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HRM
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 Human Resource Development

3.1 HUMAN RESOURCE DEVELOPMENT

3.1.1 Introduction
Human Resource Development (HRD) is a positive concept as an area of managing human
resources. It is based on the belief that it is imperative and constructive for an organization to invest in
human beings to bring substantial benefits in the long run. It aims at the overall development of the
human resource in order to contribute for the well-being of the employees, organization and the society
at large. Out of the fundamental areas of Management, Human Resource Management is considered as
the most important area of study and concern. In the Management of four M's i.e. money, machines,
materials and men, the management of men is the most significant and challenging. The efficiency of
the whole lot of activities carried out in an organization starting from the production process to the
management of various areas of administration depends to a large extent on the level of Human Resource
Development.
The term 'HRD' comprises of two words i.e. 'Human Resource' and 'Development' which has to
be defined separately. 'Human resources' in a general way are the people and their characteristics at
work either at the national level or organizational level and 'Development' is the acquisition of capabilities
that are needed to perform the present job or the future expected job.
Definition
According to Kelly, "Human Resources Development (HRD) as a theory is a framework for the
expansion of human capital within an organization through the development of both the organization and
the individual to achieve performance improvement"
In the words of M.N. Khan, "HRD is the process of increasing knowledge, skills, capabilities and
positive work attitude and values of all people working at all levels in a business undertakings".
According to Prof. T.V. Rao, HRD is a continuous process to:
 Acquire or sharpen capabilities required to perform various functions associated with
present and future needs of the job.
 Develop their general capabilities as an individual and enable them to exploit their inner
potential.
 Develop a congenial organizational climate in which dynamic relationship and team
collaborations among sub-units are strong and contribute to the professional wellbeing of
employees
3.1.2 Concept of Human Resource Development
HRD is mainly concerned with developing the skill, knowledge and competencies of people and
it is people-oriented concept. When we call it as a people-oriented concept the question of people be
developed in the larger or national context or in the smaller organisational context? Is it different at the
macro and micro level? HRD can be applied both for the national level and organizational level.
The concept of HRD was formally introduced by Leonard Nadler in 1969, in a Conference
organised by the American Society for Training and Development. Leonard Nadler defines HRD as,
"those learning experiences which are organised, for a specific time, and designed to bring
about the possibility of behavioural change."

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 HRM (Human Resource Development)

The term learning experience refers to purposeful or intentional learning not incidental learning.
Among the Indian authors T. Venkateswara Rao worked extensively on HRD. He defines HRD in the
organisational context as, "a process by which the employees of an organisation are helped in a continuous,
planned way to:
(i) Acquire or sharpen capabilities required to perform various functions associated with their
present or expected future roles;
(ii) Develop their general capabilities as individuals and discover and exploit their own inner
potentials for their own and/or organisational development purposes;
(iii) Development an organisational culture in which superior-subordinate relationship, teamwork
and collaboration among subunits are strong and contribute to the professional well-being,
motivation and pride of employees.
HRD from organisational point of view is a process in which the employees of an organisation
are helped/motivated to acquire and develop technical, managerial and behavioural knowledge, skills and
abilities, and mould the values, beliefs, attitude necessary to perform present and future roles by realising
highest human potential. With a view to contribute positively to the organisational, group, individual and
social goals.
3.1.3 Features of HRD
The following features of HRD may be identified :
(i) Planned and Systematic Approach : HRD is a planned and systematic approach to the
development of people. HRD is a system consisting of several interdependent and
interrelated subsystems e.g. performance appraisal, training, job enrichment etc. While
designing an HRD system, enough attention should be paid to building linkages between
the various sub systems.
(ii) Continuous Process : HRD is a continuous and dynamic process which believes in the
need for continuous development of personnel to face the innumerable challenges in the
functioning of an organisation. It is based on the belief that there is no end to the development
of an individual and the learning process can continue throughout the life.
(iii) Inter Disciplinary Approach : HRD is an inter disciplinary approach. It involves collection
of ideas for many sciences. It makes use of principles and concepts of behavioural
sciences for the development of people. It uses knowledge drawn from psychology,
sociology, anthropology, economics and political science for planning and implementing
various programmes for the development of individuals, groups and the organisation.
(iv) Both Micro and Macro Aspects : HRD has both micro and macro aspects. At the macro
level, HRD is described as the core of all development activities in the sense of improvement
of quality of life of people of a nation. At the micro level, HRD involves the improvement
in the quality of managers and workers so as to achieve greater quality and higher levels
of productivity.
3.1.4 Objectives of HRD
Main objectives of HRD are as follows :
(i) To provide a comprehensive framework for the overall development of people in the
organisation.
(ii) To develop the constructive mind and overall personality of each and every person in the
organisation.
(iii) To develop the capabilities of each individual in relation to his present and expected future
roles.
(iv) To develop and maintain high levels of motivation of employees.

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 HRM (Human Resource Development)

(v) To develop dyadic relationship between each employee and his supervisor.
(vi) To develop the sense of team spirit, team work and inter team collaboration in the
organisation.
(vii) To develop the overall health and self-renewing capabilities of the total organisation.
(viii) To generate systematic information about human resources for the purposes of manpower
planning, placement, succession planning and the like.
3.1.5 Essentials of HRD
While introducing HRD in an organisation, following requirements must be fulfilled :
(i) An urge and desire on the part of human resources in the organisation to find better
methods of work.
(ii) Requisite skill, attitudes and ability in the persons engaged in HRD.
(iii) Proper rapport between the HRD team/department and the key persons in the organisation.
(iv) Removal of hurdles and irritants from the organisation affecting productivity of the
employees.
(v) Involvement of the employees of the organisation to get a lot of unwritten information for
understanding the dynamics of the organisation for developing a HRD programme.
(vi) The need for suggesting the introduction of only such indigenous methods which can be
implemented by the HRD section without much cost and resistance. Besides, the need
for technical consideration may also be kept in mind.
(vii) Strengthening of human resource information system to keep continuous track of every
employee and use performance appraisal, training etc. to inject change in the desired
direction.
(viii) Members of HRD team must possess a pleasant personality, common sense, imagination,
enthusiasm, objectivity and the sense of humour required to induce favourable changes.
It has been rightly said that it is easier to change the mountains than to change the mind
of the people.
(ix) The HRD section must make all the employees in the organisation understand the
implications of new methods through seminars, lectures role playing or any other method
to thwart the potential fears among the employees of the proposed changes.
(x) HRD to be successful needs revolution in the total concept of management and not
merely sporadic and piecemeal attempts.
(xi) The HRD team/section must possess technical competence, missionary zeal, the capacity
to motivate and communicate with the employees, cultural adaptability, the capacity to
organise and manage, the capacity to inspire confidence in employees and finally patience
and dignity.
If all the above essentials are properly understood and implemented, HRD would develop both in
theory and practice and this in turn would lead to efficiency and economy in management.
3.1.6 Importance of HRD
HRD transforms potential human resources into kinetic human resources for optimisation of the
potential capacity of employees. It has been rightly said in a study of the "Capacity of United Nations
Development System" that Human rather than capital is the key to development. Organisations can
become dynamic and grow only when employee capabilities are continuously acquired, sharpened and
used.
HRD plays a vital role in the success and growth of an organisation in the following ways :
1. HRD improves the capabilities of the people by making them better aware of the skills
required for job performance and by improving clarity about performance standards. The
employees become innovative, enterprising and ever ready to take risks and move ahead.
It strengthens executive skills.
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 HRM (Human Resource Development)

2. HRD improves team work. Employees become more open towards each other and they
also trust each other. In this way the organisational climate also improves a lot.
3. HRD promotes organisational effectiveness. Appropriate employee centered policies help
the organisation achieve its goals more efficiently.
4. Performance related rewards help employees realise the importance of utilising their skills
fully in the service of organisational goals. The organisation's health and self-renewing
capabilities improve quite significantly.
5. HRD helps the organisation in procuring the right people at the right time and in making
their effective use.
6. HRD generates a lot of useful data which facilitates human resource planning and control.
HRD ultimately leads to higher productivity, lower costs and successful growth in the
organisation.
3.1.7 Assumptions of Human Resources Development
Human Resources Development has some assumptions :
1. Organizations, no matter the size, are all human created entities that are dependent upon
human expertise to institute and accomplish goals. This means that humans are assets
that need to be taken care of and their expertise harnessed and not just things to be
exploited. How they accomplish their goals in the organization is dependent on how their
expertise is maximized during their career.
2. HRD processes can and will develop and maximize human expertise to benefit both the
sponsoring organization and the individual involved both for the short and long duration.
The maximization of human expertise is geared not only to benefit the organization but for
the person him/herself. It should seek to improve his/her value as a human being.
3. HRD professionals are persons supporting the idea of individual, groups and work
processes, and organizational integrity. From the previous core beliefs, it can be said that
those who are working as HRD professionals are persons who believe and have a strong
sense of integrity.
3.1.8 Instruments or Mechanism of HRD
As far as the instruments or sub-systems of HRD are concerned, various thinkers and professionals
have given divergent views and designed the mechanism in different ways. Though there is diversity
among these views, yet there is unanimity of opinion among various HRD practitioners regarding some
of the instruments.
A well designed HRD programme should have the following sub-systems :
(i) Performance Appraisal : Performance appraisal is the process of assessing the performance
and progress of an employee or of a group of employees on a given job and his potential for future
development. It consists of a formal procedure used in the organisations to evaluate personalities,
contributions and potentials of employees.
The objective of performance appraisal is to determine the present state of efficiency of an
employee in order to establish the actual need for training. The process of performance appraisal
consists of setting standards for performance, communicating the standards to the employees, measuring
the performance and comparing the actual performance with the standards set.
(ii) Potential Appraisal : Potential appraisal is used for providing necessary data which helps in
preparing career plans for individuals. This technique aims at development of latent abilities of individuals.
This is a process of developing in the employees, capacities to perform new roles and
responsibilities. This need is generally felt when the organisation is diversifying of introducing changes.
The major objective of potential appraisal is to ensure a good match between the employees and the
job.
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 HRM (Human Resource Development)

(iii) Counselling and Monitoring : Counselling is a two way process in which a counsellor,
usually a superior, provides advice and assistance to his subordinates.
Performance counselling means the help given by a superior to his subordinate in improving the
latter's performance. It is infact, a process of guiding a subordinate to adjust better with his work
environment and to better understand others so that his dealings with them can be effective and purposeful.
The main purpose of counselling and monitoring is to help the employees scientifically to be
sensitised to their potential, their strengths and weaknesses. It also helps them in sharing and discussing
their tensions, conflicts, concerns and problems so that the adverse impact on productivity and well-
being could be thwarted.
(iv) Training : Training is an investment in the HRD process which gives dividends both in short
and long run. The ultimate goal of training is improving competence of the employees for raising the
standards of organisational performance.
An organisation can do better if it invests in technology development and improvement of human
systems, training is crucial for both of these. Lack of training may result in poor work performance, low
production, demotivation and customer dissatisfaction. But it must be ensured by the HRD section that
training is translated into practice. If one acquires knowledge but does not practice it, it will be useless.
(v) Building Morale and Motivation among the Employees of an Organisation : The
organisation must give constant evidence to the belief that human resources in the organisation are the
key to development. This requires proper motivation of the employees which provides a base for the
management functions of planning and organising.
It has been, generally, noticed that the performance of the personnel either as individuals or
members of a group is less as compared to their capabilities in terms of skills, abilities and capacities.
A climate of creativity must be developed and maintained by the management so that the performance
levels come upto the mark and growth becomes a way of life in the organisation.
(vi) Development of Team Work : The HRD section must try to develop a habit of team work
among the human resources. Team work requires among other things, that the members have an image
of their own team mates, which coincides as precisely as possible with reality. In addition, each member
must have a self-image which adjusts to reality as much as possible and thus, coincides with the image
the other members have of him.
(vii) Creating Effective HRD Environment : HRD climate is one of the pre-requisites of
effective HRD process implementation. It is an integral part of organisational climate. HRD climate
creates interest and motivation among the employees to stay long in an organisation.
It creates growth opportunities and recognition. Its success is vitally based on top management's
confidence in employees which will propel them to take initiative and meet challenging responsibilities for
the organisation. Employee's dignity and individuality is boosted when an effective HRD climate is
created.
A dynamic HRD climate can be conducive to development of both the individual as well as the
organisation. This is possible through humane treatment of employees by the employers and helping
develop right attitude among the employees. The HRD climate affects informal as well as social relations.
Therefore, it performs a descriptive rather than an evaluative role.
(viii) Developing Emotional Intelligence : Human resources are considered to be the greatest
assets in any organisation.
It is, thus essential to understand the role of emotional intelligence in enhancing the productivity
of the human resources to achieve the overall success. Emotions of the employees play an important
role in determining their productivity and output. HRD should thus focus on enhancing the emotional
intelligence of the organisation.

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 HRM (Human Resource Development)

(ix) Quality Circle : A quality circle is a small group of employees doing similar or related work
who meet regularly to identify, analyse and solve product related problems and to improve general
relations.
The quality circles are generally, autonomous units, usually led by a supervisor or a senior worker
and organised as work units. The workers who have a shared area of responsibility, meet periodically
to discuss, analyse and propose solutions to ongoing problems.
(x) Quality of Working Life : The quality of the workers' conditions both working and living,
influences the workers' satisfaction and job satisfaction to a large extent. Inadequate working and living
conditions produce adverse mental and physical effect on the employees, which leads to decline in their
efficiency and ultimately in die overall productivity of the organisation.
The HRD system should take care of employee's health and well-being of their families by
providing them with better living and working conditions. Quality of working life generally promotes a
healthy atmosphere of development and motivation among employees.
(xi) Emphasis on Excellence : Excellence is a state of mind which prepares the employees to
perform duties with dedication.
It also creates self-reliance and helps him to have a vision and an urge to do better and better
HRD approach should include :
(a) Continuous training and development for all, especially attitudinal and multi skilled training.
(b) Performance planning and objective appraisal.
(c) Emergence of self-managing groups with less supervision.
(d) Flexible attitude towards work and enriched job contents.
(e) Constructive discipline preceding punitive discipline.
(f) Meaningful participation of workers in management.
(g) Creation of a will to work.
(xii) Flexibility : The HRD administrative machinery must become flexible and be able to respond
quickly and effectively to the changing environment. Rigid and inflexible systems will not be able to deal
with changing situations. An immediate need is therefore an appropriate HRD approach at the micro-level
with an in built system of training, career development, job enrichment, job rotation, and employee
participation in management.
Thus, HRD approach focusses on the optimum utilisation of valuable human resources through
tapping their potential energy to vitalize, activate and renew an organisation to generate dynamism and
development. The magic formula for an effective HRD is to preserve the relevant, destroy the irrelevant
and create what is needed.
3.1.9 HRD Strategies
Some of the strategies of HRD are explained as follows :
(i) Total Quality Management (TQM) : TQM is a dynamic concept like HRD. TQM aims at
continuous improvement in the quality of products, which calls for the improvement in the quality of work
of employees through training and development. Total quality management can succeed only if it has the
support of total quality people. TQM cannot work without TQL because processes cannot work till people
work.
According to T.N. Chhabra, "The essence of TQM is the creation of an organisational
system that fosters cooperation between management and workers and facilities learning to
implement 'total quality'. This in turn would lead to continuous improvement of processes,
products and services and to employee fulfillment both of which are critical to customer
satisfaction and ultimately survival and growth of the firm."

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The Total Quality Human Resource Management approach involves :

(1) Shared responsibility, commitment and rewards (philosophy)
(2) Increased quality, productivity, customer satisfaction, employee satisfaction and loyalty
(Business objectives)
(3) Total quality management and continuous improvement at and across every level (Quality
Objectives)
(4) Open books, share board information on profits, productivity, quality, costs, capital spending
plans (Business information sharing)
(5) Major constituencies live shareholders, customers and all employees
(6) Extensive within and between levels and functions employee involvement
(7) Quality and economic education, multiple skill training, problem solving and group process
(education and training)
(8) Reward structure designed and adjusted by management employee committee, formal,
early union involvement
(9) Job security ensured by formal commitment, a key consideration in all decision.
(ii) Kaizen : Kaizen is a Japanese word which means continuous improvement with the involvement
of everybody in the organisation so as to generate value for customers. The message of Kaizen Strategy
is that not a day should go without some kind of improvement being made somewhere in the organisation.
It involves small improvements on ongoing basis.
A Kaizen programme can be divided into three segments :
(a) Management Oriented Kaizen : This segment concentrates on the most strategic and
logistic issues and provides the momentum to keep up progress and morale.
(b) Group Oriented Kaizen : The group oriented kaizen is a permanent approach and is
represented by quality circles and other small group activities.
(c) Individual Oriented Kaizen : Individual oriented kaizen is manifested in the form of
suggestions. It is a morale booster.
There are 5 steps in Kaizen Programme :
(a) SEIRI – straighten up
(b) SEITON – Put things in order
(c) SEISO – Clean up
(d) SEIKETSU – Personal cleanliness
(e) SHITSUKE – Discipline
Kaizen practitioners view quality as an endless journey, not a final destination. They are always
experimenting, measuring, adjusting and improving. Rather than naively assuming that zero defects
means perfection, they search for potential and actual trouble spots for improvement of product design
and processes.
(iii) Just in Time Production : Just in Time (JIT) production is also called hand to mouth
approach to production. JIT focusses attention on eliminating waste by purchasing or manufacturing just
enough of the right items just in time. JIT attacks the problem of bloated inventories that hamper
productivity and profitability. JIT approach when applied to human resources implies multifunctional
workers.
These workers are a key factor in designing of streamlined process. The processes are designed
in such a way that each worker can handle two or more machines and move from one centre to another.
Development of such workers not only decreases the number of workers and increases productivity but
also increase tem work and morale among the workers.

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 HRM (Human Resource Development)

The potential benefits of JIT include quality improvement, higher productivity, lower cost, less work
in process, less inventory of raw materials, finished goods, saved space, increased team work, higher
worker's morale and motivation. However, implementation of JIT will require considerable cooperation
between the management and the workers.
(iv) Empowerment : This strategy is based on the philosophy that more power you give away
to the lower levels the more you have in terms of productivity and performance. This technique is seen
by the traditional authoritarian managers as a threat to their authority.
But nowadays the issue is not whether to give empowerment to workers or not, rather the issue
is how empowerment should take place. Empowerment can take place when the employees are adequately
trained, provided with all relevant information and the best possible tools, fully involved in key decisions
and are fully rewarded for results.
(v) Benchmarking : According to T.N. Chliabra, "learning from the experiences and best practices
of others is essential to survive and grow in the turbulent market environment. Dynamic companies are
constantly monitoring information from the external environment to compare their process, products and
services with the best industry practices known as bench marking."
Bench marking is the practice of identifying, studying and building upon best practices in the
industry or in the world. Benchmarking help establish quality targets which lead to a competitive advantage.
The Bench-markers guide includes the following points :
(a) Pick a specific area you want to improve. Study your own procedures thoroughly and
choose a company or companies to benchmark that handle the process well
(b) Send out the people who will have to make the changes. It won't help if senior executives
or consultants do the benchmarking, then come back and tell the concerned workers of
a process what to do
(c) Be prepared to exchange information
(d) Avoid legal problems
(e) Respect the confidentiality of the data you obtain.
(vi) Learning Organisation:
Learning is the organisational capability to recognise and nurture the development of skills, abilities
and knowledge base. It is exemplified by companywide training, foundational knowledge, process
knowledge, educational development, continuous self improvement and managerial learning which are
the well recognised mechanisms of HRD. TQM is a positive step towards developing learning organisation.
In today's dynamic business environment, the learning organisations alone will survive because
of their competence to learn, create, codify and use knowledge faster than their rivals. The future
organisation must be built as a complex institution in which thinking, learning and knowledge creation
takes place, constantly generating ideas that will permit the transformation of the organisation by its
people.
The above mentioned strategies are changing the outlook and approaches towards management
of human resources.
3.1.10 Action-Research Model
 Action Research Model is a method to facilitate change by helping involve the client
system in a diagnostic, active-learning, problem-finding, and problem-solving process.
1. Provides a systematic approach to solve business challenges
 Being prepared to initiate, anticipate, and respond positively to change is beneficial to the
efficiency and sustainability of organizations.
 The Action Research Model is a step-by-step method that helps OD professionals conduct
interventions geared towards improving a business situation.
 Since it is systematic, the emphasis is to ensure that all basis of a problem are taken into
account in a proper order and appropriately addressed.
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 HRM (Human Resource Development)

2. Helps us analyze issues and design the appropriate intervention

 Action research focuses on putting information to action.
 This model helps clients identify business needs and challenges, create a contract to
define the working relationship and deliverables, collect data to identify the gaps and find
the root causes, analyze data to identify priorities and actions needed, identify the
interventions needed, and create a project plan.
 Organizations can implement successful change programs for both short- and long- term.
3. Fosters a culture of learning
 OD Practitioners transfer their knowledge to the organization in data collection, analysis,
statistical tools borrowed from areas such as quality management, strategic planning,
communication, problem solving and decision making, team building, culture change,
systems thinking, leadership development, and process improvement.
 A deeper understanding of the issues related to the organization is developed.
 This learning results in greater insights from all involved on how a problem or situation can
be handled best
4. Requires the involvement of senior leaders and other critical stakeholders
 Action research requires change agents, who act as the conduits for delegation and
feedback, to take on pivotal responsibilities and information to effectively communicate
data.
 This is not possible without the key involvement of senior leaders and other critical
stakeholders.
 The buy-in of these individuals helps keep the project on track and results in greater
engagement in the change process.
5. Promotes collaboration
 In action research, the client and the change agent collaborate in identifying and ranking
specific problems, in devising methods for finding their real causes, and in developing
plans for coping with them both realistically and practically.
 This collaboration helps in building greater trust and understanding both of which are
pivotal to an organization being able to achieve its goals.
6. Helps reshape the organizational culture
 An organization that is used to authoritative style of management will eventually realize
that most people feel disconnected with change.
 After introducing action research as a way to handle change, the organization can find
renewed energy and engagement regarding organizational issues.
 People feel vested in the process and want to help. Everyone involved feels their contribution
is valuable.
7. Helps improve performance on all levels
 The action research model results in a comprehensive approach that addresses all areas
of improvement within an organization.
 As the project plan is created by following a systematic approach to discovery, the
organization can better achieve long term goals, implement the interventions, collect
feedback to measure results, and transfer the skills and knowledge learned to imbed the
process into the culture.
 By doing so, performance is enhanced throughout the organization.

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8. Helps align actions with organization strategy

 For organizations, change is the way to remain competitive and to grow.
 Since essential information is available as a part of the client discussion and other data-
gathering processes, action research helps the organization make necessary tweaks in
its actions so that it can achieve its goals.
 Action research also facilitates the application of other models such as the McKinsey 7-
S model which helps further in the alignment process.
9. Helps develop leadership
 The leadership when involved with the change process develops skills to work with groups,
understand their issues, and come up with solutions in a collaborative way.
 Developing leadership in this manner is good for the culture of the organization and helps
build engagement.
 Leadership understands the value of organizational learning and learns to facilitate this in
order for the organization to continue to grow successfully.
10. Sees the organization as a whole system
 Action research helps in viewing the system as a whole and not in its individual components.
 This gives the bigger picture on the best course of action for the organization.
 Helps people come on board through a better understanding of their role in bringing about
change.
3.1.11 HRD Culture and Climate
Human Resource Development Climate
An organisation’s success is determined as much by the skill and motivation of its members as
by almost any other factor. While this has always been true, recent changes focus attention on ways
human resources development activities can be used to ensure that organisations have what it takes to
successfully meet the challenges (Desimone, Werner and Harris 2002).
The human resource development climate of an organization plays a significant role in ensuring
competency, motivation and development of its employees. Human resource development climate can
be created using appropriate human resource development systems and leadership styles by top
management. Human resource development climate is both a means to an end and an end in itself.
1. Defining Climate
Perception about an organization's goals and about decisions that a manager should take to
achieve these goals come not only from formal control systems but also through informal organization.
Underpinning this prescription is a belief that organizations have the climate, and both the formal and
informal structures combine to create what is called organizational climate.
The term climate is used to designate the quality of the internal environment which affects quality
of cooperation, development of the individual, extent of member's dedication or commitment to
organizational purpose, and the efficiency with which that purpose becomes translated into results. It
influences morale and the attitudes of the individual toward his work and his environment.
Baumgartel (1971) viewed organizational climate as a product of leadership practices,
communication practices and enduring and systematic characteristics of the working relationships among
persons and divisions of any particular organization.
Hellriegel and Slocum (1974) define organizational climate as a "set of attributes which can be
perceived about a particular organization and/or its subsystems, and that may be induced in the way that
organization and/ or its subsystems deal with their members and environment".

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2. Definition of HRD Culture and Climate

HRD Climate is helpful in the fulfilment of committed goals of an individual, organization and
society. It increases the capabilities and efficiency of an individual and is likely to reflect itself in the long
run in the well-being of the individual, reputation of the institution and ultimately the well-being of the
society. However, the nature of efforts and investments in developing human resources may vary from
organization to organization depending on its need, nature of capabilities the organization wants to build
up and the size of the organization etc.
Payne and Monsfield (1973) viewed HRD climate as a conceptual linkage between organizations
and individuals that intervenes between specific situation attributes or events and individual perceptions,
attitudes and behaviour.
Human Resource Development Climate and Organizational Climate
Human resource development climate is an integral part of organizational climate. It can be
defined as perceptions the employee has on the developmental environment of an organization. This
developmental climate will have the following characteristics (Rao and Abraham, 1986):
(1) a tendency at all levels starting from top management to the lowest level to treat people
as the most important resource
(2) perception that developing the competencies in the employees is the job of every manager/
supervisor
(3) faith in the capability of employees to change and acquire new competencies at any stage
of life
(4) a tendency to be open in communications and discussions rather than being secretive
(fairly free expression of feelings)
(5) encouraging risk-taking and experimentation
(6) making efforts to help employees reorganize their strengths and weaknesses through
feedback
(7) a general climate of trust
(8) a tendency on the part of employees to be generally helpful to each other and collaborate
with each other; (team spirit)
(9) tendency to discourage stereotypes and favouritism
(10) supportive personnel policies
(11) supportive human resource development practices including performance appraisal,
training, reward management, potential development, job-rotation career planning etc.
It is possible to work out the profile of an organization on the basis of these tendencies.
Organizations differ in the extent to which they have these tendencies. Some organizations may have
most of these tendencies, some others may have only a few of these and very few will have none of
these tendencies. Human resource development climate contributes to the organizations wellbeing and
selfrenewing capabilities resulting in increasing the enabling capabilities of individuals, team and the
entire organization.
Organisational Culture
Every organisation has some characteristics which are common with any other organisation. At
the same time, each organisation has its unique set of characteristics and properties. This psychological
structure of organisation and their sub-units is usually referred to as Organisational Culture.
Stephen P. Robbins, (1986) stated that “Organisational Culture is a relatively uniform perception
held of the organisation, it has common characteristics, it is descriptive, it can distinguish one organisation
from another and it integrates individual, group and organisation system variables”.

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 HRM (Human Resource Development)

Elements of Human Resource Development Climate

HRD climate is characterized by the tendencies such as treating employees as the most important
resources, perceiving that developing employees is the job of every manager, believing in the capability
of employees, communicating openly, encouraging risk taking and experimentation, making efforts to
help employees recognize their strengths and weaknesses, creating a general climate of trust, collaboration
and autonomy, supportive personnel policies, and supportive HRD practices. An optimal level of development
climate is essential to facilitate HRD activities (Rao, T.V. and E. Abraham, 1986).The top management
subscribing to these values is a starting point. When a critical mass internalized these values, there
emerged a conducive climate for HRD. This positive HRD climate renders the existing systems more
effective and makes the organisations more receptive to the introduction of relevant additional system
(Athreya, M. B, 1988). A healthy HRD climate certainly bolsters the overall internal environment of the
organisation, fosters employee commitment, involvement and satisfaction with the job.
The elements of HRD climate can be grouped into three broad categories:
(1) General climate
(2) HRD (OCTAPACE) culture, and
(3) Human Resource Development mechanisms.
To begin with the general climate items, focus on the importance given to human resources
development by the top management and line managers, in general. The OCTAPACE items deal with
the extent to which Openness, Confrontation, Trust, Autonomy, Proactivity, Authenticity, Collaboration and
Experimentation are valued and promoted in the organization. The items dealing with human resource
development mechanisms measure the extent to which human resource development mechanisms are
implemented seriously. These three groups were taken with the following assumptions:
(1) a supportive climate overall is important for human resource development to be effectively
implemented. Such supportive climates consist of not only top management and line
management's commitment but also good personnel policies and positive attitudes towards
development.
(2) an integrated look at human resource development and efforts to use as many human
resource development mechanisms as possible will result in the successful implementation
of human resource development. These mechanisms include: performance appraisal,
potential appraisal, career planning, performance rewards, feedback and counselling training,
employee welfare for quality work life, job-rotation, etc.
(3) OCTAPACE culture is essential for facilitating human resource development.
1. General Climate
The following factors work as an enabling force to enhance of human resource development
climate :
 Top Management Style and Philosophy
 Personnel policies
 Positive Attitudes Towards Development
 Commitment of Line Managers
(A) Top Management Style and Philosophy : A development style, a belief in the capability
of people, a participative approach, openness and receptivity to suggestions from
subordinates are some of the dimensions that contribute to the creation of a positive HRD
climate.
(B) Personnel Policies : Personnel policies that show high concern for employees and
emphasise equity and objectivity in appraisals, policies that emphasise sufficient resource
allocation for welfare and developmental activities, policies that emphasise a collaborative
attitude and trust among the people go a long way in creating the HRD climate.

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 HRM (Human Resource Development)

(C) Positive Attitude Towards Development : A helpful and supportive attitude on the part
of HRD and personnel people plays a very critical role in generating the HRD climate. If
the personal behaviour of any of these agents is not supportive, the HRD climate is likely
to be vitiated.
(D) Commitment of Line Managers : The commitment of line managers to the development
of their subordinates is a very important determiner of HRD climate. If line managers are
willing to spend a part of their time for their subordinates, it is likely to have a positive
impact.
2. HRD (OCTAPACE) Culture
The HRD (OCTAPACE) Culture deals with the following items :
(A) Openness
Openness can be defined as a spontaneous expression of feelings and thoughts, and the sharing
of these without defensiveness. Openness is in both directions, receiving and giving. Both these may
relate to ideas (including suggestions), feedback (including criticism), and feelings. For example, openness
means receiving without reservation, and taking steps to encourage more feedback and suggestions
from customers, colleagues and others. Similarly, it means giving, without hesitation, ideas, information,
feedback, feelings, etc. Openness may also mean spatial openness, in terms of accessibility. Installing
internal E-mailing may be a step in this direction: everyone having a computer terminal has access to
information which he may retrieve at any time. Offices without walls are another symbolic arrangement
promoting openness. In some organizations, even the chief executive does not have a separate exclusive
cabin; floor space is shared by other colleagues at different levels in the organization. This willingness
to share and this openness results in greater clarity of objectives and free interaction among people. As
a result of openness, there should be more unbiased performance feedback. Indicators of openness in
an organization will be productive meetings and improved implementation of systems and innovations.
(B) Confrontation
Confrontation can be defined as facing rather than shying away from problems. It also implies
deeper analysis of interpersonal problems. All this involves taking up challenges. The term confrontation
is being used with some reservation and means putting up a front as contrasted with putting ones back
to the problem. A better term would be confrontation and exploration (CE). Let us use the term confrontation
in this sense of confrontation and exploration, i.e. facing a problem and working jointly with others to find
a solution to the problem. The outcome of confrontation will be better role clarity, improved problem
solving, and willingness to deal with problems and with 'difficult' employees and customers.
There will be willingness of teams to discuss and resolve sensitive issues. The indicators, which
are also outcomes, can be improved by periodical discussions with clients, bold action, and not postponing
sticky matters.
(C) Trust
Trust is not used in the moral sense. It is reflected in maintaining the confidentiality of information
shared by others, and in not misusing it. It is also reflected in a sense of assurance that others will help,
when such help is needed and will honour mutual commitments and obligations. Trust is also reflected
in accepting what another person says at face value, and not searching for ulterior motives. Trust is an
extremely important ingredient in the institution building process. The outcome of trust includes higher
empathy, timely support, reduced stress, reduction and simplification of forms and procedures. Such
simplification is an indicator of trust and of reduced paper work, effective delegation and higher productivity.
(D) Authenticity
Authenticity is the congruence of what one feels, says and does. It is reflected in owning up one's
mistakes, and in unreserved sharing of feelings. Authenticity is closer to openness. The outcome of
authenticity in an organization is reduced distortion in communication. This can be seen in the
correspondence between members in an organization.

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 HRM (Human Resource Development)

(E) Proactivity
Proaction means taking the initiative, preplanning, and taking preventive action, and calculating
the payoffs of an alternative course, before taking the action. Proaction can be contrasted with the term
react. In the latter, action is in response to an act from some source; while in the former the action is
taken independent of the source. For example, if a person shouts back at his friend's accusation he
shows reactive behaviour. However, if he does not use this pattern but responds calmly and suggests
that they discuss the problem together, he is showing proactive behaviour. Proactivity gives initiative to
the person to start a new process or set a new pattern of behaviour. Proactivity involves unusual
behaviour. In this sense pro activity means freeing oneself from, and taking action beyond immediate
concerns. A person showing proactivity functions at all the three levels of feeling, thinking and action.
(F) Autonomy
Autonomy is using and giving freedom to plan and act in one's own sphere. It means respecting
and encouraging individual and role autonomy. It develops mutual respect and is likely to result in
willingness to take on responsibility, individual initiative, better succession planning. The main indicator
of autonomy is effective delegation in organization and reduction in references made to senior people for
approval of planned actions.
(G) Collaboration
Collaboration is giving help to, and asking for help from, others. It means working together
(individuals and groups) to solve problems with team spirit. The outcome of collaboration includes timely
help, team work, sharing of experiences, improved communication and improved resource sharing. The
indication could be productivity reports, more meetings, and involvement of staff, more joint decisions,
better resource utilization and higher quality of meetings.
(H) Experimenting
Experimenting means, using and encouraging, innovative approaches to solve problems; using
feedback for improving, taking a fresh look at hinges and encouraging creativity. We are so caught up
with our daily tasks that we often use only traditional, tried and tested ways of dealing with problems.
While these methods save time and energy, they also blind us from perceiving the advantage of new
ways of solving a problem. The more we work under pressure, the less is our inclination to try a different
approach as the risk seems to be too high. And yet, complex problems require new approaches to their
solutions. Organizational learning does not imply repetitive action; it implies applying past experience to
current problems to go beyond. This can be called creativity. Other terms such as innovations, experiments,
new approaches, etc. also convey the same meaning. There are several aspects of creativity in an
organization. Creativity is reflected in new suggestions generated by employees, attempts at improving
upon previous ways of working, trying out a new idea to which one has been exposed, innovating new
methods, and thinking about a problem while ignoring the so called constraints. The last one is also
called lateral thinking, i.e. thinking aimed at generating alternatives. There is enough evidence that such
thinking contributes towards the development of new products, new methods and new processes.
The conventional implication with which the term 'climate' has been used in literature is
'Organizational Climate'. The concept of climate with specific reference to the human resource development
context, i.e. human resource development climate has been introduced by Rao (1996).
3. HRD Mechanisms
All the structures, systems and techniques that an organization uses to help its employees
acquire and strengthen their capabilities are viewed under HRD mechanisms. These mechanisms or
systems or techniques can be used to facilitate favourable HRD climate in the organization in general
and managerial and nonmanagerial in particular. The HRD function itself has been initiated in most of
organizations in the last few years only. Some of them are yet to make their presence felt. It also reveals
that no organization has yet introduced all the HRD mechanisms. Important HRD mechanisms, which
constitute the part of the HRD climate and considered for the present study are the following.

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 HRM (Human Resource Development)

(a) Performance Appraisal

(b) Career Planning
(c) Grievance Mechanism
(d) Feedback and Counselling
(e) Training and Development
(f) Employee Welfare for quality work life
(g) Job Rotation
(h) Rewards
(i) Recruitment and Selection
(A) Performance Appraisal
Performance appraisal is a continuous process through which performance of employees is
identified, measured and improved. This process includes various practices like recognition of employees’
achievements, providing them regular feedback and offering career development (Aguinis H (2007),
Lansbury. R (1988).
Wilson. J.P (2005), supported the idea and explored that performance management is neither a
technique nor a single step process, it can be considered as a set of processes that includes knowledge
of employees about what their managers expect of them, their motivation to perform well, mentoring and
evaluation of their performance aimed at identifying areas where the improvements are needed.
Performance appraisal may be defined as a structured formal interaction between a subordinate
and supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in which the
work performance of the subordinate is examined and discussed, with a view to identifying weaknesses
and strengths as well as opportunities for improvement and skills development.
Performance Appraisal is the systematic evaluation of the performance of employees and to
understand the abilities of a person for further growth and development. Performance appraisal has been
traditionally treated as a control mechanism to control employees through salary administration, reward
administration, promotion and disciplinary action. It is a method of evaluating the behaviour of employees
in the work spot, normally both the quantitative and qualitative aspects of job performance. Performance
in this context refers to the degree of accomplishment of the tasks that make up an individual's job.
Individual’s commitment to the job demands is revealed through performance appraisal. Often the term
is confused with effort, which means energy transferred in terms of results.
(B) Career Planning
Career planning is the discovery and development of talents and planned deployment of these
talents. Career can be defined as a sequence of separate but related work activities that provide continuity.
It consists of a series of properly sequenced role experiences, which are related to career development.
Moreover career development is the process through which the action plans are taking place. In general
career planning is a process of development of human resources. The perception of employees regarding
career planning contributes to the HRD climate.
(C) Grievance Mechanism
Timely disposal of grievances of employees is an important HRD mechanism. Whenever there
is a tendency to ignore the grievances of the employees the concerned organisations ceased to be
maintaining a healthy developmental atmosphere. The developmental mechanisms of grievance handling
require the following:
 Conceptual understanding all grievances of work
 The sources of grievances
 Corporate initiative in installing workable redressal machinery

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 HRM (Human Resource Development)

(D) Feedback and Counselling

Feedback is the information received back to know about the effectiveness of implication of a
matter or communication. Effectiveness of communication can be known from the feedback.
Communication efficiency can be improved by the analysis of feedback and corrective actions.
Counselling refers the process of advising an employee or listening to the statement of his
problems and enabling him to find from his own thinking and talking a solution for it, which is satisfactory
to him. It relates to a method of understanding and helping people who are upset emotionally. Thus it
can be defined as a discussion of an emotional problem with an employee with the general objective of
minimising it.
The need for counselling may arise from varied on and off the job conditions such as dissatisfaction,
resistance to change, alienation, frustration, conflict and stress.
(E) Training and Development
Training and development programmes are necessary in any organisation for improving the
quality of work of employees at all levels, particularly in the world of fast changing technology, changing
values and environment.
The two terms are quite identical to each other, but they are not the same in meaning. Training
is a learning process that aims to permanently improve the ability and behaviour of the employees by
enabling them to acquire new skill, knowledge and attitude for more efficient performance. This includes:
 identification of training needs
 developing suitable training programmes
 providing requisite job skills and knowledge to employees
 evaluating the effectiveness of training programmes
Development is the growth or realization of a person’s ability, through conscious or unconscious
learning. Development programs usually include phases of planned study and experience, and are
usually supported by a coaching or counselling facility. Development occurs when a gain in experience
is effectively combined with the conceptual understanding that can illustrate it, giving increased confidence
both to act and to perceive how such action relates to its context (Bolton,M., 1995).
(F) Employee Welfare for quality work life
Employee welfare measures are relevant both in physical and physiological aspects of the
employees. Employee welfare programmes create a sense of belonging and adequacy that benefit, the
organization in the long run. The employees are not paid adequately in many organisations. Welfare
programmes like education subsidies, health and medical benefits are contributing in such a way that
the employees can save a major part of their mental energy and the organisation can make use of it.
(G) Job Rotation
Job rotation forms a favourite technique to broaden and understand several business situations.
The distribution of responsibilities, it is suggested, will result in specialization. However, to be able to
utilize their specialization in the best possible way, the work- tasks should be rotated among the employees
so as to broaden their field of specialization as well as their knowledge about the organization's operation
as a whole. Therefore, once a year the work-tasks, should be rotated among the various employees
depending upon their qualifications and suitability to perform the new work-task.
(H) Rewards
A reward can be anything that attracts a worker’s attention and stimulates him to work. It is an
incentive. According to Burack and Smith, “An incentive scheme is a plan or programmes to motivate
individual or group performance”. An incentive programme is most frequently built on monetary reward
(incentive pay or a monetary bonus) but may also include a variety of non-monetary rewards or prizes.”

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 HRM (Human Resource Development)

(I) Recruitment and Selection

Recruitment is the process of identifying the prospective employees, stimulating and encouraging
them to apply for a particular job or jobs in an organisation. It is a positive action as it involves inviting
people to apply. The purpose is to have an inventory of eligible persons from amongst whom, proper
selection of the most suitable person can be made.
Selection is the process of examining the applicants with regard to their suitability for the given
job or jobs and choosing the best from the suitable candidates and rejecting the others. Thus this is
negative in nature in the sense that rejection of candidates is involved.
3.1.12 HRD Interventions
Human resource development (HRD) is an essential function within a human resources
management department (see Table). The nature of the function and its scope are shaped by the
organization's mission and its ability to maintain market share. McLagan defines it as "the integrated use
of training and development, organization development, and career development to improve individual,
group , and organizational effectiveness." Many studies have identified roles, outputs, and competencies
for HRD professionals.
Human Resource Development Interventions Component of the HPT Model
 Compensation and Benefits
 Motivation (Incentives and Rewards)
 Performance Appraisals
 Assessment Centers and Competency Training
 Succession Planning and Career Pathing
 Leadership and Executive Development
 Management and Supervisory Development
 Literacy
 Retirement Planning
 Health and Wellness
The purpose of this section is to identify frequently used HRD interventions such as those in
Table.
Employee Selection
Employee selection is choosing the right person for the job. The process begins with a precise
description of the skills and/or knowledge, experiences, and personal characteristics needed to accomplish
the job tasks. Valuable sources for identification are knowledgeable people and personal observations of
competent performers. The selection process differs in complexity among organizations. Some fill positions
quickly and inexpensively by perusing resumes and application forms. Other organizations select potential
employees by elaborate, and sometimes costly, selection systems involving job- related tests, a series
of interviews, and background checks. Decisions regarding selection are crucial for effective organizational
performance.
Compensation and Benefits
Compensation programs are monetary and in-kind payments used by organizations. Goals of
compensation policies include rewarding employees' past performances, remaining competitive in the
labor market, maintaining salary equity among employees, motivating employees' future performances,
maintaining the budget, attracting new employees, and reducing unnecessary turnover. Compensation
typically includes pay for work and performance, disability income, deferred income, health, accident, and
liability protection, loss-of-job-income, and continuation of spousal income when there is a loss due to
a employee's relocation.

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 HRM (Human Resource Development)

Benefits are the non-cash portion of the compensation program that are intended to improve the
quality of work life for an organization's employees. Benefits include the employer's share of legally
required payments (e.g., FICA, unemployment compensation, retirement and savings plan payments,
401k, profit sharing, stock bonuses, medical benefit payments, etc.) Benefits were once viewed as gifts
from the employer; they are now considered entitlements.
Motivation (Incentives and Rewards)
Incentives link pay with a standard of performance. They are future-oriented with the objective of
inducing desired behavior. They can be short or long term, and they can be tied to individual and/or group
performance. There are variations in incentives. Monetary incentives include salary, differential pay,
allowances, time off with pay, deferred income, loss-of-job coverage, and other perquisites (product
samples, an expense account, tax service, legal service, a company apartment, club membership, free
housing, parking privileges, stock bonus, etc.). Nonmonetary incentives include desirable working conditions,
training, and adequate equipment and materials. Examples of management incentives are participatory
goal setting and decision making, and career opportunities.
Rewards can change and reinforce behavior. Skinner's research showed that rewarded behaviors
are more likely to be repeated. Rewards need to be timely, specific, and matched to the preferences of
the person and the achievement of goals. Rewards can be formal, such as public recognition, gift
certificates, etc., or informal such as field trips. Nelson has catalogued more than 1,000 ways to reward
employees. Wilson suggests that rewards should be SMART: specific, meaningful, achievable, reliable,
and timely.
Performance Appraisals
Performance appraisals help individuals manage their performance by providing them with
feedback. Organizations also have performance appraisal programs that provide criteria for salary
decisions, promotion, and improving job performance. Gohrman discusses the many potential benefits
of regular performance appraisal: increase in employee self-esteem and motivation to perform effectively,
job clarification, communication between employee and rater, clearer organizational goals, and better
human resource planning. Morissey suggests that some positive advantages of performance appraisals
are increased probability of promotion for good performance, decreased likelihood of receiving undesirable
assignments, clear understanding of supervisor's expectations, and greater personal reward and recognition
for meeting those expectations. He also sees benefits for the organization in reduced turnover, reduced
liability for potential legal action, improved overall productivity, improved organizational results, and greater
attractiveness to potential new hires. Research suggests that the performance review should be
approximately 60 minutes long and conducted as a mutual discussion.
Examples of performance appraisal methods used by organizations include checklists, weighted
checklists, graphic rating scales, mixed scales, forced-choice scales, and critical incidents (written
descriptions of a highly effective or highly ineffective performance), and behaviorally anchored rating
scales (BARS). The HRD literature is filled with positive techniques for conducting effective performance
reviews. It also reports stories of anxiety, frustration, uncertainty, and ambiguity when performance
appraisals are handled improperly.
Assessment Centers and Competency Testing
An assessment center is "a place where standardized selection procedures are applied, usually
to separate management from non-management candidates and executive candidates from middle
managers." Candidates are evaluated and selected by testing mechanisms to determine if they are
capable of performing predetermined skills. Others see it as a process where trained professional
evaluators observe, record, and evaluate how a candidate performs in simulated job situations. In-basket
techniques, leaderless group discussions, role playing, and speech making are common practices for
testing job candidates.

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 HRM (Human Resource Development)

It is important for an organization to study its jobs to identify and assign weights to the knowledge
and skills each one requires. Testing people for current job skills, or for attributes or skills needed for
future performance, helps the organization fulfill its strategic goals for human resources. Interviews,
psychological profiles, intelligence testing, etc., are sometimes used in competency testing.
Succession Planning and Career "Pathing"
Succession planning is a systematic identification of employees for senior management positions.
It involves long-term planning and is often developmentally oriented. Succession planning is likely to
involve input from several managers and recommendations for experiential assignments to ensure the
ability of the candidates to fill positions as they open.
A career path is a sequence of jobs, usually involving related tasks and experiences, that employees
move through over time. For example, a career path in a school setting may include the positions of
teacher, counselor, department head, principal, central office administrator, and superintendent. Career
paths are generally vertical lines of progression; however, they can include horizontal assignments as
well. This is increasingly the case as management positions disappear.
Leadership and Executive Development
Leadership development is necessary at all levels of an organization. High-potential employees
receive special training and experience that translate into personal and professional growth. Leadership
development includes coping with changes that occur during the life cycle of an organization, from
growth to decline. It is about changes in the external environment, specifically about rearranging priorities
and overturning assumptions about how the business operates and the role of leadership.
Executive development deals with the organization's vision, values, and business strategies, and
the goal is to develop leaders who can ensure the strategic development of the organization. Leadership
and executive development are successful when the process is embedded in the organization's HRD
efforts.
Management and Supervisory Development
Management development is "the education, training, knowledge transfer, and, ultimately, skills
demonstration of those individuals who are defined as managers by their respective organizations." It is
about coping with complexity. Effective management development supports the organization's mission,
strategy, goals, objectives, and market position. Supervisory development is designed for front-line
managers who work with and through non-management employees to meet the objectives of the company
and the needs of its employees. It is broader than management and executive development. Bittel and
Newstrom state the unique roles the HRD and PT personnel play in supervisory development as follows:
1. Recognition of the innate qualifications, limitations, and aspirations of supervisors
2. Genuine knowledge of specific competencies required to complete work assignments
3. Sensitivity to the roles and relationships imposed on the supervisors by the company
4. Realization of the continuing evolution of the supervisor's role
Literacy
Literacy is a person's knowledge, especially one's reading and writing abilities, which enables the
person to function in society. Literacy programs are efforts by businesses to improve workplace
communication, job understanding, and job skill development.
Literacy rates are often directly connected to quality of work and job performance. Raising the
literacy skills of workers is likely to increase productivity and lower production costs.
Retirement Planning
To have positive experiences in retirement, people must plan ahead. No longer is retirement
looked at as withdrawal, retreat, and solitude. Current gerontological thinking suggests new words for
retirement: reorientation, recommitment, reinvention, reinvolvement, regeneration, renewal, renovation,
redirection, reinvestigation, replenishment, reexploration, and more. Retirement planning is usually part
of a benefits package. People want to know about finding part-time employment (should they want it),
legal issues, housing arrangements, health and wellness, etc.

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 HRM (Human Resource Development)

Health and Wellness

Health and wellness programs are commonly offered by organizations and can serve to enhance
employee morale and productivity and to reduce absentee rates and health care costs. According to the
National Centers for Disease Control, more than 60 percent of all disease is caused by lifestyle risks.
The most powerful lifestyle risks are smoking, inattention to diet, lack of exercise, substance abuse, back
problems, mental distress, failure to use safety belts, and excessive stress. Employees who participate
in workplace wellness programs tend to have better attitudes and behavior, exhibiting more loyalty,
enthusiasm , motivation, and energy.
3.1.13 HR Accounting and Audit
Human Resource Accounting: Meaning, Definition, Objectives and Limitations!
Meaning
Human resources are considered as important assets and are different from the physical assets.
Physical assets do not have feelings and emotions, whereas human assets are subjected to various
types of feelings and emotions. In the same way, unlike physical assets human assets never gets
depreciated.
Therefore, the valuations of human resources along with other assets are also required in order
to find out the total cost of an organization. In 1960s, Rensis Likert along with other social researchers
made an attempt to define the concept of human resource accounting (HRA).
Definition
1. The American Association of Accountants (AAA) defines HRA as follows: 'HRA is a process
of identifying and measuring data about human resources and communicating this
information to interested parties'.
2. Flamhoitz defines HRA as 'accounting for people as an organizational resource. It involves
measuring the costs incurred by organizations to recruit, select, hire, train, and develop
human assets. It also involves measuring the economic value of people to the organization'.
3. According to Stephen Knauf, 'HRA is the measurement and quantification of human
organizational inputs such as recruiting, training, experience and commitment'.
Need for HRA
The need for human asset valuation arose as a result of growing concern for human relations
management in the industry.
Behavioural scientists concerned with management of organizations pointed out the following
reasons for HRA :
1. Under conventional accounting, no information is made available about the human resources
employed in an organization, and without people the financial and physical resources
cannot be operationally effective.
2. The expenses related to the human organization are charged to current revenue instead
of being treated as investments, to be amortized over a period of time, with the result that
magnitude of net income is significantly distorted. This makes the assessment of firm and
inter-firm comparison difficult.
3. The productivity and profitability of a firm largely depends on the contribution of human
assets. Two firms having identical physical assets and operating in the same market may
have different returns due to differences in human assets. If the value of human assets
is ignored, the total valuation of the firm becomes difficult.
4. If the value of human resources is not duly reported in profit and loss account and balance
sheet, the important act of management on human assets cannot be perceived.
5. Expenses on recruitment, training, etc. are treated as expenses and written off against
revenue under conventional accounting. All expenses on human resources are to be
treated as investments, since the benefits are accrued over a period of time.

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Objectives of HRA
Rensis Likert described the following objectives of HRA :
1. Providing cost value information about acquiring, developing, allocating and maintaining
human resources.
2. Enabling management to monitor the use of human resources.
3. Finding depreciation or appreciation among human resources.
4. Assisting in developing effective management practices.
5. Increasing managerial awareness of the value of human resources.
6. For better human resource planning.
7. For better decisions about people, based on improved information system.
8. Assisting in effective utilization of manpower.
Methods of Valuation of Human Assets
There are a number of methods suggested for the valuation of human assets. Many of these
methods are based on the valuation of physical and financial assets while others take into account
human consideration. Major methods of valuation of human assets are historical cost, replacement cost,
standard cost, present value of future earnings, and expected realizable value.
Historical Cost
Historical cost is based on actual cost incurred on human resources. Such a cost may be of two
types – acquisition cost and learning cost. Acquisition cost is the expense incurred on training and
development. This method is very simple in its application but it does not reflect the true value of human
assets. For example, an experienced employee may not require much training and, therefore, his value
may appear to below though his real value is much more than what is suggested by historical cost
method.
Replacement Cost
As against historical cost method which takes into account the actual cost incurred on employees,
replacement cost takes into account the national cost that may be required to acquire a new employee
to replace the present one.
In calculating the replacement cost, different types of expenses are taken into account which may
be in the form of acquisition and learning cost. Replacement cost is generally much higher than the
historical cost.
For example, Friedman has estimated that the replacement cost of an executive in middle
management level is about 1.5 to 2 times the current salary paid in that position. Replacement cost is
much better indicator of value of human assets though it may present certain operational problems. For
example, true replacement of a person may not be found easily with whose cost the valuation is done.
Standard Cost
Instead of using historical or replacement cost, many companies use standard cost for the
valuation of human assets just as its used for physical and financial assets. For using standard cost,
employees of an organization are categorized into different groups based on their hierarchical positions.
Standard cost is fixed for each category of employees and their value is calculated. This method
is simple but does not take into account differences in employees put in the same group. In many cases,
these differences may be quite vital.
Present value of future earnings
In this method, the future earnings of various groups of employees are estimated up to the age
of their retirement and are discounted at a predetermined rate to obtain the present value of such
earnings. This method is similar to the present value of future earnings used in the case of financial
assets. However, this method does not give correct value of human assets as it does not measure their
contributions to achieving organizational effectiveness.
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Acquisition Cost Method

Under this method the costs of acquisition, namely, the costs incurred in recruitment. Hiring and
induction of employees are taken into account. The process involves capitalization of historic costs. The
cost so capitalized has to be written off over a period of time for which the employee remains with the
firm.
If for some reason the employee leaves the organization prematurely, the unamortized cost
remaining in the books has to be written off against the profit and loss account of the particular year.
Replacement Cost Method
While in the case of acquisition cost past costs are considered, under this approach one takes
in to account how much it costs to replace a firm's existing resources and thus represents a current
value approach. So this is a method resource and thus represents a current market conditions. This
exercise may be redundant unless the management desires to replace its present resources. It is also
difficult exercise as in many cases the replacement may not be exactly similar.
Present Value of Future Earnings Method
This model is developed by Lev and Schwartz and is popular in India. This is also known as
capitalization of salary method. Under this method the future earnings of an employee or grades of
employees are estimated up to the age of retirement and are discounted at a rate appropriate to the
person or the group in order to obtain the present value.
The model may be expresses as follows :
V = the human capital value of a person y years old
I(t) = the person's annual earnings up to retirement
R = discount rate specific to the person
T= retirement age.
The above formula does not take into account the probability of a person dying before retirement
or leaving the organization.
Expected realizable value
The above methods discussed so far are based on cost consideration. Therefore these methods
may provide information for record purpose but do not reflect the true value of human assets. As against
these methods.
Expected realizable value is based on the assumption. And this is true also. That there is no
direct relationship between cost incurred on an individual and his value to organization can be defined
as the present worth of the set of future services that he is expected to provide during the period he
remains in the organization.
Flamholtz has given the variables affecting an individual's expected realizable value (IERV)
Individual conditional values and his like hood of remaining in the organization. The former is a
function of the individual's abilities and activation level. While the later is a function of such variables as
job satisfaction, commitment, motivation, and other factors.
Economic Value Method
The economist's concept of the value of an asset is equal to the present worth of its estimated
future economic benefits. This approach has a strong theoretical appeal.
But this method involves the following steps :
(a) Estimation of the future benefits, and
(b) Ascertaining the present value of such benefits by using an appropriate interest (discount)
rate.

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Competitive Bidding Method

This is also known as the opportunity cost method. Opportunity cost is defined as the measurable
value of benefits that could be obtained by choosing an alternative course of action. In the case of HRA.
Opportunity costs are determined by a process of competitive bidding in which various divisions and
departments bid for the services of various officers. The amount of bid is added to the capital employed
of the successful bidder for determining the return on investment.
Benefits of HRA
There are certain benefits for accounting of human resources, which are explained as follows:
1. The system of HRA discloses the value of human resources, which helps in proper
interpretation of return on capital employed.
2. Managerial decision-making can be improved with the help of HRA.
3. The implementation of human resource accounting clearly identifies human resources as
valuable assets, which helps in preventing misuse of human resources by the superiors
as well as the management.
4. It helps in efficient utilization of human resources and understanding the evil effects of
labour unrest on the quality of human resources.
5. This system can increase productivity because the human talent, devotion, and skills are
considered valuable assets, which can boost the morale of the employees.
6. It can assist the management for implementing best methods of wages and salary
administration.
Limitations of HRA
HRA is yet to gain momentum in India due to certain difficulties :
1. The valuation methods have certain disadvantages as well as advantages; therefore,
there is always a bone of contention among the firms that which method is an ideal one.
2. There are no standardized procedures developed so far. So, firms are providing only as
additional information.
3. Under conventional accounting, certain standards are accepted commonly, which is not
possible under this method.
4. All the methods of accounting for human assets are based on certain assumptions, which
can go wrong at any time. For example, it is assumed that all workers continue to work
with the same organization till retirement, which is far from possible.
5. It is believed that human resources do not suffer depreciation, and in fact they always
appreciate, which can also prove otherwise in certain firms.
6. The lifespan of human resources cannot be estimated. So, the valuation seems to be
unrealistic.
Human Resource (HR) Audit
Meaning
HR audit is an important management control device. It is a tool to judge organisations performance
and effectiveness of HR management. According to Dale Yoder, "Personnel audit refers to an examination
and evaluation of policies, procedures and practices to determine the effectiveness of personnel
management."
It is an analytical, investigative and comparative process. It gives feedback about HR functions
to operating managers and HR specialists. It enables to know about the effectiveness of personnel
programmes. It further provides feedback about how well managers are meeting their HR duties. It
provides quality control check on HR activities. It refers to determine the effectiveness and efficiency of
HRM.
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Features
The essential features of HR audit are :
(1) The measurement and effectiveness HR management's mission, goals, strategies, policies,
programmes and activities, and
(2) To determine the action plan for future in response to the results from such measurement.
According to R.D. Gray, "the primary purpose of audit is to know how the various units are
functioning and how they have been able to meet the policies and guidelines which were agreed upon;
and to assist the rest of the organization by identifying the gap between objectives and results for the
end product of an evaluation should be to formulate plans for corrections or adjustments."
Objectives
Objectives of HR Audit
(1) To review every aspect of management of HR to determine the effectiveness of each
programmes in an organisation.
(2) To seek explanation and information in respect of failure and success of HR.
(3) To evaluate implementation of policies.
(4) To evaluate the performance of personnel staff and employees.
(5) To seek priorities, values and goals of management philosophy.
Need For Human Resource Audit
Though there is no legal obligation to have HR audit as in case of financial accounts but the
managements have realized its need and usefulness. Therefore they have taken up HR audit voluntarily.
It is done to fulfill the following needs :
(1) The managements of organisations have realized the need for HR audit because of
powerful influence on motivation of employees at work due to participation of employees
in decision making.
(2) Growth of organisation needs HR audit. Large organisation requires continuous feedback
for improvement in performance of its employees.
(3) Mounting pressures from trade unions of employees and their participation in formulating
employment policy and questioning of managerial competence have raised the need for
HR audit.
(4) An effective two way communication system has also facilitated the need for HR audit.
(5) Many plants are located at large distances. This also made the HR audit compulsory.
(6) The HR audit becomes essential because of delegation of authority and decentralization
of power.
Approaches to HR Audit
According to William Werther and Keith Davis, there are five approaches for the purpose of
evaluation.
These are briefly outlined as under :
(1) Comparative Approach : Under this approach auditors identify one model company and
the results obtained of the organisation under audit are compared with it.
(2) Outside Authority Approach : In outside authority approach a benchmark is set to compare
own results. A standard for audit set by outside consultant is used as benchmark.
(3) Statistical Approach : Under statistical approach the statistical information maintained by
the company in respect of absenteeism, employee turnover etc. is used as the measures
for evaluating performance.

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 HRM (Human Resource Development)

(4) Compliance Approach : Under compliance approach the auditors make a review of past
actions to determine to see whether those activities are in compliance with the legal
provisions and in accordance with the policies and procedures of the company.
(5) MBO Approach : Under MBO approach specific targets are fixed. The performance is
measured against these targets. The auditors conduct the survey of actual performance
and compare with the goals set.
3.1.14 Consultant - Client Relationship
Definition of Consultant and Client
One definition to consider for consultants is “those who provide general management advice
within strategic, organizational, or and who are institutionally organized in firms” is not however, to
capture some key points about management consultancy. A more comprehensive definition is:
Consultant is an advisory contracted for and pmvided to organizations to help in an objective and
independent manner, the client organization to identify management problems. Analyze such problems,
and help, when requested, in the implementation of solutions (Greiner and Metzger, 1983).
This is an important elaboration the earlier definition. For example, it emphasizes that management
consultants are truly external to the organization. Normally, management would not take the place of staff
within the organization. Nor would they have direct clout in organization. Kubr (1996) notes that “objective
and independent” implies a financial, administrative, political emotional independence from the client.
Further, there is an implication that the resources of a firm typically back the management consulting
activities, i.e. it is typically more than a simple individual.
Role of consultant
Schein (1990) has identified three broadly accepted models of consultation: purchase of expertise,
doctor-patient, and process consultation:
(1) Purchase-of-expertise suggests that clients are looking for consultants to provide
independent perspective to bear on specific challenges hand. There is no expectation to
focus on the client relationship per se, but rather to provide expertise in a detached
manner.
(2) The doctor-patient model has the consultant focusing on using a diagnostic approach to
examine the client organization's problems. From their distinct experience, knowledge and
diagnostic abilities the consultants identify strategic and organizational problems. This
model emphasizes the importance of building a strong relationships and developing trust
client and the consultant.
(3) The process consultation model considers the consultant as a facilitator with the client
actually providing much of the relevant expertise. There is a clear distinction of roles and
tasks. In the end the client chooses what to do about the problem. The consultant provides
mote of the framework and methodology for defining the problem and the best possible
alternatives.
Alternatively, and Grenier 1985) propose five of consultants :
(1) The mental adventurer truly intransigent problems such as long-term scenarios for country
development, by applying rigorous economic methods and leveraging his or her experience
base.
(2) The strategic navigator bases his or her contribution on a rich quantitative understanding
of the market and competitive dynamics, and then recommends courses of action without
too much regard of the client’s perspective.
(3) The management physician derives his or her recommendations from a deep understanding
of the internal dynamics of the client often willing to sacrifice some objectivity to gain a
realistic on what is achievable.
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(4) The system architect impacts his or her clients by helping redesign processes, routines,
and systems – always in close with the client.
(5) The friendly co-pilot counsels senior managers as a facilitator rather than as an expert,
and has no ambition to provide new knowledge to the client (Nees and Grenicr. 1985).
Necs and Grenier’s model shows many similarities to Schcin’s (1990) study, for example the
mental adventurer can be considered similar to the expert. The strategic navigator management physician
and system architect correlate with the “doctor-patient” model and the friendly copilot aligns with the
process-consultation model. Institutionally organized strategy consultants are found primarily in the strategic
navigator and management physician segments. In any event, consultant engagements beyond simply
purchasing expertise require the development of a relationship between the consultant and the client.
Turner (1982) proposed a continuum with eight categories of client-consultant relationships. His framework
used a hierarchy of tasks to illustrate the level of extent of a client's involvement with a consultant. The
eight task categories identified are:
(1) providing information to a client;
(2) solving a client’s problem;
(3) making a diagnosis, which may necessitate redefinition of the problem;
(4) making recommendations based on the diagnosis;
(5) assisting with implementation of recommended actions;
(6) building a consensus and commitment around a corrective action;
(7) facilitating client learning; and
(8) permanently improving organizational effectiveness.
Turner argued that until the late 1970s, consultants tended to work more as suppliers to the client.
Increasingly relationships in consulting engagements have evolved to build more of a partnership of
mutual respect aimed at fundamentally improving the client's effectiveness.
Client
The question of who the client is quickly becomes an important issue in consultant – client
relationships. A viable model is one in which, in the initial contact, a single manager is the client, but trust
and confidence develop between the key client and the consultant, both begin to view the manager and
his or her subordinate team as the client, then the manager’s total organization the client.
Role or client
In discussing consultancy, it is important to clarify the concept of client. Schein points out that
any helping or change process always has a target or a client (Schein. 1997). There is an assumption,
few instance, that the client is always clearly identifiable, when in reality the question of the client actually
is be “ambiguous and problematic.” There can be complicated dynamics around this very issue. Schein
proposes a simplifying model to understand types of clients and types of client relationships.
In Schein’s model, six basic types can be distinguished :
(1) Contact clients : individual(s) who first contact the consultant with a request, question,
(2) Intermediate clients : the individuals or groups who or which get involved in various
interviews, meetings, and other activities as the project evolves.
(3) Primary clients : the individual(s) who ultimately “own” the problem or issue being worked
on; they are typically also the ones who pay the consulting bills or whose budget covers
the consultation project.
(4) Unwitting clients : members of the organization or client system above, below and laterally
related to the primary clients who will be affected by interventions but who are not aware
they will be impacted.

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(5) Indirect clients : members of the organization who are aware that they will be affected by
the interventions but who are unknown to the consultant and who may feel either positive
or negative about these effects.
(6) Ultimate clients : the community, the total organization, an occupational group, or any
other group that the consultant cares about and whose welfare must be considered in any
intervention that the consultant makes (Schein, 1997).
Thus, concept of client is not straightforward, Different types of clients may well have different
needs, expectations, influence and degrees of participation in consultancy.
The Dependency and Termination of Client Consultant Relationship
If the consultant is in the business of enhancing the client system’s abilities in problem solving
and renewal, then the consultant is in the business of assisting the effective managerial skills and
insights rather than to create a prolonged dependency relationship. This issue tends to be minor but if
the consultant and client work out the expert versus facilitator issue described earlier and if the consultant
subscribes to the dependency and more client growth than the traditional consulting modes and the
notion of a shared technology leads to learning on the part of the client.
The latter notion that if the consultant intervention is to be helpful in an ongoing sense, it is
imperative for client to have ‘free informed choice’. And to have this free choice the client requires a
cognitive map of the overall process. Thus the consultant will have to be quite open about such matters
as the objectives of the various interventions that are made and about the sequence of planned events.
The OD consultant should continuously be part educator he or she intervenes in the system.
3.1.15 Knowledge Management (KM)
Concept of KM:
Knowledge management is a process of acquiring, generating, accumulating and using knowledge
for the benefit of the organisation to enable it to gain a competitive edge for survival, growth and
prosperity in a globalized competitive economy.
Features of KM:
Some salient features of KM are described below:
(i) KM is a systematic process; consisting of standardized procedures to collect, store,
distribute and use knowledge. The essence of KM is to get right knowledge to right people,
at the right time.
(ii) Knowledge is of two types - explicit and implicit. Explicit knowledge is visible information
available in literature, reports, patents, technical specifications, communication with
customers, suppliers, competitors etc. It can be embedded in rules, systems, policies and
procedures etc. of the organisation.
Tacit or implicit knowledge is personal knowledge residing in the minds of people as a
result of their personal beliefs, values, perspectives and experience. There is a need for
a learning organisation for enhancement, sharing and utilisation of tacit knowledge.
(iii) KM is a continuous process; as the world economy is dynamic and full of challenges. It
requires constant creation of new skills and capabilities and improvement of existing ones.
(iv) KM requires whole-hearted support of top management, to provide cultural and technical
foundation for the origination and implementation of KM practices.
(v) The objective of KM is improvement in organisational performance; to enable the
organisation acquire, sharpen and utilize its competitive edge for survival and growth in
the global economy of today.

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Knowledge Management and Information Technology

KM is not an outgrowth of IT. Rather, KM requires human skills, creativity and innovative capabilities
of people; which are the base of KM. In fact I there are tools of IT like Intranets, Lotus Notes, MS-
Exchange etc.; which provide an infrastructure for the free play of human creativity and innovative powers
for the formulation of corporation strategy, in a competitive globalized environment.
The above ideas are illustrated with the help of the following diagram :

An Overview of the Process of KM :

KM broadly consists of the following major steps :
(i) Identification of Knowledge Needs : The first step in KM is an identification of what type
of knowledge is required for the successful designing and implementation of corporate
strategy.
(ii) Determination of Knowledge Assets : The management must identify what are the
knowledge assets of the organisation; which basically are competitors, suppliers,
governmental agencies, products and processes, technology etc. Management must plan
to get maximum returns out of knowledge assets.
(iii) Generation of Knowledge : Generation of knowledge requires two sources :
(a) Acquisition of knowledge through knowledge assets e.g. knowledge about new
products (from competitors), new technologies, social, economical, political changes.
It also requires transformation of raw information into knowledge, useful to solve
business problems.
(b) Generation of knowledge, by creating conditions for the emergence of a learning
organisation. This is the most important internal source of knowledge generation
which makes tacit knowledge of individuals available for organisational purposes.
(iv) Knowledge Storage : It includes preserving existing and acquired knowledge in knowledge
repositories. (A knowledge repository is an on line computer based storehouse of organised
information about a particular domain of knowledge).
(v) Knowledge Distribution : It is a process which allows members of the organisation to
have an access to the collective knowledge of the organisation.
(vi) Knowledge Utilization : It requires embedding knowledge in products, processes,
procedures etc. of the organisation. Best utilisation of knowledge takes place when
managers utilize knowledge in organisational decision making. A learning organisation
creates conditions for sharing and utilizing knowledge in organisational contexts.
(vii) Feedback on KM : Feedback on KM implies evaluating the significance of knowledge
assets. It also includes impact of KM on organisational performance; and devising
techniques for betterment of KM in future.
Significance of KM
Significance of KM could be highlighted with reference the following advantages which KM provides
to the organisation:
(i) Building and Sharpening Competitive Edge : KM enables a corporation to build and
sharpen its competitive edge, for survival and growth in the competitive globalized economy.
In fact, KM aided by IT tools enables a corporation to design and implement most appropriate
corporate strategies.
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 HRM (Human Resource Development)

(ii) Betterment of Human Relations : KM is basically built on the knowledge generated,

shared and utilized through a learning organisation. There is no doubt that learning
organisation provides the foundation on which the building of KM could be built. A learning
organisation through facilitating interaction among people of the organisation, leads to
betterment of human relations; which is a very big permanent asset an organisation can
boast of to possess.
(iii) Improvement in Organisational Efficiency : KM provides knowledge which can be
embedded in organisational processes. It makes knowledge available for decision-making
purposes. Thus it helps to improve organisational efficiency, resulting in reduced costs
and increased profits, for the organisation.
(iv) Enhancement of Human Capital Capabilities : KM-its concept and practices - motivate
people to enhance their intellectual capabilities, resulting in new skills, improvement of
existing skills etc. Thus not only does KM enhance the intellectual elements of people; but
also indirectly prevents depreciation of human capital.
(v) Enhancement of Enterprise Goodwill : Initiation and practices of KM help an enterprise
enhance its goodwill in the global market; enabling it to acquire more success and
prosperity.
3.1.16 Human Resource Information System (HRIS)
Concept
Human resource information system has become a part of all large organisations. It is a
computerized system that aids in the processing of information relating to human resource management.
It is a device, design to fulfill the manpower information needs of the organisation. The organisation has
to incur a meager amount to install this system. Human resource information system facilitates the
organisation to store information relating to skills, knowledge, capabilities, potentialities, qualifications
required to perform jobs and available among employees which is made accessible at the fingertips of
the managers through computer network.
HRIS differs from the manual system as it uses the information technology or computers. HRIS
forms a part of management information system which includes information relating to finances, assets,
accounting, sales, marketing, production etc. HRIS meant for collection and analysis of data relating to
human resources of the organisation.
It helps managers in decision-making in respect of promotion, wage fixing, recruitment, training
and development. In this way HRIS works as a decision support system device. The inputs of HRIS
include the information relating to employees, their abilities, qualifications, potentialities, creative instincts,
age, pay scales, various jobs in the organisation, their required skills and qualifications to do them, the
number of employees and executives manning various positions, organisational objectives, policies and
procedures etc.
This information is loaded into the system. This data is analyzed into the most useful information
required by the managers. This is the transformation of input data. The information technology after
transformation gives output in multiple forms like printouts and other devices. HRIS is the device widely
used by the corporate bodies for it provides significant, accurate, relevant and comprehensive data base
information in respect of human resources required by the organisation.
There are many private firms who keep and maintain the database elating to human resources
dealing in consultancy services in respect of recruitment of executive and other personnel's required by
the companies. These consultancy firms are the important external sources of recruitment of all types
and kinds of personnel's to the companies in India and abroad. The HRIS not only can be prepared for
an industrial, business, service, educational, govt. organisation but also for the entire city, district, state
or country can be prepared and used whenever need arise for a special kind of personnel's.

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In order to eliminate human resource problem of any kind HRIS comes to the rescue and provide
the services of hiring human resources, maintaining the complete record of human resources. It can at
any moment show the supply of human resources available.
The HRIS works as follows
Inputs
The input of human resource information system includes information related to employees such
as education, age, experience, training, present status, present salary, whether promoted or not,
organisation's policy past and present, procedures past and present, and other necessary detailed
information relating to the human resources at the organisation. These are the raw data collected from
the office files and entered into computer terminal connected to the main computer. This information is
checked and rechecked and scanned to ensure its correctness.
The computerized human resource information system is in all respect a superior one to that of
manual system which is time consuming and not so cost effective. On the contrary HRIS is time saving
and cheap and there is no possibility of error. Errors can be eliminated. The most important benefit of
the system is the information available immediately as and when desired.
Transformation
The information fed to the computer can be transformed into more meaningful and necessary
information that exactly required by the organisation. This is the conversion stage of computerized HRIS.
The transformations of HRIS are closely related to the computer software. These are the instructions or
commands for the computer to do the needful.

Organisations may have functional HRIS to suit to their needs. They may have HRIS for marketing
sales, advertising, production, finance, accounting, materials etc. These are the various types of HRIS
can easily be prepared and maintained.
The information transformed into meaningful calculation is very useful to the managers and
organisation as well. This works as a decision support system. Comparative statements weekly, monthly,
quarterly, annually can easily be had at the fingertips of the managers which aid in making appropriate
decisions. Statistical analysis and operation research techniques can be used.
Output
The transformed material can be utilized potentially. Output referred to the printouts of the
transformed material from the computer printer, e.g. salary statement, cheques to be issued to the
parties, report on performance of an employee, budget estimates, average cost of production of goods
etc. All these can be had in the form of printouts, terminal screens etc. A well knit HRIS acts as a worthy
decision support system of a very high quality. The high quality output must be accurate, relevant,
consistent, readable and comprehensive not partial.
Feedback and Control
The output obtained is relevant and useful or not must be known. The method of ensuring it is
known as feedback. Feedback establishes control over the system.

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Advantages of HRIS
1. It gives accurate information.
2. It does fast processing.
3. It works as a valuable tool to strategic planning and its implementation.
4. It gives instant information relating to existing human resources, skills, categories, pay
structures, qualifications, age, specialization, training and development, experience etc.
5. It acts as a decision support system.
6. It is an expert system.
7. It is time efficient and not much expensive.
8. It facilitates reliable information.
9. Information relating to human resources is made easily accessible through HRIS.
10. It establishes strong management control.
11. It facilitates configurations of various designs, such as multiple systems, mixing of system
designs, centralized computer facility. It tells about the attitude of the organisation regarding
its human resources.
Infrastructure Required by HRIS
Computerized human resource information system is one time investment. Initial investment is
very high. Installation of the entire network of computers, software's, specialized staff need very heavy
investment. But in the long run it is very cost effective. It is quite cheap. For its use only the computer
consumables are required.
HRIS is the system which facilitates quick human resource decision making. But it has certain
drawbacks. This information is easily accessible by anyone and hence there is every likelihood of its
misuse or underuse. It requires that the members of the organisation using HRIS must follow certain
ethics and abstain from revealing the vital information to any unauthorized person.
It is a strategic tool in the hands of management for effective planning for future. Therefore the
secrecy of the information must be maintained at any cost. The employees of the organisation need to
be trained on certain ethics to be followed by everyone.
Designing of Human Resource Information System (HRIS)
The four steps involved in designing of HRIS are as follows: 1. Determination of Information
Needs 2. Designing the System 3. Implementation 4. Monitoring and Evaluation.
1. Determination of Information Needs : Data and information are basic inputs for decision
making activity. Managers at different levels may need different types of information. Hence, identification
of information needed by the managers becomes the first step in designing HRIS. This involves a
perspicacious study of the activities carried out in the organisation.
Work patterns, their relationship and constraints affecting the HRIS also need to be analysed.
Yes, these factors may differ from organisation to organisation and from industry to industry and even
from time to time in case of the same organisation and industry.
2. Designing the System : At this stage, the flow of information is structured in such a manner
that it is economical and matches with the information needs of managers. It is important to mention that
HRIS as a sub-system of Management Information System (MIS) does not require a separate design.
However, designing HRIS may require developing preferred processing techniques for desired data set
by managers at different levels.
3. Implementation : This is the stage when the HRIS is actually set up. In order to handle the
system effectively, employees are imparted the necessary skill through orientation and training
programmes. Besides, facilities are increased and upgraded, procedures are properly streamlined with
an objective to integrate the HRIS with various organisational components in existence at the.
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 HRM (Human Resource Development)

4. Monitoring and Evaluation : It involves measuring the performance, or say, contribution of

the system to the overall human resource management of the organisation. By doing so, gaps are
identified and corrective steps are taken to ensure its smooth operation. The system is evaluated on a
regular basis so that it is evaluated in the light of changes taking place from time to time within and
outside the organisation.
Advantages and Uses of Human Resource Information System (HRIS)
Advantages
A well developed HRIS offers the following advantages :
1. Reduction in the cost of stored data in human resource.
2. Higher speed of retrieval and processing of data.
3. Reduction in duplication of efforts leading to reduction in cost.
4. Availability of accurate and timely data about human resources.
5. Better analysis leading to more effective decision making.
6. More meaningful career planning and counselling at all levels.
7. Improved quality of reports.
8. Better ability to respond to environmental changes.
9. More transparency in the system.
Alastair' Evans has listed the following potential benefits that can be derived from HRIS:
Cost Effectiveness
1. The computerization of personnel records offers an option to be considered when personnel
functions are-facing conflicting pressures to provide more information whilst at the same
time cut back on administrative overhead costs. As the costs of computer hardware falls
relative to the costs of employing clerical staff, so the adoption of computerized systems
is becoming increasingly cost effective.
2. A reduction of one-third in time taken to process new employees.
3. Savings of between 55 and 90 per cent of the time taken to provide routine information
by manual methods.
4. Clerical savings of over 600 hours per year in providing data to patrol, over 800 hours per
year in preparing weekly reports and almost 500 hours per year in preparing monthly,
quarterly and annual reports.
5. Improved accuracy of data which is updated at regular intervals, such as pay, personal
records, etc.
Uses of HRIS
The main purpose of maintaining HRIS system is to gather, classify, process, record and
disseminates the information required for efficient and effective management of human resources in the
organisation.
The various uses of HRIS in an organisation can be listed as follows :
Personnel Administration : It encompasses personal information of an employee. These may
include name, address, date of birth, marital status, and the date of joining the organisation. It also
contains the name and address of next kin of the employee concern. These information describe the
employee.
Salary Administration : One of the functions of HRIS is to provide a report containing information
like present salary, benefits, last pay increase and proposed increase in future.
Leave/Absence Increase : HRIS is also used to control leave/absence of employees. This is
done by maintaining a leave history of each employee. Every employee can be issued an identity card
writing every employee's token number coded on it. Employee's entry and exit from the organisation
should be recorded on the identity card. This reduces chances for malpractice or oversight in calculating
wages for each employee.
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 HRM (Human Resource Development)

Skill Inventory : Recording employee skills and monitoring a skill data base is yet another use
of the HRIS. Such a skill record helps identify employees with the necessary skill for certain positions
or jobs in an organisation.
Medical History : The HRIS is also used to maintain occupational health data required for
industrial safety purposes, accident monitoring, and so on.
Performance Appraisal : In order to form a comprehensive overview about an employee, HRIS
maintains performance appraisal data such as the due date of the appraisal, potential for promotion,
scores of each performance criteria and alike. The textual information can be combined with the factual
data obtained from the HRIS and the combination of information can be used for imparting training and
affecting employee mobility in the form of transfer and promotion.
Manpower Planning : HRIS is used for manpower planning also. It keeps information of
organisational requirements in terms of positions. HRIS connects employees to the required positions
in the organisation. It is also used to identify vacancies and establish employees thereon. HRIS can also
help identify a logical progression path and the steps to be taken for employee progress/ advancement.
Recruitment : Recruitment forms the most essential function of HRM. HRIS helps in the
recruitment process in a big way by recording the details of activities involved in employee recruitment.
These may include cost and method of recruitment and time taken to fill the positions level wise, for
example.
Career Planning : By providing necessary information such as which employees have been
earmarked for which positions, HRIS facilitates positional advancement of employees. In other words,
HRIS helps in planning for succession.
Collective Bargaining : HRIS through a computer terminal can provide up-to-date relevant and
required information, facts and figures and, thus, can facilitate collective bargaining. It can he p collective
bargaining as "what if analysis" rather as feelings and fictions. In the same manner, HRIS can also help
maintain better human relations in the organisation.
Now, the various uses or applications of HRIS can be juxtaposed as follows :
Table : Computerised Applications for HRIS

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 Human Resource Management (MSP)

Human Resource Management

Model Solved Paper
Time : 120 min. Maximum Marks : 200

Note : This paper contains hundred (100) objective type questions, each question carries two
(2) marks. Attempt all the questions.

1. LPG stands for Liberalisation, ___________ and Gloablisation.

(A) Planning (B) Privatisation
(C) Presenting (D) None of these

2. David Mc. Clelland identified three motives those are :

(A) Affiliation (B) Power
(C) Achievement (D) All of these

3. Among the given options which best suits the explanation- In this approach the structure is clear,
well defined, centralized, the vertical hierarchy of command is also maintained.
(A) Mechanistic approach (B) Scientific approach
(C) Humanistic approach (D) None of these

4. “Controlling is determining, what is being accomplished- that is evaluating performance and, if

necessary applying corrective measures so that the performance takes place according to plans”
is given by:
(A) Michael E Porter (B) Chester Barnard
(C) Terry and Franklin (D) Charles Babbage

5. Match the following

List-I List-II
(a) Forecasting (i) Controlling
(b) Communication (ii) Planning
(c) Selection of manager (iii) Leading
(d) Established performance standard (iv) Staffing
Codes :
(a) (b) (c) (d)
(A) (iv) (iii) (ii) (i)
(B) (iii) (iv) (ii) (i)
(C) (ii) (iv) (iii) (i)
(D) (ii) (iii) (iv) (i)

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 Human Resource Management (MSP)

6. According to the skills which are there in the management levels, the technical skills become
_____ at the top level of the management hierarchy.
(A) Highest (B) Least
(C) Balance between (A) and (B) (D) None of the above.

7. Who developed the four principles of scientific management for improving productivity?
(A) Elton Mayo (B) F.W Taylor
(C) Henry Fayol (D) None of these

8. Who developed a formula for determining the number of possible relationships between a manager
and subordinates?
(A) V.A Graicunas (B) James D. Thompson
(C) Frank and Lillian (D) None of these

9. Which of the following is the major element of planning process?

(A) Developing leadership abilities (B) Selecting right people
(C) Perception of opportunities (D) Motivating people

10. Which principle of management is violates by matrix organisational structure?

(A) Division of labour (B) Unity of direction
(C) Unity of command (D) None of the above

11. Which one is not a part of effective organisation’s career planning process?
(A) Assessment of occupational & Career Choice
(B) Personal Assessment
(C) Annual Appraisal & Development Programme
(D) Incentive Management

12. QWL movement was spearheaded by

(A) CA Barlett and S Ghoshal
(B) Eric Tryst, Fred Enery, Eina Thorsrud
(C) D Harnett and L cummings
(D) Ronen simcha & Oded Shankar

13. Rationalisation of human resource means-

(A) Only downsizing
(B) Only increasing the manpower strength
(C) Right sizing
(D) Skill enhancement only

14. Who had advanced the ‘soft’ and ‘hard’ approach of HRM ?
(A) Benjamin Schmeider (B) James Niniger
(C) John Strong (D) Uoyd Baind

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 Human Resource Management (MSP)

15. Job analysis includes

(A) Job description and job enlargement
(B) Job enlargement and Job enrichment
(C) Job description and Job specification
(D) All of the above

16. Fish bone Analysis as a tool of quality circle was advanced by :

(A) Edward Deming (B) Joseph Juran
(C) Kouru Ishikawa (D) Phillip Crosby

17. Who has advanced the PDCA cycle of Quality management ?

(A) Joseph M Juran (B) W Edwards Deming
(C) Kaoru Ishikawa (D) Phillip Crosby

18. Match the following

List-I : (Contributor) List-II : (Contribution to TQM)
a. Walter Shewart 1. Concept of internal customer
b. Joseph Juran 2. Product design quality
c. Kaoru Ishikawa 3. Statistical control chart
d. Genichi Taguchi 4. Quality as ‘fitness for use’
Codes :
a b c d
(A) 2 1 3 4
(B) 4 3 1 2
(C) 2 3 1 4
(D) 3 4 1 2

19. The Philosophy of ‘never-ending improvement’ in total quality management is called

(A) Kanaban (B) Business Process Re-engineering
(C) Benchmarking (D) Kaizen

20. CIRO approach to training and development stands for :

(A) Content, Initiative, Response and Output
(B) Content, Input, Response and Operation
(C) Content, Input, Reliable and Output
(D) Content, Input, Reaction and Output

21. OCTAPACE is :
(A) Openness, Confrontation, Trust, Authenticity, Pro-activity, Autonomy, Collaboration,
Experimenting.
(B) Openness, Comfort, Trust, Authenticity, Pro-activity, Autonomy, Collaboration, Experimenting.
(C) Open, Confrontation, Trust, Authenticity, Pro-activity, Autonomy, Collaboration, Experimenting.
(D) None of the above

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 Human Resource Management (MSP)

22. Who is known as the father of Indian HRD ?

(A) T.V. Rao (B) Mahatma Gandhi
(C) Udaipareek (D) John storey

23. HR maturity of company with respect to its strategic goals is measured by

(A) Human Resource Development (HRD) scorecard
(B) HR scorecard
(C) both (A) and (B)
(D) none of above

24. In the 'matching model' of HRM, what is meant by 'Cost driven HRM'?
(A) Where a strategic planning process does not exist, but people are viewed as a resource.
(B) Where a strategic planning process exists, but people are viewed as a cost.
(C) Where a strategic planning process does not exist, and people are viewed as a cost.
(D) Where a strategic planning process exists, and people are viewed as a resource

25. Which of the following factors are included in the calculation of Human Development Index ?
(A) Life expectancy (B) Adult literacy
(C) Decent standard of living (D) All of these

26. The concept of HR audit has emerged from

(A) Financial audit (B) Purchase audit
(C) Marketing audit (D) None of these

27. Which of the following is not the importance of HRD ?

(A) Success of organization (B) Higher quality of work life
(C) Higher productivity (D) Lower morale

28. If employee is citizen of India, working in U.S and employed by company whose headquarters are
in Japan then employee is classified as
(A) third country nationals (B) third world employees
(C) expatriates (D) host country nationals

29. The conventional connotation with which the term 'climate' has been used in literature is :
(A) HRD outcome (B) HRD culture
(C) Organisational climate (D) Supportive HRD

30. Which of the following is not the part of HRD mechanism?

(A) Career planning (B) Performance appraisal
(C) Role analysis (D) Business budgeting

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 Human Resource Management (MSP)

31. Which of the following is not considered as a leadership style ?

(A) Task oriented leadership style
(B) Society oriented leadership style
(C) Employee oriented leadership style
(D) Autocratic leadership style

32. Its basic premise is that the behaviour of human beings is determined by the sum of external
environmental factors and not by internal needs, desires and wants. The reference is to :
(A) Vroom’s Contingency Model of Motivation
(B) Skinner’s Operant theory of Motivation
(C) Adam’s Equity theory of Motivation
(D) All of the above

33. Behavioural Science Approach towards management comes from :

(A) Taylor
(B) Fayol
(C) Researcher from Howard University
(D) Louis Braudies

34. Which of the following statements about the informal communication is not true.
(A) It is helpful in reducing the rigours of formal hierarchical channel of communication.
(B) It is multi - dimensional and is also called grapevine.
(C) It has the disadvantage of undermining the role of discipline in the organisation.
(D) It is a desirable type of communication which should be supported to the extent possible
with the formal communication.

35. A management theory stating that different situations call for different leadership styles and that
essentially there is no one best way to lead is :
(A) Charisma leader (B) Autocratic leader
(C) Situational leader (D) None of these

36. Which of the following is not process Prospective motivation.

(A) Power and Affiliation Needs
(B) Expectancy theory
(C) Porter - Lawler Extension of Expectancy theory
(D) Equity theory

37. Which one is part of Michael Porter’s generic strategies ?

(A) Cost leadership strategy (B) Focus strategy
(C) Differentiation strategy (D) All of the above

38. R Likert believed which of the following types of leaders to be more effective
(A) Production- oriented (B) Task-oriented
(C) People- oriented (D) Job- centred

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 Human Resource Management (MSP)

39. Which cannot be described as ‘soft’ or ‘generic’ skills ?

(A) Team working (B) Motivation
(C) Leadership (D) IT skills

40. ‘Johari window’ concept is associated with :

(A) Motivation (B) Leadership
(C) Communication (D) Attitude

41. Which is the order of correct settlement of industrial disputes ?

1. Industrial Tribunal 2. National Tribunal
3. Conciliation 4. Labour Court
(A) 3, 1, 4, 2 (B) 3, 4, 1, 2
(C) 1, 4, 3, 2 (D) 3, 2, 4, 1

42. The dispute of individual workman is deemed to be industrial dispute if the dispute or difference is
connected with or arising out of the following where no other workman nor any union of workman
is a party to the dispute :
(A) Grievance of an individual workman
(B) Discharge of an individual workman
(C) Dismissal of an individual workman
(D) Discharge dismissal, retrenchment or otherwise termination of services of an individual
workman.

43. Match the following :

List-I List-II
a. I schedule 1. Conditions of service for change of which
notice is to be given
b. II & III schedule 2. Labour courts Industrial tribunals
c. IV schedule 3. Industries which may be declared as public
utility services
d. V schedule 4. Unfair labour practices
Codes :
a b c d
(A) 4 3 2 1
(B) 2 3 1 4
(C) 3 2 1 4
(D) 4 2 3 1

44. Under the Industrial disputes Act, employees have the right to strike and express their disagreement
on an issue but no right to ________
(A) Express violence (B) Tool down
(C) Gherao (D) Boycott

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 Human Resource Management (MSP)

45. Good industrial relations refer to :

(A) Absence of industrial dispute
(B) Greater use of collective bargaining
(C) Friendly attitude of employer and trade union
(D) All of the above

46. Chapter V-A of industrial dispute Act, 1947 envisages about :

(A) closure (B) grievance redressal
(C) Lay-off retrenchment (D) all of the above

47. When the process of collective bargaining fails then the role of third party comes to break the
deadlock and this process is generally called :
(A) Conciliation/mediation (B) arbitration
(C) intervention (D) None of these

48. Assertion (A) : A grievance is a sign of the employee discontent with job and its nature.
Reason (R) : It is caused due to the difference between employee expectations and management
practice.
(A) R is true, A is false (B) A is true, R is false
(C) Both A and R are true (D) Both A and R are false

49. Match the following :

Enactment Year
1. Industrial employment standing orders Act 1. 1948
2. Industrial disputes Act 2. 1926
3. Factories Act 3. 1947
4. Trade Unions Act 4. 1946
Codes :
a b c d
(A) 3 2 4 1
(B) 4 2 1 3
(C) 2 1 4 3
(D) 4 3 1 2

50. Under Industrial disputes Act, 1947 an aggrieved employee should be given the answer within
_______ from the submission of grievance.
(A) 24 hours (B) 36 hours
(C) 48 hours (D) 72 hours

51. Parties to industrial relations are

(A) ILO, Government, Association of employers
(B) ILO, Government, IMF
(C) ILO, Board of Directors, Association of employers
(D) Government, Board of Directors, Association of employers

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 Human Resource Management (MSP)

52. industrial relation is grounded in_______________based on unitary approach,

(A) Mutual co-operation (B) Individual treatment
(C) Team work and shared goals (D) All of the above

53. According to Marxist approach, wage related disputes are______

(A) Primary (B) Secondary
(C) Tertiary (D) Not considered

54. ______ as legitimate representative of employee interests is perceived by pluralistic approach

(A) Trade unions (B) Management
(C) Board of Directors (D) None of the above

55. A course on Industrial relations in its MBA programme was firstly introduced by
(A) IIM Indore (B) XLRI Jamshedpur
(C) MDI Gurgaon (D) IIM Bangalore

56. Which is not an approach to industrial relations?

(A) Unitary approach (B) Pluralistic approach
(C) Marxist approach (D) Employee's approach

57. All - India Trade Union Congress formed to __________.

(A) To establish just industrial relations
(B) To establish a socialist state in India
(C) To bring about unity in the trade union movement
(D) The right to strike

58. The acts do not apply to the registered trade unions are
(A) The Co-operative Societies Act, 1912
(B) The Societies Registration Act, 1860
(C) The Companies Act, 1956
(D) All of the above

59. Disqualification of an office bearer or executive of the trade union is based on the grounds of
A. Has been convicted by the court of any offence involving moral turpitude
B. Has not attained the age of 18 years
C. Is not working with any establishment
(A) A&B (B) A&C
(C) B & C (D) A, B and C

60. year in which the trade union movement start in India?

(A) 1975 (B) 1939
(C) 1935 (D) 1918

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 Human Resource Management (MSP)

61. The Section 20 of the Factories act discusses about

(A) Drininking Water (B) Lighting
(C) Spittoons (D) Latrines and Urinals

62. the section _______ of Factories Act 1947. The employment of young person on dangerous
machines shall be prohibited
(A) Section 21 (B) Section 22
(C) Section 23 (D) Section 24

63. The section __________A suitable goggles shall be provided for the protection of persons
employed in any factory
(A) Section-36 (B) Section-39
(C) Section-40 (D) Section -35

64. A half yearly return for every half of every calendar year , in duplicate in Form _______ so as
to reach the inspector of factories on or before ________ of the year
(A) Form NO-20, 31st July (B) Form No 21, 31st July
(C) Form No. 25, 31st July (D) Form No. 24, 31st June

65. An accident report, shall be confirmed by the manager by sending a separate report in form no
_______ with details of number of person killed or injured to i) Inspector of Factories
within _______ hours of the accident.
(A) Form No.18, 12 Hours (B) Form No. 18.A , 12 Hours
(C) Form No.18, 24 Hours (D) Form. No 18 A , 24 Hours

66. The particulars of the accident should be entered in separate registers kept as-Accident Book-
Form No _________for ESI office .
(A) Form No -14, (B) Form No -15
(C) From .No-21 (D) From No- 20

67. Section _______ of the Factories Act describes about the rights of the workers
(A) 111 (B) 111 A
(C) 110 (D) 112

68. The occupier shall be punishable with imprisonment extend to _______ months or fine _______
or both for using false certificate of fitness.
(A) two months, 1000 rupees (B) one year, 2000 rupees
(C) six months, 1000 rupees (D) one month, 5000 rupees

69. In case of employee covered under the ESI, the accident report shall be sent in Form No _______
to Local office of the ESI to which the company attached
(A) Form No. 18 (B) Form No. 18 A
(C) Form No. 25 (D) From No.16

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 Human Resource Management (MSP)

70. Under the Factories Act 1948, a register of Adult workers shall be maintained in Form No
_______.
(A) From No.25 (B) Form No. 25 A
(C) Form No.12 (D) Form No. 14

71. Choose the correct date and year on which payment of wages act was passed ?
(A) 23rd April, 1936 (B) 28th March, 1937
(C) 25th April, 1937 (D) 27th April, 1936

72. In which year did the payment of wages act come into force ?
(A) 23rd April, 1925 (B) 28th March, 1940
(C) 23rd April, 1936 (D) 28th March, 1937

73. The power is vested in the ________ to make the act applicable to payment of wages to any
class of persons employed in any establishment or class of establishments specified in section
2(h) by giving 3 month’s notice to that effect.
(A) Central Government (B) Acting Government
(C) State Government (D) Judicial Court

74. Which of these deductions under section 7 of payment of wages act is not authorised ?
(A) Deduction for Fines
(B) Deduction for payment of income tax
(C) Deduction for payment of insurance
(D) Deduction for uniform and property

75. For which of the following purposes the payment of wages Act, 1938 was enacted ?
(A) To fix minimum rates of wages in sweated industries.
(B) To ensure payment of equal remuneration to both male and female workers for similar
work.
(C) To regulate payment of wages.
(D) All the above.

76. Who among the following will be responsible for the payment of wages to workers under the
payment of wages Act ?
(A) The employer
(B) The manager of the factory
(C) The person responsible to the employer for the supervision and control of the industrial
establishment.
(D) All the Above.

77. The payment of wages Act ,1936 was passed on the recommendations of:-
(A) The fair wages committee.
(B) The Rege committee.
(C) The Royal Commission on Labour.
(D) The National Commission on Labour
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 Human Resource Management (MSP)

78. Which of the following statements is not correct as per the Payment of Bonus Act, 1965 ?
(A) It is applicable to construction industry.
(B) It does not apply to employees in Life Insurance Corporation of India.
(C) Allocable surplus means 67% of the available surplus.
(D) Employee means any person including apprentice.

79. The ceiling on wage or salary for calculation of Bonus under the Payment of Bonus Act 1965 is
(A) Rs. 2,500 (B) Rs. 3,500
(C) Rs. 4,500 (D) Rs. 6,500

80. The Payment of Bonus Act, 1965 is applicable to an employee who draws wage or salary of
(A) Rs. 3500 in case of apprentice
(B) Rs. 5000 in case of apprentice and employee
(C) Rs. 7500 in case of employee only
(D) Rs. 10,000 in case of employee only

81. The principle that governs "A place for everything and everything in its place"
(A) Placement (B) Housekeeping
(C) Office keeping (D) Floor Management

82. Which is not an extra-mural welfare?

(A) Co-operative consumer facility (B) Creche for child care
(C) Recreational club (D) Health and Medical Services

83. Which of the following common defences were not available to the employers in cases of
compensation for accidents under the common law?
(A) Doctrine of Assumed Risk
(B) Doctrine of Contributory Negligence
(C) Doctrine of Common Employment and Fellow Servant's responsibility
(D) Doctrine of Natural Risk

84. "Workers are becoming conscious of their rights and privileges therefore it is prudent to appease
the workers" is the philosophy of ___________________
(A) Placating Theory (B) Policing Theory
(C) Philanthropic Theory (D) Paternalistic Theory

85. Welfare connotes atleast minimum desirable conditions of existence biologically and socially
determined is _____.
(A) Total concept (B) Social concept
(C) Relative concept (D) Positive concept

86. Minimum conditions of welfare is explained by

(A) Dr.Aykroid's formula (B) Subsistence Theory
(C) Both (A) and (B) (D) None of the above

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 Human Resource Management (MSP)

87. The labour welfare philosophy is meant for guarding the interests of labour against the exploitation
of employers
(A) Trusteeship Theory (B) Placating Theory
(C) Policing Theory (D) Philanthropic Theory

88. The labour welfare philosophy exposes the cause of empathic considerations by the employer of
employee well-being
(A) Trusteeship Theory (B) Placating Theory
(C) Policing Theory (D) Philanthropic Theory

89. Which of the statement is true about the trusteeship theory

(A) The employer has to set out a portion of the profits for the benefit of the employees
(B) Labour Welfare is provided for pacifying the agitating working class
(C) guarding the interests of labour against the exploitation of employers.
(D) exposes the cause of empathic considerations by the employer of employee well-being

90. Which of the statement is true about the placating theory

(A) The employer has to set out a portion of the profits for the benefit of the employees
(B) Labour Welfare is provided for pacifying the agitating working class
(C) Guarding the interests of labour against the exploitation of employers.
(D) Exposes the cause of empathic considerations by the employer of employee well-being

91. The person days of employment as a% of the total person days in labour force then Subtracting
this from 100 gives
(A) unemployment rate (B) Employment rate
(C) Underemployment rate (D) None of the above

92. At the All India level,________per cent of people work as casual labour.
(A) 46.6 percent (B) 32.8 percent
(C) 17.0 percent (D) 3.7 percent

93. Statement A : Enterprise surveys fails to capture the entire non-agricultural workforce, small
unorganised enterprise.
Statement B : Sources of counting workers engaged in formal employment are partial in nature
(A) Both the statements are true
(B) Both the statements are false
(C) Statement A is true, Statement B is false
(D) Statement B is true , statement A is false

94. At the All India level, _________per cent of the persons employed under Agriculture, Forestry and
Fishing sector.
(A) 46.1 percent (B) 32.0 per cent
(C) 21.8 percent (D) 50 per cent

95. At the All India level, a majority 67.5 per cent of the self employed workers had average monthly
earnings up to Rs. ______________
(A) 2000 (B) 3000
(C) 5500 (D) 7500

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 Human Resource Management (MSP)

96. Employment-Unemployment Survey conducted by the

(A) NSSO (B) MoLE
(C) Census Commissioner (D) MSME

97. According to Fifth Annual Employment - Unemployment Survey (2015-16), the all India male
LFPR is
(A) 24 percent (B) 75 percent
(C) 48 percent (D) 60 percent

98. According to Fifth Annual Employment - Unemployment Survey (2015-16), the All India male WPR
is
(A) 21.7 percent (B) 72.1 percent
(C) 45.9 percent (D) 75.2 percent

99. Which is not a Primary agency involved in collection of employment and unemployment statistics
(A) CSO (B) NSSO
(C) MOSPI (D) MSME

100. At the All India level,___________percent of workers deployed in tertiary sector

(A) 46.1 percent (B) 32.0 per cent
(C) 21.8 percent (D) 50 per cent

ANSWER KEY

1 2 3 4 5 6 7 8 9 10
B D A C C B B A C C
11 12 13 14 15 16 17 18 19 20
D B C C C C B D D D
21 22 23 24 25 26 27 28 29 30
A A A B D A D A C D
31 32 33 34 35 36 37 38 39 40
B B C C C A D C D C
41 42 43 44 45 46 47 48 49 50
B D C A A C A C D C
51 52 53 54 55 56 57 58 59 60
A D B A B D B D A D
61 62 63 64 65 66 67 68 69 70
C C D B A B B A D C
71 72 73 74 75 76 77 78 79 80
A D C D C D C D B D
81 82 83 84 85 86 87 88 89 90
B B D A D C C D A B
91 92 93 94 95 96 97 98 99 100
A B A A D A B B D B

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 Human Resource Management (MSP)

SOLUTIONS

1. (B) Privatisation
2. (D) According to the Need theory, also known as Three Needs Theory, proposed by psychologist
David McClelland, is a motivational model that attempts to explain how the needs for
achievement, power, and affiliation affect the actions of people from a managerial context.

3. (A) Henry Fayol also supports the mechanistic approach.

The elements of administrative theory by Henry Fayol it relates to the accomplishment of
tasks, and include principles of management the concept of line and staff, committees
and functions of management.
As it includes the management principles which relates to the organisation and its
employees that includes Division of work, Unity of command, Authority, Centralization,
Remuneration and Team spirit.
All the above management principles signify the characteristics which relate to mechanistic
organizations where they prefer formalized structure due to two main reasons:
It reduces the variability within the organisation and enhances predictability in the organisation
rather than being ambiguous.
It considers processes and procedures to be administratively authorized.

The mechanistic organisation structure is clear, well defined, centralized, the vertical
hierarchy of command, authority and control.
4. (C) According to the steps that are included in the process of controlling :
The establishment of standards
Measurement of performance
Comparing measured performance to stated standards
Taking corrective action.
5. (C) Planning – Forecasting
Staffing – Communication
Leading – Selection of manager
Controlling – Established performance standard.

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 Human Resource Management (MSP)

6. (B) Technical skills become least important at the top level of the management hierarchy,
replaced with a greater emphasis on conceptual skills. Technical skills are most pronounced
at lower levels of management because first line managers are closer to the production
process.
7. (B) According to Taylor’s scientific management approach, he developed four principles of
scientific management for improving productivity.
 According to the Science, not rule of thumb: Taylor has suggested the management
as a science. Every decision to be taken or activities to be performed must be
depending and based on the facts and there should be any decision which is taken
on the basis of assumptions. He told that we should not stick with the old techniques,
but we should strive to form new techniques.
To find the best solutions it becomes very essential to have a proper discussion between
managers and workers.
 Scientific selection of the worker
 Management and labour cooperation rather than conflict.
 Scientific training of the worker.
8. (A) V.A Graicunas formula is as follows :
R = n (2n/2 + (n – 1))
Here, r = number of relationships
n = number of subordinates
According to Graicunas as the number of subordinates increase arithmatically the number
of relationships which the superior has to control also increases almost geometrically.
9. (C) The major element of planning process is selection of right person at the right place or
job.
10. (C) The term unity of command refers to the principle that a subordinate should have one and
only one superior to whom he or she is directly responsible.
Matrix management is the practice of managing individuals with more than one reporting
line. Hence Matrix organisation violates “Unity of Command”. Unity of direction is
management principle based on the concept that all team members involved in the same
activities must share the same objective.
11. (D) Incentive Management
12. (B) Eric Tryst, Fred Enery, Eina Thorsrud
13. (C) Right sizing
14. (C) John Strong
15. (C) Job description and Job specification
16. (C) Kouru Ishikawa
17. (B) W Edwards Deming
18. (D) 3 4 1 2
19. (D) Kaizen
20. (D) The CIRO approach to training was developed by wars, Bird & Racham. It is unique to
classify evaluation process. This approach consists of four level of evaluation are content,
Input, Reaction & output.
21. (A) The OCTAPACE profile is a 40-item instrument that gives the profile of organization's
ethos in eight values. These values are openness, confrontation, trust, authenticity, pro-
action, autonomy, collaboration and experimentation.

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 Human Resource Management (MSP)

22. (A) A new Human Resource Development system emerged in India in the year 1974. Dr. T.V
Rao, who is regarded as "The father of Indian HRD" and Dr. Udai Pareek were instrumental
in setting up the HRD department for Larsen & Toubro, thereby making it the first company
in India to have a fully dedicated HRD department.
23. (A) The HRD scorecard is a method for Human Resources to position itself as a strategic
planning partner with line managers and executives within an organization.
24. (B) Where a strategic planning process exists, but people are viewed as a cost.
25. (D) All of these
26. (A) Auditing has been a routine exercise in the area of finance, especially because it is a
statutory obligation. However, in case of Human Resource, there is no legal binding to
adopt auditing. Some of the companies nevertheless prefer to have Human Resource
audits.
27. (D) The success of an organization depends largely upon the capability, competence, efficiency
and effectiveness of its human resources. The HRD system develops a strong sense of
capability, competence and responsibility among the employees.
It provides higher quality of work life through opportunities of a meaningful career, job
satisfaction and professional development.
HRD also encourages employees to use their hidden talents for higher productivity.
28. (A) third country nationals
29. (C) Organisational climate
30. (D) Career planning is a crucial phase of HRD because it provides employees to make
strategy for work-life balance.
Performance appraisal is an important tool for improving the performance of employees
as it help in timely staffing decisions.
Role analysis brings about greater clarity in roles. The role player knows what he is
expected to do on the job, keeping the perceptions of about his job in mind.
31. (B) Society oriented leadership style
32. (B) Skinner’s theory of operant conditioning was based on the work of Thorndike (1905).
Edward Thorndike studied learning in animals using a puzzle box to propose the theory
known as the ‘law of effect’.
33. (C) The term behavioural sciences is often confused with the term social sciences. Though
these two broad areas are interrelated and study systematic processes of behavior, they
differ on their level of scientific analysis of various dimensions of behaviour. Behavioural
sciences abstract empirical data to investigate the decision processes and communication
strategies with and between organizations in a social system. This involves fields
psychology, social neuroscience and cognitive science.
34. (C) It has the disadvantage of undermining the role of discipline in the organisation
35. (C) Situational leader
36. (A) Mc Clelland’s Achievement Power and Affiliation Needs is the content perspectives of
Motivation
37. (D) Michael Porter has argued that a firm’s strength ultimately fall into of two heading: cost
advantage and differentiation. By applying these strengths in either a broad or narrow
scope three generic strategies result : cost leadership focus & differentiation.
38. (C) Rensis Likert was of the opinion that traditional job- oriented supervision was the cause
of low productivity and low morale. He emphasised participative management in the field
of decision-making.
39. (D) IT skills

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 Human Resource Management (MSP)

40. (C) The Johari Window is a communication model that is used to improve understanding
between individuals
41. (B) 3, 4, 1, 2
42. (D) Discharge dismissal, retrenchment or otherwise termination of services of an individual
workman.
43. (C) 3 2 1 4
44. (A) Express violence
45. (A) Industrial relations is a multidisciplinary field that studies the employment relationship.
Industrial relations has three faces :
 Science building, problem solving, and ethical.
46. (C) Lay-off retrenchment
47. (A) Conciliation/mediation
48. (C) Both A and R are true
49. (D) 4 3 1 2
50. (C) 48 hours
51. (A) ILO, Government, Association of employers
52. (D) Mutual co-operation, Individual treatment, Team work and shared goals
53. (B) According to Marxist approach, wage related disputes are secondary
54. (A) Trade union as legitimate representative of employee interests is perceived by pluralistic
approach
55. (B) XLRI Jamshedpur
56. (D) Employees approach
57. (B) To establish a socialist state in India- All - India Trade Union Congress
58. (D) The acts do not apply to the registered trade unions are The Co-operative Societies Act,
1912, The Societies Registration Act, 1860, The Companies Act, 1956
59. (A) Has been convicted by the court of any offence involving moral turpitude, has not attained
the age of 18 years
60. (D) trade union movement start in India -1918
61. (C) The Section 20 of the Factories act discusses about spittoons .
62. (C) The section 23 of Factories Act.1947. The employment of young person on dangerous
machines shall be prohibited
63. (D) The section 35 , suitable goggles shall be provided for the protection of persons
employed in any factory
64. (B) A half yearly return for every half of every calendar year , in duplicate in Form 21 so as
to reach the inspector of factories on or before 31st July of the year
65. (A) An accident report, shall be confirmed by the manager by sending a separate report in
form no 18 with details of number of person killed or injured to i) Inspector of Factories
within 12 hours of the accident .
66. (B) The particulars of the accident should be entered in separate registers kept as-Accident
Book- Form No 15 for ESI office .
67. (B) Section 111A of the Factories Act describes about the rights of the workers
68. (A) The occupier shall be punishable with imprisonment extend to 2 months or fine 1000
rupees or both for using false certificate of fitness.
69. (D) In case of employee covered under the ESI, the accident report shall be sent in Form No
16- to Local office of the ESI to which the company attached
70. (C) Under the Factories Act 1948, a register of Adult workers shall be maintained in Form No 12

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 Human Resource Management (MSP)

71. (A) 23rd April, 1936

72. (D) 28th March, 1937
73. (C) State Government
74. (D) Deduction for uniform and property
75. (C) To regulate payment of wages.
76. (D) All the Above.
77. (C) The Royal Commission on Labour.
78. (D) Employee means any person including apprentice.
79. (B) Rs. 3,500
80. (D) Rs. 10,000 in case of employee only
81. (B) House keeping - the principle that governs “A place for everything and everything in its
place”
82. (B) extra-mural welfare - Co-operative consumer facility, Recreational club, Health and Medical
Services
83. (D) common defences were not available to the employers in cases of compensation for
accidents under the common law – doctrine of natural risk
84. (A) Workers are becoming conscious of their rights and privileges therefore it is prudent to
appease the workers” is the philosophy of Placating Theory
85. (D) Welfare connotes atleast minimum desirable conditions of existence biologically and socially
determined is positive concept
86. (C) Minimum conditions of welfare is explained by Dr.Aykroid’s formula through Subsistence
Theory
87. (C) Policing theory - The labour welfare philosophy is meant for guarding the interests of
labour against the exploitation of employers
88. (D) Philanthropic theory - The labour welfare philosophy exposes the cause of empathic
considerations by the employer of employee well-being
89. (A) trusteeship theory - The employer has to set out a portion of the profits for the benefit of
the employees
90. (B) placating theory -Labour Welfare is provided for pacifying the agitating working class
91. (A) The person days of employment as a% of the total person days in labour force then
Subtracting this from 100 gives unemployment rate
92. (B) At the All India level, 32.8 per cent of people work as casual labour
93. (A) Enterprise surveys fails to capture the entire non-agricultural workforce, small unorganised
enterprise. Sources of counting workers engaged in formal employment are partial in
nature
94. (A) At the All India level, 46.1 per cent of the persons employed under Agriculture, Forestry
and Fishing sector.
95. (D) At the All India level, a majority 67.5 per cent of the self employed workers had average
monthly earnings up to Rs7500
96. (A) Employment-Unemployment Survey conducted by the NSSO
97. (B) According to Fifth Annual Employment – Unemployment Survey (2015-16), the all India
male LFPR is 75 percent
98. (B) According to Fifth Annual Employment – Unemployment Survey (2015-16), the All India
male WPR is 72.1 percent
99. (D) MSME not a Primary agency involved in collection of employment and unemployment
statistics
100. (B) At the All India level,32.0 percent of workers deployed in tertiary sector

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