individual career goals and meetingorganizational needs. A variety of tools and activities are employeesfor this purpose.

i. SELF-ASSESSMENT TOOLS :- Here the employees

go through a process in which they think throughtheir life roles, interests, skills and work attitudes

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and preferences. They identify career goals,develop suitable action plans and point outobstacles that come in the way. Two self-assessment tools are quite commonly used in theorganizations. The first one is called the career-planning workshop. After individuals complete theirself-assessment, they share their findings withothers in career workshops. These workshops throwlight on how to prepare and follow throughindividual career strategies. The second tool, calledas a career workbook, consists of a form of careerguide in the question-answer format outlining stepsfor realizing career goals. Individuals use thiscompany specific, tailor-made guide to learn about

their career chances. This guide generally throwslight on organization’s structure, career paths,qualifications for jobs and career ladders.

ii. INDIVIDUAL COUNSELLING :- Employeecounseling is a process whereby employees areguided in overcoming performance problems. It isusually done through face-to-face meetingsbetween the employee and the counselor or coach.Here discussions of employees’ interest goals,

current job activities and performance and careerobjectives take place. Counseling is generallyoffered by the HR department. Sometimes outsideexperts are also be called in. if supervisors act ascoaches they should be given clearly defined rolesand training. This is, however, a costly and time-consuming process.

iii. EMPLOYEE DEVELOPMENT PROGRAMMES :- These consist of skill assessment and training

efforts that organizations use to groom theiremployees for future vacancies. Seminars,workshops, job rotations and mentoringprogrammes are used to develop a broad base of skills as a part of such developmental activities.

iv. CAREER PROGRAMMES FOR SPECIAL GROUPS :-In recent years, there is growing evidence regardingdual career families developing tensions andfrictions owing to their inability to reconcile the

differences between the family roles and workdemands. When we talk of dual career couples (a

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situation where both husband and wife have distinctcareers outside the home) certain puzzlingquestions arise naturally: whose career isimportant; who takes care of children; what if thewife gets a tempting promotion in another location;who buys groceries and cleans the house if both arebusy, etc. realizing these problems, organizationsare providing a place and a procedure for discussingsuch role conflicts and coping strategies. They arecoming out with schemes such as part-time work,long parental leave, childcare centers, flexibleworking hours and promotions and transfers in tunewith the demands of dual career conflicts.

CAREER COUNSELING :

Career counseling means guiding and advising people ontheir possible career paths and what they must do to achievepromotions/ career goals.

Career counseling is one important socio-economic need of the younger generation of every country including India.Schools, colleges and social organizations have to providesuch counseling facilities for suitable career development of the younger generation. Even newspapers and magazines

undertake career planning and counseling activity. At thebusiness level, business organization has to provide careerguidance and career counseling facilities to their employees.Such career counseling has wider social significance.

Career planning needs advising and guiding employees intheir possible career paths and the direction in which theyought to be heading. Such advising and guiding is calledcareer counseling. The need of counseling arises whenemployees have to plan their own careers.

Career counseling is possible by senior executives throughperiodic discussions with their subordinates. Even expertsmay be appointed for providing career guidance to individualemployees. Such counseling helps them to understand theirstrengths and weaknesses in the context of careeropportunities available in the organization. Such careerguidance encourages subordinate employees to take interestin certain areas where suitable opportunities of careerdevelopment are available.

Role of Organization in Career Counseling:

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Organizations/managements play positive role in careerdevelopment of their employees. They help their employeesthrough career information, career counseling and motivation

of employees.Career counseling is one major method by which organizationcan help an employee in his career. Employees needguidance in their career paths and the direction in which theyought to be heading. This is described as career counseling.Such counseling is required when employees have to plantheir own careers and develop themselves for careerprogression in the organization. This enables a worker tounderstand himself more clearly and develop his own thinkingand outlook which is necessary in career planning.

Career counseling is possible by HR managers and alsoby departmental managers. The employee can select thecareer most suitable to his potential and aptitude due to suchcareer counseling. An employee is encouraged to avail of thetraining and development facilities available within theorganization through career counseling. In brief, careercounseling is one important method by which theorganization can help an employee in his careerdevelopment. Professionally run organizations ask theirmanagers to identify the internal employees having

potentialities and develop them in order to occupy theirpositions as and when they fell vacant. This is the manner inwhich organization helps an employee in his careerdevelopment.

EMPLOYEE RETENTION TECHNIQUES:

An organization prefers to have efficient and stablemanpower. Such manpower provides different benefits to theorganization in the form of efficient production, cordialindustrial relations, low labor turnover, team spirit amongworkers, limited accidents and market reputation. In order tobring stability to labor force, organizations should chalk outretention strategy and implement it.

Employee retention strategy involves taking actions forretaining employee over a long period. Research studiesindicate that both high and low achievers have higher quitrates than average performers. Quitting by high performers

is a matter of serious concern for the organization. Here, theorganization has to introduce strategy to retain high

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performers. This is known as selective retention strategy . This means retaining those who are needed and letting to gothose who are not needed.

DIAGRAM: Measures to retain employees underretention strategy

(1) Provision of retention bonus: Retention bonus is akind of ad hoc payment to best performers to retain them inthe organization. Such retention bonus is offered to mid-leveland rank-and-file employees along with top executives. Thistechnique is· used when any change like merger andacquisition or organizational restructuring takes place andemployees tend to leave the organization because of thepossible effect of such change. Here, retention bonuspayment acts as an incentive attraction to employees. Here,

the details of retention bonus need to be decided as per theneeds / expectations of employees as well as those of organization.

(2) Package of incentives for long-term stay: Here, theorganization designs a. suitable long term package foremployees which will discourage employees from leaving theorganization for some short term benefit. The employeeleaves the organization mainly because he feels that hismarket value is more than what his organization is giving atpresent. For avoiding this situation, a package of measures

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should be introduced. It should include stock options withprovision of higher benefits for longer duration of stay in theorganization. In addition, provision may be included forcancelling certain incentives/benefits, if the employee leavesthe organization earlier than stipulated time.

(3) Matching jobs and employees: One important reasonof labor turnover is mismatch between employees and their

jobs. This problem develops because of wrong placement,faulty career path decided for an employee, transfer to thedepartment or work disliked by an employee, promotion to aposition not liked by an employee. Retention of suchunsatisfied and disturbed employees is possible byintroducing suitable strategy under which proper matching of

an employee and his job will be achieved. In manycompanies, employees are given choice to switch from oneline function to staff function and vice-versa or from fast trackproject to slow-track project. This type of flexibility reducesmonotony and job stress and increases job satisfaction, jobinterest and job liking. As a result, turnover due to mismatchis minimized. Retention of employees affected by mis-matchis also possible.

(4) Provision of Intangible benefits to employees:

Organizations offer intangible benefits for the retention of employees. Such benefits (intangibles) include overseastraining opportunity, employment in foreign branches of theorganization, holiday trips for employees and their families,dinner meetings in five star hotels, meetings' in posh hotelswith employees and their families, etc. Some MNCs useoverseas training and employment abroad as carrots forretaining their best performers.

(5) Encouraging employee relationship management:Employee relationship management (ERM) acts as oneemployee retention strategy. This facilitates purposefulcommunication between employer and employees and avoidslabor turnover. Research studies show that changing job ispainful to an employee as it affects his life as well as family'sstability, children's education, social network and employment.An employee feels strongly about morale, relation withimmediate superior and opportunities outside. As a result, hedecides to leave the present job. Here, employing organization

should take adequate care and developed employeerelationship. This reduces employee dissatisfaction level and

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facilitates employee retention.

(6) By persuasion of employees: Organizations can usepersuasion as one method for the retention of key employees. If

key employees can be brought in the organization from outsidethrough persuasion, they can also be retained through effectivepersuasion. Here, the persuasive skills of the chief executive orHR personnel play an important role. He can offer certainincentives and convince the person that it is in his interest tocontinue in the same organization rather than joining someother organization. Many progressive organizations rely on thistechnique to retain key employees.

(7) Conducting stay interviews: Companies conduct stay

interviews in order to retain their workforce by making themfeel appreciated and motivated. Contrary to exit interviews,stay interviews are conducted to understand the reasons whyemployees wish to continue working for the same organization.It is all about their work, the environment, the practices and thepeople that appeal to them and motivate them to stay on. Stayinterviews are also held to understand the issues an employeemay be facing. Such interviews focus on what is going right inthe organization, rather than what went wrong. Stayinterviews are an employee sensing exercise. Such interviewsdefect early warning signals as regards expectations of employees. This enables management to take suitableremedial measures in time and retain the employees for long.

This approach of stay interviews is very positive and helpsmanagement/HRD professionals by providing usefulinformation which can be used for introducing new techniquesfor the retention of employees.

Stay interviews are conducted periodically by the immediatesupervisor. Here, the HRD professionals are also involved as

key partners and facilitators in the process.

(8) In addition to the measures noted above, some moremeasures/techniques can be used for the retention of keypersonnel including top executives, middle level managers and keyoperatives functioning at lower levels. Such measures are asnoted below:

(a) Introduction of scientific recruitment and selection so as toavoid the tragedy of misfits.

(b) Providing scientific training facilities and careerdevelopment opportunities to employees so that they will

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opportunities to employees for progress in their careers.Complete dependence on outside talent may causestagnation in the career prospects of present employeeswhich in turn may lead to frustration and high turnover.Career planning and succession planning are similar but notsynonymous. A succession plan involves identification of vacancies that are likely to occur in the higher levels andlocate the probable successors. Succession planningmotivates employees and facilitates continuity of theorganization.

Advantages / Importance of Succession Planning

1. Succession planning helps when there is a sudden need due to

job hopping/death of serious injury to a key employee.2. There is little or no set back due to absence of key employee.3. Acts as a motivator for the individual employee who comes to

know of the impending promotion in advance.4. Succession planning helps create loyalty towards the

organization and improved motivation and morale of individualemployees.

5. Organization gains stable workforce and low employeeturnover.

6. Ultimately organization becomes successful in accomplishing

its goals effectively.

CHAPTER – 9 - PARTICIPATIVE MANAGEMENT

Opening examples : Participative management

• Many organizations have achieved substantial value creation due

to their employees sharing wonderful ideas. Toyota is a great

example. Toyota's suggestions scheme, operational for decades

now, nets almost 2,000,000 suggestions per year that is 33

suggestions per employee every year. What's more, 95 per centof these are implemented. That makes about 5,000

improvements per day. Employee suggestions helped cut British

Airways cost by 4.5 million pounds. HSBC managed to save up to

Rs 50 lakh per annum just by adopting a single useful suggestion

made by an employee. And British Gas received over 11,000

suggestions, of which 1,100 were implemented and resulted in

cost savings of over 10 million pounds. In India, Gujarat Narmada

Fertilizer Corporation grossed 5,000 suggestions over five years,

with savings of Rs. 6.5 million per annum.

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• At TVS Motors, Hosur, two workers: Prasad and Kanaka Raj each

offered 6000 suggestions over a period of time. All these

suggestions being highly useful to the company, the automobile

giant rewarded these two workers handsomely. Each got a

reward of Rs. 22 lakh.• Satyam started its company-wide suggestion scheme, the Idea

Junction, in June 2001: The proposition behind this initiative was

to enable greater value creation by Sat yam employees (or

associates, as they are called) through ideas, suggestions and

complaints, for new opportunities and definite improvements in

all facets. A key aspect was that the company's overall approach,

policies and practices should result in creating a healthy

environment for associate involvement.

A real-time intelligent web-based portal is present in Intranet, which

is available to all Satyam associates across the globe to support the

entire life cycle of an idea, suggestion or complaint. Satyam

associates are able to log in and provide ideas, suggestions and

complaints, track progress made against the same; participate in

various forums and surveys and obtain information on suggestions

that have been implemented or rewarded. A comprehensive reward

policy is also in place, wherein rewards are envisaged not only forimplemented ideas but also for accepted ideas when these exceed a

certain number. As on March 31, 2003, over 5,814 ideas have been

contributed, more than 1,000 ideas have been accepted and

implemented and over 1,100 reward points have been awarded to

associates.

To ensure that ideas, suggestions and complaints submitted to each

circle are acknowledged, evaluated and taken to a logical

conclusion, a responsible person is identified in each circle to act as

the Circle Idea leader (ClL). The CILs are tracking and evaluating

ideas in addition to facilitating implementation of accepted ideas in

the respective circles and interact with the Idea Junction Team at

the corporate strategy group for company-wide issues.

SCOPE AND WAYS OF PARTICIPATION

Employee participation in management is nothing new. It is as old asthe institution of owners and workers. But its importance has

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increased and has been brought into sharp focus with the Industrial

Revolution and the advent of large enterprises.

In its narrow sense, participative management refers to the

constitution of consultative councils and committees, comprisingrepresentatives of employees and employers, to recommend steps

for improving productivity, machine utilization, job loading; for

effecting savings in power, light; for identifying lazy workers, safety,

so on and so forth.

In its real sense participative management exists when employees

are involved in decision making process, not in mere job related

activities, but at all levels of management.

Workers' participation in management is synonymous with co-

determination-a term popularly used in former East Germany to

describe this participation. Participative management is also called

employee empowerment.

There are three groups of managerial decisions which have a direct

impact on the workers of any industrial establishment. They are

social, personnel and economic decisions.

• Economic decisions include financial aspects-the methods of

manufacturing, automation, shut-down, lay-offs, mergers and

similar other functions.

• Personnel decisions refer to recruitment and selection,

promotions, demotions, transfers, grievance settlement, work

distribution, and so on.

• Social decisions relate to hours of work, welfare measures,

questions affecting work rules and the conduct of individual worker's

safety, health, sanitation and noise control. The workers must have

a say in the decisions on the issues mentioned above.

But there is a difference of opinion about the scope and the extent

to which workers can participate in social, personnel and economic

decisions. One school of thought is of the opinion that the workers

or the trade unions should, on parity basis, sit with the managementas 'equal partners and make joint managerial decisions on all

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matters. The other school propounds the view that the workers

should only be given an opportunity, through their representatives,

to influence managerial decisions at various levels. The first view

could lead to the workers' actual participation in the decision-

making process of the management, while the second aspect willwork out to be consultation of workers in managerial decisions.

A more easy way of understanding the scope of employee

participation is to describe the levels of participation. Participation

can vary from non-existence of employee involvement in decision

making to the absence of managers themselves in making

decisions.

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Definition: - In the words of DAVIS,“It is a mental and emotional involvement of a person in agroup situation which encourages him to contribute to goalsand share responsibilities with them.”

IMPORTANCE OF PARTICIPATIVE MANAGEMENT

The importance of participative management is universally acceptedand efforts are being made for introducing such participationthrough suitable agencies and methods.

1. Participative management has wider socio-economicimportance as it gives various advantages to workers,employers and the society at large. Such participation giveshigher status to workers and enables them to think andexpress their views on the working of their company.

2. Industrial peace and cordial industrial relations are alsoestablished through participative management. In addition,workers’ participation brings industrial democracy in reality.

3. Participative management is important as it satisfies thepsychological need of self - expression of workers. Eventhe process of decision-making is made democratic throughworkers’ participation.

4. It brings human element or humanitarian approach in

industrial management.

W h e n s u b o r d i n a t e s

a r e i n v o l v e d i n

d e c i s i o n - m a k i n g a t

a l l l e v e l s , t h e

r e s u l t a n t c o n c e p t i s

p a r t i c i p a t i v e m a n a g e m e n t

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5. Participative management introduces a new set of values forthe workers and employers in which power is to be replaced bypersuasion and compulsion by co-operation.

6. Employee’s participation is also useful for raising industrialproduction and productivity. It helps consumers in anindirect manner.

7. The national economy also gets certain benefits whenindustrial peace and harmony exist over a long period. In brief,the concept of participative management is important becauseof economic, social and human values connected with it.

The ILO [International Labor Organization] has given moral

support to employee’s participation and has advocated its adoptionin all countries. Efforts are being made in all countries in this regard.In the countries of the West, this experiment is reasonablysuccessful, while in developing countries including India; the processis not satisfactory even when consultative machinery exists in manycountries.

PRE-REQUISITES OF PARTICIPATIVE MANAGEMENT

1. The participants, namely, the management and the operatives,must have clearly defined and complementary objectives. Andthe objectives of one party should not work at cross-purposes withthe objectives of the other party.

2. There must be a free flow of information and communicationbetween the management and the workers. In this way, distrust andsuspicion are avoided, and workers become responsible and maturewhen they discuss their demands with the management.

PM results in improved performance.Improved performance is theoutcome of three variables; removalof conditions of powerlessness,enhancement of self-efficacy(self-worth) and employee perception of empowerment.

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3. The representatives of workers must be drawn from theworkers themselves. The participation of the outside trade unionleaders should be discouraged. This is necessary because theproblems and difficulties of the workers are better understood bythe workers themselves than by others. The workers, therefore, canput across their points of view to the management with confidence.

4. Strong and effective trade unionism is necessary for thesuccess of participative management politicization and multiplicityof trade unions defeat the purpose of participation andmanagement.

5. Education and training of workers make a significantcontribution to the purposive working of participative management.

Trade unions and the government can play a major and meaningfulrole in organizing and conducting training programmes.

6. Neither party should feel that its position is threatened byparticipation. If workers think that their status will be adverselyaffected, they will not participate. If the managers feel that theirauthority is threatened, they will refuse participation or will be onthe defensive.

7. Consultative bodies, collective bargaining and suggestion

schemes make a mockery of participative management. To makeworker’s participation meaningful and purposeful, workers shouldbe associated at all levels of decision-making.

8. The success of participation depends on a suitable participativestructure and a change of heart on the part of employers andemployees, which may take a long time to develop. To expedite thisdevelopment, some sort of legislative action is necessary.

9. There could be the danger of a major portion of the resources of

the enterprises being diverted to workers without muchconsideration for further investments. It may be desirable toreserve a certain percentage of the resources forreinvestment, either through mutual agreement or legislation.

10. The financial cost of participation should not exceed thevalues, economic and otherwise, that come from it. Employeescannot spend all their time in participation, to the exclusion of otherwork.

FORMS / METHODS AND TECHNIQUES OF PARTICIPATIVEMANAGEMENT:

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Participative management is possible by creating suitable agencies,forum or platform through which effective communication betweenworkers and management will be possible and joint decision will bearrived at.

The following methods/technique are normally used in India for theintroduction of participative management:

The methods of participative management noted above are the

different alternatives and employers and workers can select anyone

method which is suitable and convenient. They have to make the

selected method popular and also purposeful. This is natural as the

method selected/used is not important but the result-oriented

participations are important. The method used is a means while

effective participation is end.

1. WORKS COMMITTEE

The Industrial Dispute act, 1947 provided for the setting up of aworks committee consisting of representative of management andemployees in every undertaking employing 100 or more employees.

The committees are for removing the causes of friction betweenemployer and workers in the day-to-day working of the factory. Theyalso provides forum for negotiation between employers and workersat factory level. This joint consultative committee meets frequentlyfor decision on common problem before workers and themanagement. After discussion, joint decisions are taken and suchdecisions are binding on both the parties.Matters like wage payment, bonus, training, discipline, welfarefacilities, working condition, etc.

This committee are extremely popular and effective inFrance and England whereas in India it is not popular aneffective.

2. JOINT MANAGEMENT COUNCIL

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These councils are similar to works committee with equal

representation to employees. Workers express their views, problem

and difficulties through their representative on such councils.

Various problems such as welfare facilities, discipline, training,

removal of workers, common grievances, etc. are discussed in the

meeting. Such joint consultative committees exist in UK and

Sweden. In India, participative management is mainly through joint

management council but not effectively operated.

3. CO-PARTNERSHIP (PARTICIPATION THROUGH OWNERSHIP)

In co-partnership, workers are converted into shareholders of the

company and are allowed to participate in the management like

others shareholders. The company may give financial assistance to

workers to purchase equity shares. They can elect their

representative on the board of directors. Workers are also allowed to

attend meeting of the company and participate in the discussion.

Voting rights are also given to employees. This makes them to

participate in the decision-making and policy framing of the

company at their highest level. They work in two different

capacities- as workers and as co-workers.

Many companies in India offers theirs shares to the employees but

workers don’t give positive response and hence not encouraging.

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This suggests that co-partnership, as a method of participative

management is not effective/popular in India.

61% shares of Otto India, Kolkatta are held by its employees. In

Rajasthan spinning and weaving mills 40% of the shares have been

held by its employees

4. EMPLOYEE DIRECTORS/PARTICIPATION AT BOARD LEVEL:

Here, two or three representative of workers are taken on board of directors of the company. The employee directors/ workers directorsare elected by workers and they express their view of workers in themeeting of the board. Here, employee’s directors act as a linkbetween top management and the workers. Such participationensures cordial industrial relation. The representative of workers canput the view of workers before the directors and can also safeguardthe interests of workers. As a result, the personnel policies will befair and favorable to workers. Unfavorable decision to workers willbe avoided and better treatment will be ensures to them.

This mechanism of participation is now used extensively in publicsector undertaking in India as per the initiative taken by thegovernment.

The GOI took the initiative and introduced a scheme for theappointment of worker’s representatives on the Boards of Management of public sector undertaking. As a result, the worker’srepresentatives were appointed to the boards of HindustanAutomobiles, Pimpri; Hindustan Machine Tools (Bangalore). Worker’srepresentatives have also been appointed to the Boards of

nationalized bank. In the private sector, Tata, DCM have worker’sdirectors on their boards.

5. SUGGESTION SCHEMES / PROGRAMMES:

Under suggestion programme/scheme, workers are asked to givesuggestion to the management on various administrative and othermatters such as machines utilization, waste management, energyconservation and safety measures. Their suggestions are consideredby a joint committee representing workers, heads of departmentsand technical experts. Such suggestions are for improvement in the

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existing organizational setup. Suitable suggestions relating toproduction activities, cost control, quality improvement, workingcondition, etc. are promptly accepted an executed. In addition,rewards are also given to those who make constructive suggestion.For collecting suggestion, suggestion boxes are kept in theorganization.

Suggestion scheme of participative management encouragesworkers to think (individually or collectively) and participate inraising the efficiency of the organization. In India companies like

TATA, DCM, etc. adopt this method. This idea of participativemanagement is now put into operations through quality circles,which are popular in Japan and now function in many Indianscompanies.

6. WORKERS CO-OPERATIVES (AUTO MANAGEMENT):

In this extreme form of labors participation, workers take over theindustrial unit and manage it completely on co-operative basis.Naturally, the entirely management is by the workers themselves.

This method is also called as auto management.

The basic purpose of above noted scheme of participative

management is to associates workers with the decision making

process. The methods used for workers participation are not

important but the purposeful participation is important.

7. PARTICIPATION THROUGH COLLECTIVE BARGAINING:

The principle of collective bargaining confers on the managementand the workers the right, through collective arguments, to lay downcertain rules for formulation and termination of the contract of employment, as well as the conditions of service in anestablishment. Such agreements are binding on parties and havethe force of law. Collective bargaining can really work well if thebargaining parties, namely, the employers and the workers’representatives, make use of the opportunity for bargaining in theright spirit and for a positive purpose. Collective bargaining is no-substitute for workers’ participation in management. Participation

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brings both the parties together and develops appropriate mutualunderstanding, and brings about a mature and responsiblerelationship. Collective bargaining, on the contrary, is based on thecrude concept of power and its exercise for sectional bargaining,which may end up in mistrust, withholding of information and use of pressure tactics.

8. PARTICIPATION THROUGH JOB ENLARGEMENT AND JOBENRICHMENT:

Job enlargement means expanding the job content – adding taskelements horizontally. Job enrichment means that additionalmotivators are added to the job so that it’s more rewarding. Thepurpose of job enlargement and job enrichment is to relieve

boredom of the workers, which flow from excessive specialization inmass-production industries so that the job itself may be a source of self-satisfaction. Job enlargement and job enrichment do provide forworkers participation because they offer freedom and scope to themto use their judgment.However this form of participation provides only limited freedom toa worker concerning the method of performing his/her job. It will notgive him or her any say in some of the vital questions he or she maybe interested in, such as job and income security, welfare schemeand other policy decisions of the company which affect him/her

directly.

9. PARTICIPATION THROUGH QUALITY CIRCLES:

A quality circle consists of seven to ten people from the same workarea who meet regularly to define, analyze, and solve quality andrelated problems in their area. Membership is strictly voluntary, andmeetings are usually held once a week for an hour. During thegroups initial meetings, members are trained in problem solvingtechniques borrowed from group dynamics, industrial engineering

and quality control. These techniques include brainstorming, Paretoanalysis, cause-effect analysis, histograms, control charts,stratification and scatter diagrams.

Quality circles are credited with producing quick and impressiveresults when correctly implemented.

Their advantages include the following:1. Employees are involved in decision-making. This privilege

makes them acquire communication and analytical skills and

improve their efficiency at the workplace.

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2. Savings-to-costs ratios generally are higher than thoseachieved with other productivity improvement programmes.

3. Because the programme is voluntary, employees and unionsdo not view them as another cost control effort.

4. Circle members enhance their chances of promotion tosupervisory positions.

LEVELS OF PARTICIPATION:

Under participative management, workers are associated with

the management i.e. decision-making process at different

levels. The nature of association and the coverage 6f decisions

are different at different levels. Such participation is through

the representatives of workers. Normally, the levels of participation are three. These are as noted below:

(a) Participation of Shop floor Level: Actual production

activity is conducted by workers at the shop floor. Here,

participative management is possible through works committees

in which workers elect their representatives. In such matters

committee meetings relating to day-to-day working/functioning

at the shop floor level are discussed and joint decisions are

taken. Such committees are concerned with following matters:

Conditions of work (lighting, ventilation, sanitation, etc)and amenities such as drinking water, canteens, medical and

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health services, etc;

Safety and accident prevention

Adjustment of festivals and national holidays;

Administration of welfare fund, educational and

recreational activities,

Promotion of thrift and savings, and

Review of decisions arrived in the meetings of works

committees.

Regular meetings of works committees enable workers to get

their day-to-day problems solved promptly. For this, meetings

of committees should be arranged regularly and constructive

decisions should be taken. In India, such committees are not

functioning properly and this affects participative

management at the shop floor level.

(b) Participation at Plant Level: Joint Management Councils

(JMCs) function as consultative agency at the plant level. JMCs

are concerned with the activities at the plant level. In the JMC,

equal representation is given to management and workers. The

maximum membership of JMC is 12. JMC is necessary where fivehundred or more workers are employed. JMC performs functions

on the following matters:

To deal with matters such as accident prevention at plant

level, management of canteens, water, meals, issue and

revision of work rules, indiscipline, training, absenteeism

and soon.

To receive information, to discuss and to give

suggestions on production and marketing programmes,

methods of production, general economic situation, state of

the market and so on.

To have consultations with JMC before introducing changes

in the modes of production, production schedule, general

administration problems and so on. Wages, bonus, individual

grievances of workers, personal problems of workers and matters

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of collective bargaining are outside the scope of JMCs. The

performance of JMCs is not satisfactory in India due to the

attitude of workers' representatives, trade union leadership

and negative attitude of managers.

In 1975, another scheme of participative management was

introduced in India. Under this new scheme, at the shop floor

levels, Shop Councils were to be set-up and at the plant

level, Joint Councils were to be set up. In 1977, the scheme

was extended to public sector units employing 100 or more

persons.

(c) Participation at the Corporate Level: This is participativemanagement at the highest level. Here, the Board of Directors is

the apex body in the administration and decision-making at the

corporate level. The representative of workers is taken on the

Board of Directors. He looks after the protection of interest of

workers. This also improves employer-employee relations and

ensures higher productivity. The workers' representative can

play a useful role in safeguarding the interests of workers. He

can guide the management on personnel and social functions. He

can even suggest to the management not to take certain policy

decisions and measures that would be unpopular with the

employees. Representative of workers can also suggest to the

Board, certain schemes which will motivate workers to take more

interest in the work and will also prove useful for cordial labor

management relations over a longer period.

Participation through workers' representative on the Board of

Directors is, now, introduced in many public sector enterprisesand banks. It may also be noted that participative

management at the corporate level is not effective in India.

This is because of various reasons. The Board, for example,

deals with variety of subjects and personnel matters do not

receive much attention at the Board level. The workers'

representatives on the Board are in minority whereas

decisions taken in the Board are by majority. The

representative of workers on the Board has many limitations

due to educational background, etc. Such director may not be

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able to play a constructive role.

CURRENT TRENDS IN PARTICIPATIVE MANAGEMENT:

1. SUBGROUP ORGANISATION AND MANAGEMENT: -

Each subgroup should elect a discussion leader and a recorder. Theresponsibility of the discussion leader is to focus group meetings,and the responsibility of the recorder is to present an accuraterecord of the group's activities. Subgroups should meet regularly fora limited amount of time. An agenda for each meeting is anecessity; agenda items may be referred by the group or by

members of the management team. It is important for the subgroupto present a consensus within a set of previously established timeconstraints. In other words, with each topic comes a time frame forultimate decision. If necessary, the group may issue a majority anda minority opinion, but only when a group cannot reach a consensusopinion regarding a single issue.

Participation in each subgroup should be limited to 15 members orfewer, to facilitate effective decision-making. An odd number of members in each group will assist in establishing majority versus

minority opinions.

2. MANAGEMENT PARTICIPATION IN GROUP ACTIVITIES: -

Members of the existing management team act as facilitators withinthe groups. Each group should include a minimum of one staff member (a middle or upper manager) with a particular interest orexpertise in the group's topic. This management person should

provide the group with pertinent information and resourcesnecessary to accomplish the group's task.

The staff member is not necessarily the group leader unless electedby a majority of the group members. Frequently, the group is betterserved by electing a rank-and-file member as group leader, ratherthan a management team member. However, the assigned manageris responsible for assisting the discussion leader in maintainingdecorum and maintaining a focus on the group's assigned activities.Additionally, the discussion leader, recorder, and management

advisor are jointly responsible for preparing and presenting the

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group's decisions and opinions to the Chief Executive Officer (CEO)or Chief Administrator of the organization.

3. ANNUAL GOAL- SETTING MEETINGS:

The traditional annual goal-setting meeting has value, particularly toidentify training needed to fulfill specific work tasks. An area, whichrequires constant attention, is staff development. For leaders totrust staff with greater autonomy or decision-making power, theymust be confident that staffs have adequate skill levels. Similarly,most staff are reluctant to take the initiative and acceptresponsibility if they are not confident of their ability to succeed.

Use goal-setting meetings to consider career goals and skills and

knowledge needed for future effectiveness.

Laying a foundation of common goals and competent staff is vital forparticipative management to succeed. Also absolutely crucial ispromoting an environment of trust where staff can speak out andtake initiative without fear of punishment

INDUSTRIAL DEMOCRACY AND PARTICIPATIVE MANAGEMENT:

Both the concepts are supplementary and complementary incharacter and not conflicting and clashing with each other. In fact,

industrial democracy can be introduced through various forums of participative management. Thus, participative management isan essential ingredient of industrial democracy. Workscommittees, joint management councils, etc are the differentmethods useful for the introduction of industrial democracy inconcrete form.

Participative management is the basic requirement of industrialdemocracy. It is through such participation that industrialdemocracy is put into practice. Labor participation in industry is

rightly viewed as industrial democracy in action. This is how theworkers participation in any suitable form serves as an essentialingredient of industrial democracy. In industrial democracy, aneffective system of communication and consultation in between theemployer and workers is required and labor participation inmanagement creates such system/ machinery. Industrial democracyis not merely an economic concept but an attitude of mind and hitsattitude can be given clear and concrete shape through workersparticipation scheme. Thus, participative management preparessound and solid base for industrial democracy. There is absolutely

no conflict between the two concepts. Attention to both is needed

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for industrial peace, cordial industrial relations and rapid industrialgrowth.

PARTICIPATIVE MANAGEMENT AT TATA CONSULTANCY SERVICES

Mr. NarayanSr. Engineer at Tata Consultancy Services

According to Mr. Narayan, Participative management is very usefulto any organization.It helps boost the morale of the employee by making him aware of his responsibility towards the organization.

However, the type of organization plays an important role to the

success of participative management. In the case of TCS it is ratherbeneficial as the employees are highly educated. It becomes easieras there is a level of understanding and maturity they possess.Basically the concepts they all share are similar.

METHODS OF PARTICIPATIVE MANAGEMENT FOLLOWED ATTATA CONSULTANCY SERVICES:

1) GOAL SETTING:

The employees are divided into groups; each group consists of asenior executive. The goals set here are job related as well asPolicy related.When a new policy is implemented, each group is introduced tothe policy. The group that manages to adopt the new policy mosteffectively is rewarded.

The same method is followed if a new policy is needed. Here thegroups are entrusted the task of formulating an effective policy.

The group to formulate the most effective policy is rewarded.

This is usually used at times when deadlines are needed to bemet or when there is a need for more productivity.It has been noticed that employees work best when their viewsare taken into consideration.

2) OPEN DISCUSSIONS:All the employees are allowed to voice their opinions andsuggestions. In this way there is no need to go to the person incharge to voice your opinions. Red tape is greatly avoided and in

this way there is no filtration of any information.

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3) FLOOR MEETINGS: These meeting differ from open discussions only because theyare related to a particular floor (project/ function) of employees.Here immediate problems are discussed and suggestions aregiven, the numbers of employees are less as compared to opendiscussions. Because only concerned members participate.

They are held weekly, monthly, quarterly or when ever the needarises.

4) CONFERENCES:Held every week or when a new project begins.

5. DIRECT APPRAISAL MEETINGS:

Just the same as open discussion, the only difference is that anyeffective suggestion is given immediate rewards. The employeesare evaluated. Their performance is judged and rewarded.

This increases the morale of the employees, as they know thattheir effort is being recognized and duly rewarded. Thisencourages them to work harder.

Short Notes:

1. Participative Management (2001, 2004, 2006)2. Latest trend of Employee Participative

Management (2003)

Concept Questions:

1. Quality Circles (2002)2. VRS (2002)

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CHAPTER – 10INDUSTRIAL RELATIONSIntroduction:Competition is one issue which makes a manager spends sleeplessnights. It is heating up day by day and industrialists find newstrategies to face it. The direct outcome of facing competition isimproved productivity. Improved productivity is the outcome of cordial industrial relations.Industrial relations has traditionally been a fire-fighting function inour country. The IR comes into full play only after the crisis erupts.IR is concerned with the relationship between management andworkers and the role of regulatory mechanism in resolving anyindustrial dispute.

• Specifically IR covers the following areas:

• Collective Bargaining

• Role of management, unions and government.

• Machinery for resolution of industrial disputes.

• Individual grievance and disciplinary policy and practice.

• Labor legislation

HR has moral dimensions too. It is unethical on the part of anymanagement to take advantage of the helplessness of workers andexploit them. Unemployment compels workers – particularlyilliterate and unskilled – to accept jobs, inhuman working conditionsand meager wages

The term industrial relations is a wide one and includes relationsbetween various groups connected with the working of an industrialunit i.e. employer, employees, trade unions and even consumers. Ina narrow sense, industrial relations mean relations betweenemployer and employees. Such relations should be always cordial.

Moreover, absence of cordial relations leads to disputes, strikes andstoppage of work. Maintaining cordial relations is the jointresponsibility of employers and workers.

DEFINITION OF INDUSTRIAL RELATIONS:

(1) According to the ILO, industrial relations comprise relationshipsbetween the State on the one hand and the employers’ andemployees’ organizations on the other hand and the relationshipamong the occupational organizations themselves.

(2) Dale Yoder defines industrial relations as "relationships betweenmanagement and employees or among employees and their

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organizations that characterize or grow out of employment.

FEATURES OF INDUSTRIAL RELATIONS:

(1) Industrial relations are the relations between two partiesconnected with industrial/manufacturing activity, namelyemployer and employees. Such relations are the outcome of theemployment relationship in Industry. Employer and employeesare two parties to such relationship. Such relations should becordial i.e. away from tensions as both parties are inter-relatedand inter-dependent. Both have to work together and livetogether. Even future prosperity of both parties is linkedtogether. Industrial relations include individual relations as wellas collective relations.

(2) The concept of industrial relations is complex and multi-dimensional. It is also a dynamic and developing concept.

(3) In the olden days, industrial relations were cordial and peaceful.However, at present, they are not 0 due to increase in thenumber of industrial workers, growth of trade unions, growingdemands of workers, political leadership to unions, rapidindustrial growth and exploitation of workers by employers.

(4) Industrial relations do not function in a vacuum. The attitude andapproaches of employers, employees and trade unions aredirectly related to industrial relations. In addition, economic andsocial factors have their influence on industrial relations.Industrial relations are an integral part of social relations.

(5) Industrial relations lead to "industrial peace" or "industrialunrest". Both terms are used in relation to industrial relations.

Cordial industrial relations bring industrial peace i.e. a periodwhen industrial disputes, strikes, lock-outs, etc. are absent andproduction activity is being conducted in a regular andcontinuous manner. On the other hand, industrial unrest is aperiod when industrial relations in many industrial units are notcordial leading to large number of disputes and strikes. This alsosuggests that industrial unrest is undesirable and should bereplaced by industrial peace which is an ideal situation forindustrial growth.

(6) Cordial industrial relations are always beneficial to all concerned

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parties whereas absence of such relations is harmful to all partiesand even to the national economy.

(7) Shri V.V.Giri has rightly noted the importance of industrial peace

and suggested that such peace is possible if employers andworkers adopt more liberal, democratic and peaceful outlook. Hesuggested that mutual settlement of disputes is the best methodfor solving the demands, grievances and problems of workers.

This approach (Shri V.V.Giri's approach) is the best method whichcan promote cordial labor-management relations at all levels.

IMPORTANCE/BENEFITS OF INDUSTRIAL RELATIONS:

(1) More production: Due to cordial· industrial relations employeestake keen interest in their production activities and workefficiently. As a result, high production is available. Cordialindustrial relations create favorable atmosphere for rapidindustrial growth and large scale production.

(2) Industrial peace: Cordial industrial relations bring harmony andremove causes of disputes. This leads to industrial peace whichis an ideal situation on the industrial front.

(3) Encouragement to collective bargaining and labor participationin management: Cordial industrial relations are extremelyhelpful for long-term agreement as regards various issuesbetween labor and management. Such collective bargainingagreement and association of employees with decision-makingprocess are easily possible due to cordial industrial relations.

(4) Better treatment to workers: Due to cordial industrial relations,workers take interest in the work and bring more production and

profit. As a result, the management usually acts in a liberalmanner and offers various facilities and monetary benefits toworkers. Thus, employees get more benefits from cordial labor-management relations rather than through disputes and strikes.

(5) Prosperity to employer and employees: Cordial industrialrelations lead to regular and continuous production to the fullcapacity. This raises the productivity and profitability of abusiness unit. In the long run, such unit moves towardsprosperity. Similarly, the employees get monetary and non-

monetary benefits. They get the share in the profits of theircompany. As a result, they secure higher standard of living and

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move towards prosperity.

In brief, cordial industrial relations are necessary and useful temployers and employees and even to the national economy and

the society at large. It is an ideal situation. Rapid industrial growthand high industrial productivity are possible only when smoothindustrial relations exist. Along with this, workers get higher wagesand other monetary benefits and the employers get high profits intheir business. The benefits of smooth industrial relations areavailable even to consumers as they secure regular and continuous-supply of goods at fair prices. In brief, smooth industrial relationsare important in the case of every country, particularly in the caseof a developing country like India. All possible efforts should bemade in order to maintain smooth and cordial industrial relations.

India's industrial relations policy has two basic objectives. These are: (a) prevention and peaceful settlement of disputes/conflicts, and (b) promotion of good industrial relations.

Approaches to Industrial Relations:

(1) Unitary Approach: Under this unitary approach, industrialrelations is grounded on mutual co-operation, individual treatmentof employees, team-work and shared goals. Work place conflict isregarded as a temporary deviation due to poor management orfrom employees who do not mix well within the organization’s

culture. Unions co-operate with the management and themanagement's right to manage is accepted because there is no “we

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they" feeling. Here, the basic assumption is that everyone benefitswhen the focus is on common interest and promotion of harmony.Conflict in the form of strike is not only treated as unnecessary butalso destructive.

This approach to industrial relations appears to be good in itsorientation as it emphasises on employees in an organisation.Advocates of unitary approach emphasise on a reactive industrialrelations strategy. They advocate direct negotiations withemployees. Participation of government, tribunals and unions is notsought or regarded as being necessary for achieving harmoniousemployee relations.

This unitary approach is being criticised as a tool for seducing

employees away from unionism and socialism. This approach is alsocriticised as manipulative and exploitative from the point of view of workers. The approach has failed to consider different variablesaffecting IR within individual organisations and industrial sector as awhole.

(2) Pluralistic Approach: This approach is totally different from theunitary approach. The pluralistic approach perceives:

(a) Organizations as coalitions of competing interests, where themanagement's role is to mediate amongst the different interestgroups. .

(b) Trade unions as legitimate representatives of employee interest.

(c) Stability in industrial relations (IR) as the result of concessionsand compromises between management and unions.

In this approach, authority of management is not automatically

accepted. Conflict between management and employees is regardedas inevitable and is viewed as conducive for innovation and growth.Employees join unions in order to protect their interests andinfluence decision making by the management. Unions, thus,balance the power between the management and employees. In thepluralistic approach, a strong and stable union is not only desirablebut is absolutely necessary. Similarly, the interests of the society areprotected by State intervention through legislation and industrialtribunals which provide orderly process for regulation and resolutionof conflict.

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It may be noted that theories on pluralism were evolved in the mid-sixties and early seventies when England witnessed a revival of industrial conflicts. According to pluralistic approach, industrialconflict is inevitable and it needs to be contained within the socialmechanism of collective bargaining, conciliation and arbitration. Thebasic assumption in the approach does not hold good.

(3) Marxist Approach: Marxists, like pluralists, regard conflictbetween employers and employees as inevitable. For Marxist, it is aproduct of the capitalist society.

Adverse relations in the workplace are simply one aspect of classconflict. Marxist approach focuses on the type of society in which anorganization functions. Conflict arises not merely because of

competing interests within the organization, but because of thedivision within society between those who own or manage themeans of production and those who have only their labor to offer. Inshort, industrial conflict is seen/regarded as being synonymous withpolitical and social unrest.

Trade unions, under Marxist approach, are seen both as laborreaction to exploitation by capital, as well as a weapon to bringabout a revolutionary social change. Concerns with wage-relateddisputes are secondary. Trade unions focus on improving theposition of workers within the capitalist system and not tooverthrow. For the Marxists, all strikes are political.

The Marxist approach treat state intervention via legislation andindustrial tribunals as supporting management's interest rather thanensuring a balance between the competing groups. This view is incontrast to the belief of the pluralists, who argue that stateintervention is necessary to protect, the overall interest of society.According to Marxists, the pluralistic approach is supportive of capitalism. Consequently, enterprise bargaining, employee

participation, co-operative work culture, etc are not acceptable toMarxists. 'Such initiatives are regarded as nothing more thansophisticated management techniques designed to reinforcemanagement control and the continuation of the capitalist system.

The Marxist approach has some merits but has limited scope incountries not based on socialism.

(4) V. V. Girl Approach: We have studied three different approachesto industrial relations. In addition, some more approaches toindustrial relations are available. They include Psychological

Approach, Sociological Approach, Human Relations Approach, V.V.Giri Approach and lastly Gandhian Approach. Giri Approach and

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Gandhian Approach are essentially Indian approaches developed byShri V. V. Giri, the late President of India and known labor leader andGandhiji. Both are based on their vast experience of labormovement. Brief details of these approaches are as given below:

Giri Approach: According to Late President of India, Shri V. Giri,collective bargaining and mutual negotiations between managementand labor are two methods useful for maintaining cordial industrialrelations and industrial peace. Late Shri V. V. Giri was a strongsupporter of collective bargaining agreement (Giri Approach). Hesupported collective bargaining due to its in-built capacity to solvethe problems and demands of .workers and also to make tradunionism strong and popular in India. According to him, it is the bestmethod for industrial peace. This "Giri Approach" on collective

bargaining has relevance even in the present day industrialsituation.

Shri V. V. Girl wanted compulsory adjudication in India to bereplaced by collective bargaining. This approach based on the spiritof self-government is popularly known as "Giri Approach". GiriApproach to industrial relations seeks to encourage mutualsettlement of disputes through the process of collective bargainingaided by voluntary arbitration when necessary. In 1950, this conceptwas introduced in industrial relations machinery in India. Such

agreements are now made in banks, ports, docks and in publicsector undertakings. However, the progress of collective bargainingis not satisfactory in India. It is not a popular and extensively usedtechnique in India.

Shri Giri suggested that there should be bipartite (involve two set)machinery in every industry and every unit of the industry to settlelabor management differences with active encouragement of thegovernment. Outside interference should not be encouraged. Giri'sstress was on voluntary efforts of the management and trade union

to solve differences and disputes and maintain cordial industrialrelations. He was also favorable to voluntary arbitration but againstcompulsory adjudication which is harmful to healthy growth of tradeunion movement. He was favorable to mutual settlement of disputes, collective bargaining and voluntary arbitration. He wasfavorable to peaceful settlement of disputes by concerned partiesdirectly. The philosophy advocated by him has capacity to maintaincordial industrial relations on long term basis. Unfortunatelycollective bargaining is popular in European countries but not inIndia. In UK, such agreements are compulsory in the case of nationalized industries. In Canada, the two parties (management

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and union) are required to bargain collectively by law. In France, thegovernment tries to influence the process of collective bargaining.However, the progress of collective bargaining in India is notsatisfactory even when government supports collective bargainingon voluntary basis.

(5) Gandhian Approach: Gandhian approach to industrial relations isbased on the basic principles of truth, nonviolence and non-possession. He advocated the principle of trusteeship. Employersshould act as the trustees and not the owners of their organizations.As a result, there will be no scope for conflict of interests betweenemployer and employees. Workers can use non-eo-operation as ameans to have their grievances redressed. Gandhiji acceptedworkers' right to go on strike but they have to use this right in a

nonviolent and peaceful manner. Workers should resort to strikeonly for fair and just cause and only when the employer fails torespond to their moral appeals.According to Gandhiji, workers should avoid strikes as far as possiblein industries of essential service. They should use strike as a weaponof last resort i.e. after all other legitimate measures have failed.When a trade union wants to organise strike, it should seekauthority from all workers to do so through ballot. When directsettlement of dispute fails, workers should, as far as possible, takerecourse to voluntary arbitration. Gandhiji wanted employers to

follow the principle of trusteeship. This will ensure cordial industrialrelations and disputes will be avoided. The principle of trusteeship isapplicable to production and also other aspects of business.Gandhian approach is based on ancient Indian philosophy andthoughts.

PARTIES TO INDUSTRIAL RELATIONS:

In general, major parties (also called variables or participants) to

industrial relations are the employees, employee representatives,employer, associations of employers, government and courts andtribunals. The following figure shows major parties to industrialrelations:

(a) Employees:

Employees constitute main party to industrial relations. They arelarge in number working in the organized industrial sector.Employees get employment and regular income from theemployment. Their approach should be positive and, favorable.

They have a right to make fair and reasonable demands. However,

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making unreasonable demands is undesirable as such demandslead to disputes and strikes or lockouts. Employees have to offer co-operation for cordial industrial relations. They can also spoilindustrial relations by making demands which the employer will notbe able to accept. This suggests that along with employers,employees have to share major responsibility for maintaining goodindustrial relations.

Employees consider industrial relations in terms of opportunity tovoice their grievances (individual and collective), improve theirconditions of employment, participation in management or decision-making particularly on matters relating to employees and exchangeviews, ideas and suggestions with the management. In this regard,adequate opportunities should be given to them. This ensurescordial industrial relations.

(b) Employee Associations:

Such associations are called trade unions which operate at plantlevel or at industry level. They play a crucial role in maintainingcordial industrial relations. Trade unions function at two levels - atthe industry level and at the plant level. At the· industry level, theunions establish joint consultations and joint regulation of wages,working conditions, incentives and facilities to workers with theemployer's association. At the plant level, the union exercises jointcontrol with managers and supervisory staff in regard to working

conditions, disciplinary actions, code of conduct and so on. Unionsparticipate actively for 'national, local and plant level agreementsfor meeting the demands of workers and also for maintaining cordialindustrial relations. For this, unions need constructive and non-political leadership. The unions should try to settle the demands of workers through peaceful negotiations and not by organising strikesOr work stoppages. Unions with enlightened leadership can play apositive role in maintaining cordial industrial relations over a longperiod. In the absence of such unions at all levels, the industrialrelations will be adversely affected by the activities of unions. Inter-union rivalry affects industrial relations in an organization.

(c) Government:Government is not directly involved in industrial relations but has amoral and social responsibility to maintain cordial industrial relationsthrough suitable preventive measures. This is possible throughofficial intervention, assistance and regulation of working conditions.

This is necessary for industrial growth, promotion of employmentand also for raising national income and large scale exports.

Government has to take suitable measures for promoting industrialpeace and harmony. It has to give protection to the working class by

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avoiding the possible causes responsible for disturbing industrialrelations. Government has to support peaceful negotiations forsolving disputes between management and workers so that theindustrial relations are not affected adversely. Here, the role of government is indirect but equally important. The approach of thegovernment should be impartial and fair to both the parties. Thegovernment has to support agencies useful for promoting cordialindustrial relations. In the olden days, governments everywherefollowed the laissez1air policy in this regard and industrial relationswere left to managers and workers who were required to solve theproblems themselves. However, at present, the state/governmentregulates the relationship between the management and labor andseeks to protect the interest of both parties. The government hasset up wage boards, labor courts and tribunals for solving problems

of workers. It has enacted suitable labor laws to lay down norms andto enforce their compliance. In short, the government is now alert inregard to industrial relations. It has taken preventive and positivemeasures for avoiding industrial disputes and also for maintainingcordial industrial relations.

(d) Employers:Employers constitute the main party relating to industrial relations.

They are directly involved in disputes between them and theemployees. Employers appoint large number of workers for orderly

conduct 'of production activity. They pay regular wages toemployees for services rendered. At the same time, they areendowed with certain rights in relation to workers employed. Suchrights and powers can be used by employers for exploitation of workers. This leads to conflicts. They can introduced many unfairpractices for cheating· the workers or for breaking their unions orstrikes. On many occasions, the employees are not happy orsatisfied due to low wages paid, bad working conductions infactories, absence of welfare facilities, bad treatment to workers andso on. This leads to quarrels between employer and workers.

Workers make different demands and when demands are notgranted, industrial relations are adversely affected. This leads todemonstrations, go slow an even strike by workers for short or longperiod. This leads to work stoppage and production activity comes tostandstill. As a result, both employer and workers suffer. Formaintaining cordial industrial relations, employers have to acceptmajor responsibility. They have to pay attractive wages, providehealthy working conditions, liberal welfare facilities and otherincentives to workers so that they will be satisfied. In addition,employers should give attention to the demands and grievances of

workers and solve them promptly. As a result, industrial relationswill be cordial at the factory level. Employers should avoid

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exploitation of workers and should be sympathetic towards theiremployees. Such attitude will lead to favourable industrial relations.

The employers play a useful role in maintaining cordial industrialrelations.

Employers can introduce many measures for cordial industrialrelations. Such measures include creating and maintainingemployee motivation, sharing decisions with employees, negotiatingterms and conditions of employment with employeerepresentatives, and achieving high levels of efficiency.

(e) Employers' Associations:

Such associations are started by the employers at local, industryand all India levels. They are voluntary in character. The

Confederation of Indian Industries (Cll) is a powerful body whichoperates at the national level and is playing a positive role inprotecting and promoting the legitimate interests of industries. Inaddition to Cll, there are other all India employers' associations suchas ASSOCHAM, FlCCI, AIMO, FlEO and so on. Such associations arefor the protection of interests of employers and are also favourableto cordial industrial relations at industry level. They also offer co-operation to government and trade unions in this regard. Theobjectives of employers' associations are:

(i) To represent employers in collective bargaining,

(ii) To develop appropriate machinery for avoiding/limiting industrialdisputes,(iii) To represent members on national issues, and(iv) To provide information on employee relations and to giveadvice.

Employers' associations offer co-operation to the government andtrade unions in creating cordial industrial relations by avoidingindustrial disputes. The role of such associations is indirect in

nature.

(f) Courts and Tribunals:

Courts (i.e. Legal machinery for dealing with industrial disputes) actas authority to settle legal disputes and thereby facilitate cordialindustrial relations. Laws are made for preventing industrialdisputes. Even positive measures are provided in the legalmachinery. Courts use this machinery for solving the disputes. Thepowers of judiciary are useful to settle disputes. This improvesindustrial relations considerably. In India, government has made

laws dealing with industrial relations. In addition, government hasset legal machinery (labor courts and tribunals) for resolving

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industrial conflicts.

CHAPTER – 11

TRADE UNIONS

Introduction:Employee associations constitute one of the stakeholders in IR.

These associations are popularly known as trade unions. Tradeunions are not confined to mere striking and negotiation on behalf of workers. Their role is much wider. They:

• May make their presence felt in recruiting and selection.

• They also decide who is to be hired and under what

conditions.• Also play important role in who is to be promoted, given a new

job assignment, sent for training, terminated or laid off.

• Decide wage and salary structure and negotiate revisions oncein 3 or 5 years.

• Major unions have political affiliations too.

The role of union in IR is too well-known. It is therefore, essential

that trade unions have to be understood well. Thus,

Trade union is a voluntary association of workers establishedto protect and promote their economic interests throughcollective actions and activities. As per the Trade Unions Actof 1926, a trade union "must work to protect and promote theinterests of the workers and the conditions of theiremployment." Individually workers are weak and are at themercy of their employers, but collectively they can be astrong force with capacity to fight for their rights and

demands. "Strength lies in unity" (or unity is strength) is thebasic philosophy behind trade unionism. England is the birthplace of trade unionism.

Trade unions are formal organizations of wage earners. Theybring unity and understanding among workers. They are notagainst employers or the society at large. They areessentially for avoiding the exploitation of workers and alsofor promoting their welfare. The benefits of trade unions to

workers depend on the activities undertaken by them. Alongwith this, trade unions have to accept certain wider social

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responsibilities. They have to protect the interests of workersbut not at the cost of national economy or the society atlarge.

DEFINITIONS OF A TRADE UNION:

1. According to Edwin B. Flippo, "a labor union or trade union isan organization of workers formed to promote, protect and improve,through collective action, the social, economic and political interests of itsmembers".

2. According to V. V. Giri, “trade unions are voluntary organizations of workers formed to promote and protect their interests by collective action".3

NATURE / FEATURES OF TRADE UNIONS:

(1) Trade unions are voluntary associations of workers (Acombination of workers) in one or more occupations. Seven ormore workers can form a trade union. A worker can join or haveany trade union as per his wish/ desire. However, it is relativelypermanent combination of workers and is not a temporary orcasual combination. It has to be a long term combination forachieving its objectives. Membership is voluntary. Largenumbers of workers are away from any trade union.

(2) Trade unions are for the pursuit of common interests of members. They protect the interests of members andpromote their welfare.

Why do workers join a trade union?

• Dissatisfaction for security, wages, hours of work, type of work etc.

•

For power.

(3) Trade unions act collectively i.e. through united actionsof members. Community of interest motivates them to uniteand act collectively.

(4) Trade unions are concerned with economic, cultural,political and social life of members. A union covers allaspects of life of its members but it is mainly for protecting

economic interests of members.

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(5) In India, trade unions include unions of workers andunions of employers as employers can register their unionsunder the Trade Unions Act, 1926. A trade union can beformed by owners of industry as' per the legal provisions.However, employers' unions are very small in number ascompared to the unions of workers. Naturally, by tradeunion, we generally mean the union of workers or wageearners.

(6) Trade unions function on democratic principles. Theirobjective is to protect the interests of workers and avoidtheir exploitation in any possible form and by any agency.

Trade unions have democratic setup. Office bearers areelected by members and major decisions are taken in the

union meetings after discussion and voting.

(7) A trade union acts as a collective bargaining agent for itsmembers. It acts as an instrument of defense againstinjustice and exploitation.

(8) Trade unions are basically concerned with the problems of workers. They are for the protection of workers. Workerscollectively protect their interests and also avoid their

exploitation. A trade union is. rightly described as anorganised expression of the needs, aspirations and attitudesof the working class. These are not political associations andare not concerned with party politics even when they needthe support of political parties for the protection of interestsof the working class. In India, in the olden days, the tradeunions have supported freedom movement of the country.Even at present, we have trade unions sponsored by orsupported by political parties. Some political leaders also actas trade union leaders.

(9) Trade unions are given legal recognition. Unions can beregistered under the Indian Trade Unions Act, 1926. Workersare given right to form unions for their protection and self-help.

(10) The basic principles of trade unionism are: (a) Unity isstrength.(b) Equal pay for equal work.(c) Security of employment/ service.

Trade unions function on the basis of these cardinal

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principles. The unions fight back, if anyone of these principlesis threatened.

(11) The character of trade union has been constantly

changing due to economic, social and other factors. Inaddition, its origin and growth has been influenced by anumber of ideologies.

FUNCTIONS/ACTIVITIES/OBJECTIVES OF TRADE UNION:

The functions of trade unions are normally classified intothose functions which are militant or protective (i.e. obtaining

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better wages and working conditions, etc) and those functionswhich are fraternal, ministrant or positive (provision of benefits such as sickness and accident payments).

Major functions/ activities/ objectives of trade unions are asnoted below:

(1) To make constant efforts for higher wages and othermonetary benefits in the form of bonus and profit-sharing tomembers.

(2) To fight for securing better working conditions, security of employment, monetary benefits and various welfare facilitieslike transport, housing and sports facilities to members.

(3) To undertake strike, go slow and other aggressive activitiesif injustice cannot be removed through peaceful means likedirect negotiations and collective bargaining.

Trade unions should use strike as a weapon of last resort.It is to be used only when all other efforts failed to solve theproblems and grievances of workers. Strike should not beorganized frequently and for minor problems of workers which

can be solved easily by negotiating with the management.

The unsuccessful strike of textile workers (organized by Mr.Datta Samant) in Mumbai city in 1982 has affected the textileworkers severely. Thousands of workers and their familiesreturned to their villages as alternative employment was notavailable to them in Mumbai city. Large majority of textilemills in Mumbai city were dosed down and Mumbai is no morea town of textile mills. Big hotels and malls are, now,constructed in the premises of textile mills. This unsuccessful

strike of longest period of 18 months finally brought tragicend of textile workers in Mumbai city.

(4) To conduct direct negotiations with the employer as regardsvarious difficulties, demands and grievances of workers andalso for peaceful settlement of disputes. In addition, to makecollective bargaining agreement with the employer. Here, theunion acts as a representative body of workers. Unions act asrepresentatives of working class. Trade unions need not restricttheir functions to mere striking and negotiating on behalf of workers. They can make their presence felt in other areas such

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as recruitment and selection, promotions and job assignments,etc…

(5) To protect the economic interests of workers through certain

economic activities like opening of co-operative store or bank,etc.

(6) To undertake educational, cultural, social and otheractivities for the benefit of workers and thereby to raise theirwelfare. Such activities include provision of reading rooms andlibrary, facilities providing scholarships to children of workers,arranging cultural competitions etc.

(7) To oppose any political move which is likely to affect the workingclass and the trade union movement adversely.

(8) To join hands with other unions for common benefits of working class and to support other unions if the need arises.

(9) To protect the rights of workers and to see the labor law:are implemented properly and also for the benefit of theworking class.

(11) To represent the grievances of members, to provide legaladvice to members as regards compensation under differentlabor laws.

(12) To oppose to rationalization, automation and otherprogrammes if they are against the workers and the security of theiremployment.

(13) To undertake any other activity which is legal and alsobeneficial to the members i.e., workers.

TRADE UNION MOVEMENT IN India

Trade union movement in our country has a century-long history. The first quarter of the last century saw the birth of the trade unionmovement, but the seeds of the movement were sown much earlier.In the twenties, soon after the First World War, working class in ourcountry realized the effectiveness of strike as means of obtainingconcessions, higher wages and better working conditions. Manystrikes were declared consequently and most of them were

successful. This success led to the formation of several unions. TheAll India Trade Union Congress (AITUC) was set up in 1920 with the

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objectives of representing workers' interests, to co-ordinate theactivities of all labor organizations in the country, and to spread themessage about the need for union movement. Hundreds of unionscame into being in big and small industries. Their number, as well asmembership, increased considerably.A landmark in the history of labor movement was the enactment of the Trade Unions Act, 1926. The Act gave a legal status to theregistered trade unions and conferred on them and their members ameasure of immunity from civil suits and criminal prosecution.Registration of unions gave them respectability before employersand the general public.

Towards the end of 1920s, there was a split in the union movement,the split being caused by the leaders' ideological differences. The

AITUC was captured by the communists. The moderates formed anew organization, called the All India Trade Union Federation.Ideological differences and splits had their effect on strikes too.Majority of the strikes failed.

Unlike 1920s, the 1930s were not favorable to the trade unionmovement. The prosecution of the communists involved in theMeerut conspiracy case and the failure of the Bombay textile strikeof 1929 brought a lull in trade union activities. Economic depressionof the period also added to the dull phase of union movement.

Retrenchments and strikes were common, the latter being mostlyineffective. There were further splits in the movement, but justbefore the Second World War some unity was achieved.

The unity was shattered during the Second World War because of ideological differences and mounting cost of living. Industrial unrestincreased and the government banned strikes and lockouts invokingthe Defence of India Rules. Luckily, workers realized the need for anorganized movement to secure relief. This realization led to anincrease in the number of unions.

The aftermath of Independence was not good for unions. The hopesof workers to secure better facilities and wages from the nationalgovernment were not realized. There was large-scale unrest andstrikes and lockouts multiplied. The disunity in the trade union rankswas aggravated by the starting of three central labor organizationnamely, the Indian National Trade Union Congress (INTUC) in 1947;the Hind Mazdoor Sabha (HMS) in 1948, and the United Trade UnionCongress (UTUC) in 1949.

As years went by, more unions and central organisations came intobeing. The movement became well-established.

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As of today, there are more than 66,000 registered unions and mostof them are affiliated to one or the other central trade union. Table23.1 gives details about the central trade unions, their affiliates,political affiliation, date of establishment and membership claimed.

YEAR NO. OF UNIONSREGISTERED

MEMBERSHIP (‘000)

1990 52016 70191991 53535 61001992 55680 57461993 55784 31341994 56872 40941995 57952 6538

1996 58805 56131997 59968 7408

The above table shows that there has been a steady increase in thenumber of registered unions, but their membership fluctuated fromyear to year.

WEAKNESSES/DEFECTS OF INDIAN TRADE UNIONS:

Trade unions in India suffer from various weaknesses/short -comings. Their role or actual contribution in protecting theworkers in limited due to such weaknesses. The majorweaknesses of Indian trade unions are as explained below:

(1) Predominance of small-sized unions: In India, the unionsare many but their membership is limited. Nearly three-fourths of the unions have a membership of less than 500.

The average membership of unions in India is less than 1000,

(979 in 1998 and 835 in 1997) whereas in UK the averagemembership is nearly 17,600 and in the USA 9,500. Due tolimited membership, the unions are financially weak and failto undertake different economic and other activities for thebenefit of members.

(2) Existence of rival unions: In India, rival unions exist at alllevels. It is like a house divided against itself. Practically, inevery industrial unit, two or more unions controlled bydifferent political parties/leaders exist. Such small unions

waste their time, energy and resources while fighting amongthemselves rather than fighting for the protection of workers.

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There is no unity among unions. In fact, inter-unioncompetition/rivalry leads to many industrial disputes. Leadersof rival unions are stabbed or even murdered. Theemployers/managements take undue advantage of such rivalunions. The policy of divided and rule is used. The verypurpose of trade unionism is defeated due to multiplicity of unions.

3) Inadequate coverage: In India, trade union movementexists throughout the country. But it is restricted to organizedsector only. The progress of the movement is rapid only incertain States like West Bengal, Kerala, Maharashtra, and

Tamil Nadu. Trade unions are not popular among the workingclass in general. Many workers join the union only when the

strike is organized: About 40 per cent of factory workers jointhe unions and the rest are away from it. This means unionsdo not have popular support base. After liberalization, theattraction of industrial workers towards trade unionism is fastdecreasing.

(4) Weak financial position: Due to limited membership, smallsize of unions, poverty of workers and limited interest of workers, majority of Indian trade unions are financially weak

and unstable. Naturally, they are not in a position toundertake various economic, social and cultural activities forthe benefit of members. The contribution of unions inproviding welfare facilities is limited due to financialdifficulties. The total income of the 7,231 trade unions(submitting returns) with a membership of 54.21akhs was Rs.7,464 lakhs in 2000. The per member expenditure of theunion works out to only Rs. 110 which is too low. As a resultof very small subscription, the trade unions cannot undertakelabor welfare activities on a large scale.

(5) Political leadership: Most of the trade unions in India haveoutside leadership i.e. leadership of professional politicians.

This means the leadership is not from the working class itself but from political parties. The present leadership of politiciansis interested in exploiting workers for political purposes. Theinterest of the working class is not well protected by thepolitical and professional leaders. Moreover, unions are usedto promote the interests of the political parties.

The political leadership trade unions are actually harmful to

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the cause of working class. Strikes are prolonged by politicalleader for personal prestige. Very often, negotiations withemployer fail due to uncompromising outlook of politicalleadership. Thus, outside leadership is one major weakness of Indian trade unions.

(6) Absence of full-time paid office-bearers: Majority of unions do not have whole-time paid office-bears. Many unionleaders work on honorary basis. They devote limited time andenergy to union activities. The office-bearers are also nottrained properly. They lack the knowledge of trade unionismand labour laws in India. Unions undertake limited activitiesdue to absence of full time paid office bearers.

(7) Limited stress on welfare activities: Majority of tradeunions in India undertake limited welfare activities. They feelthat their only activity is to fight with the employer for higherwages and other demands. Other activities like opening a co -operative bank or store, provision of educational and medicalfacilities, provision of welfare facilities, etc. are notundertaken by large majority of unions. As a result, workersare not attracted towards the unions and the contribution of unions in raising labour welfare is also limited.

(8) More reliance on strikes and litigations: Trade unions inIndia concentrate attention on strikes and other activities likego-slow and demonstrations. Trade unions have a right tostrike but strike should be used as a weapon of the lastresort. Unfortunately, strikes are organized very often. Thus,undue stress on strikes and litigations (in place of direct andpeaceful negotiations) is one basic defect of Indian tradeunionism. Many unions organized strike first and then startthe negotiations. However, the process should be justopposite.

In the recent years, one major change witnessed in the caseof trade unions is the change in the attitude of unionstowards management, industry, government and theeconomy. The unions are becoming increasingly matured,practical and responsive in their thinking and actions. Theunion leaders have, now, become more mature in theirapproach. Unions have accepted the realities of economicreforms and globalization. Their opposition to automation,retrenchment, voluntary retirement, etc is fast reducing.

(9) Absence of loyalty of workers to unions: In India, workers

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migrate from one union to another frequently. Such migrationsuggests the absence of loyalty of workers to their unions.

This also indicates absence of confidence in the unions.Migration of workers affects the financial position of unionsand also their bargaining power.

Large majority of unions have not made honest efforts toimprove and secure the loyalty of workers. Unions take undueinterest in organising strikes at the cost of other usefulactivities for the benefit of workers. The unions ignored usefulactivities like provision of medical relief, help to dependentsof deceased members, educational and cultural activities andso on. In brief, Indian trade unions failed to providecontinuous and substantial support to all the activities of workers.

(10) Lack of public sympathy: Indian trade unions areinterested in disputes, strikes and demonstrations. They givelimited attention to peaceful methods for the settlement of disputes. The general public gets information about theunions only when strikes are organized. People feel thatunions are only for strikes and disputes. As a result, publicsupport or sympathy is not available to trade unions.

(11) Unfavorable attitude of employers/managements: InIndia, employers/managements are not favorable for rapidgrowth of healthy trade unionism. They do not provideadequate support and facilities to unions. They also takeinterest in the formation of rival unions for their benefit(divide and rule policy). Trade union leaders are victimized.Efforts are made to break the union operating in asatisfactory manner. This conservative attitude of management harms the growth of healthy trade unionism inIndia.

SUGGESTIONS FOR HEALTHY GROWTH OF INDIAN TRADEUNIONS:

The following suggestions are worth noting for removing thedeficiencies of Indian trade unions and also for healthygrowth of trade unions in India:

(1) Unity among unions: The present weaknesses like smallunions, limited membership, multiplicity of unions, weakfinancial position of unions and inter-union rivalries can beremoved if unity is established among the unions. It is

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desirable to have a few strong unions with huge membershiprather than large number of weak unions with limitedmembership. "One union in one industry" is a golden rule forIndian trade unions.

(2) Removal "of inter-union rivalries: Inter-union rivalriesaffect all unions and also the healthy growth of tradeunionism. Such rivalries are due to multiplicity of unions andpolitical leadership to unions. The movement lack solidaritydue to inter-union rivalries. It is, therefore, necessary to bringunity among unions.

(3) Elimination of unhealthy political influence: The presentlinking of unions with political parties and politicians is highly

dangerous for the healthy growth of trade unionism in India. The leadership of "outsiders" is harmful to healthy growth of trade unions. Trade unions need leadership from workingclass itself. Fortunately, depolitication of unions is afavourable trend witnessed in recent years. For example,some leading companies such as Telco, Voltas, Siemens andBlue Star have unions but are not affected by political parties.

Trade unions need working class leadership and not politicalleadership. Efforts should be made to develop new leadershipfrom amongst the working class. Thus, the present politicalleadership should .be replaced by responsible trade unionleadership.

(4) Expansion of union activities: Indian trade unions do notundertake economic, social and cultural activities which areequally important for raising the welfare of the working class.Many unions are more or less like strike committees. Thissituation is undesirable. Expansion/ Diversification in the

activities of trade unions is essential for raising the utility andpopularity of trade unions. Trade unions should, therefore,undertake various activities for the benefit of workers.

(5)· Providing financial stability: Most of the trade unions inIndia are financially weak. The financial problems of theunions can be solved by raising the membership and bycollecting more contributions from members. In addition,special donations should be collected from the members atthe time of bonus payment. Unions can even arrange cultural

programmes for raising funds. Financial stability enablesunions to undertake welfare and other activities.

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(6) More stress on peaceful means: Trade unions in Indiashould replace their aggressive approach in the form of strikes, gherao, go slow, etc. by peaceful and constructive

approach in the form of direct negotiations and collectivebargaining. The unions can protect the interests of theworking class through peaceful and democratic means.

(7) Promotion of responsible trade union leadership: Tradeunion leaders need full knowledge of the constitutional andlegal rights available to unions. They have to use these rightsto secure and promote workers' interests. Personal integrity,patience, understanding and courage are some of thequalities required by trade union leaders. Such leaders can

make positive contribution in building healthy trade unionmovement in India.

(8) Change in the outlook of Employers: Employers in Indiashould adopt more liberal and progressive outlook towardstrade unionism. Attempts to discourage the information of unions, encouragement for the formation of rival unions,bribing the union leaders and creating difficulties in thesmooth working of unions are undesirable practices andeven dangerous to employers. Such policy of divide-and-rulewill not be profitable to them in the long run.

(9) Education and training of workers: Working class shouldbe provided suitable education and training. Workers shouldbe made conscious about their right to form a union.Progress of the movement will be rapid when adequateawareness is created among the workers as regards unionsand their positive contribution.

(10) Making workers conscious of their responsibilities:Unions should make every worker understand fully first hisduties and responsibilities and then his rights and privileges.Responsible working class is essential for the healthy growthof trade union movement. Workers interested in theirdemands only are not useful for creating strong and stabletrade unions.

(11) Wider coverage: In India, large majority of workers

remain away from the unions. Limited membership makesthe unions weak with limited bargaining power. For healthy

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growth of trade unionism, wide coverage of unions ispositive contribution in building healthy trade unionmovement in India.

(12) Miscellaneous suggestions for healthy growth of TradeUnions:

(a) There is a need to eradicate illiteracy among workers andto enlarge the membership of unions.

(b) There is an urgent need of reforming the structure of trade unions.

(c) It is necessary to cover unorganized sector within thescope of trade unionism. The workers from this sector arelarge and need protection through unity of actions.

(d) There is a need for widening the philosophical basis of trade unionism in India.

It may be pointed out that the measures noted above areuseful for making Indian trade union movement strong,healthy, democratic, peaceful and purposeful to employeesand the national economy. The above noted suggestions areactually the pre-conditions for the healthy growth of tradeunions in India. For example, unity among the unions,elimination of inter-union rivalries, elimination of politicaldomination, stress on constructive activities, financial

stability, wide coverage, more stress on peaceful anddemocratic means are some important conditions for thehealthy growth of trade unionism in India.

PROBLEMS BEFORE INDIAN TRADE UNIONS:

The weaknesses of trade unions are actually the problemsbefore Indian trade unions. Such problems/ challenges are:

(1) How to remove the present multiplicity of trade unions

and how to bring about unity among rival unions.

(2) How to reduce the present domination of politicians and

political parties on the trade unions at all levels and how to

develop new leadership from the working class itself.

(3) How to develop popular support of working class to the

unions and how to achieve wide coverage for the unions. In

other words, how to develop loyalty of workers towards the

trade unions.

(4) How to expand the activities of the unions with

stress on welfare activities so as to provide better welfare

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to the working class.

(5) How to replace the present aggressive and strike-

oriented approach of union leaders by compromising,

constructive and peaceful outlook for solving the

problems of workers.(6) How to make trade unions financially strong and

stable organisations for undertaking variety of activities for

the benefit of working class.

(7) How to secure sympathy from employer,

government and also from the public.

(8) How to introduce unity among all India trade unions for

introducing common policies and ideologies for the benefit of

working class as a whole.(9) How to remove present weaknesses of trade unions so as

to make them strong, stable and utility-oriented.

(10) How to maintain stable and purposeful existence in the

light of current globalization process?

=======================================

==================

CASE STUDY ORIENTATION PROGRAMME IN BHARAT FOUNDRY:

BHARAT FOUNDRY is a big company manufacturing and marketingmany engineering products. It has 24 different departments and aworkforce of 450 employees (lower level) and 76 supervisors,officers and managers. Every month 20-25 new employees wereappointed as the rate of labor turnover was rather high. Upto 1999the induction/orientation programme in the company was as noted

below:

On the day of appointment, the newly appointed employee wasescorted from the employment office to one of the foundrydepartments by an office messenger. The departmentalhead/supervisor was not given prior intimation. The new worker wastaken to the superintendent's office. The messenger used to give aslip with few details of new employee and move away. Thesuperintendent used to call the new employee as per the timeavailable and used to give very brief details of rules, job details and

the supervisor under whom he has to work. The whole process wasover within a period of ten minutes. Thereafter, the new worker is

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sent to the supervisor who normally asks few routine questions andasks him to join a specific group from the department. Suitableintroduction, proper information and guidance, job timing, etc. wereabsent. As a result, the new employee becomes shy and nervousafter joining the company. He used to feel insecure and uneasy. Hefails to develop good opinion about the company, his superiors andco-workers. As a result, the rate of labor turnover and absenteeismwas exceptionally high. The matter attracted the attention of toplevel management. The situation was treated as insulting to thecompany. High labor turnover was treated as disgrace to thecompany. Moreover, the company had to' face many problems (inthe normal working/production activities) due to high labor turnover,low morale and absence of motivation. Series of meetings of seniormanagers/departmental heads were arranged to study the problem

of high labor turnover. It was concluded that this situation wasmainly due to ineffective/defective/inhuman induction/orientationprogramme of the company. The orientation was not giving anybenefit to the company but it operates against the company. As aresult, stable labor force is not available to the company. Mr. AnilSen, the newly appointed but competent personnel manager wasasked to study the problem in depth and introduce new, attractive,agreeable, scientific and employee friendly induction/orientationprogramme. Personnel Manager Mr. Sen gave immediate attentionto the issue and decided to introduce new orientation

plan/programme in consultation with the top management. Thefeatures of new orientation programme/plan/ procedure are as notedbelow:

(1) Each new employee is to be presented a small informationbooklet containing general information of the company,organizational details, rules, regulations and procedures followed inthe company, facilities provided to employees and the rules of discipline, etc. The booklet is to be given on the first day with arequest to study the same within the first few days after joining the

company.(2) A 30 minute film will be shown to newly appointed employees inthe auditorium of the company. This film is informative and shallgive all broad features of the company. It is an easy introduction tothe company - its products, directors, top officers and so on. Thefilm will create a feeling of affinity and oneness with the company.

(3) The pay scale, promotion possibilities, career opportunities, codeof conduct, concessions available, etc. are to be discussed in detail,in a joint meeting with personnel manager and a few other

managers. Two or more such meetings are to be arranged by thepersonnel department for the benefit of newly appointed employees.

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(4) All facilities available in the plant/production unit are to beexplained and actually shown to new employees. For this, a smalltrip to departments, administrative offices, canteen etc. is to bearranged as a part of orientation programme.

(5) Each employee is to be welcomed properly on the first day of his joining duties. Prior intimation about his appointment is to be sent inadvance to concerned department with a request to concernedofficer to give personal attention to newly appointed employees forthe first two weeks.

(6) At the conclusion of the orientation, each employee is invited tocome back to the personnel department to discuss and talk over any

problem pertaining to work or personnel matters.

(7) The personnel manager or his assistant will personally escorteach new employee to the department of his work and make properintroduction. Every possible efforts will be made to create a feelingof confidence among new employees. Efforts are made to reducetension and to create positive impression on their minds as regardscompany, its officers and co-workers.

The new orientation programme introduced in Jan, 2001 proved

successful. It gave promising results.

Questions:(1) Why labor turnover was high under the old orientationprogramme?(2) Do you feel that new orientation is positive and employeefriendly?(3) What, according to you, will be the promising results of neworientation programme?(4) What are the advantages of scientific orientation?

(5) Do you feel that induction/orientation is a neglected' aspect of personnel management in India?

UNIVERSITY CASE STUDIES

November – 2001

Analysis the following case and answer the questions givenat the end.

'Raka' is a reputed Marketing Research organisation having about

150 operative employees and 70 executives all over the country. The operative staff is mostly involved in data collection, while the

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executives at different levels usually do the research design,analysis and presentation. .

The company has a performance rating system, which has been inexistence for about 10 years and was designed at that time, by thehead of administration, a clerk who had been promoted into thatposition over the years without any formal training. All employeesare rated by their immediate superiors, by means of a rating scale.

Then, the form is evaluated by a superior at the next level, whichthe employees are informed of his performance rating. Theemployee then signs a form indicating that he/she has been soinformed. The employee's signature does not necessary mean thathe/she agrees with the rating given.

The parameters considered are Quality of Work, Quantity of Work,Reliability, co-operativeness and Community Service. The employeeis rated on a 5 point rating scale. Rating of each year is maintainedin the employee's file in the HR Development. Ratings are supposedto be used as a basis for promotions and increments. In practicehowever, little use is made of the ratings for anything. A smallinformal survey conducted a year ago showed that the superiorspent on an average about 3 minutes filling up a form and less than10 minutes discussing itwith the subordinate. Employee feelings about the system range

from indifferent to hostility. Most feel that community service is nota part of their job and should not influence their rating, whileimportant criteria like leadership potential which indeed should be a'part of the form are left out.

The system seems to be causing much dissatisfaction and hostilityamong the employees of the firm. The managing Director, Mr.Gandhi feels that it is becoming a dangerous source of friction andshould be done away with all together.

(a) List the important facts of the case and explain the mainproblems of the existing Performance Appraisal System.

(5)(b) Do you agree with the Managing Director that the System of Performance Appraisal should be discontinued altogether in thisorganisation? Justify your view. (5)(c) Keeping the executives in mind suggest some improvements inthe Performance Appraisal System. Also suggest some additionaltechniques of Appraisal that could be used.

(5)

(d) Keeping the operative employees in mind suggest someimprovements in the Performance Appraisal System. Also suggest

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some additional techniques of Appraisal that could be used.(5)

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NOVEMBER 2002

Evaluation of Executive Development Programme:

The Indian Cooking Gas Ltd., was established as a public sectorcompany in 1963. It had its plants in six areas in the. country. Thecompany provided both in-company and out-company executivedevelopment programmes. In company programmes includedorientation programme for Apprentice Assistant ExecutiveEngineers. It had a staff college at Bangalore. Programmes wereconducted at staff college for all types personnel. In companyprogrammes included quality management, participativemanagement, time management etc. The best faculty was drawnfrom Indian Institute of Management, Universities, Professional

Bodies etc., apart from the four permanent and Internal faculty. Atpresent all the four permanent faculty positions are vacant.

Evaluation of management development programmes is done as aritual rather than to make is a part of development process.Evaluation of in-company programme is done at staff college withthe objective of knowing the participants learning and to know howfar the participants have found the programme useful. The staff college sends no formal feedback to the functional heads of thedepartments and to the corporate personnel and administrative

department. There appears to be no formal system that provides forthe feedback from the participants and out-company programmes totheir respective functional heads. There exists no evaluation modelwith pre-training and post-training evaluation and no efforts aremade to develop evaluation techniques.Analysis 10 mks

Questions:(1) Find out the reasons for the unsatisfactory conditions of evaluation of management development programmes?

(5)(2) How do you improve the conditions of evaluation of managementdevelopment programmes?

(5)

November - 2003

Analyse the case given under and answer the questions inyour own words analytically:

Magnum Industries Ltd. has been a Rs. 200 crore consumer durablemanufacturing company located in downtown Mumbai. It employed

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about 900 employees and the manufacturing process involveddischarge of toxic chemical effluents and water. However, due to thepersistent pressure from the surrounding community the companyhad to shift its plant manufacturing activities to one of the MIDCareas in the outskirts of Mumbai. It may be given that most of theemployees were largely unqualified and in the age range betweentheir late thirties and early fifties. Inspite of providing bus transportfacilities from the various town areas of Mumbai to the new plantlocation in MIDC 30% of the employees sought severance. Theemployees have been from different parts of India hencecosmopolitan in nature. At the new location the plant had beenupgraded by new technology from a foreign country and newmachineries and plants had been brought to increase theproductivity and improve the product quality to the world class

manufacturing standard. In order to replenish the manpower thecompany at the new location recruited approximately 150 newyoung persons who were IT! trained with HSC pass background.

These young people have been from the surrounding areas, talukasof the concerned district. Majority of these young men, thoughqualified have had no industrial background. They have been fromagricultural and other types of rural backgrounds. Hence they haveno perception about industrial organization, manufacturingprocesses and set up, discipline and every other aspect of theindustry. The new employees were unruly and had no respect for the

old employees. The problems faced by the organization hence, havebeen that there was a perceptual and cultural gap between the newand the old employees. On the one hand the old employees weredemotivated to work in a distant location having to travel 2 hours bybus. They were voicing about separation through V.R.S. On the otherhand, though the new young employees were good at their work,they were unruly and highly demanding in every matter. Also theywanted to assert themselves by capturing. executive positions in therecognized Trade Union. Whereas the company had the challenge tointegrate the new technology to upgrade production processes,

improve product quality, reduce cost, increase production and.productivity, and thereby increase rnarket share.

Questions:(a) What are the HR challenges you see in this case as the HRDManager yourself of the company?

(7)(b) What kind of training programmes would you plan· for the newlyrecruited employees to tame them and change their attitudes astrue manpower assets of the company? (6)

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Divan could not believe what he heard. He had always pridedhimself on his hands-on style and thought he had his ear to theground. "How-could I lose touch?" he wondered, somewhat shaken."When you are the-boss, people accept your authority withoutquestion," continued Saxena. "In any case, you have beensuccessful at Vertigo and it is difficult to argue with success. But themoment you announce your intention to leave, the aura begins tofade away. And in deciding on your successor, the board will seekyour opinion, with due regard to your judgement. The boardmembers must do what in their view is right for the company.Having said that, may I also mention that if there is a showdown inthe boardroom, you could always choose to stay on? We would likeit. Or we could bring in an outsider.""I have finalised my career plans and there is no question of staying

on beyond six months from now," said Divan. "The board isscheduled to meet next month. Let us shelve the matter till then. Inthe meantime, I rely on you, Ram, to keep this discussion betweenthe two of us.""Of course yes," said Saxena.On his way home, Divan thought about the matter in detail. Bringingan outsider would undo all his life's work at Vertigo. There wereconsiderations like culture and compatibility, which were paramount.

The chairman had to be an inside man. "Richard lacks stature,"Divan said to himself. "Ranjan is the one I have been grooming, but

heavens, the flip side of it all had missed me completely. There is noway I can allow a split at the top just before I quit. I must leave on ahigh note in my own interest. I must find a way out of the imminentmess."

What should Divan do?

November - 2005

Analyse the case given below and answer the questions in

your own words analytically.

SAS Pvt. Ltd. is probably the least-well-known major softwarecompany, in India. The company makes statistical analysis software(hence the acronym SAS). And the company is growing very rapidlyfrom 1900 employees five years ago, it now has 5400 employees.But SAS is not your typical software company. It is not your typical'anything' company. At its headquarters, just outside Bangalore,there is a 36,000 square-foot gym for employees. There is a full-length basketball court, pool tables, a private sky-lighted yoga room

and workout areas. Outside, there are soccer and cricket fields.Massages are available several times a week and classes are offered

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in dance and tennis. The company also operates the largest day-care facility in India. To encourage families to eat lunch together,the SAS cafeteria supplies baby seats and high chairs. To encouragefamilies to eat dinner together, the company has a seven-hour workday, five days a week. Unlike many work-obsessive software firms,most SAS employees leave the office by 5 p. m. Management likesto call its work place culture "relaxed".

The list of employee amenities at SAS goes on and on. Unlimitedtea, coffee and juice, One week paid vacation during Diwali. Anonsite health clinic staffed with six nurses and two doctors. Zerocost to employees for health insurance. Casual dress every day. Isthis any way to run a business? Management thinks so. SAS'sstrategy is to make it impossible for people not to do their work.

Even though the company provides no stock option plans andsalaries no better than the competition, the company has built anunbelievably loyal work force. Whereas competitors typically haveturnover rates above 30 percent, SAS's rate has never been higherthan 5 percent. Management claims that it saves Rs. 75 lakhs a year

just in employee replacement-related costs such as recruitment,interviews, moving costs for new hires and lost work time. Just incase anyone wonders if the company makes any money, we'll addthe following. SAS is owned by just two people – Rahul Sharma andDeepak Ahuja. They were recently_listed as being in the top

100richest people in India.

Questions:(a) List the important facts in the case.

(5)(b) Are progressive HR practices like those at SAS, a cause or aresult of high profits? Discuss.

(5)(c) What possible problems could the management at SAS face(from employees) due to the benefits offered?

(5)(d) If you are appointed as the HR manager at SAS, what changeswould you recommend in the compensation structure?

(5)

November – 2006

Mr. Anthony is the Chief Executive of a medium sized Chemical Co.in Hyderabad. He holds a Ph.D. in Chemistry. However, he has not

been involved in research and development of new products for twodecades. Though turnover is not a problem for the company, Mr.

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Anthony and his senior colleagues noticed that the workers onhourly basis are not working up to their full potential. It is a wellknown fact that they filled their days with unnecessary andunproductive activities. Mr. Anthony knew that workers can bemotivated for giving maximum performance through variousincentive plans. One day Mr. Anthony contacted Personnel Managerand enquired: "Why our workers are not motivated? We pay themhighest in the industry". The Personnel Manager replied. "I havealready informed you a number of times, that money, workingconditions and benefits are not enough? Hard work and efficiency gounnoticed and unrewarded in our organization. Our promotions andbenefit plans are tied to length of service. Even the lazy workers,accordingly, enjoy all the benefits in the organization, which infact,according to the workers, should go only to those who work hard".

Mr. Anthony then wanted the Personnel Manager to look into theproblem more closely and find out a solution to the problems of workers on hourly basis.

Questions:

(a) List the important facts in the case.(6)

(b) Explain the motivational problem in this case.(6)

(c) If you were the Manager, how would you motivate employees sothat they work better?

(8)

November – 2007 Case Study:(20)

Rise and Fall Jagannath (Jaggu to his friends) is'an over ambitious young man. Forhim ends justify means. With a diploma in Engineering, Jaggu joined

in 1977; a Bangalore-based company as a Technical Assistant. Hegot himself enrolled as a student in an evening college and obtainedhis degree in Engineering in 1982. Recognizing his improvedqualification, Jaggu was promoted as Engineer - Sales in 1984. Jagguexcelled himself in the new role and became the blue - eyed boy of the management. Promotions carne to him in quick successions. Hewas made Manager - Sales in 1986 and Senior Manager - Marketingin 1988. Jaggu did not forget his academic pursuits. After beingpromoted as Engineer - Sales, he joined an MBA (Part-time)programme. After completing MBA Jaggu became a Ph. D. scholar

and obtained his doctoral degree in 1989. Functioning as SeniorManager - Marketing Jaggu eyed on things beyond his jurisdiction.

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He started complaining against Suresh the Section Head andPrahalad the Unit Chief (both production) with Ravi, the EVP(Executive - Vice President). The complaints included delay inexecutive orders, poor quality and customer rejections. Most of thecomplaints were concocted. Ravi was convinced and requested

Jaggu to head the production Section so that things could bestraightened up there. Jaggu became the Section Head and Sureshwas shifted to sales. Jaggu started spreading his wings. He prevailedupon Ravi and got sales and quality under his control, in addition toproduction. Suresh an equal in status, was now subordinated to

Jaggu. Success had gone to Jaggu's head. He had everything goingin his favour position, power, money and qualification. He dividedworkers and used them as pawns. He ignored Prahalad andestablished direct link with Ravi. Unable to bear the humiliation,

Prahalad quit the company. Jaggu was promoted as GeneralManager. He became a megalomaniac. Things had to end to somepoint. It happened in Jaggu's life too. There were complaints againsthim. He had inducted his brother-in-law, Ganesh, as an engineer.Ganesh was by nature corrupt. He stole copper worth Rs. 5 lakh andwas suspended. Jaggu tried to defend Ganesh but failed in his effortcorruption charges were also leveled against Jaggu who wasreported to have made nearly Rs. 20 lakh for himself.On the New Year day of 1993Jaggu was reverted back to his oldposition - sales Suresh was promoted and was asked to head

production. Roles got revered. Suresh became boss to Jaggu. Unableto swallow the insult, Jaggu put in his papers. Back home, Jaggustarted his own consultancy claiming himself as an authority inquality management. He poached on his previous company andpicked up two best brains in quality. From 1977 to 1993, Jaggu'scareer graph had a steep rise and a sudden fall. Whether therewould be another hump in the cure is a big question.

Questions:(a) Bring out the principles of promotion that were employed in

promoting Jaggu. (10)(b) What would you do if you were Ravi?

(5)(c) Bring out the ethical issues involved in Jaggu's behaviour.

(5)

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