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Prepared by

Mrs.Vijayarani Anandan, MBA., M.Phil., NET., (Ph.D)

Asst. Prof – SRM Ramapuram B-School, SRM University, Ramapuram, Chennai - 89

SRM Ramapuram B-School

SRM University - Ramapuram, Chennai – 89

Study Material

MB13204 – HUMAN RESOURCE MANAGEMENT

Unit – I

INTRODUCTION TO HRM

Synopsis:

Meaning of HRM

Definition of HRM

Difference between PM, HRM and HRD

Objectives of HRM

Significance of HRM

Scope of HRM

Functions of HRM

Role of HR Manager

Process of HRM

Managing Diversity

Role of HRM in strategic Management

MEANING OF HRM

Human Resource Management (HRM) is the function within an

organization that focuses on recruitment of, management of, and

providing direction for the people who work in the organization.

Human resource management (HRM, or simply HR) is the

management of an organization's workforce, or human resources. It is

responsible for the attraction, selection, training, assessment, and

rewarding of employees, while also overseeing organizational

leadership and culture, and ensuring compliance with employment and

labor laws.

DEFINITION OF HRM

Human resources management (HRM) is a management function

concerned with hiring, motivating and maintaining people in an

organization. It focuses on people in organizations. Human resource

management is designing management systems to ensure that human

talent is used effectively and efficiently to accomplish organizational

goals.

According to Phillopo “HRM is the personnel function which is

concerned with procurement, development, compensation, integration

and maintenance of the personnel of an organization for the purpose of

contributing towards the accomplishments of the organization’s

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objectives. Therefore, personnel management is the planning,

organizing, directing, and controlling of the performance of those

operative functions (Edward B. Philippo).

DIFFERENCE BETWEEN PM AND HRM

Personnel Management Human Resource Management

It is concerned with managing

people at work

It is concerned with the

management of employees’ skills,

knowledge, abilities, talents,

aptitudes, creative abilities etc

Employees are treated like other

components such as machinery,

equipment etc

Employees are treated as a

resource and an asset

Employee is treated as an

economic man (i.e., he works for

money only)

Employee is treated as an

economic, social and

psychological man

Employees are treated as a cost

centre- wages paid are treated as

cost of labour.

Employees are treated as a profit

centre i.e., amount invested in

human resources brings more

revenues

OBJECTIVES OF HRM

1. Organizational Objectives: To assist the organization to

achieve its primary objectives, whether it is profit making and

organizational effectiveness.

2. Societal Objectives: To be responsive to the needs and

challenges of the society while minimizing the negative

impact, if any, of such demands upon the organization.

3. Functional Objectives: To maintain department’s contribution

and level of services at a level appropriate to the organization’s

needs.

4. Personal Objectives: To assist employees in achieving their

personal goals, at least in so far as these goals enhance the

individual’s contribution to the organization. This is necessary

to maintain employee performance and satisfaction for the

purpose of maintaining, retaining and motivating the

employees in the organization

SIGNIFICANCE / IMPORTANCE OF HRM

Organizational significance

Effective utilization of human resources to motivate them andto change their attitudes to work and the organization.

To develop personnel to meet the demands of the work

effectively; and

To ensure proper recruitment and to retain personnel in the

organization so that right people are available.

Social significance

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Maintaining balance between jobs and job-seekers, taking into

consideration job requirements, job seekers’ abilities and

aptitudes

Providing most productive employment from which socio-

psychological satisfaction can be derived.

Utilizing human capabilities effectively and matching with

government rewards.

Eliminating wasteful organizational and individual practices.

Professional Significance

This aspect involves in developing people and providing

appropriate environment for effective utilization of their

capabilities and involves the following.

Developing people on continuous basis to meet the challenges

of their jobs.

Maintaining the dignity of personnel at the work place;

Providing proper physical and social environment at the work

place to make

SCOPE OF HUMAN RESOURCE MANAGEMENT

The scope of HRM is very wide:

1. Personnel aspect: This is concerned with manpower planning,

recruitment, selection, placement, transfer, promotion, training and

development, layoff and retrenchment, remuneration, incentives,

productivity etc.

2. Welfare aspect: It deals with working conditions and amenities

such as canteens, creches, rest and lunch rooms, housing, transport,

medical assistance, education, health and safety, recreation facilities,

etc.

3. Industrial relations aspect: This covers union-management

relations, joint consultation, collective bargaining, grievance and

disciplinary procedures, settlement of disputes, etc

FUNCTIONS OF HUMAN RESOURCE MANAGEMENT

The functions performed by managers are common to all organization.

Generally the functions performed by Human Resource Management

may be classified into two categories. They are I. Managerial

Function and II. Operative Function

I. MANAGERIAL FUNCTION:

1. Planning:

This involves predetermined course of action. In this process

organizational goals and formulation of policies and programmes for

achieving them are chalked out. A well thought out plan makes

execution perfect and easy.

2. Organising:

This is a process by which the structure and allocation of jobs are

determined. Organising involves each subordinate a specific task,

establishing departments, delegating authority to subordinates,

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establishing channels of authority and communication, and

coordinating the work of subordinates.

3. Staffing:

This is a process by which managers select, train, promote and retire

the subordinates. This involves in deciding the type of people to be

hired, recruiting prospective employees, selecting employees, setting

performance standard, compensating employees, evaluating

performance, counseling employees, training and developing

employees.

4. Directing:

Directing is the process of activating group efforts to achieve thedesired goals.

5. Controlling:

This is the process of setting standards for performance, checking to

compares see how actual performance compares with these set

standards and taking needed corrective action.

II. OPERATIONAL FUNCTION

1. PROCUREMENT:

Procurement function is securing and employing the people having

required level of human resources essential for achieving the

organizational objectives. It involves job analysis, human resources

planning, recruitment, selection, placement, induction and handling

internal mobility.

a) Job Analysis: It is the study and collection of data relating to the

operations and responsibilities of a specific job. It includes:

Collection of data and information and facts relating to the

various aspects of jobs including men, machines and materials.

Drawing up of job description, job specification, job

requirements and employee specification with which nature,

levels and quantum human resources can be finalised.

Providing the guidelines, plans and the basis for job design and

for all operative functions of HRM.

b) Human Resources Planning:

This is the process which assures the organisation that it will have

adequate number of qualified persons, at requisite times, performing in

a way to satisfy the needs of the organisation and also provide

satisfaction to the individual employee, so employed. The process

involves:

Estimating the present and future requirements of human

resources based on objectives and long range plans of the

organisation

Calculation of net human resource requirements based on the

present availability of human resources.

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Taking suitable steps to identify, mould, change and develop

the strength of existing employees so as to meet the future

requirements.

Preparation of action plans to acquire the balance human

resources from outside the organisation and to develop the

existing employees.

c) Recruitment:

It is the process of searching for future employees (requirement) and

ensuring they apply for jobs in the organisation. It involves:

Identification of existing sources of candidates and developing

them.

Seeking out and identifying new sources of applicants.

Motivating the right type of candidates to apply for jobs in the

organisation.

Ensuring a healthy balance between internal and external

sources

d) Selection

It is the process of ascertaining the qualifications, experience, skill,

knowledge etc. of an applicant to ascertain his / her suitability for the

job applied for. This includes:

Developing application blanks.

Creating and developing valid and reliable testing techniques.

Formulating interviewing techniques.

Checking of references.

Setting up for medical examination policy and procedure.

Line Managers to be involved in the decision making.g.

Sending letters of appointment

Employing the selected candidates, when he reports for duty

e) Placement

It is the process of allotting to the selected candidate the most suitable

job, as per the job requirements and employee specifications. This

function includes:

Counselling the concerned managers regarding the placement

Overseeing the follow-up studies, employee performanceappraisal to monitor employee adjustment to the job, in the

coming days.

Correcting wrong / misjudged placements, if any.

f) Induction and Orientation

These are procedures by which a new employee is rehabilitated in the

new surroundings and introduced to the practices, procedures, policies,

people etc. of the organisation. It includes:

Familiarizing the employee with company philosophy,

objectives, policies, career planning and development,

company product, market share, history, culture, etc.

Introduce the new employee to the people - his colleagues,

supervisors and subordinates

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Mould the employee by orientation methods to the new

working conditions

2. HUMAN RESOURCES DEVELOPMENT:

This process involves improving, moulding, and developing the skills,

knowledge, creativity, attitude, aptitude, values, commitment etc.

based on the present and future job and company requirements.

a) Performance Appraisal:

It is the continuous and systematic evaluation of individual employees

with respect to their performance and their potential for future

development. It includes:

Enunciating policies, procedures and techniques.

Assisting functional managers.

Reviewing and summarizing reports.

Evaluating the effectiveness of various programmes.

b) Training:

It is the process of transmitting the employees the technical and

operating skills and knowledge. It includes:

Identification of training needs of the individuals and for the

organisation

Developing appropriate training programmes.

Assisting and advising the management in the conduct of

training programmes.

Transmitting requisite job skills and job knowledge to the

employees.

Assess the effectiveness of training programmes.

c) Management Development: It is the process of designing and

conducting appropriate executive development programmes so as todevelop the managerial and human relations of skills of the employees.

It includes:

Identification of the areas in which management development

is needed.

Conducting development programmes.

Motivating executives / managers.

Designing special development programmes / assessment

procedures for promotions.

Utilizing the services of specialists - both internal and external

for development and /or Institutional (external) development

programmes.

Evaluating the effectiveness of executive development

programmes.

d) Career Planning and Development:

It is the planning of one's career and implementation of career plans by

means of education, training, job search and acquiring of work

experience. It includes:

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Internal mobility - vertical and horizontal transfers, promotion

and demotion.

Transfer - process of placing employees in the same level jobs

where they can be utilised more effectively as per the needs of

the organisation. This also means – developing transfer

policies, offering assistance and guidance to employees under

transfer orders and evaluating transfer policy periodically.

Promotion - it deals with the upward assignment of employees

to occupy higher positions (with better status and pay) in

consonance with resources of employees and job requirement.

The Department must ensure that

Equitable, fair and consistent promotions areformulated and administered.

Managers and employees are given assistance and

guidance on the subject of promotion.

Execution of promotional policies is as per policies and

procedures.

Demotion - is the downward assignment of, an employee in an

organisation. The Department must ensure that:

Equitable, fair and consistent demotion policies are

drawn up.

Assisting and advising employees regarding demotions.

Ensure fair implementation of demotion policies and

procedures.

e) Organisation Development:

The planned process drawn up to improve organisational effectiveness

through changes in individual and group behaviour, culture and

systems of the organisation - drawing models from applied behavioral

science.

3. COMPENSATION MANAGEMENT:

The process of providing equitable, fair and adequate remuneration to

the employees. This process involves - Job evaluation, wage and salary

administration, incentives, bonus, fringe benefits, social security

measures and so on.

a) Job Evaluation - the process of determining the relative worth of

jobs:

Select suitable job evaluation techniques.

Classify jobs in to various categories.

Determining relative worth of jobs in various categories.

b) Wage and Salary Administration - developing and operating an

appropriate wage and salary programme. It will necessitate:

Initiate a wage and salary survey. Determining wage / salary rates based on various factors.

Proper administration of Wage and Salary Programmes.

The periodical evaluation of its effectiveness.

c) Incentives - formulation administration and reviewing the schemes

of payment of financial incentives in addition to regular wages and

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Formulation of incentive schemes.

Assisting managers on its operation.

Periodical review to evaluate effectiveness and relevance.

d) Bonus - payment of statutory bonus according to the Payment of

Bonus Act, 1965, and its latest amendments

e) Fringe Benefits - various benefits at the peripheral area of the

wage. Organisation provides these primarily to motivate the

employees and to meet their contingencies. Benefits include:

Disablement benefit, Housing facilities, Educational facilities to

employees’ children, Canteen facilities, Conveyance facilities, Credit

facilities, Legal assistance, Medical, maternity and welfare facilities

and Company stores.

f) Social security measures -These measures are in addition to fringe

benefits, which include:

Workmen's compensation to those workers (or their

dependants) who are involved in accidents.

Disablement benefits and allowance.

Dependent benefits.

Retirement benefits like Provident Fund, Pension, Gratuity etc

4. INTEGRATION FUNCTION

It is the process of reconciling organizational goals with those of its

members. Integration involves motivating employees through various

financial and non financial incentives providing satisfaction , handling

employees grievances through formal grievance ,collective bargaining

,workers participation in management , conflict resolution developing

cordial human relationship employee consulting improving quality of

work life. It includes:

a. Motivation: it is the force which instigates an employee to

work in a proper direction

b. Job satisfaction: it is the amount of satisfaction and

contentment derived from ones job, its pay and environment.

c. Grievance redressal: various problems and conflict which are

amongst the employees should be properly and cordially

handled

d.

Collective bargaining: It means negotiating with the managers

on various terms and conditions.

e. Conflict management: It refers to effective and efficient

management of conflict arising in the organization.

f. Participation of employees: Employees should be given a

chance to participate in the working of the firm with their

suggestion

g.

Discipline: It is one of the most essential requirements of

organization for its smooth and efficient working.

5. MAINTENANCE:

It is concerned with promoting physical and mental health

of employees by providing various benefits and facilities

a. Health: it provides health facilities, medical aid etc.

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b. Safety: it provides security measures like PF, pension, gratuity,

injury/disablement benefits allowances, group insurances etc.

c. Welfare schemes; health, safety and welfare measures are

designed to preserve the HR of the organizations.

d. Personnel records: they are maintained to keep entire records

of the employees and update them.

e. Personnel research: Research is conducted to check whether

HR is sufficient as per the current status.

f. Personnel audit : controlling and evaluating current HR status

and requirements

ROLE OF HR MANAGER

1. Humanitarian Role: Reminding moral and ethical obligations to

employees.

2. Counsellor: Consultations to employees about marital, health,

mental, physical and career problems.

3. Mediator: Playing the role of a peacemaker during disputes,

conflicts between individuals and groups or management.

4. Spokesman: To represent the company in Media and other forums

because he has better overall picture of his company’s operations.

5. Problem Solver: Solving problems of overall human resource

management and long-term organizational planning.

6. Change Agent: Introducing and implementing institutional changes

and installing organizational development programs

7. Management of Manpower Resources: Broadly concerned with

leadership both in the group and individual relationships and labour-

management relations

ROLE OF HRM IN STAREGIC MANAGEMENT

Strategy: “Strategy is a way of doing something. It includes the

formulation of goals and set of action plans for accomplishment of that

goal.”

Strategic Management: “A Process of formulating, implementing

and evaluating business strategies to achieve organizational objectivesis called Strategic Management”

Definition of Strategic Management: - “Strategic Management is

that set of managerial decisions and actions that determine the long-

term performance of a corporation. It includes environmental

scanning, strategy formulation, strategy implementation and evaluation

and control.” The study of strategic management therefore emphasizes

monitoring and evaluating environmental opportunities and threats in

the light of a corporation’s strengths and weaknesses.

Steps in Strategic Management:

1. Environmental Scanning: Analyze the Opportunities and Threats

in External Environment

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2. Strategy Formulation: Formulate Strategies to match Strengths

and Weaknesses. It can be done at corporate level, Business Unit

Level and Functional Level.

3. Strategy Implementation: Implement the Strategies

4. Evaluation & Control: Ensure the organizational objectives aremet.

Role of HRM in strategic management

Role in Strategy Formulation: HRM is in a unique position to supply

competitive intelligence that may be useful in strategy formulation.

Details regarding advanced incentive plans used by competitors,

opinion survey data from employees, elicit information about customercomplaints, information about pending legislation etc. can be provided

by HRM. Unique HR capabilities serve as a driving force in strategy

formulation.

Role in Strategy Implementation: HR Manager helps strategy

implementation by supplying competent people. Additionally, HRM

facilitates strategy implementation by encouraging proactive thinking,

communicating goals and improving productivity and quality.

MANAGING DIVERSITY

Meaning of Diversity:

The management of people on the basis of Gender, race, age,

educational background, sexual orientation or preference, physical

abilities or qualities, social status, religion and/or economic status,

marital status/ family status and lifestyle.

Managing Diversity

Managing Diversity is defined as Planning and implementing

organisational systems and practices to manage people so that the potential advantages of diversity are maximized while its potential

disadvantages are minimized

Strategies to manage diversity at the workplace:

There is no perfect way of managing diversity. However, managers

must be very flexible, multi-skilled, cross-cultural and

multidisciplinary to tackle diversity. Let us take a look at some of themethods:

Proactive cross cultural training: The rapidly diversifying workforce

and market requires continuous training of the executives throughout

their career.(IBM- Three types of Executive training program).

Equitable treatment of the employee: Performance based incentives

and merit based appraisal always works in managing diversity.

Informal interactions: Meeting peers over lunch and parties always

helps to create the understanding and reduce the differences. (TCS-

Maitree Initiative).

Developing a responsive work culture: A culture conducive to

achieving goals and facilitating sustainable improved performance and

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productivity has to be developed in the organisation. This helps to

generate commitment among its members to its vision and values.

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Unit – II

Topic – 1

JOB ANALYSIS

Synopsis

Introduction

Meaning of job

Meaning of job analysis

Definition of job analysis

Uses/benefits/ importance job analysis

Steps/process of job analysis

Methods/ techniques of collecting job analysis data

Components of job analysis

INTRODUCTION

Determination of manpower requirements is one of the most important

problems in HRM. Job analysis and job design, provide this

knowledge.

MEANING OF JOB

A job may be defined as a ―collection or aggregation of tasks, duties

and responsibilities which as a whole, are regarded as a regular

assignment to individual employees, and which is different from otherassignments, In other words, when the total work to be done is divided

and grouped into packages, we call it a ―job.

MEANING OF JOB ANALYSIS

Job analysis is the procedure through which we can determine the

duties and nature of the jobs and the kinds of people (in terms of skills

and experience) who should be hired for them. Thus, job analysisinvolves the process of identifying the nature of a job (job description)

and the qualities of the likely job holder (job specification).

DEFINITION OF JOB ANALYSIS

Flippo has offered a more comprehensive definition of job analysis as,

―Job analysis is the process of studying and collect ing information

relating to the operations and responsibilities of a specific job. The

immediate products of the analysis are job descriptions and job

specifications.

According to DeCenzo and P. Robbins, ―A job analysis is a

systematic exploration of the activities within a job. It is a basic

technical procedure, one that is used to define the duties,

responsibilities, and accountabilities of a job.

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USES/BENEFITS/ IMPORTANCE OF JOB ANALYSIS

1. Organizational Design: Job analysis will be useful in classifying

the jobs and the interrelationships among the jobs. On the basis of

information obtained through job analysis, sound decisions regarding

hierarchical positions and functional differentiation can be taken and

this will improve operational efficiency.

2. Organization and Manpower Planning: It is helpful in

organization planning, for it defines labour in concrete terms and co-

ordinates the activities of the work force, and clearly divides duties

and responsibilities.

3. Recruitment and Selection: Job analysis provides you with

information on what the job entails and what human requirements are

required to carry out these activities. This information is the basis on

which you decide what sort of people to recruit and hire

4. Placement and Orientation: Job analysis helps in matching the

job requirements with the abilities, interests and aptitudes of people.

Jobs will be assigned to persons on the basis of suitability for the job.

The orientation programme will help the employee in learning the

activities and understanding duties that are required to perform a given

job more effectively.

5. Employee Training and Management Development: Job

analysis provides the necessary information to the management of

training and development programmes. It helps in to determine the

content and subject matter of in training courses. It also helps in

checking application information, interviewing test results and in

checking references.

6. Job Evaluation and Compensation: Job evaluation is the process

of determining the relative worth of different jobs in an organization

with a view to link compensation, both basic and supplementary, with

the worth of the jobs. The worth of a job is determined on the basis of

job characteristics and job holder characteristics. Job analysis provides

both in the forms of job description and job specification.

7. Performance Appraisal: Performance appraisal involves

comparing each employee‘s actual performance with his or her desired

performance. Through job analysis industrial engineers and other

experts determine standards to be achieved and specific activities to be

performed.

8. Health and Safety: It provides an opportunity for identifying

hazardous conditions and unhealthy environmental factors so that

corrective measures may be taken to minimize and avoid the

possibility of accidents.

STEPS OR PROCESS INVOLVED IN JOB ANALYSIS

The six steps of job analysis are shown in the following figure:

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1. Determine the Use of the Job Analysis Information: Start by

identifying the use to which the information will be put, since this will

determine the type of data you collect and the technique you use to

collect them.

2. Collection of Background Information: According to Terry,

―The make -up of a job, its relation to other jobs, and its requirements

for competent performance are essential information needed for a job

evaluation. This information can be had by reviewing available

background information such as organization charts (which show how

the job in question relates to other jobs and where they fit into the

overall organization); class specifications (which describe the general

requirements of the class of job to which the job under analysis

belongs); and the existing job descriptions which provide a starting

point from which to build the revised job description.

3. Selection of Jobs for Analysis: To do job analysis is a costly and

time consuming process. It is hence, necessary to select a

representative sample of jobs for purposes of analysis. Priorities of

various jobs can also be determined. A job may be selected because it

has undergone undocumented changes in job content. The request for

analysis of a job may originate with the employee, supervisor, or a

manager. When the employee requests an analysis it is usually because

new job demands have not been reflected in changes in wages.

Employee‘s salaries are, in part, based upon the nature of the work thatthey perform. Some organizations establish a time cycle for the

analysis of each job. For example: A job analysis may be required for

all jobs every three years. New jobs must also be subjected to analysis.

4. Collection of Job Analysis Data: Job data on features of the job,

requited employee qualification and requirements, should be collected

either form the employees who actually perform a job; or from other

employees (such as foremen or supervisors) who watch the workers

doing a job and there by acquire knowledge about it; or from the

outside persons, known as the trade job analysis who are appointed to

watch employees performing a job. The duties of such a trade job

analyst are (i) to outline the complete scope of a job and to consider all

the physical and mental activities involved in determining what the

worker does.; (ii) find out why a worker does a job; and for this

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purpose he studies why each task is essential for the overall result; and

(iii) the skill factor which may be needed in the worker to differentiate

between jobs and establish the extent of the difficulty of any job.

5. Processing the Information: Once job analysis information has

been collected, the next step is to place it in a form that will make it

useful to those charged with the various personnel functions. Several

issues arise with respect to this. First, how much detail is needed?

Second, can the job analysis information be expressed in quantitative

terms? These must be considered properly.

6. Preparing Job Descriptions and Job Classifications: Job

information which has been collected must be processed to prepare the

job description form. It is a statement showing full details of the

activities of the job. Separate job description forms may be used for

various activities in the job and may be compiled later on. The job

analysis is made with the help of these description forms. These forms

may be used as reference for the future.

7. Developing Job Specifications: Job specifications are also

prepared on the basis of information collected. It is a statement ofminimum acceptable qualities of the person to be placed on the job. It

specifies the standard by which the qualities of the person are

measured. Job analyst prepares such statement taking into

consideration the skills required in performing the job properly. Such

statement is used in selecting a person matching with the job.

METHODS FOR COLLECTING JOB ANALYSIS DATA

As discussed earlier, information is to be collected for job analysis.

Such information may be collected by the trained job analysis,

superiors concerned and job holders themselves. Job information is

collected through the following methods:

1. Participant Diary/Logs: Workers can be to keep participant

diary/long or lists of things they do during the day. For every activity

he or she engages in, the employee records the activity (along with the

time) in a log. This can provide you with a very comprehensive picture

of the job, especially when it‘s supplemented with subsequent

interviews with the worker and his or her supervisor. This method

provides more accurate information if done faithfully. However, it is

quite time consuming. Further, each job holder may maintain records

according to his own way which presents problems in analysis at later

stage. Therefore, it has limited application.

2. Interview: There are three types of interviews you can use to

collect job analysis data: individual interviews with each employee;

group interviews with groups of employees having the same job; andsupervisor interviews with one or more supervisors who are

thoroughly knowledgeable about the job being analyzed. The group

interview is used when a large number of employees are performing

similar or identical work, since this can be a quick and inexpensive

way of learning about the job. As a rule, the worker‘s immediate

supervisor would attend the group session; if not, you should interview

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the supervisor separately to get that person‘s perspective on the duties

and responsibilities of the job.

3. Critical Incidents: In this method, job holders are asked to describe

incidents concerning the job on the basis of their past experience. The

incidents so collected are analyzed and classified according to the job

areas they describe, A fairly picture of actual job requirements can be

obtained by distinguishing between effective and ineffective behaviors

of workers on the job. However, this method is time consuming. The

analyst requires a high degree of skill to analyze the contents of

descriptions given by workers.

4. Technical Conference Method: This method utilizes supervisors

with extensive knowledge of the job. Here, specific characteristics of

a job are obtained from the ―experts. Although it is a good data

gathering method, it often overlooks the incumbent worker‘s

perception about what they do on their job.

5. Job Performance: Under this method, the job analyst actually

performs the job under study to get first-hand experience of the actual

tasks, and physical and social demands of the job. This method can beused only for jobs where skill requirements are low and can be learnt

quickly and easily. This is a time-consuming method and is not

appropriate for jobs requiring extensive training.

6. Functional Job Analysis:

Functional job analysis (FJA) is employee- oriented analytical

approach of job analysis. This approach attempts to describe the whole

person on the job. The main features of FJA include the following:

The extent to which specific instruction is necessary to perform the

task. The extent to which reasoning and judgment are required to

perform the task. The mathematical ability required to perform the task

and The verbal and language facilities required to perform the task.

7. Observation Method:

Using this method, a job analyst watches employees directly on the

job. Observations are made on various tasks, activities, the pace at

which tasks are carried out, and the way different activities are

performed. This method is suitable for jobs that involve manual,

standardized, and short job cycle activities. This method also requires

that the entire range of activities be observable; possible with some

jobs

8. Questionnaires: The method is usually employed by engineering

consultants. Properly drafted questionnaires are sent out to job-holders

for completion and are returned to supervisors. However, the

information received is often unorganized and incoherent. The idea in

issuing questionnaire is to elicit the necessary information from jobholders so that any error may first be discussed with the employee and,

after corrections, may be submitted to the job analyst

COMPONENTS OF JOB ANALYSIS

Job Analysis consists of the following elements:

1. Job description and

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2. Job specification

I. Job Description:

Job description is a written record of the duties, responsibilities and

requirements of a particular job. It is concerned with the job itself and

not with the job holders. It is a statement describing the job in suchterms as its title, location, duties, working conditions and hazards.

Flippo has Defined Job Description as, ―A job description is an

organized, factual statement of duties and responsibilities of a specific

job. In brief, it should tell what is to be done. How it is done why. It is

a standard of function, in that defines the appropriate and authorized

content of a job.

Elements of Job Description:

a). Job Identification: It includes the job title, alterative title,

department, division, and plant and code number of the job. The job

title identifies and designates the job properly, the department,

division, etc., indicate the name of the department where it is situated

whether it is the maintenance department, mechanical shop etc.

Location gives the name of the place. This portion of job description

gives answer to two important questions: to what higher level job is

this job accountable. And who is supervised directly?

b). Job Summary: Job summary describes the contents of the jobs in

terms of activities or tasks performed. Job summary should clear the

nature of the job. Primary, secondary and other duties to be performed

on the job should clearly be indicated separately.

c). Duties and Responsibilities: This is the most important phase of

job description and should be prepared very carefully. It describes the

duties to be performed along with frequency of each major duty.

Responsibilities concerning custody of money, supervision and

training of staff etc. are also described in this part.

d). Supervision: Under it is given number of persons to be supervised

along with their job titles, and the extent of supervision involved -

general, intermediate or close supervision.

e). Relation to Other Jobs: It describes the vertical and horizontal

relationships f work flow. It also indicates to whom the jobholder will

report and who will report to him. It gives an idea of channels of

promotion.

f). Machine, tools and equipment define each major type or trade

name of the machines and tools and the raw materials used.

i). Working Conditions: The working environment in terms of heat,

light, noise, dust and fumes etc, the job hazards and possibility of their

occurrence and working conditions should also be described. It will be

helpful in job evaluation.

g). Social Environment: It specifies the social conditions under

which the work will be performed. In this part the size of work group,

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interpersonal interactions required to perform the job and development

facilities are mentioned

II. Job Specification

According to Dale Yoder, ―The job specification, as such a summary

properly described is thus a specialized job description, emphasizing personnel requirement and designed especially to facilitate selection

and placement.

Flippo has defined job specification as, ―Jo b specification is a

statement of the minimum acceptable human qualities necessary to

perform a job properly ………….. It is a standard of personnel and

designates the qualities required for acceptable performance.

In is clear from the above definitions that job specification is a

statement of summary of personnel requirements for a job. It may also

be called ―standard of personal for the selection

Elements of Job Specification:

i) Physical characteristics, which include health, strength, endurance,

age, height, weight, vision, voice, eye, hand and foot co-ordination,

motor co-ordination, and colour discrimination.

ii) Psychological and social characteristics such as emotional

stability, flexibility, decision making ability, analytical view, mental

ability, pleasing manners, initiative, conversational ability etc.

iii) Mental Characteristics such as general intelligence, memory,

judgment, ability to concentrate, foresight etc.

iv) Personal Characteristics such as Gender, education, family

background, job experience, hobbies, extracurricular activities etc

************************************

UNIT – II

TOPIC – 2

HUMAN RESOURCE PLANNING (HRP)

Synopsis

Meaning of HRP

Definition of HRP

Objectives of HRP

Importance of HRP

Factors affecting HRP

Process or steps involved in HRP

MENAING OF HRP

Humans resource planning is the process of examining an

organization’s or individual’s future human resource needs for

instance, what types of skills will be needed for jobs of the future

compared to future human resource capabilities (such as the types of

skilled employees you already have) and developing human resource

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policies and practices to address potential problems for example,

implementing training programmes to avoid skill deficiencies.

DEFINITION OF HUMAN RESOURCE PLANNING

According to Vetter, “HRP is the process by which management

determines how the organization should move from its current man

power position to desired manpower position. Through planning,

management strives to have the right time, doing things which result in

both the organization and individual receiving maximum long run

benefits”.

According to Gordon Mc Beath, “HRP is concerned with two things:

Planning of manpower requirements and Planning of Manpower

supplies”.

OBJECTIVES OF HUMAN RESOURCE PLANNING

a) Forecasting Human Resources Requirements: HRP is essential to

determine the future needs of HR in an organization. In the absence of

this plan it is very difficult to provide the right kind of people at the

right time.

b) Effective Management of Change: Proper planning is required to

cope with changes in the different aspects which affect the

organization. These changes need continuation of allocation/

reallocation and effective utilization of HR in organization.

c) Realizing the Organizational Goals: In order to meet the

expansion and other organizational activities the organizational HR

planning is essential.

d) Promoting Employees: HRP gives the feedback in the form of

employee data which can be used in decision-making in promotional

opportunities to be made available for the organization.

e) Effective Utilization of HR: The data base will provide the useful

information in identifying surplus and deficiency in human resources.

The objective of HRP is to maintain and improve the organizational

capacity to reach its goals by developing appropriate strategies that

will result in the maximum contribution of HR.

IMPORTANCE OF HRP

HRP is the subsystem in the total organizational planning.

Organizational planning includes managerial activities that set the

company’s objective for the future and determines the appropriate

means for achieving those objectives. The importance of HRP is

elaborated on the basis of the key roles that it is playing in the

organization.

1. Future Personnel Needs: Human resource planning is

significant because it helps to determine the future personnel

needs of the organization. If an organization is facing the

problem of either surplus or deficiency in staff strength, then it

is the result of the absence of effecting HR planning. All public

sector enterprises find themselves overstaffed now as they

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never had any planning for personnel requirement and went of

recruitment spree till late 1980’s. The problem of excess staff

has become such a prominent problem that many private sector

units are resorting to VRS ‘voluntary retirement scheme’. The

excess of labor problem would have been there if the

organization had good HRP system. Effective HRP system will

also enable the organization to have good succession planning.

2. Part of Strategic Planning: HRP has become an integral part

of strategic planning of strategic planning. HRP provides

inputs in strategy formulation process in terms of deciding

whether the organization has got the right kind of human

resources to carry out the given strategy. HRP is also necessaryduring the implementation stage in the form of deciding to

make resource allocation decisions related to organization

structure, process and human resources. In some organizations

HRP play as significant role as strategic planning and HR

issues are perceived as inherent in business management.

3. Creating Highly Talented Personnel: Even though India has

a great pool of educated unemployed, it is the discretion of HR

manager that will enable the company to recruit the right

person with right skills to the organization. Even the existing

staff hope the job so frequently that organization face frequent

shortage of manpower. Manpower planning in the form of skill

development is required to help the organization in dealing

with this problem of skilled manpower shortage

4. International Strategies: An international expansion strategy

of an organization is facilitated to a great extent by HR

planning. The HR department’s ability to fill key jobs with

foreign nationals and reassignment of employees from within

or across national borders is a major challenge that is being

faced by international business. With the growing trend

towards global operation, the need for HRP will as well will be

the need to integrate HRP more closely with the organizations

strategic plans. Without effective HRP and subsequent

attention to employee recruitment, selection, placement,

development, and career planning, the growing competition for

foreign executives may lead to expensive and strategically

descriptive turnover among key decision makers.

5. Foundation for Personnel Functions: HRP provides essential

information for designing and implementing personnel

functions, such as recruitment, selection, training and

development, personnel movement like transfers, promotions

and layoffs.

6.

Increasing Investments in Human Resources: Organizations

are making increasing investments in human resource

development compelling the increased need for HRP.

Organizations are realizing that human assets can increase in

value more than the physical assets. An employee who

gradually develops his/ her skills and abilities become a

valuable asset for the organization. Organizations can make

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investments in its personnel either through direct training or

job assignment and the rupee value of such a trained, flexible,

motivated productive workforce is difficult to determine. Top

officials have started acknowledging that quality of work force

is responsible for both short term and long term performance of

the organization.

7. Resistance to Change: Employees are always reluctant

whenever they hear about change and even about job rotation.

Organizations cannot shift one employee from one department

to another without any specific planning. Even for carrying out

job rotation (shifting one employee from one department to

another) there is a need to plan well ahead and match the skillsrequired and existing skills of the employees.

8. Uniting the Viewpoint of Line and Staff Managers: HRP

helps to unite the viewpoints of line and staff managers.

Though HRP is initiated and executed by the corporate staff, it

requires the input and cooperation of all managers within an

organization. Each department manager knows about the issues

faced by his department more than anyone else. So

communication between HR staff and line managers is

essential for the success of HR Planning and development.

9. Succession Planning: Human Resource Planning prepares

people for future challenges. The ‘stars’ are picked up, trained,

assessed and assisted continuously so that when the time

comes such trained employees can quickly take the

responsibilities and position of their boss or seniors as and

when situation arrives.

10. Other Benefits: (a) HRP helps in judging the effectiveness of

manpower policies and programmes of management. (b) It

develops awareness on effective utilization of human resources

for the overall development of organization. (c) It facilitates

selection and training of employees with adequate knowledge,

experience and aptitudes so as to carry on and achieve the

organizational objectives (d) HRP encourages the company to

review and modify its human resource policies and practices

and to examine the way of utilizing the human resources for better utilization.

FACTORS AFFECTING HRP

1. Type and Strategy of the Organization: Type of the organization

determines the production processes involve, number and type of staff

needed and the supervisory and managerial personnel required. HR

need is also defined by the strategic plan of organization. If the

organization has a plan for organic growth then organization need to

hire additional employees. On the other hand If the organization is

going for mergers and acquisition, then organization need to plan for

layoffs, as mergers can create, duplicate or overlap positions that can

be handled more efficiently with fewer employees.

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Organization first decides whether to be reactive or proactive in HRP.

Organizations either carefully anticipate the needs and systematically

plan to fill the need in advance (proactive) or can simply react to the

needs as they arise (reactive). Likewise, the organization must

determine the width of the HR plan. Organization can choose a narrow

focus by planning in only one or two HR areas like recruitment and

selection or can have a broad perspective by planning in all areas

including training and remuneration. The nature of HR plan is also

decides upon the formality of the plan. It can decides to have an

informal plan that lies mostly in the minds of the managers and

personnel staff or can have a formal plan which is properly

documented in writing

The nature of HR plan is also depended upon the flexibility that is

practiced in the organization. HR plan should have the ability to

anticipate and deal with contingencies. Organizations frame HRP in

such a way that it can contain many contingencies, which reflect

different scenarios thereby assuring that the plan is flexible and

adaptable.

2. Organizational Growth Cycles and Planning: All organizations

pass through different stages of growth from the day of its inception.

The stage of growth in which an organization is determines the nature

and extends of HRP. Small organizations in the earlier stages of

growth may not have well defined personnel planning. But as the

organization enters the growth stage they feel the need to plan its

human resource. At this stage organization gives emphasis upon

employee development. But as the organization reaches the mature

stage it experience less flexibility and variability resulting in low

growth rate. HR planning becomes more formalized and less flexible

and less innovative and problem like retirement and possible

retrenchment dominate planning.

During the declining stage of the organization HRP takes a different

focus like planning to do the layoff, retrenchment and retirement. In

declining situation planning always becomes reactive in nature

towards the financial and sales distress faced by the company.

3. Environmental Uncertainties: Political, social and economic

changes affect all organizations and the fluctuations that are happening

in these environments affect organizations drastically. Personnel

planners deal with such environmental uncertainties by carefully

formulating recruitment, selection, training and development policies

and programmes. The balance in the organization is achieved through

careful succession planning, promotion channels, layoffs, flexi time,

job sharing, retirement, VRS and other personnel related

arrangements.

4. Time Horizons: HR plans can be short term or long term. Short

term plans spans from six months to one year, while long term plans

spread over three to twenty years. The extent of time period depends

upon the degree of uncertainty that is prevailing in an organizations

environment. Greater the uncertainty, shorter the plan time horizon

and vice versa.

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5. Type and Quality of information: The information used to

forecast personnel needs originates from a multitude of sources. The

forecast depends to a large extent upon the type of information and the

quality of data that is available to personnel planners. The quality and

accuracy of information depend upon the clarity with which the

organizational decision makers have defined their strategy, structure,

budgets, production schedule and so on.

6. Nature of Jobs Being Filled: Personnel planners need to be really

careful with respect to the nature of the jobs being filled in the

organization. Employees belonging to lower level who need very

limited skills can be recruited hastily but, while hiring employees for

higher posts, selection and recruitment need to be carried out with high

discretion. Organization need to anticipate vacancies far in advance as

possible, to provide sufficient time to recruit suitable candidate.

7. Outsourcing: Several organizations outsource part of their work to

outside parties in the form of subcontract. Outsourcing is a regular

feature both in the public sector as well as in the private sector

companies. Many of the organizations have surplus labour and hence

instead of hiring more people they go for outsourcing. Outsourcing is

usually done for non critical activities. Outsourcing of non- critical

activities through subcontracting determines HRP.

HRP PROCESS

HRP effectively involves forecasting personnel needs, assessing

personnel supply and matching demand – supply factors through

personnel related programmes. The HR planning process is influenced

by overall organizational objectives and environment of business

1. Environmental Scanning:

It refers to the systematic monitoring of the external forces influencing

the organization. The following forces are essential for pertinent HRP.

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Economic factors, including general and regional conditions.

Technological changes, Demographic changes including age,

composition and literacy, Political and legislative issues, including

laws and administrative rulings Social concerns, including child care,

educational facilities and priorities. By scanning the environment for

changes that will affect an organization, managers can anticipate their

impact and make adjustments early.

Organizational Objectives and Policies: HR plan is usually derived

from the organizational objectives. Specific requirements in terms of

number and characteristics of employees should be derived from

organizational objectives Once the organizational objectives are

specified, communicated and understood by all concerned, the HRdepartment must specify its objective with regard to HR utilization in

the organization.

2. HR Demand Forecast:

Demand forecasting is the process of estimating the future quantity

and quality of people required to meet the future needs of the

organization. Annual budget and long-term corporate plan when

translated into activity into activity form the basis for HR forecast.

For eg: in the case of a manufacturing company, the sales budget will

form the basis for production plan giving the number and type of

products to be produced in each period. This will form the basis upon

which the organization will decide the number of hours to be worked

by each skilled category of workers. Once the number hours required

is available organization can determine the quality and quantity of

personnel required for the task.

Demand forecasting is influenced by both internal factors and external

factors: external factors include-competition, economic climate, laws

and regulatory bodies, changes in technology and social factors

whereas internal factors are budget constraints, production level, new

products and services, organizational structure and employee

separations.

Demand forecasting is essential because it helps the organization to 1.

Quantify the jobs, necessary for producing a given number of goods,

2. To determine the nature of staff mix required in the future, 3. To

assess appropriate levels in different parts of organization so as to

avoid unnecessary costs to the organization, 4. To prevent shortages of

personnel where and when, they are needed by the organization. 5. To

monitor compliances with legal requirements with regard to

reservation of jobs.

Techniques like managerial judgment, ratio- trend analysis, regression

analysis, work study techniques, Delphi techniques are some of the

major methods used by the organization for demand forecasting.

3. HR Supply Forecast:

Supply forecast determines whether the HR department will be able to

procure the required number of workers. Supply forecast measures the

number of people likely to be available from within and outside an

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organization, after making allowance for absenteeism, internal

movements and promotions, wastage and changes in hours, and other

conditions of work.

Supply forecast is required because it is needed as it 1. Helps to

quantify the number of people and positions expected to be available

in future to help the organization realize its plans and meet its

objectives 2. Helps to clarify the staff mixes that will arise in future 3.

It assesses existing staffing in different parts of the organization. 4. It

will enable the organization to prevent shortage of people where and

when they are most needed. 5. It also helps to monitor future

compliance with legal requirements of job reservations.

4. HR Programming:

Once an organization’s personnel demand and supply are forecasted

the demand and supply need to be balanced in order that the vacancies

can be filled by the right employees at the right time.

5. HR Plan Implementation:

HR implementation requires converting an HR plan into action. A

series of action are initiated as a part of HR plan implementation.

Programmes such as recruitment, selection and placement, training

and development, retraining and redeployment, retention plan,

succession plan etc when clubbed together form the implementation

part of the HR plan.

6. Control and Evaluation:

Control and evaluation represent the final phase of the HRP process.

All HR plan include budgets, targets and standards. The achievement

of the organization will be evaluated and monitored against the plan.

During this final phase organization will be evaluating on the number

of people employed against the established (both those who are in the

post and those who are in pipe line) and on the number recruited

against the recruitment targets. Evaluation is also done with respect to

employment cost against the budget and wastage accrued so that

corrective action can be taken in future.

*************************************

UNIT – II

TOPIC – 3

RECRUITMENT

Synopsis

Introduction to Recruitment

Meaning and Definition of Recruitment

Factors affecting Recruitment

Sources of Recruitment

Process of Recruitment

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INTRODUCTION

Recruitment, selection, placement, induction, training and

development are all the core functions of HRD. Once it is determined

what types of jobs in how many numbers are to be filled up with the

qualifications fixed, the next step is for search of qualified people.

Hiring of people involves these broad groups of activities but not

mutually exclusive viz., recruitment, selection and placement.

Recruitment is the first step in the process of filling a vacancy.

Recruitment is the generating of applications or applicants for specific

Positions to be filled up in the organization.

MEANING OF RECRUITMENT

Recruitment is a process of searching for and obtaining applicants for jobs so that

the right people in right number can be selected.

According to Dale Yoder, “Recruitment is a process to discover the source of

manpower to meet the requirements of staffing schedule and to employ effective

measures for attracting that manpower in adequate numbers to facilitate effective

selection of an efficient working force.”

According to Bergmann and Taylor, “Recruitment is the process of locating,

identifying, and attracting capable applicants.

FACTORS AFFECTING RECRUITMENT

There are various factors that influence recruitment. They are as

follows:

I. Internal factors

II. External factors

I. INTERNAL FACTORS

1. Size: The organizational size is an influencing factor. Larger

organizations find recruitment less problematic than smaller size units.

2. Policy: The policy of recruitment by the organization, whether

recruitment is from internal source (from own employees) or from

external sources also affect the recruitment process. Generally,

recruiting through internal sourcing is preferred in view of cost

consideration, familiarity and in easily finding most suitable.

3. Image: Image of the organization is another internal factor

influencing recruitment. Managerial actions like good public relations,

rendering public services like building roads, public parks, hospitals

and schools help to earn image or goodwill for the organization.

4. Image of jobs: Better remuneration and working conditions are

considered the characteristics of good image of a job. Besides,

promotion and career development progammes of the organization

also attract potential candidates.

II. EXTERNAL FACTORS

1. Demographic factors: Demographic factors such as sex, age,

literacy, economic status etc, have influence on recruitment process.

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2. Labour markets: Labour market conditions, that is, supply labour

is of particular importance in affecting recruitment process. If the

demand for a specific skill requirements is high relative to its supply,

recruiting employees will involve more efforts. On the contrary, if

supply is more than demand for particular skill, recruitment will be

relatively easier.

3. Unemployment situation: The rate of unemployment is yet another

external factor having its influence on the recruitment process. When

the unemployment rate in a given area is high, the recruitment process

tends to be simpler.

4. Labour laws: There are several labour laws and regulations passed

by the central and state Governments that govern different types of

employment. These cover, working conditions, compensation,

retirement benefits and safety and health of employees in industrial

undertakings. Child Labour (Prohibition and Regulation) Act, 1986,

for example prohibits employment of children in certain employments.

So also, several other acts such as Employment Exchange

(Compulsory Notification of Vacancies) Act, 1959, the Apprentice Act

19961; the Factories Act, 1948 and the Mines Act 1952 have bearing

on recruitments.

SOURCES OF RECRUITMENT

The different sources of recruitment could be classified into two broad

categories, viz.,

I. Internal sources and

II. External sources

I. INTERNAL SOURCES

The various internal sources are as follows:-

1. Present employees

Promotions and transfers from among the present employees can be a

good source of recruitment. Promotion implies upgrading of an

employee to a higher position carrying higher status, pay and

responsibilities.

2. Former employees

Former employees are another source of applicants for vacancies to be

filled up in the organization. Retired or retrenched employees may be

interested to come back to the company to work on a part-time basis.

Some former employees, who left the organization for any reason, may

again be interested to come back to work.

3. Employee referrals

The existing employees refer their family members, friends and

relatives to the company as potential candidates for the vacancies to be

filled up most effective methods of recruiting people in the

organization because employees refer to those potential candidates

who meet the company requirement by their previous experience.

4. Previous applicants

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Those who applied previously and whose applications though found

good was not selected for one reason or other may be considered at

this point of time. Unsolicited applications may also be considered.

Advantages of internal source are:

Familiarity with their own employees Better use of the talent

Economical recruitment

Morale booster

Gives motivation.

Disadvantages of internal source:

Limited choice

Discourages competition

Creates conflicts.

II. EXTERNAL SOURCES

1. Employment Exchanges

After India’s independence, National Employment Service was

established to bring employees and job seekers together. In response to

it, the Compulsory Notification of Vacancies Act of 1959 (commonly

called Employment Exchange Act) was enacted which became

operative in 1960. Under S4 of the Act, it is obligatory for all

industrial establishments having 25 workers or more, to notify the

nearest employment exchange of vacancies in them, before they are

filled. Employment exchanges are particularly useful in recruiting

blue-collar, white collar and technical workers.

2. Employment agencies

In addition to the government agencies, there are a number of privateemployment agencies who register candidates for employment and

furnish a list of suitable candidates from their data bank as and when

sought by prospective employers. The main function of these agencies

is to invite applications and short list the suitable candidates for the

organization. Of course, the final decision on selection is taken by the

representatives of the organization. The representatives of the

employment agencies may also sit on the panel for final selection of

the candidates.

3. Advertisement

Advertisement is perhaps the most widely used method for generating

many applications. This is because its reach is very high. This method

of recruitment can be used for jobs like clerical, technical and

managerial. While preparing advertisement, lot of care has to be takento make it clear and to the point. It must ensure that some self-

selection among applicants takes place and only qualified applicants

response to the advertisement. Advertisement copy should be prepared

very well to answer AIDA. That is, advertisement should arrest

attention, gain interest, arouse desire and result in action.

4. Professional associations

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Very often recruitment for certain professional and technical positions

is made through professional associations. Institute of Engineers,

Indian Medical Association, All India Management Association etc.,

provide placement services for their members. For this, the

professional associations prepare either list of job seekers or publish or

sponsor journals or magazines containing advertisements for their

members.

5. Campus recruitment

This is another source of recruitment. This is gaining popularity in

India. The advantages are:

Most of the eligible candidates are available at one place.

The interviews are arranged in a short notice.

The teaching faculty can also be consulted.

Gives opportunity to sell the organization to a large students

body who would be graduating subsequently.

6. Deputation

Yet another source of recruitment is deputation ie., sending an

employee to another organization for a short duration of two or three

years. This method of recruitment is in vogue in Government

Departments and public sector organizations. This method provides

ready expertise and the organization does not have to incur the initial

cost of induction and training.

7. Word-of-mouth

Some organizations in India practice ‘the word-of-mouth’ method of

recruitment. In this method, the word is passed around the possible

vacancies or openings in the organization. Another form of word-of-

mouth recruitment is “employee- pinching” ie., the employees working

in another organization are offered on attractive offer by the rival

organizations. This method is economic, both in terms of time and

money.

8. Raiding or poaching

Raiding or poaching is another method of recruitment whereby the

rival firms by offering better terms and conditions, try to attract

qualified employees to join them. This raiding is a common feature in

the Indian organizations.

Merits of External Source of Recruitment

A process of selection

Availability of talented candidates.

Opportunity to select best candidates.

Provides healthy competition among job seekers.

Demerits of External Source of Recruitment

Expensive and time consuming

Unfamiliarity with the organization

Discourages the existing employees and they may feel belittled

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RECRUITMENT PROCESS

The recruitment process consists of the following:

1. Recruitment planning: Planning involves to draft a comprehensive

job specification for the vacant positions outlining their major and

minor responsibilities; the skills, experience and qualifications needed; grade and level of pay ; starting data ; whether temporary or

permanent; and mention of special conditions, if any, to the jobs to be

filled.

2. Strategy Development: The next step involved is to devise a

suitable strategy for recruiting the candidates in the organization. The

strategic consideration would include the type of recruitment method,

the geographical area to be considered for the search, source of

recruitment and sequence of activities for recruitment.

3. Searching: Searching involves deciding internal or external

sources. Sometimes both internal and external may be decided.

Screening is the next step. Job specification is invaluable in this

regard. Screening is done on the basis of qualification, knowledge,

skills, abilities, interest and experience mentioned in job specification.

4. Evaluation and control: Evaluation & control in recruitment is

needed as considerable cost is involved in the process. This includes

Salary of the recruiters

Cost of time spent for preparing job analysis, advertisement

etc.,

Administrative expenses

Cost of outsourcing or overtime while vacancies remain

unfilled and

Cost incurred in recruiting unsuitable candidates.

****************************************

UNIT – II

TOPIC – 4

SELECTION

Synopsis

Meaning and Definition of Selection

Difference between recruitment and selection

Process of Selection

MEANING AND DEFINITION OF SELECTION

It refers to the process of offering jobs to one or more applicants from

the applications received through recruitment. Selection is the processof picking the suitable candidates from the pool of job applications to

fill various jobs in the organization.

According to Yodder, selection is the process by which candidates for

employment are divided into class - those who will be offered

employment and those who will not.”

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According to Stone, “Selection is the process of differentiating

between applicants in order to identify (and hire) those with a greater

likelihood of success in a job.”

DIFFERNCE BETWEEN RECRUITMNET AND SELECTION

Recruitment Selection

Technically precedes selection Selection follows recruitment

The process of identifying and

encouraging potential candidates

to apply for jobs in the

organization

Selection involves choosing the

best out of those recruited

Recruitment is positive as it aims

at increasing the number of job

seekers (applications) for wider

choice or increasing the selection

ratio.

Selection on the other hand is

negative in its application, as it

rejects a large number of

unqualified applicants in order to

identify those who are suitable for

the jobs.

Recruitment involves searching Selection involves comparing

those already searched

SELECTION PROCESS

Following are the steps involved in a standard selection process:

1. Preliminary Interview

2. Application Blank

3. Selection Tests

4. Selection Interview

5. Reference checks

6. Physical Examination

7. Final selection

1. Preliminary interview

After screening the applications, preliminary interview will be

conducted. The purpose of preliminary interview is to eliminate

unsuitable or unqualified candidates from the selection process. In

screening unqualified candidates are eliminated on the basis of

information given in the application form, whereas preliminary

interview rejects misfits for reasons, which did not appear in the

application forms.

2. Application Blanks

This is a method for getting information from a prospective candidate.

This serves as a personal record of the candidate bearing personal

history profile, detailed personal activities, skills and

accomplishments. Almost all organizations require job seekers to fill

up the application. Usual contents are as follows:

Biographical information – Age, father’s name, sex,

nationality, height, marital status. Educational information - Name of the institutions where the

candidate studied - marks – Divisions – Distinctions.

Work Experience – previous experience – nature of job –

salary – duration – reason for quitting.

Salary – last salary drawn – minimum salary acceptable.

Extra-curricular information – NSS – NCC – hobbies etc.

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References – Name and address

3. Selection Tests

Individuals differ in many respects including job related abilities and

skills. In order to select a right person for the job, individual

differences in abilities and skills to be adequately and accurately

measured for comparison.

According to Lee J. Groobach, “A test is a systematic procedure for

comparing the behavior of two or more persons.”

Milton M. Blum defines test as “a sample of an aspect of individual’s

behaviour, performance and attitude.”

In simple words, test is a systematic procedure for sampling human

behaviour. Tests may be for psychological testing and for testing

specific abilities and skills. Psychological tests may be conducted for

various purposes:

Guiding and counseling

Career guidance

Research on human behaviour and personality

Employment selection for placement

For appraising employees promotional potentials

For counseling to perform better in their jobs.

Types of tests

Broadly there are two types of tests viz., I. Ability tests and II.

Personality tests.

I. Ability tests

a) Aptitude test

Aptitude tests measure ability and skills of the candidate. These testsmeasure and indicate how well a person would be able to perform after

training. Thus aptitude tests are used to predict the future ability. There

are two objectives of the aptitude tests. One to advice youth or job

seekers regarding the field where they are likely to succeed. This is

called ‘vocational guidance.’ Second to select best persons for jobs

where they may succeed. This is called ‘vocational selection.’ There

are specific aptitude tests for mechanical aptitude test, clerical aptitude

test, management aptitude test etc.,

b) Achievement test

Achievement test measures the person’s potential in a given area or

job. In other words, these tests measure what a person can do based on

skill or knowledge already acquired.

c) Intelligence test

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Intelligence tests measure general ability for intellectual performance.

The core concept underlying the intelligence test is mental age. It is

presumed that with physical age, intelligence also grows. There may

be exceptions to this rule. If a five year old child does the test for six

years or above, his or her mental age would be determined

accordingly. Mental age is generally indexed in terms of Intelligence

Quotient (IQ) and calculate using the following formula:

It means that IQ is a ratio of mental age to actual age multiplied by

100. IQ levels may vary because of culture and exposure. Intelligence

testing in industry is based on the assumption that if organization can

get bright, alert employees quick at learning, it can train them faster

than those who are less endowed.

d) Judgment test

These tests are designed to know the ability to apply knowledge in

solving a problem.

II. Personality tests

a) Interest tests

These tests discover a person’s area of interest and to find the kind of

work that would satisfy him. The most widely used interest test is

Kuder Reference Record. It consists of three forms. The first form

measures vocational interest such as mechanical, computational,

artistic, literary, music and clerical interest. The second form measures

vocational interest such as group activities, avoiding conflicts etc. The

third form of interest measures preference to particular occupations

such as accountants, salesman, managerial position etc.

b) Personality tests

These tests are also known as ‘personality inventories.’ These tests are

designed to measure the dimensions of personality ie., personality

traits such as interpersonal competence, dominance, submission,

extroversions – introversions, self-confidence, ability to lead and

ambition.

c) Projective tests

These tests are based on pictures or incomplete items. The candidate is

asked to narrate or project his own interpretation on these. The way in

which the candidate responds, reflects his or her own values, motives,

attitude, apprehensions, personality etc. These tests are called

projective because they induce the candidate to put himself or herself

into the situation to project the test situation.

d) Attitude tests

These tests are designed to know the candidate’s tendencies towards

favouring or otherwise to people, situations, actions and a host of such

other things. Test of social responsibility, authoritarianism, study of

values, employees morale are the well-known examples of attitude

tests.

Advantages of testing

Such tests predict future performance of personnel and for

transfer, promotion etc.

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It is a method of diagnoses of the situation and behaviour.

Cost effective test administered to a group saves time and cost.

Uncovers qualifications and talents, which cannot be detected

from application blanks and interviews.

Tests serve as unbiased tools of selection process.

Tests being quantifiable yield themselves to scientific and

statistical analysis.

4. Selection Interview

The next step in the selection process is ‘employment interview.’

Interview is the widely used selection method. It is a face-to-face

interaction between interviewer and the interviewee. If handled

properly, it can be a powerful technique in having accurate

information of the interview otherwise not available.

Objectives of Interview

Verifies the information obtained through application form and

tests.

Helps to obtain additional information from the applicant

otherwise not available.

Gives the candidate necessary facts and information about the

job and the organization.

Helps to establish mutual understanding between the company

and the candidate and build the company’s image.

Types of interview

Four types of interview for selection have been identified. They are:

a) Preliminary interview

This process would be initiated to screen the applicants to decide

whether further detailed interview will be required. The candidate is

given freedom by giving job details during the interview to decide

whether the job will suit him. This method saves time and money for

the company.

b) Patterned interview

In this type of interview, the pattern of the interview is decided in

advance. What kind of information is to be sought or given, how the

interview is to be conducted and how much time is to be allotted, all

these are worked in advance. In case the interviewer drifts he or she is

swiftly guided back to structural questions. Such interviews are also

called as standardized interviews.

c) Depth interview

Under this method, the interview tries to portray the interview in depth

and detail. Accordingly the life history of the applicant along with his

or her work experience, academic qualifications, health, attitude,

interest and hobbies are all analysed.

d) Stress interview

Such interviews are conducted for the jobs which are to be performed

under stressful conditions. The objective of stress interview is to make

deliberate attempts to create stressful or strained conditions for the

interview to observe how the applicant behaves under stressful

conditions. The common methods used to induce stress include

frequency interruptions, keeping silent for an extended period of time,

asking too many questions at a time, making derogatory remarks about

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the candidate, accusing him that he is lying and so on. The purpose is

to observe how the candidate behaves under the successful conditions

– whether he loses his temper, gets confused or frightened.

How to make successful interview?

The interview should have a definite time schedule. This

should be let known both to the interviewer and interviewee.

Interview should be conducted by the competent, trained and

experienced interviewers.

The interviewers should be supplied with specific set of

guidelines for conducting interview.

A resume for all the candidates to be interviewed should be

prepared and the same be made available to the interviewers

before the interview starts.

The interview should not end abruptly but it should come to

close tactfully providing satisfaction to the interviewer.

The interviewers should show their sensitivity to the

interviewees sentiments and also sympathetic towards him or

her.

The interviewers should also evince emotional maturity and a

stable personality during the interview session.

5. Reference checks

In the selection process, the next step is verifying information or

obtaining additional information through reference. The applicant is

asked to give the names of one or two referees who know him

personally. Previous employers, University Professors, neighbours and

friends are usually referees. However, references are treated as a mere

formality and are hardly used to influence the selection decisions.

6. Physical examination

The last tool used in the selection process is physical examination. The

main purpose of conducting physical or medical examination is to

have proper matching of job requirement with the physical ability of

the candidate. Among various objectives of physical test, the major

ones are, to detect if the individual is carrying any infectious diseases,

to identify health defects of an individual undertaking certain works

determined to his or her health and to protect companies from

employees filing compensation claim for injuries and accidents caused

by pre-existing ailments.

7. Final selection

Final selection follows the above procedures outlined. Selected

candidates would be sent with appointment orders. Additional names

than required vacancies may be kept in the waiting list.

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UNIT – III

TOPIC - 1

ORIENTATION OR INDUCTION

Orientation

After an employee has been recruited he is provided with basic

background information about the employer, working conditions and

the information necessary to perform his job satisfactorily. The new

employee’s initial orientation helps him perform better by providing

him information of the company rules, and practices.

In the words of John M. Ivancevich, “Orientation orients, directs,and guides employees to understand the work, firm, colleagues, and

mission. It introduces new employees to the organisation, and to his

new tasks, managers, and work groups.”

According to John Bernardin, “Orientation is a term used for the

organizationally sponsored, formalized activities associated with an

employee’s socialisation into the organisation.”

Billimoria has defined orientation as, “Induction (orientation) is a

technique by which a new employee is rehabilitated into the changed

surroundings and introduced to the practices, policies, and purposes of

the organisation.”

Orientation is one component of the new employee socialization

process. Socialization is the ongoing process of instilling in all new

employees prevailing attitudes, standards, values, patterns of

behaviour that are expected by the organisation and its departments.

Thus, orientation is a process through which a new employee is

introduced to the organisation. It is then process wherein an employee

is made to feel comfortable and at home in the organisation. The new

employee is handed over a rulebook, company booklets, policy

manuals, progress reports and documents containing company

information which are informational in nature. It is responsibility of

the human resource department to execute the orientation programme.

UNIT – III

TOPIC - 2

TRAINING

Synopsis

Meaning and Definition of training

Difference between training and development

Process or steps involved in training

Techniques or methods of training

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MEANING OF TRAINING

Training is the formal and systematic modification of behavior

through learning which occurs as a result of education, instruction,

development and planned experience.

Training is the most important and established function of the

personnel programme is to impart training to the new comers. In the

modern world of technological changes, the need for training

employees is being increasingly recognized so as to keep employees in

touch with the new developments, and technology. Every organization

must have a systematic training programme otherwise employees will

try to learn the job by trial and error method which can prove to be

dangerous

DEFINITION OF TRAINING

According to Flippo, “Training is the act of increasing knowledge

and skills of an employee for doing a particular job"

Hamblin defines training as ‘any activity which deliberately attempts

to improve a person’s skill on a job’ as opposed to education which is

mainly concerned with personal development and not related directly

to the job

Development is any learning activity, which is directed towards

future, needs rather than present needs, and which is concerned more

with career growth than immediate performance.

DIFFERENCE BETWEEN TRAINING AND DEVELOPMENT

Sl.No Training Development

1 Non-managers Managers

2 Technical / Mechanical

Operation

Theoretical / conceptual

ideas

3 Specific job related

information

General knowledge

4 Short term Long term

THE TRAINING PROCESS

1. Assessment of training needs:-

Identifying the training needs of an organization is the first step in the

systematic training process. All training needs should be related to the

specific needs of the organization and also of the individual

employees. For the identification of training needs, the gap between

the existing level of knowledge, skills, performance and aptitudes of

employees and the required levels of the knowledge, skills

performance and aptitude should be clearly specified. Training needs

can be identified clearly through the following types of analysis.

a) Organizational Analysis.

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b) Operational or Job Analysis.

c) Manpower Analysis.

a) Organizational Analysis:-

It relates to the determination of the organization’s goals, its resources

and the allocation of the resources as they relate to the organizational

goals. The analysis of the organizational goals establishes the

framework within which t raining needs can be defined more clearly.

The purpose of the organizational analysis is to determine where

training emphasis should be placed within the organization.

b) Operational or Job Analysis:

It focuses on the task or job regardless of the employee doing the job.

This type of analysis includes the determination with which the worker

must perform the job and the specific worker behavior required in

order to perform the job effectively. The jobs are also analyzed in

order to identify job contents, the knowledge, skills and aptitudes

required and the work behavior.

c) Person or Manpower Analysis:

It reviews the knowledge, attitudes and skill s of the workers in each

position and determines what knowledge, attitude he must acquire and

what adjustment s in hi s behavior he must introduce if he is to

contribute substantially to the attainment of organizational objectives.

Training can be effective if the three types of analysis are carried on

continuously. In addition the conclusion from this analysis should be

integrated in a properly designed and executed training program.

2. Establishment of Training Goals:-

After deciding the training needs, the logical steps in the training

process are to set training and development objectives in concrete

terms. In fact, without clearly set objectives/goals, it is not possible to

design a well planed training program which is to be executed and also

evaluated for judging its effectiveness. Training objectives decided

should be tangible, verifiable and measurable. Some objectives are

tangible while some others are difficult to state. The overall training

objective is to fill in the gap between the existing and the desired pool

of knowledge, skills and aptitudes. Defining training objectives in

quantitative and qualitative terms is useful for designing, executing

and al so for evaluation of the training program.

3. Designing Training Program:-

After finalizing the objectives of training, the next step in the training

program is designing a t raining program which acts as a base of actual

training to employees. For achieving training objectives, an

appropriate training policy is absolutely essential. This policy

represents the commitment of top management to employee training

and development. Training policy involves rules and procedures

relating to training activity. Every training and development program

must address certain vital issues- who participate in program? Who are

the trainers? What methods of techniques are to be used for training?

What should be the level of training? What learning principles are

needed? And where is the program conducted?

Who are the trainees?

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Trainees should be selected on the basis of self nomination,

recommendations of supervisors or by the HR department itself.

Whatever the base, it is advisable to have two or more target

audiences. Bringing several target audience together can also facilitate

group processes such as problem solving and decision making,

elements useful in quality circle projects.

Who are the trainers?

Training and development program can be conducted by several

people, including the following:

i . Immediate supervisors.

i i . Co – workers as in buddy systems.

i i i . Members of the personnel staff.

iv. Special is t in other parts of the company.

v. Outside consultants .

v i . Industry associations

vi i . Faculty member s at universities.

4. Implementation of training Program:-

After designing training program, the same is to be implemented as per

the detail s decided. This means actual imparting t raining to trainees

who may be workers, supervisors or executives. Program

implementation involves concrete action on the following points.

a) Organizing training and other facilities and deciding the location of

training where training activity is to be arranged.

b) Arranging the schedule of training program which will make

training effecting and also offer convenience to participants and

trainers.

c) Conducting training program as per the designed prepared.

d) Monitoring the process of the training program as well as the

progress of trainees. In the execution of training program, time factor

is one more difficulty. Training for executives needs to be arranged

without disturbing their busy schedule. It is also not possible to keep

them away from the regular work during the training period.

5. Evaluation of Training Program:-

Since the huge amounts of money are spent on training and

development, how far the program has been useful must be judged or

determined. Evaluation helps in determine the results of the training

and development program

Need for Evaluation: - The need for evaluation of t raining program

is to determine if they are accomplishing specific training objectives to

ensure trainee capabilities, determine their cost effectiveness. Finally,

credibility of training and development is greatly enhanced when it is

proved that organization has benefited tangibly from it.

METHODS OR TECHNIQUES OF TRAINING.

I. On the job training:

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This type of training is also known as job instruction training, is the

most commonly used method. Under this method the individual is

placed on a regular job and certain skills are taught that are necessary

to perform that job. The trainee learns under the supervision and

guidance of a qualified worker or instructor. On the job training has

the advantage of giving firsthand knowledge and experience under the

actual working conditions. On the job training method include job

rotation, coaching, job instruction or training through step-by-step and

committee assignments.

1) Job rotation: Job rotation involves movement of trainee from one

job to another. The trainee receives job knowledge and gains

experience from the supervisors or trainers in each of different job

assignment. This method gives on opportunity to the trainee to

understand the problems of employees on other jobs and respect them.

2) Coaching: In coaching superior plays an active role in training the

subordinate by assigning him challenging tasks. The superior acts as a

coach in training the subordinate by assisting and advising him to

complete the assigned task.

3) Job instruction: This method is known as training through step by

step. Under “trainer explains trainee the way of doing job, job

knowledge and skills and allows him to do the job. The trainer

appraises the performance of the trainee, provides feedback

information and corrects the trainee. The process or the steps under job

instruction method areas follows

4) Committee assignment: Under committee assignment group of

trainees are given and asked to solve an actual organizational

problems. The trainee solves the problem jointly. It develops

teamwork.

5) Mentoring

A mentor can tutor others in their learning. Mentors help employees

solve problems both through training them in skills and through

modeling effective attitudes and behaviors. This system is sometimes

known as a buddy system.

Advantages of on the job training

Generally more cost effective

Less disruptive to the business - i.e. employees are not away

from work

Training an employee in their own working environment, with

equipment they are familiar with and people they know can

help they gain direct experience to a standard approved by the

employer

Employees may find that they have more confidence if they are

supervised and guided as they feel they are doing the job right

Employees may feel more at ease being taught or supervised by

people they know rather than complete strangers at an external

training course

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Managers or supervisors can assess improvement and progress

over a period of time and this makes it easier to identify a

problem intervene and resolve problems quickly

On the job training is also productive, as the employee is still

working as they are learning

As training progresses and the employee begins to feel more

confident, this confidence would allow them to work at a

higher standard and ultimately be more productive

Training "on-the-job" provides an opportunity to get to know

staff they might not normally talk to others.

Disadvantages of on the job training

Teaching or coaching is a specialist skill in itself; unless the

trainer has the skills and knowledge to train, this would mean

that the training will not be done to a sufficient standard

The trainer may not be given the time to spend with the

employee to teach them properly, which would mean

substandard training has been achieved and learning has only

been half done.

The trainer may possess bad habits and pass these on to the

trainee

II. Off the job training:

Under this method of training, trainee is separated from the job

situation and his attention is focused upon learning the material related

to his future job performance. Since the trainee is not distracted by the

job requirements, he can place his entire concentration on learning the

job rather than spending his time in performing it. Off – field job

training methods are as follows:

1) Lectures: It is common method to impart facts, concepts, principles

etc., to a large group at one time. The main advantage of lectures is

that it can be used for a very large group at one time and there is low

cost per trainee.

Pros or merits:

Less time is needed for the trainer to prepare than other

methods.

It provides a lot of information quickly when it is less

important that the trainees retain a lot of details.

Cons or demerits:

Does not actively involve trainees in training process.

The trainees forget much information if it is presented onlyorally.

2) Discussion: Combining lectures with discussion eliminate the

limitation of one-way communication. In this method the trainees

interact with the lecturer and any doubts or misunderstanding of the

concept and principles are cleared.

3) Seminar

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Seminars often combine several group methods: lectures, discussions,

conferences, demonstrations.

Pros:

Group members are involved in the training.

The trainer can use many group methods as part of the seminar

activity.

Cons:

Planning is time-consuming.

The trainer must have skill in conducting a seminar.

More time is needed to conduct a seminar than is needed for

many other methods

4) Case study:

In this technique, an actual or hypothetical problem is presented to a

training group for discussion and solution. It is important to note that

the problem presented incases usually do not have a single solution,

but narrow mindedness of trainees is reduced as problem-solving

ability is increased.

Pros:

A case study can present a real-life situation which lets traineesconsider what they would do.

It can present a wide variety of skills in which applying

knowledge is important.

Cons:

Cases can be difficult to write and time-consuming to discuss.

The trainer must be creative and very skilled at leading

discussions, making points, and keeping trainees on track.

5) Vestibule training:

In this method, actual work conditions are simulated in the classroom.

Material, files and equipments those are used in actual job

performance are also used in training. This type of training is

commonly used for training personnel for clerical and semi-skilled

jobs. The duration of this training ranges from days to a few weeks.

6) Committee conference:

Committees can be a method of training. The junior members of the

committee can learn from the discussion and interaction with the

senior member of the committee. The senior member can also learn

from the opinions and views expressed by the junior members.

Committees can serve the purpose of developing good social relations.

In the case of conference, group discussions and the meetings are held

to discuss various issues and to provide solutions to various problems.

The chairperson leads the discussion and then the participants attempt

to provide solutions. The conferences act as a group interaction and

exchange of views and idea. It reshapes thinking and attitudes of the

participants.

The conference training method is a good problem-solving approach.

A group considers a specific problem or issue and they work to reach

agreement on statements or solutions.

Pros:

There is a lot of trainee participation.

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The trainees build consensus and the trainer can use several

methods (lecture, panel, seminar) to keep sessions interesting.

Cons:

It can be difficult to control a group. Opinions generated at the

conference may differ from the manager¡¦s ideas, causing

conflict.

7) Reading, television and video instructions:

Planned reading of relevant and current management literature is one

of the best methods of management development. It is essentially a

self development program. A manager may be aided by training

department, which often provide a list of valuable books. Also there

are television program that are features towards management

development. Videotapes are also available whereby important

managerial discussions, debates and talks can be viewed and listened.

8) Role playing:

It is defined as a method of human interaction that involves realistic

behavior in imaginary situations. This method of training involves

actions, doing and practice. The participants play the role of certain

characters, such as production manager, mechanical engineer,

superintendents, maintenance engineers, quality control inspectors,

foreman, workers and the like. This method is mostly used for

developing interpersonal interactions and relations.

Pros:

Trainees can learn possible results of certain behaviors in a

classroom situation.

They get an opportunity to practice people skills.

It is possible to experiment with many different approaches to a

situation without alienating any actual customers.

Cons:

A lot of time is spent making a single point.

Trainers must be skilled and creative in helping the class learn

from the situation.

In some role play situations, only a few people get to practice

while others watch.

9) Simulations

Trainees participate in a reality-based, interactive activity where they

imitate actions required on the job. It is a useful technique for skills

development.

Pros:

Training becomes more reality-based, as trainees are actively

involved in the learning process. It directly applies to jobs performed after training.

Simulations involve yet another learning style, increasing the

chance that trainees will retain what they have learned.

Cons:

Simulations are time-consuming.

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The trainer must be very skilled and make sure that trainees

practice the skills correctly. Only perfect practice makes

perfect.

Advantages of off-the-job training:

Use of specialist trainers and accommodation

Employee can focus on the training - and not be distracted by

work

Opportunity to mix with employees from other businesses

Disadvantages of off-the-job training:

Employee needs to be motivated to learn

May not be directly relevant to the employee's job

Costs (transport, course fees, examination fees, materials,

accommodation)

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UNIT – III

TOPIC – III

CAREER DEVELOPMENT

Synopsis

Meaning of career development

Process of career development

MEANING OF CAREER DEVELOPMENT

Career development is an organized approach used to match employee

goals with the business needs of the agency in support of workforce

development initiatives.

Managers are responsible for linking the organization’s needs to

employee career goals, and can assist employees in the career planning

process. Human Resource manager is responsible for designing career

paths and employee development programs that help employees reach

their goals. Each employee is responsible for planning and managing

his/her career.

Career development involves managing your career either within or

between organizations. It also includes learning new skills, and

making improvements to help you in your career. Career development

is an ongoing, lifelong process to help you learn and achieve more in

your career. Career planning is a lifelong process, which includes

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choosing an occupation, getting a job, growing in our job, possibly

changing careers, and eventually retiring.

THE PURPOSE OF CAREER DEVELOPMENT

Enhance each employee’s current job performance.

Enable individuals to take advantage of future job

opportunities.

Fulfill agencies’ goals for a dynamic and effective workforce.

PROCESS OF CAREER DEVELOPMENT

Career development and the career planning process include a number

of specific steps that help to identify personal skills and attributes.

Step -1: Self-Assessment

Evaluating a person. This involves taking a personal inventory of who

you are and identifying your individual values, interests, skills, and

personal qualities. What makes you tick as a person? You will look at

those personal attributes under a microscope and come up with key

qualities you can identify and use in your search for the perfect career.Career assessments may be required to promote a better understanding

of personal attributes and skills.

Step – 2: Research (Career Exploration)

Obtain an insider’s perspective about the career field you are

considering. Conduct Informational Interviews in person, phone, or by

email. Professionals enjoy sharing their expertise with people

interested in the field. Perform informational interviews with alumni

from your college to gain their perspective of the field and to listen to

what they have to say. This strategy provides firsthand knowledge

from someone currently working in the field and gives you an

opportunity to ask about their experiences as well as potential jobs and

what one might expect if just entering the field. Research what types

of jobs are available in your area of interest by checking out Majors to

Career Converter, The Occupational Outlook

Step - 3: Decision-Making

Once you’ve made a thorough self -assessment and have done some

research of career options, it’s time to make a decision. This can be

difficult since there may still be many unknowns and a fear of making

the wrong choice. One thing for sure is that although we can do all the

necessary steps to making an informed decision, there is no absolute

certainty that we are unquestioningly making the right decision. This

uncertainty is easier for some people than others but a key point to

remember is that you can always learn from any job you have and take

those skills and apply them at your next job.

Step - 4: Search (Taking Action)

It’s now time to look for prospective jobs and/or employers, send out

cover letters and resumes, and begin networking with people in the

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field. Keep in mind that cover letters and resumes are designed to

make a favorable impression on employers (if done properly) and the

interview process is what will ultimately land you the job. In other

words, make sure your cover letter and resume highlight your skills

and strengths based on the employer’s needs and that you are fully

prepared to knock their socks off at the interview. Take time to

research the employer’s website prior to the interview, and be prepared

to ask thoughtful questions based on your research.

Step - 5: Acceptance

Wow! You’ve completed all of the steps above and you’ve been

accepted into a new and exciting or different job. Congratulations!

According to the Bureau of Labor Statistics, 64.1% of people change

jobs between 5 and 14 times in their lifetime. Consequently, learning

the skills above will increase your chances of gaining meaningful and

satisfactory work as well as help you to avoid many of the stresses that

occur with changing jobs. By recognizing that change is good (even

advantageous), changing jobs can be viewed as a positive experience

and need not be as anxiety provoking as it may initially seem. You will

continue the process of self-assessment, research, decision-making,

and job searching in order to make effective and fulfilling career

changes throughout your lifetime. This focused approach works to

their advantage from their everyday work to long-term aspirations.

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UNIT – III

TOPIC – IV

PERFORMANCE APPRAISAL

Synopsis

Meaning of Performance appraisal

Importance of performance appraisal

Process or steps involved in performance appraisal

Techniques or methods of performance appraisal

INTRODUCTION

In the organization context performance appraisal is an evaluation of

personnel in a systematic way by superiors or others familiar with their

performance. It is also described as merit rating in which one

individual is ranked as better or worse in comparison to others. The

basic purpose in this merit rating is to determine an employee’s

eligibility for promotion. However, performance appraisal is a broad

term and it may be used to ascertain the need for training and

development, salary increase, transfer, discharge, etc. besides promotion.

MEANING AND DEFINITION OF PERFORMANCE

APPRAISAL

It is the systematic assessment of an individual with respect to his or

her performance on the job and his or her potential for development in

that job.

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According to Flippo, a prominent personality in the field of Human

resources, “performance appraisal is the systematic, periodic and an

impartial rating of an employee’s excellence in the matters pertaining

to his present job and his potential for a better job.”

According to International Labor Organization, “A regular and

continuous evaluation of the quality, quantity and style of the

performance along with the assessment of the factors influencing the

performance and behavior of an individual is called as performance

appraisal.

NEED AND IMPORTANCE OF PERFORMANCE APPRAISAL

Performance is always measured in terms of outcome and not efforts.

Performance Appraisal is needed in most of the organizations in order:

To give information about the performance of employees on

the job and give ranks on the basis of which decisions

regarding salary fixation, demotion, promotion, transfer and

confirmation are taken.

To provide information about amount of achievement and

behavior of subordinate in their job. This kind of information

helps to evaluate the performance of the subordinate, by

correcting loopholes in performances and to set new standards

of work, if required.

To provide information about an employee’s job-relevant

strengths and & weaknesses.

To provide information so as to identify shortage in employee

regarding ability, awareness and find out training and

developmental needs.

To avoid grievances and in disciplinary activities in the

organization.

It is an ongoing process in every large scale organization.

PERFORMANCE APPRAISAL PROCESS

Performance appraisal can be undertaken either on informal basis or

on formal and systematic basis. In comparatively smaller organizations

appraisal either based on traits or performance or a combination of

both, is done informally through the observation of concerned

employees. In larger organization, appraisals are more systematic as

evaluation reveals lot of useful information

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1. Defining objectives

The first step in the systematic appraisal system is to define the

objectives of the appraisal itself. Appraisal is used for different

purposes from motivating the appraise to controlling their behaviour.

In each case, the emphasis on different aspects of appraisal differs. For

example, reward providing appraisal, such as salary revision or

promotion differs from appraisal for training and development.

2. Defining appraisal norms

Appraisal is done in the context of certain norms or standards. These

may be in the form of various traits of theapprises or their expected

work performance results. Since one of the basic long-term objectives

is to improve performance, appraisal is more performance oriented.

Hence performance norms are to be specified in the beginnings of the

period for which appraisal is concerned.

3. Designing appraisal programme

In the design for appraisal programme, types of personnel to act as

appraisers, appraisal methodology and types of appraisal are all to be

decided. Ideally speaking all personnel of the organization should be

covered by the appraisal system. But generally various organizations

keep lower level employees out of the purview of formal appraisal.

Generally, the superior concerned appraises his subordinates.

However, the present trend in appraisal suggests the concept of 360

degree appraisal, which involves appraisal by the apprises himself

known as self appraisal. The next issue is the methodology to be used

in appraisal system. Should it be through structured forms and

questionnaire or personal interview of the appraises or a combination

of both is to be decided. Along with this the time period and tuning of

the appraisal should be decided.

4. Implementation

In implementing appraisal programme, the appraisal is conducted by

the appraisers and they may also conduct interview if it is provided in

the appraisal system. The results of the appraisal are communicated to

HR department for follow up actions which should be oriented towards

the objectives of the appraisal.

5. Appraisal feedback

Appraisal feedback is the most crucial stage in appraisal process. If

they are rated high or performance highly applauded, naturally they

are happy and feel their self – esteem is high. On the other if they are

rated low they resent, cry and may even be ill tempered. But the fact is

fact. Even in such cases, their plus points should be listed out. Their

weaknesses may be put clearly through counselors and advised.

6. Post – Appraisal action

Rewards, promotions, training and patting on the back follows in the

post – appraisal action. Linking performance appraisal with reward.

METHODS OF PERFORMANCE APPRAISAL

Performance appraisal methods are categorized in two ways traditional

and modern methods. Each organization adopts a different method of

performance appraisal according to the need of organization. In small

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organization, it may be on an informal basis where personal opinion of

a superior about his subordinates may consider for appraisal

I. Traditional Methods

a) Ranking method

b) Paired comparison

c) Grading

d) Forced distribution method

e) Forced choice method

f) Checklist method

g) Critical incidents methods

h) Graphic scale method

i) Essay method

j) Field Review Method

a) Ranking Method

Ranking is the oldest and simple method of appraisal in which a

person is ranked against others on the basis of certain traits or

characteristics. This is very simple method when the number of

persons to be ranked is small because ranking has to be given on the

basis of traits which are not easily determinable, unlike marks in an

examination. The method has limited value for performance appraisal

as the difference in ranks do not indicate absolute or equal differences

of ability between individuals.

b) Paired comparison

Paired comparison method is a slight variation of ranking system. This

method is adopted for use in the large groups. In this method, each

person is compared with other persons taking only one at a time.

Usually only trait, overall suitability to perform the job, is considered.

The rater puts a tick mark against the person whom he considered the

better of the two, and final ranking is determined by the number of

times that person is judged better than others.

c) Grading

This is a method where certain categories of abilities of performance

are defined well in advance. Persons are put in particular category

depending on their traits and characteristics. The categories may be

outstanding, good, average, poor, very poor or may be in terms of

letter like A,B,C,D etc., with A indicating the best and D indicating the

worst. The actual performance of the employees is measured against

these grades. This method is generally useful for promotion based on

performance.

d) Forced Distribution Method

As there is a tendency to rank high many of the employees, forced

distribution method has been adopted. In this method, the appraiser is

forced to appraise the appraisers according to the pattern of a normal

curve. For example 10 percent of employees may be rated as excellent,

20 per cent as above average, 40 per cent as average 20 per cent below

average and 10 per cent as poor. The basic advantage of this method is

that it overcomes the problem of adopting a central tendency of rating

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most of the employees to a point, particularly high or near high to

appeaser them.

e) Forced – Choice Method

The forced – choice rating method contains a series of group

statements and the rater checks how effectively the statement describes

each individual under evaluation. Though both of them describe the

characteristics of an employee, the rater is forced to tick only one

which appears to be more descriptive of the employee. Out of these

two statements, only one statement is considered for final analysis of

rating.

f) Check – List Method

Under this method HR department prepares series of questions. Each

question has alternative answers ‘Yes’ or ‘No’. The rater concerned

has to tick appropriate answers relevant to the appraises. Some of the

same questions are:

Is he / she interested in the job Yes/No

Is he / she regular on the job Yes / No

Does he / she show uniform behaviour to all Yes /No

Fifty to hundred questions may be asked. Different questions may

have different weightage of scores. After filling the questionnaire by

the rater who observes the employees will be sent to HR department,

which will compute total score and evaluate.

g) Critical Incidence Method

In this method, only critical incidents and behaviour associated with

these incidents are taken for evaluation. This method involves three

steps. A test of noteworthy on the job behaviour (good or bad) is

prepared. A group of experts then assigns scale values depending on

the degree of desirability for the job. Finally, a check list of incidents

which define good and bad employees is prepared. The rater is given

this checklist for rating. The basic idea behind this rating is to apprise

the people who can do well in critical situations because in normal

situation most employees work alike. This method is useful to find

potential employees who can be useful in critical situation.

h) Graphic Scale Method

Graphic scale is also known as linear rating scale. This is most

commonly used method of performance appraisal. In this method, a

printed appraisal form is used for each appraises. The form contains

various employee characteristics and his job performance. Various

characteristics are, leadership, dependability, cooperativeness,

enthusiasm, creativity, analytical ability, decisiveness, emotional

maturity etc., depending on the level of the employee. Job

performance includes quantity and quality of work performance,

specific targets achieved, regularity of attendance etc. The degree of

quality may be measured on three point or five point scale. On five

point scale, ‘excellent, very good, average, poor or very poor’ may be

grading.

i) Essay Method

In this method, the rater writes a detailed description on an employee’s

characteristics and behavior, Knowledge about organizational policies,

procedures and rules, Knowledge about the job, Training and

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development needs of the employee, strengths, weakness, past

performance, potential and suggestions for improvement. It is said to

be the encouraging and simple method to use. It does not need

difficult formats and specific training to complete it.

J. Field Review Method

In the field review method, an employee is not appraised by his direct

superior but by another person, usually from HR department. The

reason is that such a person may take more objective view in appraisal

as he is not under pressure as the superior of the employee may be.

The rater, in this case, appraises the employee based on his records of

output and other quantitative information such as absenteeism, late

coming etc. the rater also conducts interviews of the employees and his

superior to ascertain qualitative aspects of job performance. This

method is more suitable for promotion purpose.

II. Modern Methods

a) Management by objectives (MBO)

b) Behaviourally anchord rating scales (BARS)

c) Assessment centres

d) 360-degree appraisal

e) cost Accounting method

a) Management by Objectives (MBO):

The concept of ‘Management by Objectives’ (MBO) was coined by

Peter Drucker in 1954. It is a process where the employees and the

superiors come together to identify some goals which are common to

them, the employees set their own goals to be achieved, the benchmark

is taken as the criteria for measuring their performances and their

involvement is there in deciding the course of action to be followed.

The basic nature of MBO is participative, setting their goals, selecting

a course of actions to achieve goals and then taking decision. The most

important aspect of MBO is measuring the actual performances of the

employee with the standards set by them. It is also said to be a process

that integrates organizational objectives into individual objectives.

Entire programme of MBO is divided in four major steps

Setting up of goal,

Action planning,

Comparison and

Timely review

Setting up of goal: In goal setting superior and subordinate together

set certain goals, i.e the expected outcome that each employee is

supposed to achieve.

Action planning: the manner in which goals could be achieved is

determined i.e. identifying the activities which are necessary to

perform; to achieve pr determined goals or standards. When the

employees start with their activities, they come to know what is to be

done, what has been done, and what remains to be done and it also

gives an idea about the resources to be achieved.

Comparison: The goals set by the individual employee are compared

with the actual goals achieved. It gives an idea to the evaluator as why

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there is a variation in desired outcome and actual outcome .Such a

comparison helps create need for training so as to enhance employees’

performance.

Timely review: corrective actions are taken so that actual

performances do not deviate from standards established in beginning.

The main reason for conducting reviews is not to humiliate the

performer but to assist him in better performances in future.

b) Behaviorally Anchored Rating Scales:

This method is a combination of traditional rating scales and critical

incidents methods. It consists of preset critical areas of job

performance or sets of behavioral statements which describes the

important job performance qualities as good or bad (for e.g. the

qualities like inter personal relationships, flexibility and consistency,

job knowledge etc). These statements are developed from critical

incidents.

These behavioral examples are then again translated into appropriate

performance dimensions. Those that are selected into the dimension

are retained. The final groups of behavior incidents are then scaled

numerically to a level of performance that is perceived to represent. A

rater must indicate which behavior on each scale best describes an

employee’s performance. The results of the above processes are

behavioral descriptions, such as anticipate, plan, executes, solves

immediate problems, carries out orders, and handles urgent situation

situations.

c) Assessment Centres: It is a method which was first implemented in

German Army in 1930. With the passage of time industrial houses and

business started using this method. This is a system of assessment

where individual employee is assessed by many experts by using

different technique of performance appraisal. The techniques which

may be used are role playing, case studies, simulation exercises,

transactional analysis etc.

In this method employees from different departments are brought

together for an assignment which they are supposed to perform in a

group, as if they are working for a higher post or promoted. Each

employee is ranked by the observer on the basis of merit .The basic

purpose behind assessment is to recognize whether a particular

employee can be promoted, or is there any need for training or

development. This method has certain advantages such as it helps the

observer in making correct decision in terms of which employee has

the capability of getting promoted, but it has certain disadvantages also

it is costly and time consuming, discourages the poor performers etc.

d) 360 Degree Performance Appraisals:

This method is also known as ‘multi-rater feedback’, it is the appraisal

in a wider perspective where the comment about the employees’

performance comes from all the possible sources that are directly or

indirectly related with the employee on his job.

In 360 degree performance appraisal an employee can be appraised by

his peers, managers (i.e. superior), subordinates, team members,

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customers, suppliers/ vendors - anyone who comes into direct or

indirect contact with the employee and can provide necessary

information or feedback regarding performance of the employee the

“on-the- job”.

The four major component of 360 degree performance appraisal are

Employees Self Appraisal

Appraisal by Superior

Appraisal by Subordinate

Peer Appraisal.

Employee self appraisal gives an option to the employee to know his

own strengths and weaknesses, his achievements, and judge his own

performance. Appraisal by superior forms the traditional part of the

360 degree performance appraisal where the employees’

responsibilities and actual performance is judged by the superior.

Appraisal by subordinate gives a chance to evaluate the employee on

the basis of communication and motivating abilities, superior’s ability

to delegate the work, leadership qualities etc. It is also known as

internal customers; the correct opinion given by peers can aid to find

employees’ who are co-operative, employees who ready to work in a

team and understanding towards others.

e) Cost Accounting Method:

In this method performance of an employee is evaluated on the basis

of monetary returns the employee gives to his or her organization. A

relationship is recognized between the cost included in keeping the

employee in an organization and the benefit the organization gets from

him or her. The evaluation is based on the established relationship

between the cost and the benefit. The following factors are considered

while evaluating an employee’s performance:

Interpersonal relationship with others.

Quality of product produced or service given to theorganization.

Wastage, damage, accidents caused by the employee.

Average value of production or service by an employee.

Overhead cost incurred.

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UNIT - III

TOPIC – 4

LEADERSHIP

Synopsis

Meaning of leadership

Difference between leader and manager

Nature or characteristics of leadership

Leadership skill

Functions of Leader

Types of Leader

MEANING OF LEADERSHIP

Leadership is a process of influence on a group. Leadership is the

ability of a manager to induce subordinates to work with confidence

and zeal. Peter F Drucker considers "leadership" as a human

characteristic which lifts a man's vision to higher sights, raises a man's

performance to higher standards and builds man's personality beyond

its normal limitations

According to Louis A Allen - "A leader is one who guides and directs

other people. He gives the efforts to his followers a direction and

purpose by influencing their behaviour".

DIFFERENCE BETWEEN LEADERSHIP AND

MANAGEMENT

Leadership is different from management. The main differences

between these two terms are:-

A manager is required to plan, organize, direct and control. But

a leader is one who gets others to follow him.

A manager depends on his authority. But a leader depends on

his confidence and goodwill. He inspires enthusiasm.

Management is concerned with the formulation of broad

policies to guide the operations of an enterprise. But leadership

is concerned with the initiation of action for the

accomplishment of the goals.

An individual is a leader in the true sense if he is accepted as a

leader by the group. A manager is appointed and he derives his

authority by virtue of his office.

Management is associated with the organized structure. But

leadership may be associated with unorganised groups.

NATURE OR CHARACTERISTIC FEATURES OFLEADERSHIP

1. Leadership implies the existence of followers: We appraise the

qualities of leadership by studying his followers. In an organization

leaders are also followers. for e.g.:- Supervisor works under a branch

head. Thus, in a formal organization a leader has to be able to be both

l d ll f ll d b bl l hi b h d b di I i h h i A d h j d h h i b h h

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a leader as well as a follower, and be able to relate him both upward

and downward.

2. Leadership involves a community of interest between the leader

and his followers: In other words, the objectives of both the leader

and his men are one and the same. If the leader strives for one purpose

and his team of workers works for some other purpose, it is no

leadership.

3. Leadership involves an unequal distribution of authority among

leaders and group members: Leaders can direct some of the

activities of group members, i.e., the group members are compelled or

are willing to obey most of the leader's directions. The group members

cannot similarly direct the leader's activities, though they will

obviously affect those activities in a number of ways.

4. Leadership is a process of Influence: Leadership implies that

leaders can influence their followers or subordinates in addition to

being able to give their followers or subordinates legitimate directions.

5. Leadership is the function of stimulation: Leadership is the

function of motivating people to strive willingly to attain

organizational objectives. A successful leader allows his subordinates

(followers) to have their individual goals set up by themselves in such

a way that they do not conflict with the organizational objectives.

6. A leader must be exemplary: In the words of George Terry - "A

Leader shows the way by his own example. He is not a pusher, he

pulls rather than pushes". According to L.G. Urwick - "it does not

what a leader says, still less what he writes, that influences

subordinates. It is what he is. And they judge what he is by what he

does and how he behaves". From the above explanation it is clear that

a leader must set an ideal before his followers. He must stimulate his

followers for hard and sincere work by his personal behaviour. In other

words a leader must set an exemplary standard before his followers.

7. A Leader ensures absolute justice: A leader must be objective and

impartial. He should not follow unfair practices like favouritism and

nepotism. He must show fair play and absolute justice in all his

decisions and actions.

LEADERSHIP SKILL

The leader is expected to play many roles and therefore, must

be qualified to guide others to organizational achievement. Although

no set of absolute traits or skills may be identified, the individuals who

possess abilities to lead others must have certain attributes to help

them in performing their leadership roles. In a broad way the skills

which are necessary for an industrial leader may be summarized under

four heads:-

(a) Human skill

(b) Conceptual skill

(c) Technical skill and

(d) Personal skill.

A) Human Skill

A good leader is considerate towards his followers because his success

largely depends on the co-operation of his followers. He approaches

various problems in terms of people involved more than in terms of

t h i l t i l d A l d h ld h d t di f Th t i t t t k f th l d i t t th b t f th

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technical aspects involved. A leader should have an understanding of

human behaviour. He should know people; know their needs,

sentiments, emotions, as also their actions and reactions to particular

decisions, their motivations etc. Thus, a successful leader possesses the

human relations attitude. He always tries to develop social

understanding with other people.

B) Conceptual Skill

In the words of Chester Barnard -"the essential aspect of the executive

process is the sensing of the organization as a whole and the total

situation relevant to it". Conceptual skills include -

(a) The understanding of the organization behaviour,

(b) Understanding the competitors of the firm, and

(c) Knowing the financial status of the firm.

A leader should have the ability to look at the enterprise as a whole, to

recognize that the various functions of an organization depend upon

one another and are interrelated, that changes in one affect all others.

The leader should have skill to run the firm in such a way that overall

performance of the firm in the long run will be sound.

C) Technical Skill

A leader should have a thorough knowledge of, and competence in, the

principles, procedures and operations of a job. Technical skill involves

specialized knowledge, analytical skill and a facility in the use of the

tools and techniques of a specific discipline. Technical competence is

an essential quality of leadership.

D) Personal Skill

The most important task of the leader is to get the best from others.

This is possible only if he possesses certain qualities. These personal

skills include:- Intelligence, Emotional Maturity, Personal

Motivation, Integrity and Flexibility of Mind.

FUNCTIONS OF A LEADER

According to Peter Drucker - "An effective leader is one who can

make ordinary men do extraordinary things, make common people do

uncommon things. Leadership is a lifting of a man's sights to a higher

vision, the raising of man's standard to a higher performance, the

building of a man's personality beyond its normal limitations." This

view point of Peter Drucker stresses the leaders' obligation to attain

organizational goals and gives attention to the needs of the individuals

who are his subordinates. The important functions of a business leader

may be briefly summarized as follows:-

1. To take the initiative: A leader initiates all the measures that are

necessary for the purpose of ensuring the health and progress of the

undertaking in a competitive economy. He should not expect others to

guide or direct him. He should lay down the aims and objectives,

commence their implementation and see that the goals are achieved

according the predetermined targets.

2. He identifies group goals: A leader must always help the group

identify and attain their goals. Thus, a leader is a goal setter.

3. He represents the organization: A leader represents the

organization and its purpose, ideals, philosophy and problems to those

ki f it d t th t id ld I th d l d i t 2 P ti i ti d ti l d hi

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working for it and to the outside world .In other words, leaders is true

representative of the entire organization.

4. He acts as a arbitrator: When groups experience internal

difference, whether based on emotional or intellectual clashes, a leader

can often resolve the differences. He acts as an arbitrator to prevent

serious group difference.

5. To assign reasons for his action: It is a delicate task of leaders to

assigns reason to his every command. He has to instruct things in such

a way that they are intelligible to all concerned and their co-operation

is readily forthcoming.

6. To interpret: He interprets the objectives of the organization and

the means to be followed to achieve them; he appraises his followers,

convinces them, and creates confidence among them.

7. To guide and direct: It is the primary function of the leader to

guide and direct the organization. He should issue the necessary

instructions and see that they are properly communicated.

8. To encourage team work: A leader must try to win the confidence

of his subordinates. He must act like the capital of a team.

9. He manages the organization: Last, but not the least, he

administers the undertaking by arranging for the forecast, planning,

organization, direction, coordination and control of its activities.

TYPE OF LEADERS

The different types of leadership styles are:-

1. Autocratic or task Management Leadership,

2. Participative or democratic leadership,

3. Laissez faire or Free-rein Leadership, and

4. Paternalistic Leadership.

1. Autocratic or Task Management Leadership

The autocratic Leader gives order which he insists shall be obeyed. He

determines polices for the group without consulting them, and does not

give detailed information about future plans, but simply tells the group

what steps must they take. In other words, an autocratic leader is one

who centralizes the authority in himself and does not delegate

authority to his subordinates. He is dictatorial by nature, and has no

regard for the subordinates. He drives himself and his subordinates

with one thought uppermost in his mind- action must produce results.

Types of autocratic leadership

Strict autocratic leaders: A strict autocratic relies on negative influence

and gives orders which the subordinates must accept. He may also use

his power to disperse rewards to his group.

Benevolent Autocrat: The benevolent is effected in getting high

productivity in many situations and he can develop effective human

relationship. His motivational style is usually positive.

Manipulative Autocrat: A manipulative autocratic leader is one who

makes the subordinates feel that they are participating in decision

making process even though he has already taken the decision.

2 Participative or Democratic Leadership 4 Paternalistic Leadership

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2. Participative or Democratic Leadership

A democratic leader is one who consults and invites his subordinates

to participate in the decision making process. He gives orders only

after consulting the group; sees to it that polices are worked out in

group decisions and with the acceptance of group. The manager

largely avoids the use of power to get a job done. He behaves that a

desired organizational behaviour can be obtained if employees' needs

and wants are satisfied. Therefore, he not only issues orders but

interprets them and sees to it that the employees have the necessary

skill and tool to carry out their assignments. He assigns a fair work

lead to his personal and recognizes the job that is well done; there is a

team approach to the attainment of organizational goals. He recognizes

human value for greater concern for his subordinates.

3. Laissez Faire or Free-rein Leadership

A free-rein leader does not lead, but leaves the group entirely to itself.

The leader avoids using power and interest the decision making

authority to his subordinates. He does not direct his subordinates and

there is complete freedom for the subordinates. Group of members

work themselves and provide their own motivation. The manager exits

as a contact man with outsiders to bring for his group the information

and resources it needs to accomplish its job.

4 Paternalistic Leadership

Under this type of leadership, the leader assumes that his function is

fatherly. His attitude is that of treating the relationship between the

leader and his groups that of family with the leader as the head of the

family. The leader works to help to work to help, guide, protect and

keep his followers happily working together as members of a family.

He provides them with good working condition, fringe benefits and

employee services. It is said that employees under such leadership well

work harder out of gratitude.

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UNIT – III

TOPIC – 5

CULTURE

Synopsis

Meaning and definition of Organisational culture

Characteristics of Organisational Culture

Characteristics of Organisational culture

Dimensions of Organisational culture

MEANING OF CULTURE

The organizational culture is a system of shared beliefs and attitudes

that develop within an organization and guides the behaviour of its

members. There are clear-cut guidelines as to how employees are to

behave generally within organization The employees need to learn 5 Rules There are strict guidelines related to getting along in the

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behave generally within organization. The employees need to learn

how the particular enterprise does things.

DEFINITION OF CULTURE

Edgar Schein defines organizational culture as “a pattern of basic

assumptions – invented, discovered or developed by a given group as

it learns to cope with its problems of external adaptation and internal

integration – that has worked well enough to be considered valuable

and, therefore to be taught to new members as the correct way to

perceive, think and fell in relation to those problems”

ORGANIZATIONAL CULTURE CHARACTERISTICS

1. Observed behavioral regularities. When organizational

participants interact with one another, they use common language,

terminology, and rituals related to deference and demeanor.

2. Norms. Standards of behavior exist, including guidelines on how

much work to do, which in many organizations come down to “Do not

do too much; do not do too little.”

3. Dominant values. There are major values that the organization

advocated and expects the participants to share. Typical examples are

high product quality, low absenteeism, and high efficiency.

4. Philosophy. There are policies that set forth the organization’s

beliefs about how employees and/or customers are to be treated.

5. Rules. There are strict guidelines related to getting along in the

organization. Newcomers must learn those “ropes” in order to be

accepted as full-fledged members of the group.

6. Organizational climate. This is an overall “feeling” that is

conveyed by the physical layout, the way participants interact, and the

way members of the organization conduct themselves with customers

or other outsiders.

DIMENSIONS OF SUCCESSFUL ORGANIZATIONAL

CULTURE

Research conducted by D.R Denison and A.K Mishra, show that

organizational culture is related to organizational success.

Organizational culture is a framework that guides day-to-day

behaviour and decision making for employees and directs their actions

toward completion of organizational goals. Culture is what gives birth

to and defines the organizational goals. Culture must be aligned with

the other parts of organizational actions, such as planning, organizing,

leading, and controlling; indeed, if culture is not aligned with these

tasks, then the organization is in for difficult times.

The figure below shows that culture based on adaptability,

involvement, a clear mission and consistency can help companies

achieve higher sales growth, return on assets, profits, quality and

employee satisfaction.

a) Adaptability: is the ability to notice and respond to changes in the INTRODUCTION

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a) Adaptability: is the ability to notice and respond to changes in the

organization’s environment.

b) Involvement: In cultures that promote higher levels of employment

in decision-making employees feel a greater sense of ownership and

responsibility.

c) Clear Mission: Mission is a company’s purpose or reason for

existing. In organizational cultures in which there is a clear

organizational vision, the organization’s strategic purpose and

direction are apparent to everyone in the company.

d) Consistency: In consistent organizational cultures, the company

actively defines and teaches organizational values, beliefs and

attitudes. Consistent organizational cultures are also called strong

cultures, because the core beliefs and widely shared and strongly held.

******************************************

UNIT – IV

COMPENSATION MANAGEMENT

Synopsis

Introduction

Meaning and Definition of Compensation

Components of compensation

Types of compensation

Factors Influencing compensation

INTRODUCTION

Employees’ compensation is one of the major determinants of

employee satisfaction in an organization. The compensation policy and

the reward system of an organization are viewed by the employee as a

indicators of the management’s attitude and concern for them. It is not

just the compensation in tote, but its fairness as perceived by the

employees that determines the success of a wage and salary

administration system.

DEFINITION

Gary Dessler in his book Human Resource Management defines

compensation in these words “Employee compensation refers to all

forms of pay going to employees and arising from their employment.”

The phrase ‘all forms of pay’ in the definition does not include non -

financial benefits, but all the direct and indirect financial

compensations.

According to Thomas J. Bergmann(1988) compensation consists of

four distinct components: Compensation = Wage or Salary +

Employee benefits +Non-recurring financial rewards+ Non-pecuniary

rewards.

COMPONENTS OF COMPENSATION

1. Basic Wages/Salaries

Basic wages / salaries refer to the cash component of the wage

structure based on which other elements of compensation may be

structured. It is normally a fixed amount which is subject to changes

based on annual increments or subject to periodical pay hikes Wages 4 Bonus

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based on annual increments or subject to periodical pay hikes. Wages

represent hourly rates of pay, and salary refers to the monthly rate of

pay, irrespective of the number of hours put in by the employee.

Wages and salaries are subject to the annual increments. They differ

from employee to employee, and depend upon the nature of job,

seniority, and merit.

2. Dearness Allowance

The payment of dearness allowance facilitates employees and

workers to face the price increase or inflation of prices of goods and

services consumed by him. The onslaught of price increase has a major

bearing on the living conditions of the labour. The increasing prices

reduce the compensation to nothing and the money’s worth is coming

down based on the level of inflation. The payment of dearness

allowance, which may be a fixed percentage on the basic wage,

enables the employees to face the increasing prices.

3. Incentives

Incentives are paid in addition to wages and salaries and are

also called ‘payments by results’. Incentives depend upon productivity,

sales, profit, or cost reduction efforts. There are:

(a) Individual incentive schemes, and

(b) Group incentive programmes.

Individual incentives are applicable to specific employee performance.

Where a given task demands group efforts for completion, incentives

are paid to the group as a whole. The amount is later divided among

group members on an equitable basis.

4. Bonus

The bonus can be paid in different ways. It can be fixed

percentage on the basic wage paid annually or in proportion to the

profitability. The Government also prescribes a minimum statutory

bonus for all employees and workers. There is also a bonus plan which

compensates the managers and employees based on the sales revenueor profit margin achieved. Bonus plans can also be based on piece

wages but depends upon the productivity of labour.

5. Non-Monetary Benefits

These benefits give psychological satisfaction to employees

even when financial benefit is not available. Such benefits are:

(a) Recognition of merit through certificate, etc.

(b) Offering challenging job responsibilities,

(c) Promoting growth prospects,

(d) Comfortable working conditions,

(e) Competent supervision, and

(f) Job sharing and flexi-time.

6. Commissions

Commission to managers and employees may be based on the

sales revenue or profits of the company. It is always a fixed percentage

on the target achieved. For taxation purposes, commission is again a

taxable component of compensation. The payment of commission as a

component of commission is practiced heavily on target based sales.

Depending upon the targets achieved, companies may pay a

commission on a monthly or periodical basis.

7 Mixed Plans health and insurance plans etc Such benefits are computable in terms

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7. Mixed Plans

Companies may also pay employees and others a combination

of pay as well as commissions. This plan is called combination or

mixed plan. Apart from the salaries paid, the employees may be

eligible for a fixed percentage of commission upon achievement of

fixed target of sales or profits or Performance objectives. Nowadays,most of the corporate sector is following this practice. This is also

termed as variable component of compensation.

8. Piece Rate Wages

Piece rate wages are prevalent in the manufacturing wages. The

laborers are paid wages for each of the Quantity produced by them.

The gross earnings of the labour would be equivalent to number of

goods produced by them. Piece rate wages improves productivity and

is an absolute measurement of productivity to wage structure. The

fairness of compensation is totally based on the productivity and not

by other qualitative factors.

9. Fringe Benefits

Fringe benefits may be defined as wide range of benefits and

services that employees receive as an integral part of their total

compensation package. They are based on critical job factors and

performance. Fringe benefits constitute indirect compensation as they

are usually extended as a condition of employment and not directly

related to performance of concerned employee. Fringe benefits are

supplements to regular wages received by the workers at a cost of

employers. They include benefits such as paid vacation, pension,

health and insurance plans, etc. Such benefits are computable in terms

of money and the amount of benefit is generally not predetermined.

The purpose of fringe benefits is to retain efficient and capable people

in the organization over a long period. They foster loyalty and acts as a

security base for the employees.

10. Profit Sharing

Profit-sharing is regarded as a stepping stone to industrial

democracy. Profit-sharing is an agreement by which employees

receive a share, fixed in advance of the profits. Profit sharing usually

involves the determination of an organization’s profit at the end of the

fiscal year and the distribution of a percentage of the profits to the

workers qualified to share in the earnings. The percentage to be shared

by the workers is often predetermined at the beginning of the work

period and is often communicated to the workers so that they have

some knowledge of their potential gains. To enable the workers to

participate in profit sharing, they are required to work for certain

number of years and develop some seniority.

The theory behind profit-sharing is that management feels its

workers will fulfill their responsibilities more diligently if they realize

that their efforts may result in higher profits, which will be returned to

the workers through profit-sharing.

TYPES OF COMPENSATION

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TYPES OF COMPENSATION

I. DIRECT /BASE COMPENSATION

Direct compensation refers to monetary benefits offered and provided

to employees in return of the services they provide to the organization.

The monetary benefits include basic salary, house rent allowance,conveyance, leave travel allowance, medical reimbursements, special

allowances, bonus, Pf/Gratuity, etc. They are given at a regular

interval at a definite time.

1. Basic Salary

Salary is the amount received by the employee in lieu of the work

done by him/her for a certain period say a day, a week, a month, etc. It

is the money an employee receives from his/her employer by rendering

his/her services

2. House Rent Allowance

Organizations either provide accommodations to its employees who

are from different state or country or they provide house rent

allowances to its employees. This is done to provide them social

security and motivate them to work.

3. Conveyance

Organizations provide for cab facilities to their employees. Few

organizations also provide vehicles and petrol allowances to their

employees to motivate them

4. Leave Travel Allowance

These allowances are provided to retain the best talent in the

organization. The employees are given allowances to visit any place

they wish with their families. The allowances are scaled as per the

position of employee in the organization.

5. Medical Reimbursement

Organizations also look after the health conditions of their employees.

The employees are provided with medi-claims for them and their

family members. These medi-claims include health-insurances and

treatment bills reimbursements.

6. Bonus

Bonus is paid to the employees during festive seasons to motivate

them and provide them the social security. The bonus amount usually

amounts to one month’s salary of the employee.

7. Special Allowance

Special allowance such as overtime, mobile allowances, meals,

commissions, travel expenses, reduced interest loans; insurance, club

memberships, etc are provided to employees to provide them social

security and motivate them which improve the organizational

productivity

Organizations also provide for accidental insurance and life insurance

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II. INDIRECT /SUPPLEMENTARY COMPENSATION

Indirect compensation refers to non-monetary benefits offered and

provided to employees in lieu of the services provided by them to the

organization. They include Leave Policy, Overtime Policy, Car policy,

Hospitalization, Insurance, Leave travel Assistance Limits, RetirementBenefits, Holiday Homes.

1. Leave Policy

It is the right of employee to get adequate number of leave while

working with the organization. The organizations provide for paid

leaves such as, casual leaves, medical leaves (sick leave), and

maternity leaves, statutory pay, etc.

2. Overtime Policy

Employees should be provided with the adequate allowances and

facilities during their overtime, if they happened to do so, such as

transport facilities, overtime pay, etc.

3. Hospitalization

The employees should be provided allowances to get their regular

check-ups, say at an interval of one year. Even their dependents should

be eligible for the medi-claims that provide them emotional and social

security.

4. Insurance

Organizations also provide for accidental insurance and life insurance

for employees. This gives them the emotional security and they feel

themselves valued in the organization.

5. Retirement Benefits

Organizations provide for pension plans and other benefits for their

employees which benefits them after they retire from the organizationat the prescribed age.

6. Flexible Timings

Organizations provide for flexible timings to the employees who

cannot come to work during normal shifts due to their personal

problems and valid reasons.

FACTORS CONSIDERED IN DECIDING THE

COMPENSATION

I. EXTERNAL FACTORS

1. Demand and Supply of Labour

Wage is a price or compensation for the services rendered by a worker.

The firm requires these services, and it must pay a price that will bring

forth the supply which is controlled by the individual worker or by a

group of workers acting together through their unions. The primary

result of the operation of the law of supply and demand is the creation

of the going wage rate. It is not practicable to draw demand and supply

curves for each job in an organization even though, theoretically, a compensating the working class. Thus, the laws enacted and the labour

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j g g , y,

separate curve exists for each job.

2. Cost of Living

Another important factor affecting the wage is the cost of living

adjustments of wages. This tends to vary money wage depending uponthe variations in the cost of living index following rise or fall in the

general price level and consumer price index. It is an essential

ingredient of long-term labour contract unless provision is made to

reopen the wage clause periodically.

3. Labour Union

Organized labor is able to ensure better wages than the unorganized

one. Higher wages may have to be paid by the firm to its workers

under the pressure or trade union. If the trade union fails in their

attempt to raise the wage and other allowances through collective

bargaining, they resort to strike and other methods hereby the supply

of labour is restricted. This exerts a kind of influence on the employer

to concede at least partially the demands of the labour unions.

4. Government

To protect the working class from the exploitations of powerful

employers, the government has enacted several laws. Laws on

minimum wages, hours of work, equal pay for equal work, payment of

dearness and other allowances, payment of bonus, etc., have been

enacted and enforced to bring about a measure of fairness in

p g g ,

policies framed by the government have an important influence on

wages and salaries paid by the employers. Wages and salaries can’t be

fixed below the level prescribed by the government.

5. Prevailing Wage Rates

Wages in a firm are influenced by the general wage level or the wages paid for similar occupations in the industry, region and the economy as

a whole. External alignment of wages is essential because if wages

paid by a firm are lower than those paid by other firms, the firm will

not be able to attract and retain efficient employees. For instance, there

is a wide difference between the pay packages offered by multinational

and Indian companies. It is because of this difference that the

multinational corporations are able to attract the most talented

workforce.

II. INTERNAL FACTORS

1. Ability to Pay

Employer’s ability to pay is an important factor affecting wages not

only for the individual firm, but also for the entire industry. This

depends upon the financial position and profitability of the firm.

However, the fundamental determinants of the wage rate for the

individual firm emanate from supply and demand of labour. If the firm

is marginal and cannot afford to pay competitive rates, its employees

will generally leave it for better paying jobs in other organizations.

But, this adjustment is neither immediate nor perfect because of

problems of labour immobility and lack of perfect knowledge of

alternatives. If the firm is highly successful, there is little need to pay a) Hardship,

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g y , p y

more than the competitive rates to obtain personnel. Ability to pay is

an important factor affecting wages, not only for the individual firm

but also for the entire industry.

2. Top Management Philosophy

Wage rates to be paid to the employees are also affected by the topmanagement’s philosophy, values and attitudes. As wage and salary

payments constitute a major portion of costs and /or apportionment of

profits to the employees, top management may like to keep it to the

minimum. On the other hand, top management may like to pay higher

pay to attract top talent.

3. Productivity of Workers

To achieve the best results from the workers and to motivate him to

increase his efficiency, wages have to be productivity based. There has

been a trend towards gearing wage increase to productivity increases.

Productivity is the key factor in the operation of a company. High

wages and low costs are possible only when productivity increases

appreciably.

4. Job Requirements

Job requirements indicating measures of job difficulty provide a basis

for determining the relative value of one job against another in an

enterprise. Explicitly, job may be graded in terms of a relative degree

of skill, effort and responsibility needed and the adversity of working

conditions. The occupational wage differentials in terms of

) p,

b) Difficulty of learning the job

c) Stability of employment

d) Responsibility of learning the job and

f) Change for success or failure in the work.

This reforms a basis for job evaluation plans and thus, determineswage levels in an industry.

5. Employees Related Factors

Several employees related factors interact to determine his

remuneration. These include

i) Performance: productivity is always rewarded with a pay increase.

Rewarding performance motivates the employees to do better in

future.

ii) Seniority: Unions view seniority as the most objective criteria for

pay increases whereas management prefer performance to effect pay

increases.

iii) Experience: Makes an employee gain valuable insights and is

generally rewarded

iv) Potential: organizations do pay some employees based on their

potential. Young managers are paid more because of their potential to

perform even if they are short of experience.

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UNIT – V The objectives of industrial relations are:

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TOPIC - 1

INDUSTRIAL RELATION

Synopsis

Meaning and Definition of IR

Objectives of IR

Importance of IR

Approaches to IR

Trade Union

MEANING AND DEFINITION

Industrial relations are concerned with the relationship between

management and workers and the role of the regulatory mechanism in

resolving any industrial dispute. A formal definition is “concerned

with the systems, rules, procedures used by unions and employers to

determine the reward for effort and other conditions of employment, to

protect the interest of the employed and their employers, and to

regulate the ways in which employers treat their employees”.

The international Labor organization (ILO) stated that “industrial

relations deal with either the relationships between the state and

employer’s and worker’s organizations or the relations between the

occupational organizational themselves”.

OBJECTIVES OF IR

j

To safeguard the interests of the labour and the management by

preventing one of the players from getting a strong hold over

the other;

To develop and secure mutual understanding and good

relationship among all the players in the industrial set-up.

To maintain industrial peace and harmony by preventing

industrial conflicts

To improve the standard of living of the average worker by

providing basic and standard amenities.

To increase productivity by minimizing industrial conflicts and

maintaining harmonious industrial relations.

To ensure discipline in the organization and in the industry.

To provide a basic framework for the management and the

employee to resolve their differences.

To improve the bargaining capacity of the workers through

trade unions.

IMPORTANCE OF IR IR is a key for increased productivity in industrial

establishments

IR has moral dimensions, too. It is unethical on the part of any

management to take advantage of the helplessness of workers

and exploit them. IR assumes relevance in this context. One of

its objectives is to protect workers interest and to improve their

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economic conditions.

IR seeks to protect the rights of managers too. Where a

worker’s behavior deviates from expected lines, it is the

management’s prerogative to take action.

There is a set procedure for handling any act of indiscipline or

indiscretion on the part of an employee and if the management

satisfies the procedure, tit is justified in taking action

IR emphasis the need to keep labour in check by floating

stooge unions, buying up union leaders, and striking

clandestine deals with powerful politicians do no good to

mangers or to the organizations they represent.

APPROACHES TO INDUSTRIAL RELATIONS

Though there are different approaches to industrial relations,

the basics of management of good relations remain the same across all

the approaches. These different approaches help in viewing industrial

relations from different perspectives. The different approaches to

industrial relations are:

1. Psychological approach

2. Sociological approach

3. Human relations approach

4.

Socio-ethical approach

5. Gandhian approach

6. Systems approach

1. PSYCHOLOGICAL APPROACH

According to this approach, most of the problems in industrial

relations arise because of the differing perceptions and attitude of the

management and the workers. The perception of both parties (workers

and managers) regarding a particular aspect varies and as a result,some minute issues aggravate into major problems. The different

personalities and strained inter-group and interpersonal relationships

add fuel to the fire and increase the disharmony in the system.

2.

SOCIOLOGICAL APPROACH

This approach considers the industry as a social system. The work

behavior of individuals is closely influenced by social factors that

impact an individual’s life in society. These differences among

individuals, a result of their social upbringing and association, create

conflict and competition among the members of an industrial society.

3. HUM AN RELATI ONS APPROACH

This approach holds that the handling of human resources is different

from handling material, physical or financial resources. It lays

emphasis on the human aspect and the way human feelings influence

the work relations and behavior of employees in the organization.

4. SOCIO-ETH ICAL APPROACH

This approach states that industrial relations apart from having

sociological ramifications, also has an ethical base. Hence the workers

and the management should work in mutual cooperation and realize

their moral responsibility towards the organizational objectives. The employees are the pillars on which the organization is built. They

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Understanding each other’s problems and constraints can help in

resolving conflicts peacefully.

5.

GANDHI AN APPROACH

According to this approach, industrial problems should be solved

peacefully using nonviolent methods. In the same way, problems in the

industry should be solved through satyagraha’s and non-violence

rather than resorting to violent deeds and crimes.

6. SYSTEMS APPROACH

The basic elements of the system approach are the participants,

environmental forces and the output. There are three aspects major

participants namely, the workers, the management and their

representatives. The interaction between these three results in

significant strata that are referred to a subsystem of an industrial

relations system.

PARTIES TO INDUSTRIAL REALTIONS

The major parties to IR are the employees, employee

representatives, employers, associations of employers, government and

courts and tribunals.

1. EMPLOYEES

are the chief contributors to the organizational objectives, and are the

organization’s most valuable resource. To maintain harmonious

industrial relations, employees have to be satisfied with the

organization, its policies and procedures and their jobs.

2.

TRADE UNIONSTrade unions constitute the employee representative bodies in an

organization. Trade unions enjoy power and status based on the

support of the employees. Their power is used as a weapon in

regarding the organization’s industrial environment and having their

demands accepted by the management. These demands usually relate

to increase in wages, improvement in working conditions, and

additional benefits and welfare measures. In some cases, trade unions

also have a political affiliation, which adds to their power.

3. THE MANAGEMENT

The management plays a critical role in the industrial relations of an

organization. Management policies can help in maintaining high

employee morale and in preventing industrial conflicts and disputes.

4. THE GOVERNMENT

The government has a limited role to play in industrial relations. It

provides a basic framework within which the management, the trade

unions and the employees are expected to work for the common good

of the organization. The government comes into the picture only when

the three players fail to do this and is unable to sort out their

differences. The government then intervenes as a mediator through the 2. For imposing restrictive conditions on the conduct of any trade or

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process of conciliation, arbitrator and adjudication.

TRADE UNION

MEANING OF TRADE UNION

A trade union or labour union is a continuing long term as associationof employees formed to promote, protect and improve, through

collective action, the social, economic and political interests of its

members.

A trade union may also be defined as any combination, whether

temporary or permanent, formed primarily for the purpose of

regulating the relations between workmen and employers or between

workmen and workmen or between employers and employers or for

imposing restrictive conditions on the conduct of any trade or business

and includes any federation of two or more unions.

NATURE OF TRADE UNIONS

Trade unions are voluntary organizations of workers or employers

formed to promote and protect their interests through collective action.

The Trade Unions Act, 1926 defines a trade union as a combination,

whether temporary or permanent, formed -

1. Primarily for the purpose of regulating the relation between

Workmen and employers or

Between workmen and workmen, or

Between employers and employers, or

business, and includes any federation of two or, more trade unions.

3. To regulate relations among workmen, between workmen and

employers or among employers themselves.

OBJECTIVES OF TRADE UNIONObjectives of trade unions are:

To take labour out of the competitive process; because if a

number of workers freely compete for a job, the employer will

definitely offer them less wages.

To negotiate at all levels with employers over wages and

conditions of work.

To protect the workers in their inalienable right to higher and

better life.

To make workers to take part in union activities and to obey

union rules and decisions.

To protect and promote the interests of the workers.

To provide legal assistance to workers (i.e. union members) in

connection with work affairs.

To protect the jobs of the workers against lay off,

retrenchment, etc.

To ensure that workers get as per rule, the pension, provident

fund, compensation for injuries, etc.

To ensure for the workers, better health, safety and welfare

standards.

To have a voice or participation in the factory management. Separation between the ownership of capital and labour,

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To ensure that workers get respect and human treatment from

the foremen, managers, etc.

ORIGIN OF TRADE UNION

1.

Trade unions are the creation of industrialization and modernindustrial conditions.

2. Industrial revolution destroyed the earlier way of life and left

the individual worker, who was protected by the customary

values, to drift by himself in the anonymity of the town, and

gathered these workers together around the employer.

3. The employer did pay as little as possible to the workers; the

workers as individual could not protest against it and therefore

those (workers) similarly situated, economically and socially

and closely associated with the work of the same employer

developed mutual understanding and a common solution of

their problems of living and this crystallized them into a self-

conscious group what we may call as Trade union.

4. Trade union got originated out of the necessity of workers to

protect and defend themselves from encroachment, injustice

and wrong imposed upon them by the employer or the

management of the concern.

5. The aspects of the process of industrialization those

necessitated the origin of the trade union are:

both of which are essential for producing goods and

rendering services to the consumers.

Since, individually the workers did not have any other

source of the livelihood except that of service under

the owners of capital, there was no match between thetwo as regards economic resources or bargaining power

or skill. It was the owner of capital who dictated terms

and conditions of employment. This again infused a

spirit of union among the workers.

The state or law remained silent because in its eyes

workers and employers were equal. This further

increased the exploitation of workers by the owners of

capital.

Though an individual worker was dispensable to an

employer, but he could not afford to dispense with the

services of a group of workers.

FUNCTIONS OF TRADE UNIONS

The provision of friendly services such as a place for leisure

pursuits, information about jobs existing in other factories,

games and outings, etc.

The provision of social services such as insurance against old

age, unemployment, strike, pay, payment for hospital fee, legal

services, etc.

Wage bargaining i.e. collective wage bargaining with the To communicate their views, aims, ideas, feelings and

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employers.

Safeguarding the job of the workers.

Political activities, i.e. the political pressure for reform, e.g.

trade union legislation works to protect the union and the

workers from such industrial abuses as delay in payment of

wages, excessive hours of work, poor working conditions, etc.

To develop cooperation with employers.

To arouse public opinion in favour of labour.

To secure some shares in profit and in the control of the

enterprise.

WHY DO EMPLOYEES JOIN TRADE UNION?

Workers join trade unions because they are constrained by

circumstances to do so; and because they want:

To get economic security; that is, they want steady

employment with an adequate income;

To restrain the management from taking any action which is

irrational, illogical, discriminatory or prejudicial to the interests

of labour. Workers desire that the assignment of jobs, transfers,

promotions, the maintenance of discipline, layoffs, retirement,

rewards and punishments should be on the basis of pre-

determined policy and on the basis of what is fair and just;

frustrations to the management; that is, they want to have an

effective voice in discussions which affect their welfare;

To secure protection from economic hazards beyond their

control; for example, illness, accident, death, disability,

unemployment and old age;

To get along with their fellow-workers in a better way and to

gain respect in the eyes of their peers; and

To get a job through the good offices of a trade union. Plants

get unionized for three reasons – dissatisfaction, lack of power

and union instrumentality. Dissatisfied employees seek union

membership to improve work situation.

Employees believe unionization fetch them power. Power, in

turn, is believed to remove dissatisfaction. Employees take

unions as instruments to remove dissatisfaction.

In general, the expectation that work will satisfy personal

preferences induces satisfaction or dissatisfaction with work.

As the level of dissatisfaction increases, individual workers

seek to change their work situation. If they fail, and if the

positive consequences of unionization seem to outweigh the

negative ones, individual workers will be inclined to join the

union.

TYPES OF TRADE UNION

Trade unions may be classified in various ways

1. Business unions

It is that emphasis upon the economic advantages to be bargained It is that are extremely radical both in viewpoint and action. They are

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through collective action and thus aim at improving the wages,

working hours and conditions of workers and similar other objectives

largely through the process of collective bargaining.

2. Predatory unions

It is that serve as a means for the enrichment of its leaders who payonly secondary attention to the advancement of interests of members.

It distinctive characteristic is the ruthless pursuit of the target by

whatever means deemed appropriate at the time regardless of ethical or

legal codes or effect upon those outside its own membership. Such a

union may employ any of the business, friendly, revolutionary

or violent methods for the achievement of its objectives.

3. Dependant or company unions

It is that rely upon the support of the employer or company

management or the other large groups and hence they are likely to pay

secondary importance to the interests of members;

4. Friendly unions

It is which are idealistic, conservative and law abiding and they mainly

aspire to elevate the moral, intellectual and social life of workers to

improve the conditions under which they work, to raise their material

standard of living and provide them security against unemployment,

accident, disease or old age. They depend upon the process of

collective bargaining for the attainment of their objectives;

5. Revolutionary unions

class conscious and tend to repudiate the existing institutional order,

especially individual ownership of productive means and the wage

systems. They are strongly inclined towards strike and violence and

looks upon unionism and socialism as the two wings of the labour

movement.

Another viewpoint classifies trade unions into following categories;

a) Craft unions, which are the simplest form of trade unionism.

They are usually formed of workers with the same craft,

training and specialization, no matter in what industry or trade

they are employed.

b)

General labour unions, which aim at becoming all embracing

organizations accepting as a new member practically any wage

earner whatever the place or character of his work or whatever

his industrial qualifications may be.

c) Industrial unions, which organize workers belonging to an

industry or a group of related industries or service.

d) Federations of trade unions, which are combination of

various unions for the purpose of gaining strength and

solidarity. Such federations may be local, regional or statewide

national and international. Unions affiliated with the federation

are described as affiliated unions and those, which are

unaffiliated, are known as independent unions

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developed to ensure that they willingly conform to the rules and Unpleasant relationship with supervisors and co-workers

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regulations of the organization.

If employees are forced to follow the rules and regulations of

the organization by inducing fear in them, then it is referred to as

“Negative Discipline”. In this type of discipline, the employees fear

loss of promotion, an increment or a job and therefore reluctantly andunwillingly try to conform to the organizational rules.

Organizations should use negative discipline only when it is extremely

essential.

All efforts should be made to ensure a discipline through a positive

approach, so that employees are motivated to perform as per the

disciplinary standards laid out by the organization.

ACTS OF INDISCIPLINE OR MISCONDUCT

Misconduct or an act of indiscipline impairs the organization, tarnishes

its reputation and leads to employee unrest. If not tacked immediately,

these acts can lead to disciplinary problems. The basic acts of

misconduct or indiscipline in an organization can be categorized as

follows:

1. Attendance

Attendance is one of the major problems that mangers encounter in

organizations. It relates to misuse of leave facilities, tardiness and

absenteeism. The reasons for attendance problems could be:

Incongruence in employee and organizational goals

Personality characteristics, like attitude towards work

Ensured job security leading to a relaxed and uninterested

approach

2. On the job behavior

An employee’s behavior should be in accordance with the rules and

regulations laid out by the organization. Any behavior that hampers

the work of the individual or disturbs the performance of other

employees demands disciplinary action. Reasons for such acts of

indiscipline can be:

Lack of proper upbringing and education

Work-related pressures and trained relationships

General attitude and personality of the individual

3. Dishonesty

Dishonesty is not only stealing or misusing organizational resources. It

could also involve claiming a colleague’s work, cheating, spying,

working below potential etc. Dishonesty brings in distrust among the

employees and between the management and the employees.

The reasons for dishonesty could be: Social and economic pressures

Lack of proper upbringing and education

Personality characteristics of the employee

Biased and subjective performance evaluation systems

4. Activities those are harmful for the organization employee realize his fault and the inconvenience that his behavior has

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This category includes all those activities that employees engage in,

which affect either their on-the- job performance or the organization’s

reputation. Unauthorized strikes, criminal activities, and working for a

competitor are some of these activities.

TYPES OF DISCIPLINARY ACTION

1. Verbal warning

Verbal warning is an informal warning given to an employee. It is one

of the mildest actions taken against an employee for an act of

indiscipline. Such warnings are given in an formal and private

environment.

2. Written warning

If the oral warning fails, then the next step is to give a written warning

to the employee. This is a formal stage as the written warning is placed

in the employee’s file and a copy given to the employee and one sent

to the personnel department.

3. Suspension

If the employee does not adhere to the rules and regulations of the

organizations in spite of being given a verbal and written warning,

then the next step is “suspension” of the employee. In suspension, the

employee is laid- off from work for a short period of time and he is not

paid during this time. This kind of action helps in making the

caused to others in the workplace.

4. Demotion

If no improvement is noticed in the performance of the employee even

after suspension, and if the management wants to strongly avoid

dismissing the employee, demotion may be alternative. Demotion isadministered only when

The employee clearly does not have the ability to perform the

job

Management perceives itself legally or ethically constrained

from distributing the employee

It is believed that this action will take the employee to change

his behavior.

5. Pay cut

This approach has a demoralizing effect on the employees, but is

considered rational action by management if the only other alternative

is dismissal. If employee alters his behavior, the pay cut can always be

cancelled.

6. Dismissal

The ultimate disciplinary punishment is dismissing the erring

employee. This action must be used only for the most serious offense

or after all earlier steps have failed. The decision to dismiss an

employee should be given long and hard consideration before being

implemented.

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In the words of Lewis Allen, "Motivation is the work a 2. Workers will tend to be as efficient as possible by improving

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manager performs to inspire, encourage and impel people to take

required action".

According to Dubin, Motivation is, "The complex of forces

starting and keeping a person

at work in an organization. To put it generally, motivation starts andmaintains an activity along a prescribed line. Motivation is something

that moves the person to action, and continuous him in the course of

action already initiated".

IMPORTANCE AND BENEFITS OF MOTIVATION

A manager's primary task is to motivate others to perform the

tasks of the organization. Therefore, the manager must find the keys to

get subordinates to come to work regularly and on time, to work hard,

and to make positive contributions towards the effective and efficient

achievement of organizational objectives. Motivation is an effective

instrument in the hands of a manager for inspiring the work force and

creating confidence in it. By motivating the work force, management

creates "will to work" which is necessary for the achievement of

organizational goals. The various benefits of motivation are:-

1. Motivation is one of the important elements in the directing

process. By motivating the workers, a manager directs or

guides the workers' actions in the desired direction for

accomplishing the goals of the organization

upon their skills and knowledge so that they are able to

contribute to the progress of the organization thereby

increasing productivity.

3. For performing any tasks, two things are necessary. They are:

(a) able to work and (b) willingness to work. Withoutwillingness to work, ability to work is of no use. The

willingness to work can be created only by motivation.

4.

Organizational effectiveness becomes, to some degree, a

question of management's ability to motivate its employees, to

direct at least a reasonable effort towards the goals of the

organization.

5.

Motivation contributes to good industrial relations in the

organization. When the workers are motivated, contented and

disciplined, the frictions between the workers and the

management will be reduced.

6. Motivation is the best remedy for resistance to changes. When

changes are introduced in an organization, generally, there will

be resistance from the workers. But if the workers of an

organization are motivated, they will accept, introduce and

implement the changes whole heartily and help to keep the

organization on the right track of progress.

7. Motivation facilitates the maximum utilization of all factors of

production, human, physical and financial resources and

thereby contributes to higher production.

8. Motivation promotes a sense of belonging among the workers. sleep

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The workers feel that the enterprise belongs to them and the

interest of the enterprise is their interests.

9. Many organizations are now beginning to pay increasing

attention to developing their employees as future resources

upon which they can draw as they grow and develop.

THEORIES OF MOTIVATION

1. MASLOW'S NEED-HIERARCHY THEORY OF

MOTIVATION

According to Abraham Maslow, a U.S psychologist, man is a wanting

animal. He has a variety of wants or needs. All motivated behaviour of

man is directed towards the satisfaction of his needs. The theory

postulated that people are motivated by multiple needs, which could be

arranged in a hierarchy.

Maslow offers a general theory of motivation called the 'need

hierarchy theory'. The needs have been classified into the following in

order:a) Physiological Needs

Physiological needs are those required to sustain life, such as:

air

water

nourishment

According to Maslow's theory, if such needs are not satisfied then

one's motivation will from the quest to satisfy them. Higher needs

such as social needs and esteem are not felt until one has met the needs

basic to one's bodily functioning.

b) SafetyOnce physiological needs are met, one's attention turns to safety and

security in order to be free from the threat of physical and emotional

harm. Such needs might be fulfilled by:

Living in a safe area

Medical insurance

Job security

Financial reserves

According to Maslow's hierarchy, if a person feels that he or she is in

harm's way, higher needs will not receive much attention.

c) Social Needs

Once a person has met the lower level physiological and safety needs,

higher level needs become important, the first of which are social

needs. Social needs are those related to interaction with other people

and may include:

Need for friends

Need for belonging

Need to give and receive love

d) Esteem Self-actualized persons have frequent occurrences of peak experiences,

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Once a person feels a sense of "belonging", the need to feel important

arises. Esteem needs may be classified as internal or external. Internal

esteem needs are those related to self-esteem such as self respect and

achievement. External esteem needs are those such as social status and

recognition. Some esteem needs are: Self-respect

Achievement

Attention

Recognition

Reputation

Maslow later refined his model to include a level between esteem

needs and selfactualization: the need for knowledge and aesthetics.

e) Self-Actualization

Self-actualization is the summit of Maslow's hierarchy of needs. It is

the quest of reaching one's full potential as a person. Unlike lower

level needs, this need is never fully satisfied; as one grows

psychologically there are always new opportunities to continue to

grow.

Self-actualized people tend to have needs such as:

Truth

Justice

Wisdom

Meaning

which are energized moments of profound happiness and harmony.

According to Maslow, only a small percentage of the population

reaches the level of self-actualization.

2. HERTZBERG'S THEORY OF MOTIVATIONHertzberg developed a theory of motivation on the premise that human

nature has two separate elements - The motivators and maintenance

factors. According to this theory of motivation the items that

determine job content are considered motivational factors e.g.:-

Achievement, recognition, responsibility, advancement and the work

itself. The elements that influence the job context are the hygiene or

maintenance factors e.g.:- company policy, salary, inter-personal

relations, working conditions etc. They must be adequate and if they

are absent or inadequate, they will create dissatisfaction.

(a) Hygiene Factors:

Hygiene factors represent the need to avoid pain in the environment.

They are not an intrinsic part of a job, but they are related to the

conditions under which a job is performed. They are associated with

negative feelings. They must be viewed as preventive measures that

remove sources of dissatisfaction from environment. Hertzberg

believed that hygiene factors created a zero level of motivation and if

maintained at proper level prevents negative type of motivation from

occurring. Thus, hygiene factors, when absent, increase dissatisfaction

with the job. When present, help in preventing dissatisfaction but do

i i f i i i

expectations concerning their ability to perform tasks and to receive

d i d d Th h h h h f

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not increase satisfaction or motivation.

(b) Motivators:

Motivators are associated with positive feelings of employees about

the job. They make people satisfied with their job. Motivators arenecessary to keep job satisfaction and job performance high. On the

other hand, if they are not present, they do not prove highly satisfying.

Motivational factors or satisfiers are directly related to job content

itself, the individual's performance of it, its responsibilities and the

growth and recognition obtained from it. Motivators are intrinsic to the

job. Thus, when motivators are absent, prevent both satisfaction and

motivation. When, motivators are present, they lead to satisfaction and

motivation. To apply the two-factor theory to the workplace,

Hertzberg suggests a two-step process:

The supervisor should attempt to eliminate the hygiene factors

that are found to be more basic than factors that lead to

satisfaction.

Once the dissatisfies have been somewhat neutralized, the

supervisor may be able to motivate workers through the

introduction of motivational factors

3. VICTOR VROOM'S EXPECTANCY THEORY

Expectancy Theory was developed by Victor H Vroom. It is

based on the notion that human behaviour depends on people's

desired rewards. The expectancy theory argues that the strength of a

tendency to act in a certain way depends in the strength of an

expectation that the act will be followed by a given outcome and on

the attractiveness of the outcome to the individual. It includes three

variables which Vroom refers to as -

(i) Valance: Valence means the strength of an individual's preference

for a particular outcome. A valence of zero occurs when the individual

is indifferent towards the outcome. The valance is negative when the

individual prefers not attaining the outcome to attaining it.

(ii) Instrumentality: Instrumentality refers to the relationship between

performance and reward. It refers to a degree to which a first level

outcome (e.g.:-superior performance) will lead to a desired second

level outcome (e.g.:- promotion). If people perceive that their

performance is adequately rewarded the perceived instrumentality will

be positive. On the other hand, if they perceive that performance does

not make any difference to their rewards, the instrumentality will be

low.

(iii) Expectancy: People have expectancies about the likelihood that

an action or effort on their part will lead to the intended performance.

Workers will be motivated by the belief that their performance will

ultimately lead to payoffs for them. Expectancy is the probability that

ti l ti ill l d t ti l fi t l l t

their behaviour in order to be in conformity with the needs of

th i ti

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a particular action will lead to a particular first level outcome.

4. MCGREGOR'S THEORY X AND THEORY Y

Different styles of management have a different bearing on the

motivation of workers in the organization. The style adopted by amanager in managing his subordinates is basically dependent upon his

assumption about human behaviour. Theory X is negative, traditional

and autocratic style while Theory Y is positive, participatory and

democratic. Thus, these labels describe contrasting set of assumptions

about human nature.

Douglas McGregor has classified the basic assumption

regarding human nature into two parts and has designated them as

'theory X’ and 'theory Y'.

a) Theory X:

This is the traditional theory of human behaviour, which makes the

following assumptions about human nature:

Management is responsible for organizing the elements of

productive enterprises - money, material, equipment, and

people - in the interest of economic ends.

With reference to people it is a process of directing their

efforts, motivating them, controlling their actions, modifying

the organization.

Without this active intervention by management, people would

be passive – even resistant to organizational needs. Hence they

must be persuaded, rewarded, punished and properly directed.

The average human being has an inherent dislike of work andwill avoid it if he can.

b) Theory Y:

The assumption of theory Y, according to McGregor are as follows:-

Work is as natural as play or rest, provided the conditions are

favourable; the average human being does not inherently

dislike work.

External control and the thrust of punishment are not the only

means for bringing about efforts towards organizational

objectives. Man can exercise self-control and self-direction in

the service of objectives to which he is committed.

Commitment to objectives is a result of the rewards associated

with their achievement. People select goals for themselves if

they see the possibilities of some kind of reward that may be

material or even psychological.

The average human being, under proper conditions does not

shirk responsibility, but learn not only to accept responsibility

but also to seek it.

He has capacity to exercise a relatively high degree of

i i i i i d i i i h l i f

IHRM is concerned with the relationships between the HRM activities

f i ti d th f i i t i hi h th

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imagination, ingenuity and creativity in the solution of

organizational problems in widely, not narrowly distributed in

the population.

Under conditions of modern industrial life the intellectual

potentialities of people are only partially utilized. As a matterof fact, men, have unlimited potential.

*********************************

UNIT – V

TOPIC - 4

HRM IN INTERNATIONAL PERSPECTIVES

(INTERNATIONAL HRM)

Synopsis

Introduction

Meaning and definition

Dimensions of IHRM

Approaches to IHRM

INTRODUCTION

IHRM is concerned with HRM issues that cross national boundaries or

are conducted in locations other than the home country headquarters.

of organisations and the foreign environments in which the

organisations operate.

DEFINITION OF IHRM

International human resource management is all about the

world wide management of human resources – Process of sourcing,

allocating, and effectively utilising their skill, knowledge, ideas, plan

and perspective in responding to TQM.

The process of procuring, allocating and effectively utilizing

human resources in an international business is called International

Human Resource Management or IHRM.

International Human Resource Management is the process of

sourcing, allocating and effectively utilizing human resources in a

multinational organization.

DIMENSIONS OF IHRM:

According to P.V. Morgan: IHRM is the interplay among 3

dimensions:

1.

HR Activities

2. Types of employees

3. Types of Countries

There are mainly four IHRM approaches. These include ethnocentric

h l t i h t i h d i t i

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1) Broad activities of IHRM – procurement, allocation and utilization

of human resources cover all the six activities of domestics HRM i.e,

HR planning, Employees Hiring, Training and Development,

Remuneration, Performance Management and Industrial Relations.

2) The three national or country categories involved in IHRM

activities are:

The host country where subsidiary may be located

The home country where the company has its head quarters and

Other countries that may be sources of labour or finance

3) The three types of employees of an international business are –

Parent Country Nationals (PCNs), Host Country Nationals (HCNs)

and Third Country Nationals (TCNs). For example, IBM which

employs Australian citizens in its Australian operations, after sends US

citizens to Asia Pacific countries on assignment, and may send some

of its Singaporean employees to its Japanese operations.

INTERNATIONAL HRM APPROACHES

approach, polycentric approach, geocentric approach, and regiocentric

approach (Wall et al, 2010).

The suitability of the type of staffing policy adopted by MNEs

depends on the strategy used by the company.

1. Ethnocentric approach

In the ethnocentric approach, all key positions in the host country

subsidiary are filled by nationals of the parent company. The policy

makes most sense for firms pursuing an international strategy.

An ethnocentric staffing policy is attractive when:

The firm believes there is a lack of qualified individuals in the

host country to fill senior management positions

The firm sees an ethnocentric staffing policy as the best way to

i t i ifi d t lt

pursuing either a global or transnational strategy to adopt geocentric

staffing policies However immigration policies of national

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maintain a unified corporate culture

The firm wants to transfer knowledge of core competencies to

the foreign operation

2. Polycentric approachPolycentric approaches to staffing policy emphasis on

recruiting host country nationals to manage the subsidiaries in their

own country. This means that host country nationals are recruited to

manage subsidiaries in their own country, while parent country

nationals occupy the key positions at corporate headquarters. This

allows the MNE to take lower profile in sensitive economic and

political situations and helps to avoid intercultural management

problems.

This approach minimizes the dangers of cultural myopia, but it

also helps create a gap between home and host country operations. The

polycentric policy is best suited to firms pursuing a localization

strategy

3. Geocentric approach

This approach utilizes the best people for all key jobs

throughout the organization, whatever their nationality or whatever the

geographical location of the post to be filled. In this way an

international executive team can be developed.

This approach is consistent with building a strong unifying

culture and informal management network. It makes sense for firms

staffing policies. However immigration policies of national

governments may limit the ability of a firm to pursue geocentric

staffing policy.

4. Regiocentric approach

Here the MNE divides its operations into geographic regions

and moves staff within a particular region. Examples include Europe,

America, Asia rather than between regions.

***************** ALL THE BEST ****************

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