UNIT – I – Human Resource Management

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 INTRODUCTION
HumanResourceManagement-ConceptandFunctions,Role,SkillsandcompetenciesofHR Manager -
HR Policies, Evolution of HRM, HRM vs HRD - Emerging Challenges of Human Resource
Management - Workforce diversity - Empowerment - Downsizing - VRS - Human Resource
Information System.
HUMAN RESOURCE MANAGEMENT
Human Resource Management is a relatively new approach to managing human beings
in any organization. Human beings are considered as the key resource in this approach. Since
an organization is a body of people, their acquisition, development of skills, motivation for
higher levels of attainments, as well as ensuring maintenance of their level of commitment are
all significant activities. All these activities fall in the domain of Human Resource
Management.
Human Resource Management is responsible for maintaining good human relations in
the organization. It is also concerned with development of individuals and achieving
integration of goals of the organization and those of the individuals.
Human Resource Management, or HRM, is the practice of managing people to achieve
better performance. For example, if you hire people into a business, you are looking forpeople
who fit the company culture as they will be happier, stay longer, and be more productive.
DEFINITIONS OF HRM
Human resources management (HRM) is a management function concerned with hiring,
motivating and maintaining people in an organization. It focuses on people in organizations.
Human resource management is designing management systems to ensure that human talent is
used effectively and efficiently to accomplish organizational goals.
According to Edwin Flippo , HRM as “planning, organizing, directing, controlling of
procurement, development, compensation, integration, maintenance and separation of human
resources to the end that individual, organizational and social objectives are achieved.”
According to the Invancevich and Glueck, “HRM is concerned with the most effective
use of people to achieve organizational and individual goals. It is the way of managing people at
work, so that they give their best to the organization”.

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 According to Dessler (2008) the policies and practices involved in carrying out thepeople
or human resource aspects of a management position, including recruiting, screening, training,
rewarding, and appraising comprises of HRM.
FEATURES/CHARACTERISTICSOFHRM
The features of human resource management can be highlighted as follows:
1. It is an inherent part of management: Human resource management is inherent in the
process of management. This function is performed by all the managers throughout the
organisation rather that by the personnel department only .If a manager is to get the best of
his people, he must undertake the basic responsibility of selecting people who will work
under him.
2. It is a pervasive function: Human Resource Management is a pervasive function of
management. It is performed by all managers at various levels in the organisation.
3. It is basic to all functional areas: Human Resource Management permeates all the
functional area of management such as production management, financial management,
and marketing management. That is every manager from top to bottom, working in any
department has to perform the personnel functions.
4. It is people centered: Human Resource Management is people centered and is relevant
in all types of organisations. It is concerned with all categories of employees from top to
the bottom of the organisation. The broad classification of employees in an industrial
enterprise may be as follows:(i) Blue-collar workers (i.e. those working on machines and
engaged in loading, unloading etc.) and white-collar workers(i.e. clerical employees),(ii)
Managerial and non- managerial personnel, (iii) Professionals (such as Chartered
Accountant, Company Secretary, Lawyer, etc.) and non-professional personnel.
5. It involves Personnel Activities or Functions: Human Resource Management involves
several functions concerned with the management of people at work. It includes
manpower planning, employment, placement, training, appraisal and compensation of
employees. For the performance of these activities efficiently, a separate department
known as Personnel Department is created in most of the organisations.
6. It is a continuous process: Human Resource Management is not a “one shot”
funct io n. It must be performed continuously if the organisational objectives are to be
achieved smoothly.

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 7. It Is based on Human Relations: Human Resource Management is concerned with the
motivation of human resources in the organisation. The human beings can‘t be dealt with
like physical factors of production. Every person has different needs,
perceptionsandexpectations.Themanagersshouldgivedueattentiontothese factors. They
require human relations skills to deal with the people at work. Human relations skills are
also required in training performance appraisal, transfer and promotion of subordinates.
NATURE OF HRM
Organization is consists of men, machine and materials but the HRM is the one which
organize and manage the organization.
 HRM recruit, develop, maintain and remunerating the employees in organization.
 The decisions related to employees are taken by HRM.
 The HRM systematically approach in handling manpower resources.
 HRM is an ongoing activity.
 It is interdisciplinary, Combination of Sociology, psychology, economics and so
on.
 It is based on Human Relations: Human Resource Management is concerned with
the motivation of human resources in the organization.
 It is people centered: Human Resource Management is people centered and is
relevant in all types of organizations. It is concerned with all categories of
personnel from top to the bottom of the organization.

OBJECTIVES OF HRM
1. Tocreateandutilizeandmotivateworkforcetoaccomplishthebasicorganizationalgoal.

2. To establish and maintain sound organizational structure and create working relationship
among all the members of an organization

3. Tosecuretheintegrationofindividualandgroupswithintheorganizationby coordination of the

individual and group goals with those of the organization

4. To create facilities and opportunities for individual or group development so as to match

it with the growth of the organization.

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 5. To attain an effective utilization of human resources in the achievement of organizational
goals.

6. To identify and satisfy individual and group needs by providing adequate and equitable
wages incentives employee benefits and social security and measures for challenging
work, prestige, recognitions, status etc.

7. To develop and maintain a quality of work life.

8. Toprovidetheorganizationwithwell-trainedandwell-motivatedemployees

9. To inculcate the sense of team spirit,team work and inter-team collaboration.

FUNCTIONSOFHRM
The functions of human resources management maybe classified as:
1. Managerial function
2. Operative function

Figure1
Managerial Functions
Planning: Planning means forecasting or predicting the future activity in a specific manner or
structure. It is the basic function and essential for all the organization.

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Organizing: It is collection or joining of all the resources available within the organizational
and outside, in order to achieve the organizational goal with efficiency.
Staffing: It involves appointing the right man for the right job at the right time. The
management is to analyse the human resource, see if he is suitable for the job and accordingly
allocate the work in the organization.
Directing: It is showing the correct path or correct way to achieve the organizational goal
within the specified time.
Controlling: Controlling as a function that concerns on regulating the person or monitoring
him whether he performs in a better way to achieve the common goal efficiently.
Coordinating: It is a type of support function. It involves accumulating the work to achieve
the task.
Operative Functions
Procurement: Procurement refers to a series of activities undertaken by the human resource
manager filling the present and future vacancies of the organisation.
• Job Analysis
• HRP
• Recruitment and Selection

Development: Development refers to both employees training and management development.

Human resource managers are responsible for conducting and supervising training and
development programmes for employees.
• Career planning
• Workers Training
• Executive development
• Organisational Development

Compensation: Compensation refers to determination of the pay scale and other benefits for
the employees. HR manager must ensure fair and equitable pay rates, Reward system incentive
plans bonus and flexible work schedules.
Maintenance: It aims at retaining efficient and experienced employees in organisation.The HR
managers are responsible for offering occupational safety, Health promotion, Physical fitness,

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Canteen facilities,Recreation activities,transportation programmes,Employee suggestion schemes
and creating a positive work environment.
• Employee wellbeing
• Social security
• Workers
• Job Rotation

Integration: Itaimsatensuringgoodrelationsbetweenthemanagementandtheemployees.
• Industrial Relations
• Discipline
• Grievance
• Dispute settlement
• Collective bargaining

IMPORTANCEOFHRM
Human Resource Management is related with effective utilization of human resources. The
importance of HRM can be discussed as:
1. Organizational Importance
Human Resource Management can help an organization to achieve to its objective more
efficiently and effectively in the following ways:
(a) Procurementofrequiredtalentsthroughrecruitment,selection,placement,inducting,
training, compensation and promotion policies.
(b) Securesco-operationofallemployeeoftheorganizationfor achieving goals.
(c) Proper utilizationof human resources forth success oftheenterprise.
(d) Ensureafutureteamofefficient competentworkersrequiredforthe organization.
2. Professional Importance
Professional competency among employees can be achieved through the following ways.
(a) Human resource management provides maximum opportunities to employees for their
personnel development.
(b) Providing healthy relationship among employees
(c) Proper allocation of work among employees.
(d) Providing training facilities for the individual development of employees.

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3. SocialImportance
(a) Human resource management enhances the dignity of labour.
(b) Provides suitable job to suitable person and it will help to satisfy the psychological and
social satisfaction of employees.
(c) Helps to provide reasonable compensation to workers, which leads them to have a good
standard of living.
(d) Helps to maintaina balance between jobs and jobseekers in terms of numbers,
qualification, aptitude etc.
(e) Takeshealthandsafetymeasureswhichensuresphysicalandmentalhealthof the employees.

4. NationalImportance
Effective management of human resources will speed up the economic growth
ofnation. This in turn leads to better standard of living and more job opportunities.

SCOPEOFTHEHRM

1. Human resources planning: –Human resource planning is a process by which the

company to identify the number of jobs vacant, whether the company has excess staff or
shortage of staff and to deal with this excess or shortage.
2. Job analysis design: –Another important area of HRM is job analysis. Job analysisgives
a detailed explanation about each and every job in the company. Based on this job
analysis the company prepares advertisements.
3. Recruitment and selection: –Based on information collected from job analysis the
company prepares advertisements and publishes them in the newspapers. A number of
applications are received after the advertisement is published, interviews are conducted
and the right employee is selected thus recruitment and selection are yet another
important areas of HRM.
4. Orientation and induction: –Once the employees have been selected an induction or
orientation program is conducted. The employees are informed about the background of
the company. They are told about the organizational culture and values and work ethics
and introduce to the other employees.

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5. Training and development: –Everyemployee goes under trainingprogram which helps
him to put up a better performance on the job. Training program is also conducted for
existing staff that have a lot of experience. This is called refresher training. Training and
development is one area where the company spends a huge amount.
6. Performance appraisal:– Once the employee has put in around 1 year of service,
performance appraisal is conducted i.e. the HR department checks the performanceofthe
employee. Based on these appraisal future promotions, incentives, increments in salary
are decided.
7. Compensation planning and remuneration: –There are various rules regarding
compensation and other benefits. It is the job of the HR department to look into
remuneration and compensation planning.
8. Motivation, welfare, health and safety: –Motivation becomes important to sustain the
number of employees in the company. It is the job of the HR department to look into the
different methods of motivation. Apart from this certain health and safety regulations
have to be followed for the benefits of the employees.
9. Industrial relations: –Another important area of HRM is maintaining co-ordinal
relations with the union members. This will help the organization to prevent strikes
lockouts and ensure smooth working in the company.

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ORGANIZATIONAL STRUCTURE OF HRM DEPARTMENT

Figure 2
ROLE OF HRM/HUMAN RESOURCE ACTIVITIES
Human Resource Management undertakes the following activities:
1. Human resource or manpower planning.
2. Recruitment, selection and placement of personnel.
3. Training and development of employees.
4. Appraisal of performance of employees.
5. Taking correctives tepssuch as transfer from one job to another.
6. Remuneration of employees.
7. Social security and welfare of employees.
8. Settinggeneralandspecificmanagementpolicyfororganizationalrelationship.
9. Collectivebargaining,contractnegotiationandgrievancehandling.
10. Staffingtheorganization.

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11. Aiding in the self-development of employees at all levels.
12. Developing and maintaining motivation for workers by providing incentives.
13. Reviewing and auditing manpower management inthe organization
14. Potential Appraisal Feedback Counseling.
15. Role Analysis for joboccupants.
16. Job Rotation.
17. Quality of work life
DIFFERENCE BETWEEN HUMAN RESOURCE MANAGEMENT AND PERSONNEL

MANAGEMENT
Human Resource Management Personnel Management
1. HRM is proactive in nature; it is not only PM is mainly reactive in nature. It satisfies
concerned with the present organizational itself by ensuring peaceful labor management
conditions but foresees future necessities and relations the present.
the acts appropriately.

2.HRM as a resource centered focuses more PM which is basically employee-centered

on the managerial aspects, in term of aims at hiring, Training, compensating and
delegating the responsibility of HRM to line maintaining the existing workforce of the
authority organization.

3. The term, used in broader sense, refers to The term however used, To refers the task of
the task of managing people belonging to the managing the employees of the concern.
different sections of the society.

4. Measures are taken for the overall progress Measures are taken to satisfy economic needs
of the employee i.e. his economics social and of the employee.
psychological needs are fulfilled.

5.Theamountspentontheemployeeis viewed as The amount spent on the employees is seen as

an investment. expenditure incurred.
6. HRM seeks to develop the competencies of Employeesgetuniformrewardbasedonjob
the employees on a sustained basis. evaluation and job worth.

Table1
QUALITIES OF GOOD HR MANAGER
1. Good Communication
2. Educational Qualification
3. Discriminating Skill
4. Leadership Qualities

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5. Fairandhonestinhis dealings
6. Abilitytotakea decisionindependently
7. Professionalaltitude
8. Abilityto solvecomplexHR problems
9. Experience(ofhis/her specificfield)
10. Personality
11. Risk taking
12. Creativeand innovative
RESPONSIBILITIES/ROLEOFHR MANAGER
Human Resource Manager is one of the most important key to open a lock hanging on the doorof
success in an organisation. If a Human Resource Manager is efficient enough to handle and to
take out best from his team members any oragnisation, it can achieve more from his target goals.
Human Resource manager plays a very important role in hierarchy and also in between thehigher
management and low level employees.
Stated below are major responsibilities of Human Resource Manager:-

Figure3
EVOLUTION OF HRM
Awareness regarding HRM was felt during the industrial revolution around 1850 in Western
Europe and U.S.A. Only during the beginning of 20th century, it was felt in India. The evolution
of the concept of Human Resource Management can be categorized as follows:

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Period before industrial revolution – The society was primarily an agriculture economy with
limited production. Number of specialized crafts was limited and was usually carried out within a
village or community with apprentices assisting the master craftsmen. Communication channel
were limited.
Period of industrial revolution(1750to1850)–Industrial revolution marked the conversionof
economy from agriculture based upon industry. Modernization and increased meansof
communication gave way to industrial setup. A department was set up to look into workers’
wages, welfare and other related issues. This led to emergence of personnel management with
the major task as
 Workers’wages and salaries
 Worker’srecord maintenance
 Worker’shousing facilities and health care

An important event in industrial revolution was growth of Labour Union (1790) the works
working in the industries or factories were subjected to long workinghours and veryless wages.
With growing unrest, workersacross the world started protestand this led to the establishment of
Labour unions. To deal with labour issues at one end and management at the other Personnel
Management department had to be capable of politics and diplomacy,thus the industrial relation
department emerged.
Post Industrial revolution – The term Human resource Management saw a major evolutionafter
1850. Various studies were released and many experiments were conducted during this period
which gave HRM altogether a new meaning and importance.
Abriefoverviewofmajortheoriesreleaseduringthisperiodispresentedbelow
1. Frederick W. Taylor gave principles of scientific management (1857 to 1911) led to the
evolution of scientific human resource management approach which was involved in
 Worker’straining
 Maintainingwageuniformity
 Focusonattainingbetter productivity.
2. Hawthorne studies, conducted by Elton Mayo&FritzRoethlisberger(1927to 1940).–
Observations and findings of Hawthorne experiment shifted the focus ofHuman resource
from increasing worker’s productivityto increasing worker’s efficiency through greater
work satisfaction.

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 3. Douglas McGregor TheoryX and TheoryY (1960) and Abraham Maslow’s Hierarchyof
needs (1954) – These studies and observations led to the transition from the
administrativeand passive PersonnelManagementapproachtoamoredynamic
HumanResourceManagement approach which considered workers as a valuable resource.

Asa resultoftheseprinciplesand studies,Humanresourcemanagementbecameincreasingly line

management function, linked tocorebusiness operations. Some of themajor activitiesof HR
department are listed as-
 Recruitingandselectingskilledworkforce.
 Motivationandemployeebenefits
 Traininganddevelopmentofworkforce
 Performancerelatedsalariesandappraisals.

Strategic Human Resource Management Approach

With increase intechnology andknowledge base industriesandasaresult ofglobal competition,
Human Resource Management is assuming more critical role today. Its major accomplishment is
aligning individual goals and objectives with corporate goals and objectives. Strategic HRM
focuses on actions that differentiate the organization from its competitors and aims to make long
term impact on the success of organization.
HR POLICIES
Human resource policies are systems of codified decisions, established by an organization, to
support administrative personnel functions, performance management, employee relations and
resource planning.
HR policies are also defined as that body of principles and rules of conduct which govern the
organization in its relationship with employees.
Each company has a different set of circumstances, and so develops an individual set of human
resource policies.
IMPORTANCE/SIGNIFICANCEOFHRPOLICY:
 Delegation
TheHRPolicieshelpmanagersoperatingatdifferentlevelstoactwithconfidence without the
need for consulting superiors every time.

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  Speedy Decisions
Policies can accelerate decision-making by providing a blanket framework within which
personnel decisions can be made. They condense past experience.
 Coordination
HR policies help in achieving coordination. In case organisational members are guidedby
the same policies, they can forecast more accurately the actions and decisions. They
ensure a steady course of action and prevent unwarranted deviations from planned
operations.
 BetterControl
As HR policies specify the relationship that is shared between the organisation,
management and its employees besides they allow members to work towardsachievement
of the objectives of the organisation without friction/conflict, paving theway for better
control.
 Standardsof Efficiency
Policies serve as standards in the execution of work. They enable the management toview
if they have been translated into action by various organisation or not. On the basis of the
light of actual performance, existing policies may be subjected to amendment/refinement.
 Uniformity
The HR Policies increase the chances of different people at different levels of the
organisation making similar choices, when independently facing similar situations. They
make the actions of organisational members more consistent.
 Confidence
Policies create confidence in employees while confronting routine and recurringproblems
as they make them aware where they stand in an organisation. They reduce chances of
misinterpretation, misrepresentation and consequent friction.

STEPS IN POLICY FORMULATION

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In developing HR Policies, there should be clear and consistent statements of the organization’s
policies regarding to all conditions of employment and procedures for their equal and fair
implementation.

1. IdentifytheAreas:

The areas where HR policies are needed are to be identified. Important areas of HR like
recruitment, selection, training, compensations must have specific policies clearly spelt out. If
need arises, additional policies may have to be formulated for dealing with newer HR issues.

2. Collecting Data:
After selecting the areas, relevant information should be collected for facilitating policy

formulation. The company’s records, past practices, industry practices and top management

policies should be studied. The organizational culture and employee aspirations should also be

taken into account while formulating policies.

3. EvaluatingAlternatives:
Once data have been collected, various alternative policies can be designed. Each alternative has

to be evaluated in terms of their contribution towards the desired objectives. The policies should

be for the betterment of the existing HR system and formulated in congruence with other

organizational policies. The policies should be finalized after discussion with those people who

are directly affected by its implementation.

4. CommunicatingthePolicy:
The policy details should be conveyed to all the workers throughout the organization. Policy

manual, in-house journals, notice boards, intranet, etc., can be used to create awareness among

employees at various levels. Special communication programmes can be conducted to inform all
the concerned people about the new policy.

5. Evaluationof thePolicy:

Policies should be evaluated regularly at periodic intervals to ascertain their effectiveness. The
actual policy results should be compared with predetermined standards to check if the policy was

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successful in achieving its objectives. Policies may be reviewed at the organizational level, or

outside experts may be invited to review it.

HR policies should be designed to promote common interest, create safe and healthy working

conditions, give proper recognition for work and accomplishment, recognize impact of changeon

people, encourage employees’ participation and recognize the functions and responsibilitiesof the

trade unions.

DIFFERENCEBETWEENHRMANDHRD

Table 2
EMPOWERMENT
Empowerment is based on the idea that providing employees with the resources, authority,
opportunity, and motivationto do their work, as well as holding them accountable for their
actions, will make employees happier and more proficient.
In other words, allowing employees to take leadership of their roles results in high impact and
positive long-term effects for the company and its individuals. The empowered employee
becomes “self-directed” and “self-controlled”. Empowerment focuses on employees to make use
of their full potential.

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3LevelsofEmployeeEmpowermentintheWorkplace
Employee empowermentcan happen ondifferentorganizational levels, and the most
commonsegmentation includes:
 empowermentontheorganizationallevel
 empowermentonthemanageriallevel
 empowermentontheindividuallevel
1. EmployeeEmpowermentontheOrganizationalLevel
Anorganizationthatcultivatesemployeeempowermentcanbetter:
 Embracechangesuchasdigitaltransformation
 Recognizeemployees'contribution tothe business
 Rewardresponsibleownershipintheworkplace
 Supportcollaboration,includingcross-departmentalcollaborationintheworkplace
 Fosteracultureofemployee engagement
 Retaintop talent
2. EmployeeEmpowermentontheManagerialLevel\
Empoweredteamleaders can:
 Bettersupporttheteamandhelpeachteammemberreachtheirtargets
 Providetheinformation theteamsneedwhen theyneed it
 Inspireandmotivate employees
 Helpbetterconnect employees,includingtheonesworking remotely
 Facilitatework processes
 Spreadteamspiritinthe workplace
 Bettercommunicatethebusinessgoalsandlong-termvision
 Makethe teams moresuccessful
3. Employee Empowerment on the Individual Level
When employees feel empowered and trusted, they:
 Are more willing to go the extramile for the team and the business
 Take ownership overtheir work
 Generate ideas
 Knowhow to take prudent risks to take the business to the next level
 Find meaning and purpose at work

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 Feel proud of the company they're working at
 Feel more motivated and engaged

Figure4
Empowerment on the organizational and managerial levels should exist by default. However,
achieving individual empowerment requires much more work and effort and it involves several
functions in the organization.
IMPORTANCEOFEMPLOYEE EMPOWERMENT
1. The investment in employees can improve productivity, which can reduce the costs.
2. Individualemployeesexperienceafeelingofself-esteem,self-efficacyandself- confidence.
3. Employee empower mental so helps in making employees more self-reliant.
4. It allows independent decision-making by the employees.
5. Empowermentofemployeeshelpsafirmtoassigndifferentprojectstohonethe competence of
employees.
6. More freedom given to employees can be utilized for taking judicious decisions.
7. Assigning proper authority can improve the organizational effectiveness.

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 8. Independent decision-making can improve self-confidence among the employees.
9. It can boost up the morale of the employees.
10. The overall efficiency of an organization can be multiplied due to empowerment of the
employees.

DOWNSIZING
Downsizing refers to the process of reducing the size of workforce by terminating the
employment of employees. It is also referred as layoff.
Downsizing literally means reducing the size of the organisation in order to cut costs, hive
off unprofitable operations and improve operational efficiency.
In fact, it is a restructuring process to meet the challenges of the environment. In the context
of human resource management, downsizing involves elimination of certain jobs with a view
to cut pay bill and improves work efficiency.
Downsizing is also given such names as restructuring and rightsizing. Irrespective of the
nameused,italmostalwaysmeansreducingthesizeoftheorganizationspermanentfull-time staff. It
is the process of minimizing the strength of a man power to enhance and ensure the quality of
performance and involvement in the business process of the company. This will help the
companyto channelize the work and focus on expected output when the companyis
overloaded with employees.
REASONS FOR DOWNSIZING

To Solve the Problem of Initial Over-Staffing:

Due to faulty HR planning or to fulfill social commitment, some organizations may employ more
employees as against their actual requirement. Most government departments and public sector
enterprises of Government of India face the problem of over-staffing. This is because the
government has the social responsibility to reduce unemployment in the country.

To Deal with the Adverse Consequences of Economic Recession:

Recently, many organizations, under the pressure of the global economic recession, downsized
their organizations by laying off or retrenching employees. For example, Tata Motors laid off
6,000temporaryworkerstotideovereconomicrecession.Citigroup,an American financial

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company, axed 52,000 jobs globally, and its Indian arm, Citi India, laid off 37 employees,
including senior executives.

ToTakeAdvantageofTechnological Advancements:

In the present times, rapid developments are taking place on the technology front. Automation,
computers, and the internet have changed the way business operations are carried out. Due to
this, the man-machine ratio has undergone a drastic change. Today, an organization requires less
manpower to perform the same amount of work, if not more. Thus, technological developments
made downsizing of organizations somewhat inevitable.

ToConcentrate on Core Activities and to Outsource Non-Core Activities:

To be successful in today’s competitive environment, most organizations prefer to concentrateon

activities in which they have core competence and outsource non-core activities. As a result,
people employed in non-core activities become surplus, thereby necessitating the need to
downsize the organization.

ROLE OFHR IN DOWNSIZING

• ProperCommunicationwithEmployees
• ConvincingEmployees’ UnionsandWinningtheir Support
• ProvidingOutplacementServices
• WorkingoutAlternativestoTermination
• OfferingIncentives forEarlyRetirement
• RetainingallEmployeeswithReducedWorkHours

VOLUNTARYRETIREMENTSCHEME(VRS):

Voluntary retirement scheme (VRS) refers to voluntary retirement scheme, when company faces
the problem of surplus labor, they have to remove the extra workers. This needs to be done to
avoid increase in cost. One of the methods used by the companies is the VRS scheme.

REASONSFOROFFERINGVRSBY EMPLOYERS:

(a) Recessionin theeconomyforcesthe organization toopt forVRS inorder to survive.

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(b) Globalization has brought intense competition in terms of innovation, knowledge of
manpower, knowledge of technological and management systems. Every organization wants to
recruit fresh management and techno-workers who can adapt to the latest developments easily.
Thus, the old workforce is asked to retire.

(c) Intense competition has led to mergers and takeovers in the economy. Every organization
wants to merge or amalgamate to others to become more powerful and sustainable. These
ventures keep lean structureand want to bemore cost competitive.Theyshowdoorsto manyold
workers.

EMPLOYEES’REASONSFORACCEPTINGVRS:

(1) Employee‘s personal financial position – Since a hefty compensation is paid upfront by the
employer, the employee feels tempted to seek early retirement. The compensation amount so
received can be utilized by the employee for meeting family members‘needs, say, to set up
business, and so forth.

(2) Employee‘s physical health – Failing health condition may compel an employee to opt for
VRS and utilize the compensation amount on health improvement and leading a healthy life
thereafter.

3) Extent of job satisfaction – No or low level of work satisfaction is a potent driving factor for
employees to quit their jobs and take advantage of VRS.

(4) Possibility of future lay-offs – Employees anticipating complete or partial downturn in

company‘s business may think it wise to seek early retirement with immediate financial gain
under VRS.

(5) Inability to meet work responsibilities – If an employee finds himself inadequate to perform
the duties and meet the demands of his current job, he may decide to leave the organization and
take advantage of VRS.

(6) Better alternative job opportunities – An employee having a better alternative employment
opportunity may find the time opportune to quit the present job and enter into the alternativefield
of work.

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ADVANTAGESOF VRS:

(i) VRSisamorehumanewaytoreducesurplusworkforcethanterminatingservicesof
employees. The firm‘s reputation remains intact.

(ii) Paymentofheavycompensationto retiringemployees preventsresentment ontheirpart.

(iii) Tradeunionsalso donot objectto VRSas itis voluntaryin nature.

(iv) Despiteofheavyinitialupfrontcostsintheformofheavycompensationpackage,VRS
reduces payroll costs or wage bills significantly over time. The firm is saved from paying
monthly wages or salaries to the employees opting for VRS.

DISADVANTAGES OF VRS

(i) Efficient employees may leave the firm and in efficient stayback.Thiswouldreducetheskill
base of the firm.

(ii) VRS might increase the work load of existing employees if it is used to cut the pay bill.

(iii) VRSmightcreateasenseofinsecurityinthemindsofemployeesnotoptingforVRSand deciding

to stay with the firm.

WORKFORCEDIVERSITY

We live in times when global corporations and their reach across the world bring benefits in
terms of innovative HR policies as well as challenges in terms of managing the workforce
composed of diverse races and ethnicities. Further, the issue of gender diversity in terms of more
women and third gender participating in the workforce has been a trend that has accelerated in
the last two decades in India and much earlier in the developed countries.
When an organization has people of different caste, creed, religion, minorities and different
genders, then, naturally the question arises as to how to reconcile the differences between these
employees without causing too much friction in everyday interactions.

The challenge for HR manager therefore, is to make their organizations more accommodating to
divers groups of people by addressing different life styles, needs, values and work styles.

23
DEFINITION

Workforce diversity means the heterogeneous composition of employees of an organization in

terms of age, gender, language, ethnic origin, education, marital status, etc. Managing such
diversity is really a challenge to HRM professionals.
AccordingtoMoorheadandGriffin–“Workforcediversityisconcernedwiththesimilarities
anddifferencesinsuchcharacteristicsasage,gender,ethnicheritage,physicalabilitiesand disabilities,
race, and sexual orientation, among the employees of organizations.”DIMENSIONS OF
WORKFORCE DIVERSITY

Thecharacteristicsthatdescribetheworkforceofanorganizationmaybecategorizedundertwo groups,
namely, primary dimensions and secondary dimensions.

PrimaryDimensions:
Primarydimensions such as age, gender, race, ethnicity, sexual orientation, and physical abilities
represent those elements that are either inborn or exert extra influence on early socialization.
Thesedimensions makeup theessenceofwhoweareas humanbeings. Theydefineus to others,
making them react towards accordingly. These are an enduring aspect of our personality.
These are core elements about each member of the workforce that can’t be changed such as age,
race, gender, physical and mental abilities and sexual orientation. These inborn elements are
interdependent and exert an important influence on individual’s behaviour throughout the life.
Together they form an individual’s ‘self-image’.

SecondaryDimensions:

Secondary dimensions represent those elements that we learn or over which we have some
control throughout our lives, such as education, marital status, religious beliefs, language, etc.
Secondary dimensions add an additional layer of complexity to the way we see ourselves and
others, and in someinstances can exertapowerful impact on ourcoreidentities. Theseconstitute the
elements that can be changed or at least modified. They include a person’s health habits,
religious beliefs, education and training, general appearance, status relationship, ethnic customs,
communication style and level ofincome. All thesefactors add an additional layerof complexity
to the waywesee ourselves and others and in some instances can exert a powerful impact on our
core identities.

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TYPESOFWORKFORCEDIVERSITY

• Age Diversity-Age diversity means working with people of different ages and most
importantly, generations.
• Gender Diversity- Gender diversityis equitable or fair representation of people of
different genders. It most commonly refers to an equitable ratio of men and women
• Cultural Diversity- It is the concept of multiculturalism where people following different
cultures put together in a workplace.
• Race/EthnicDiversity-Raceare defined as“acategoryofhumankindthatshares
certaindistinctivephysicaltraits.”Thetermethnicitiesismorebroadly defined as “large
groups of people classed according to common racial, national, tribal, religious,
linguistic,orculturaloriginorbackground.”Soitisaboutthedifferencesinthe physical traits
and origin of the people working together
• Diversity based on Physical Ability – Similarities and dissimilarities based on the
physical skills strength and ability of the people
• Diversity based on Mental Ability – Similarities and dissimilarities based on the
interpersonal skills, values, mindset, and beliefs attitudes of the people.

HUMANRESOURCEINFORMATIONSYSTEM

DEFINITION:

AccordingtoHedrickson,HRIScanbebrieflydescribedasintegratedsystemusedtogather, store and

analyze information regarding an organization human resources.

OBJECTIVESOFHRIS:

1. Toprovideaccurateupdatedinformationabout employeesandjob

2. Providetimelyinformation ina cost effectivemanner.

3. Toprovideexcessandsafestorageofemployeedata.

4. Toenableorganizationaccesstheeffectiveness ofHRpoliciesandproducers.

25
5. Toimproveproductivityof HR system.

6. Toaccessprograms,policiesandpracticesofHR.

7. Toaidefficient businessplanninganddecision making.

8. Alignhumanresourcefunctionswiththecompany’sbusinessstrategy.

9. Toimproveemployee and companyperformanceand productivity.

10. Tostream linethefunctionofHR department.

11. Toensure accuracyand avoid errors.

SCOPEANDCOMPONENTSOFHRIS:

1. HR administration

2. Humanresource planning.

3. Wages andsalaryadministration.

4. Leaveandabsence.

5. Traininganddevelopment.

6. Attendancesystem

7. Skills invention.

8. Carrierplanning

ADVANTAGESOFHRIS:

1. ImprovestheefficiencyandeaseofmanagingtheHR function.

26
2. Providesvariety ofapplicationsinHRfunctionsuchasrequirement,selection,attendance, training
and development, payroll, compliance etc.,

3. Centralizedstorageof informationexcessfromanywherewithinthecompany.

4. Employeescan access andexchangeinformationinaconvenientmanner.

5. Avoidandeliminatesredundantinformation.

6. Helpstoanalyzelargevolumeofdataand generatereportsinanaccurate andquickmanner.

7. Enablesempowermentto productivityofemployeetobetterelse oftheirskills.

8. HelpsHRmanagertobetterplan,managingcontrolHRcost.

9. Quickaccesstoupdateinformationandsupportsdecision making.

10. BetterDecisionmaking.

LIMITATIONSOFHRIS:

1. It is expensive to install and maintain.

2. It may require huge additional investment in future.

3. Employees need to train which involves times,cost and effects their existingwork.

4. May meet with employee’s resistance.

5. The HRIS may not be in tune with existing human resource system.

6. Lack of proper documentation can lead to problem in usage.

1
UNIT–II–Human Resource Management

2
 ACQUISITION OF HUMAN RESOURCE

Human Resource Planning-Quantitative and Qualitative dimensions-job analysis-job description

and job specification-Recruitment-Concept and sources-Selection-Concept and process-test and
interview-Placement, induction and orientation.

HUMANRESOURCEPLANNING MEANING:

The process of determining the manpower needs of an enterprise so that it is possible to fill up any
vacancy as and when it arises. This plan eliminates the risk of surplus or shortage of staff at anytime.

DEFINITION:

1) E.W. Vetter-- HRP is the process by which a management determines how the organization
should move from its current manpower position to its desired manpower position. Throughplanning
the management strives to have the right number and right kind of people at the right places, at the
right time, doing things which results in both the organization and the individual receiving,
maximum long range benefit.

2) Dale S. Beach-- HRP is a process of determining and assuming that the organization will have an
adequate number of qualified persons available at the proper times, performing jobs which meet the
needs of the enterprise and which provide satisfaction for the individuals involved

IMPORTANCE OF HRP

1. Ithelpstheorganizationtoprocuretherequiredmanpower.
2. Ithelpstoreplaceemployees.
3. ItensuresoptimuminvestmentinHR.
4. Itprovidesscopeforadvancementanddevelopmentofemployeesthroughtraining,
development etc.
5. Ithelps to tackletheproblem ofsurplusor shortageof manpower.

3
6. HR Preduces the problemof labor turnover.
7. To foresee the need for redundancy and plan to check it or to provide alternative employment
in consultation with trade union.
OBJECTIVESOFHRP
1. To ensure that the HR plan helps to attain the over all objective of the enterprise.
2. To keep the cost of recruitment and selection employees low.
3. To ensure that that the organization does not face the problem of either surplus or shortage of
manpower.
4. To ensure the selection of the right man for the right job.
5. To make available the required manpower when expansion and diversification activities
areundertaken.
6. To eliminate or minimize the adverseeffects of labour turnover.
7. Tofindasuitablereplacementforthoseemployeeswhoretire,dieordismissedfrom service.
FACTORSINFLUENCINGHRP
InternalFactors
1. Recruitmentpolicyofthe organization or company strategies.
Company’spoliciesandthestrategiesrelatingtoexpansion,diversification,alliancesetc.
determine the human resources demand in terms of quality and quantity.
2. Humanresource policies.
HRpoliciesofthecompanyregardingqualityofhumanresources,compensationlevel, quality of
work life etc. Influence human resource plan.
3. Job analysis.
Determinethequalificationsandskillsfromperspectiveapplicantsrequired.
4. Timehorizons.
Companieswithastablecompetitive environmentcanplanforlongrun.
5. Company’sproduction policy.
Company’s policy regarding how much to produce influencing the number of people
required.
6. Tradeunions.
Influenceoftradeunionsregardingthenumberofhoursofworkrecruitmentsourcesetc. affect HRP.

4
ExternalFactors.

1. Government policies.
Government policies like labor policy, Industrial relations policy, policy towards reserving
certain jobs for different communities affect HRP.
2. Level of economic development.
Determine the level of supply of human resources in future in the country.
3. Willingness of jobseekers.
4. The terms and conditions of service are acceptable to the job seekers if they find it
un reasonable they may not be willing to apply.
5. Trend in the industry.
Creates demand for particular job.
6. Level of technology.
Determine the kind of human resources required.
HUMANRESOURCE PLANNING PROCESS
Human resource planning is a process through which the right candidate for the right job is
ensured. For conducting any process, the foremost essential task is to develop the organizational
objective to be achieved through conducting the said process. Six steps in human resource
planning are presented in the figure

5
 Figure1

1. AnalysingOrganizationalObjectives:
The objective to be achieved in future in various fields such as production, marketing, finance,
expansion and sales gives the idea about the work to be done in the organization.

2. InventoryofPresentHuman Resources:
From the updated human resource information storage system, the current number of employees,
their capacity, performance and potential can be analysed. To fill the various job requirements,
the internal sources (i.e., employees from within the organization) and external sources (i.e.,
candidates from various placement agencies) can be estimated.

3. ForecastingDemandandSupplyofHuman Resource:
The human resources required at different positions according to their job profile are to be
estimated. The available internal and external sources to fulfill those requirements are also
measured. There should be proper matching of job description and job specification of one
particular work, and the profile of the person should be suitable to it.

4. EstimatingManpowerGaps:
Comparisonofhumanresourcedemandandhumanresourcesupplywillprovidewiththesurplus or
deficit of human resource. Deficit represents the number of people to be employed, whereas

6
surplusrepresentstermination.Extensiveuseofpropertraininganddevelopmentprogrammecan be
done to upgrade the skills of employees.

5. FormulatingtheHumanResourceActionPlan:
The human resource plan depends on whether there is deficit or surplus in the organization.
Accordingly, the plan may be finalized either for new recruitment, training, interdepartmental
transfer in case of deficit of termination, or voluntary retirement schemes and redeployment in
case of surplus.

6. Monitoring,ControlandFeedback:
It mainly involves implementation of the human resource action plan. Human resources are
allocated according to the requirements, and inventories are updated over a period. The plan is
monitored strictly to identify the deficiencies and remove it. Comparison between the human
resource plan and its actual implementation is done to ensure the appropriate action and the
availability of the required number of employees for various jobs.

LIMITATIONSOFHRP:

Expensive-Preparationandimplementationof HRPisexpensiveintermsof time,efforts and

money required.

Inaccurate forecasts- HRP is prepared based on forecasts, inaccurate forecasts result in

thefailure of the plan.

Uncertainties-Absenteeism,seasonalnatureofcertainjobscanbringuncertaintiesinHRP.

Tradeunionresistance-Tradeunionsthinkthatthiswillincreasetheworkloadoritwill create
redeployment of the existing employees.

Focusonquantity-TheHRPfocusesonquantitytoHRratherthanquality.Quantities without
quality do more harm than good.

7
JOB ANALYSIS

Developing an organizational structure, results in jobs which have to be staffed. Job analysis is
the procedure through which you determine the duties and nature of the jobs and the kinds of
people (in terms of skills and experience) who should be hired for them.

Someofthe definitionsof jobanalysis are

According to Michael L. Jucius, “Job analysis refers to the process of studying the operations,
duties and organizational aspects of jobs in order to derive specifications or as they called by
some, job descriptions.”

According to DeCenzo and P. Robbins, “A job analysis is a systematic exploration of the

activities within a job. It is a basic technical procedure, one that is used to define the duties,
responsibilities, and accountabilities of a job.”

METHODSOFJOB ANALYSIS:
Themethods or approaches areutilized in analyzingjobs. Theyare:
1. Personal Observation: The materials and equipment used, the working conditions andprobable
hazards, and an understanding of what the work involves are the facts which should be known by
an analyst.
2. Sending out of Questionnaires: Properly drafted questionnaires are sent out to job- holders for
completion and are returned to supervisors.
3. Maintenance of Long Records: The employee maintains a daily record of duties he performs,
marking the time at which each task is started and finished.
4. Critical Incidents: In this method, job holders are asked to describe incidents concerning the
job on the basis of their past experience. The incidents so collected are analyzed and classified
according to the job areas they describe.
5. Personal Interviews: Personal interviews may be held by the analyst with the employees, and
answers to relevant questions may be recorded. But the method is time-consuming and costly.
6. Technical Conference Method: This method utilizes supervisors with extensive knowledge of
the job. Here, specific characteristics of a job are obtained from the “experts.”
7. Functional Job Analysis: Functional job analysis (FJA) is employee- oriented analytical
approach of job analysis. This approach attempts to describe the whole person on the job.

8
PROCESSOFJOBANALYSIS:
Followingaretheimportant stepsin theprocess ofjob analysis:
1. Determine the Use of the Job Analysis Information: Start by identifying the use to which the
information will be put, since this will determine the type of data you collect and the technique
you use to collect them.
2. CollectionofBackgroundInformation:AccordingtoTerry,“Themake-upofajob,itsrelation to
other jobs, and its requirements for competent performance are essential information needed
forajob evaluation. This information can behad byreviewingavailablebackgroundinformation
such as organization charts and the existing job descriptions.
3. Selection of Jobs for Analysis: Job analysis is a costly and time consuming process. Hence, it
is necessary to select a representative sample of jobs for the purposes of analysis. Priorities of
various jobs can also be determined.
4. Collection of Job Analysis Data: Job data on features of the job, required employee
qualification and requirements, should be collected either from the employees who actually
perform a job; or from other employees who watch the workers, or from the outside persons.
5. Processing the Information: Once job analysis information has been collected, the next step is
to place it in a form that will make it useful to those charged with the various personnel
functions.Severalissues arisewithrespecttothis.First,howmuchdetailis needed? Second,can the job
analysis information be expressed in quantitative terms? These must be considered properly.
6. Preparing Job Descriptions and Job Classifications: Job information which has been collected
mustbeprocessedtopreparethejobdescriptionform.Itisastatementshowingfulldetailsofthe activities
of the job. Separate job description forms may be used for various activities in the job and maybe
compiled later on. The job analysis is made with the help of these description forms. These forms
may be used as reference for the future.
7. DevelopingJobSpecifications:Jobspecificationsarealsopreparedonthebasisofinformationcollect
ed.Itisastatementofminimumacceptablequalitiesofthepersontobe placed on the job. It specifies the
standard by which the qualities of the person are measured. JOB DESCRIPTION
Job description is an organizational, factual statement of duties and responsibilities of a specific
job. In brief, it should tell what is to be done, how it is done and why.

9
Jobdescriptionisawrittenstatementshowingjob title,tasks,dutiesandresponsibilitiesinvolved in a
job. It also prescribes the working conditions, stress that it can produce and the relationship with
other jobs.

Jobdescriptioncontainsthefollowinginformation:

1. Jobtitle, department,

2. Jobcontents interms ofactivitiesortasks performed.

3. Jobresponsibilitiestowardseffectiveperformanceofthejob.

4. Workingconditionsspecifyingspecific hazards

5. Socialenvironmentprevailingatthe workplace.

6. Machinetoolsandequipment.

7. Extentofsupervisiongivenand received.

JOB SPECIFICATION

Job specification is a statement of the minimum acceptable human qualities necessary to perform
a job properly.

1) The personal characteristics such as age, sex, education, job experience and extra co-
curricular activities.

2) Physicalcharacteristicssuchasheight,weight,chest,vision,hearing,healthetc.

3) Mental characteristics such as general intelligence, memory, judgement, foresight, abilities

to concentrate etc.

4) Socialandpsychologicalcharacteristicssuchasemotionalstability,flexibilitymanners. Initiative,
creativity, etc.

10
RECRUITMENTMEANING

It is the process of searching for and obtaining applicants for jobs, from among whom the right
people can be selected.

DEFINITION

According to Prof. William B.Werther and Keith Davis “It is the process of finding andattracting
capable applicants for employment. The process begins when new recruits are starts and ends
when their applications are submitted. The results are a pool of applicants from which new
employees are selected”.

PURPOSEANDIMPORTANCEOFRECRUITMENT


Determine the present and future requirements of the organization with its human
resource planning and job analysis.

Increase the pool of job applicants at minimum cost.


Help to increase the success rate of the selection process, by reducing the number of
visibly under qualified and over qualified applications.


Help to reduce the probability of the job applicants, will leave the organization after a
short period of time.

Be identifying and preparing potential job applicants.

Increase organizational and individual effectiveness in the short term and long term.


Evaluate the effectiveness of various recruiting techniques and source for all types of job
applicants

11
FACTORS INFLUENCING RECRUITMENT:

The following diagram represents the various factors or determinants of the effectiveness of the
recruitment process done by the organization.

Figure2
SOURCESOFRECRUITMENT

The sources of recruitment can broadly be classified into two; internal and external. I. Internal
Sources

1. InternalSources

An internal source refers to the present working force of a company. In the event of a vacancy,
someone already on the payroll is promoted. Thus, at the Tata Engineering and Locomotive
Company and at Hindustan Unilever Ltd., outside recruitment is resorted to only when
requirements cannot be met from internal promotions.

Filling a vacancy form internal sources by promotion people has the advantages of increasing the
general level of morale of existing employees and of providing to the company a more reliable
information about the candidate‘s suitability who has already worked with the company on a
lower post.

12
The major weakness of this source are that it results into inbreeding depriving the
organizationof a fresh outlook, originality and initiative and offers limited choice.

Advantages of Internal Sources of Recruitment

 Familiarity with the organization and employees

 Better use of talent
 Economical and less time consuming
 It will help to improve the morale, loyalty and belongingness of an employee
 It will motivate the employees

Disadvantages of Internal Sources of Recruitment

 Limited choice
 Discourage competition
 Creates conflicts

2. External Sources

The more commonly used external sources are the following;

1. Advertisement in the newspapers

Senior posts are largely filled by this method. This method is however, followed by
companies in 3 different ways
2. Employment Exchange
An employment exchange is an office set up by the government for bringing together as
quicklyaspossiblethosemenwhoareinsearchofemploymentandthoseemployerswho are
looking for men. Employment exchange register unemployed people and maintain
records of their names, qualifications, etc. the employers on their part intimate the
exchange about the vacancies which occur in their factories and types of employees they
required for from among the employment seekers already registered with it and forwards
their names to the employers for consideration.
3. Field Trips

13
 An interviewing team makes trip to towns and cities which are known to contain thekinds
of employees required. Arrival dates and time and venue of interview areadvertised in
advance.
4. Educational Institutions
Sometimes recruiters are sent to educational institutions where theymeet the members of
the faculty and persons in charge of placement services who recommend suitable
candidates. Some companies send representatives of professional meetings and
convention to recruit people.
5. Labour
Contracts In many industries workers are recruited through contractors who are
themselves the employees of these organizations.
6. EmployeeReferrals
Some industries with a record of good personnel relations encourage their employees to
bring suitable candidates for various openings in the organization. Companies offer rich
rewards also to employees whose recommendations are accepted.
7. Unsolicited Applicants
These are persons who gather at the factory gates to serve as casual workers or who send
in their applications without any invitation from the factory. Sometimes alreadyemployed
person may seek additional jobs. This is called moon-lighting. The number of unsolicited
applicants at any point of time depends on economic condition, the image of the company
and the job-seekers perception of the type of jobs that might be available in the company.
8. Labour Unions Organisations with ‘closed shop‘agreements with their unions arerequired
to recruit union members only.

Advantages of External Sources of Recruitment

 Availability new and talented candidates
 Opportunity to select the best candidates with innovative or creative thoughts
 Provides healthy competition among the employees

14
Disadvantages of External Sources of Recruitment
 Expensive and time consuming
 Unfamiliarity with the organisation
 Lack of mutual relations
 Chances of faulty sselection

SELECTION

MEANING:

Selection is the process of picking individuals (out of the pool of job applicants) with requisite
qualifications and competence to fill jobs in the organisation. The objective of selection process
is to determine whether an applicant meets the qualifications for a specific job and to choose the
applicant who is most likely to perform well in that job.

DEFINITION:

According to Prof. Thomas H. Stone defined selection as, “It is the process of differentiating
between applicants in order to identify (& hire) those with a greater likelihood of success in a
job”.

SELECTION PROCESS:

Selection is a long process, commencing from the preliminary interview of the applicants and
ending with the contract of employment. In practice, the process differs among organisation
between two different jobs within the same organisation. Selection procedure for SeniorManager
will be long-drawn and rigorous, but it is simple and short while hiring shopfloor workers.

15
 Figure3
PreliminaryInterview
This is a very general and basic interview conducted so as to eliminate the candidates
who are completely unfit to work in the organisation. This leaves the organisation witha
pool of potentially fit employees to fill their vacancies.
ReceivingApplications
Potential employees apply for a job by sending applications to the organisation. The
application gives the interviewers information about the candidates like their bio-data,
work experience, hobbies and interests.
ScreeningApplications
Once the applications are received, they are screened by a special screening committee
who choose candidates from the applications to call for an interview. Applicants maybe
selected on special criteria like qualifications, work experience etc.

16
EmploymentTests

Before an organisation decides a suitable job for any individual, they have to gauge
their talents and skills. This is done through various employment tests like
intelligence tests, aptitude tests, proficiency tests, personality tests etc.

EmploymentInterview
The next step in the selection process is the employee interview. Employment interviews are
done to identify a candidate’s skill set and ability to work in an organisation in detail.Purpose
of an employment interview is to find out the suitabilityof the candidate and to give him an
idea about the work profile and what is expected of the potential employee. An employment
interview is critical for the selection of the right people for the right jobs.
CheckingReferences
The person who gives the reference of a potential employee is also a veryimportant source
of information. The referee can provide info about the person’s capabilities, experience in
the previous companies and leadership and managerial skills. The information provided by
the referee is meant to keep confidential with the HR department.
Medical Examination
The medical exam is also a very important step in the selection process. Medical exams
helptheemployersknowifanyofthepotentialcandidatesarephysicallyandmentallyfit to
perform their duties in their jobs. A good system of medical checkups ensures that the
employee standards of health are higher and there are few cases of absenteeism,accidents
and employee turnover.

FinalSelectionandAppointmentLetter

This is the final step in the selection process. After the candidate has successfullypassed
all written tests, interviews and medical examination, the employee is sent or emailed an
appointment letter, confirming his selection to the job. The appointment letter contains
all the details of the job like working hours, salary, leave allowance etc. Often,
employees are hired on a conditional basis where they are hired permanentlyafter the
employees are satisfied with their performance.

17
IMPORTANCEOFTHESELECTIONPROCESS

1. Properselectionandplacementofemployeesleadtogrowthanddevelopmentofthe company. The

company can similarly, only are as good as the capabilities of its employees.

2. Thehiringoftalentedandskilledemployeesresultsintheswiftachievementof company
goals.

3. Industrial accidents will drasticallyreduce in numbers when the right technical staff
is employed for the right jobs.

4. When people get jobs they are goodat, itcreates a sense of satisfactionwith them andthus
their work efficiency and quality improves.

5. People who are satisfied with their jobs often tend to have high morale and motivation
to perform better.
TESTS

A test is a sample measurement of a candidate’s ability and interest for the job different
types of test are conducted.

1. Aptitude Test conducted to know whether candidate has the potentials to learn the skills
necessary to the work. Ex: salesman.
2. IntelligenceTesttotestthementalcapacityofthecandidateslike,reasoning,word fluency,
memory, vocabulary, etc.
3. Proficiency Test is conducted to measure a person’sskill to do hisjob. Ex: typist.
4. Interest test to measurea candidate’s interest in a particular work.
5. Personality Test helps to judge the personal traits of a candidate’s quality like, courage,
values, initiative, curiosity, judgment, temperament, etc.
6. In Basket the candidate is supplied with actual letters, telephone, conversation, reports
and adequate information about job and organization. The candidate is asked to take
decision on various items based on the information.
7. Thematic Apperception Test (TAT) candidates are shown a series of pictures and are
asked to write a storybased on these pictures. This test measures candidates conceptual,
imaginative and projective skills.

18
 8. Ink-Blot Test The candidates are asked to see the ink- blots and make meaningful
concepts out of them. The examiner keeps a record of the responses, emotional
expressions and incidental behaviors.
INTERVIEW

It is a face to face oral examination of a candidate by an employer. The final

interviewenables the employer to examine the candidate thoroughly.

KINDSOFINTERVIEW:

1. Direct Planned Interview: This interview is a straight forward, face-to-face, question an

answer situation intended to measure the candidate‘s knowledge and background.
Although it also provides an opportunity for observing the candidate‘s personal
characteristics and nothing his attitudes and motivations but the presentation is usually
superficial. The interviewer, however, does some advance planning.
2. Indirect Non-directives Interview: In this type of interview the interviewer refrains from
asking direct and specific questions but creates an atmosphere in which the interviewer
feels free to talk and go into any subject he considers important. In such atmosphere the
information obtained by the interviewer is more likelyto be an accurate representation of
what the individual believes than if the employee is asked specific questions. The
interviewer, therefore, plays mainly a listening role.
3. Patterned Interview: In this interview a series of questions which can illuminate the
strategic parts of the applicant‘s background are standardized in advance and validated
against therecord ofemployees whohavesucceed orfailed on thejobs. Answersto these
questions are compared with a critical score and used in determining who is to be
selected.
4. Stress Interview: In this interview the interviewer deliberately creates stress to see howan
applicant operates under it. To induce the stress, the interviewer responds to the
applicants‘answer with anger, silence, criticism or a flurry of incisive follow-up
questions. Events such as noise, interruptions, or change of schedules are introduced to
see how determined and inventive an applicant can be. The interviewer can add realism
by acting uncooperatively and by raising objections.

19
 5. Systematic Depth Interview: In this interview, the interviewer has a plan of areas he
wishes to cover. Ordinarily, the interviewer exhausts one are before launching into the
next so that he can be more certain of complete coverage. Each answer must be
interpreted in the context of many other interrelated circumstances. So the interviewer
must weigh the meaning of various answers.
6. Panel or Board Interview: In the board interview, more than one person interviews an
applicant at the same time. Areas of questioning are allowed to each interviewer before
the interview starts. One possible disadvantage of this method is that on being stimulated
by each other‘s questioning, interviewer may start competing with one another and thus
create conditions of stress for the candidate.
7. Group Interview: In this interview 5 or 6 applicants are placed together in a situation in
which they must interact. The situation may be structured or unstructured. It is usual for
the selector to remain silent throughout the discussion and make notes of the applicant‘s
interactions unobtrusively. The applicant who verbalizes better and who has a better
personality is likely to be selected under such circumstances.
8. Walk-in-Interview: In this interview candidates are not required to apply for the post
beforehand. They are asked to approach the employer for interview on the advertised
date, time and place with their bio-data and a copy of their passport size photograph.

PLACEMENT

Whenthecandidatereportsforduty,theorganizationhastoplacehiminitiallyinthatjobfor
whichheisselected.Theorganizationdecidesthefinalplacement aftertheinitialtrainingisover and
performance during the training. The probation period ranges between six months to two years.
If the performance is not satisfactory the organization may extend the probation period or ask the
candidate to quit the job. If the performance is satisfactory his services will beregularized and he
will be placed permanently on a job.

PROBLEMSIN PLACEMENT

1. Employee expectations- If the employee expects high salary independent and challenging
work and the job offers low salary, dependent work then the employee finds himself misfitto
the job.

20
2. Job expectations- Sometimes the expectations from the employee are more than the
employee’s abilities or skills. Then the HR manager finds the mismatch between the job and
the employees.

3. Change in technology- Technological changes brings changes in job description and

specification. This may mismatch.

4. Changes in organizational structure- The organization may do merger, acquisition,

downsizing etc. That may result in mismatch between job and employee.

HOWTOMAKEJOBPLACEMENTEFFECTIVE

1) Job rotation: Rotating the employee among different job in the department enables the
employee to satisfy his aptitude for challenging work.

2) Team work: The teamwork allows employees to use their skill, knowledge, abilities, etc. and
it minimizes the problems in placement.

3) Training & development: Continuous training & development help the employee to
acquirenew skills and knowledge.

4) Job enrichment: Provides challenging work and decision making authority to the employees.
It gives the opportunity to use his skills.

5) Empowerment:Makestheemployeetoexploithispotentialities andmakeuseof them.

ORIENTATION

MEANING:

Orientation is one component of the new employee socialization process. It is the ongoing
process of instilling in all new employees prevailing attitudes, standards, values, patterns of
behavior that are expected by the organisation and its departments.

DEFINITIONOFORIENTATION:

Orientation defined by Prof.Robert .L.Mathis and John H.Jackson as, “It is a process of planned
introduction of employees to their jobs, their co-workers and the organization”.

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PROBLEMSOFORIENTATION

 Supervisornot trainedand istoo busy

 Overwhelmedwithtoomuch informationinashort time.
 Overloadwithformsto complete
 Employeeaskedtoperformtaskwheretherearehighchancesoffailurethatcould needlessly
discourage the employee.
 Employee is forced to fill in the gaps between a broad orientation by the HR department
and a narrow orientation at the department level.
 Employeethrownintoactiontoo soon
 Employeemistakecandamagethe company
 Employeemaydevelopwrongperceptionbecauseofshortperiod spentoneach job

INDUCTION

Induction is the process of receiving and welcoming an employee when they first joint acompany
and giving them the basic information what they need to settle down quickly and happilyto start
the work. Lecture, film, group, seminarare usedto impart theinformation to new employee about
the environment of the job and organization in order to make a new employee comfortable
themselves

CRITERIAFORASUCCESSFULINDUCTIONPROGRAMME.(STEPS OR
PROCESS)

1. About thecompanyhistory.

2. Objectivesofthe company.

3. Policies

4. Procedures

5. Rulesandregulations

6. Codeof contact

7. About the department

22
8. Aboutthe superiorsand subordinates

OBJECTIVESOFINDUCTION AND ORIENTATION

1. Puttingthenewemployeesateast.

2. Greetinginterest inhis joband thecompany.

3. Providingbasic informationabout workingarrangements.

4. Indicating the standard if performance and behavior expected of him making the
employee feel that his job however small is meaningful that he is not a knowledge in
the vast field his job.

5. Informinghimaboutthetradingfacilities.

6. Creatingthefeelingof social security.

7. Minimizingtherealitywhichthecompanyprovideoffersregardingpay,benefits,status,
working conditions, responsibility, opportunity for growth, innovation, creative ideas

DIFFERENCEBETWEENORIENTATIONANDINDUCTION

Figure4

23
UNIT–III–Human Resource Management

1
 TRAININGANDDEVELOPMENT

Concept and Importance- Identifying Training and Development Needs- Designing Training
Programmes- Role specific and Competency- Based Training- Evaluating Training Effectiveness-
Training Process Outsourcing-Management Development- Career Development.

CONCEPTSOFTRAINING

It is the process of providing inputs and knowledge to empower and develop the manpower
or employee according to the industrial expectation is called as training. It is a tool that helps to
increase the efficiency and the capacity of employees by importing specified knowledge, talent,
idea, skill and experience for the development of the company.
Trainingisa processof learningasequenceof programmedbehavior. It isan applicationof
knowledge. It gives people an awareness of the rules and procedures to guide their behavior. It
attempts to improve their performance on the current job or prepare them for an intended job.

DEFINITION:
Training is the act of increasing the knowledge and skills of an employee for doing a particular job.
— Edwin B. Flippo

DevelopmentistheProcessinwhichsomeoneorsomethinggrowsorChangesand becomes more updated

and advanced

Training & Development Need=Standard Performance–Actual Performance

TOOLS TO BE USED FOR TRAINING(MODEOFPROVIDING TRAINING):

 Classroom teaching
 Seminar
 Presentation
 Guest lecture
 Video presentation
 Management games
 E– learning
 Coach and mentorship
 Tutorial or remedial class

2
IMPORTANCEOFTRAINING

 To provide job related knowledge to the workers.

 To impart skills among the workers systematically so that they may learn quickly.

 Tobringaboutchangeintheattitudesoftheworkerstowardsfellowworkers,supervisor and
the organization.
 To improve the productivity of the workers and the organization.
 To reduce the number of accidents by providing safety training to the workers,

 To make the workers handle materials, machines and equipment efficiently and thus
to check wastage of time and resources.
 To prepare workers for promotion to higher jobs by imparting them advanced skills.

BENEFITSOFTRAINING:

1. Leads to improve productivity and profitability of organisation

2. Improve the job knowledge and skillsatvariouslevelof organisation.
3. Improve job morale and confidenceofwork.
4. Improve the relationship between employee and employer
5. Helps in understanding organizational policy.
6. Provide information in future need in all areas of organisation.
7. It helps in reduce the cost and expenses in business.
8. It helps in maximizing quality of work and standard of employees.

9. Ithelpsintopreventstress,tensionandmisunderstandingof employees.
10. Itimproveslabourandmanagementqualifications.
11. Itincreasesthelevelofjob satisfactionand sp e ci ficati onamongemployees.

12. It helps in developing sense of growth in learning.

13. It improves interpersonal skills in a company.

14. It provides a good climate for learning, growth ,motivation andco-ordination

15. It creates the organization is a better place to work and live.

3
OBJECTIVESOFTRAINING:

 Topreparetheemployeestomeetpresentandfuturerecruitmentofthejobinthe organization.

 Toprovidebasicknowledgeandskillswhichtheyneedforintelligenceperformance
of particular job.
 Toprepareemployeefor achievinghigherleveltask.
 Todevelopthepotentialof peoplefornextlevelof job.
 Toensuresmooth andefficientworking condition ofparticulardepartment.

 Toensureeconomical output ofrequired qualityand standard.

 Topromoteindividualresponsibility,attitudeinrightdirection.
 Tobuilduptheoverallcapacityandstrengthofemployeetochallengesin organisation.

IDENTIFYINGTHE NEED OFTRAINING&DEVELOPMENT

• To improve Productivity

• To improve Quality

• To help a company f ulfils its future personnel needs

• To improve organizational Climate

• To improve healthandSafety

• Obsolescence Prevention

• Personal Growth.

• Technology update

• Industrial safety

• Effective management

4
PROCESSOFTRAININGOR STEPSINVOLVED IN TRAINING:

1) Assessment of training needs.

The basic step in training is to identify the need and purpose the training program based
on the organizational policy and objective of the company. Normally this will be
determined by the expectation and need of employees in the company.

2) Setting the training objectives.

The theme and objective of the training program should be fixed based on the employee
need , technological change, level of task and nature of work.

3) Selection of training method.

The optimum method should be adopted based on urgency, demand, situation, need,
Importance, budget and cost.

4) Conduct of training.
Training program should be conducted and implemented as per the schedule and plan to
develop the level of employee to the next level in terms of knowledge, skill, technology
and Idea.

5) Evaluation of training program and Follow up

The proper examination and audit should be conducted to review the impact and feed
back of training .this will help us to identify the problems and strength of the training
which help us to follow or modify the training.

5
TYPES(OR)METHODSOFTRAINING

Figure1
On theJobTraining Method
1. Job Rotation
Job Rotation is a management approach where employees are shifted between two or more
assignments or jobs at regular intervals of time in order to expose them to all verticals of an
organization. It is a pre-planned approach with an objective to test the employee skills and
competencies in order to place him or her at the right place.

2. Coaching
Coaching is a process that aims to improve performance and focuses on the ‗here and now‘
rather than on the distant past or future.

3. Job Instruction
Job Instruction Training (JIT) is a step-by-step, relatively simple technique used to train
employees on the job. It is especially suitable for teaching manual skills or procedures; the
trainer is usually an employee's supervisor but can be a co-worker.

4. Committeassignment
Committeeassignmentsrefertothemethodinwhichthetraineesareaskedtosolveanactual
organizational problem. In committee assignments, trainees have to work together in a team
and offer solution to the problem.

6
 5. Internship training
Underthe InternshipTrainingprogramme,aneducationaloravocationalinstituteentersinto an
arrangement with the industrial enterprises to provide experiential knowledge to their
students. Usually, the internship training lasts for few months and can either be paid or
unpaid.

Off theJobTraining Method

1. Casestudymethod
The case studyis a method which provides descriptive situations which stimulate trainees to
make decisions. As a training tool, the case study method can be used to develop decision-
making skills, enhance team spirit, better communication and interpersonal skills and
strengthen the analytical skills of trainees

2. Incidentmethod
Critical incident method or critical incident technique is a performance appraisal tool in
which analyses the behavior of employee in certain events in which either he performed
very well and the ones in which he could have done better.

3. Roleplay
Role Play, or Role Playing, allows a learner to assume the role or tasks of a job by
practicingorsimulatingreal working conditions. Theobjectiveofroleplayingis to learn,
improve or develop upon the skills or competencies necessary for a specific position.

4. Inbasketmethod
In basket training is a training method to acquaint employees about their job where a
number of problems are kept in the "in basket " (usually kept on the desk of the
employee). The worker has to look at the problems which could also be complaints from
different employees and simultaneously deal with those problems

5. Businessgames
Business Gamesrefersto thetrainingmethod for managers. This form of training is based
on an artificial environment that simulates the real situation in the management of the
organization. Business games allow monitoring of the consequences of decisions, and
respond naturally to various situations

7
6. GridTraining
TheGridTrainingisthe comprehensiveorganizationdevelopmentprogrammedeveloped by
Blake and Mouton, which focuses on the overall development of individuals, groups and
the organization as a whole.

Figure2

7. Lectures
Lecturing refers to giving an instructional talk on some subject — usually in front of a
class or a group of people. Eg.Class rooms

8. StimulationTraining
Simulated Training is a devised job training that is not on the job but away from the job.
It teaches a complicated, critical and hazardous task. Enough practice gives the trainees
enough exposure and renders him better prepared for the real life problem.

9. Management(Games)education
Management Games, Business Simulators refers to the training method for managers.
Thisformoftrainingisbasedonanartificialenvironmentthatsimulatestherealsituation in the
management of the organization, whether it's planning, decision making, control,
communications or management itself

10. Conferencesand seminars

A conference is a formal meeting where people congregate to discuss a specific area of
commoninterestwhileaseminarisaneducationalforumwheremembersmeettoacquire
knowledge about a particular area.

8
ROLE OFTRAINING
• Help in addressing employee weaknesses

• Improvement in worker performance

• Consistency in duty performance

• Ensuring worker satisfaction

• Increased productivity

• Improved quality of service and products

• Reduced cost

• Reduction in supervision

• Develop positive attitude

• Reduced employee turnover

COMPETENCYFOREFFECTIVETRAINING

• ADeep Knowledgeofthe Business

A deep and thorough understanding of the business or organisation you are part of is
among the greatest assets that you as a training manager can possess. A good rule of
thumb is whether you can articulate both what your companydoes and how it does it in a
few simple, concise sentences.
• TheAbilitytoMeasure andAssessStaff TrainingNeeds
Awareness of how the training needs of your employees is critical to developing your
team. Professional trainers are expected to conduct a thorough training needsanalysis
before undertaking a training assignment, and as a manager, you'll need to as well. This
process will help you determine two things - what needs to be learned by your team, and
how to priorities the learning.

9
 • StrongCommunicationandInterpersonalskills
Regardless of whether you conduct your own training programs or not, it is imperativefor
a good training manager to be highly efficient in communication of all kinds.
Understanding problems, conveying ideas, conducting training – all of this is carried
through words.

• APassionforContinuousLearning&Enthusiasmforlifelongupdating
Every day around the world thousands of academic papers are submitted, hundreds of
seminars are given, and thousands of blog posts written discussing new research and
insights into age-old management problems. As a corporate trainer who wants to remain
on top of the game you need to keep yourself abreast of the latest developments in your
field. A passion for learning will make this less of a chore and more of a spirited
endeavor.

• Innovative Thinking
The prospect of attending yet another training session can make anyone, from seasoned
corporate executives to employees who have just started, want to shoot themselves in the
head. We've all been in plenty of repetitive and monotonous training sessions. We've all
sat through presentations that were boring or were clearly being taught with a minimumof
effort by the instructor.

• EmbraceEfficiency
Training budgets are almost never static. They're one of the last things to be increased by
management in response to growth, and they're one of the first things to be cut! Training
managers almost never had the resources they need, whether it's time, money, tools, or
buy-in from the rest of the company. These are the realities of the training business
though, and they're not going to change, so make sure you develop an acute appreciation
of and desire for efficiency.

TRAININGOUTSOURCING

Training Process Outsourcing in Human Resources Management is drawing attention in

the management to build a dedicated and high caliber, human resource with maximum
skills and knowledge.

10
 Outsourcing is the business practice of hiring a party outside a company to perform
services and create goods that traditionally were performed in-house by the company's
own employees and staff.

NEED OFOUTSOURCING

 
COST EFFECTIVE
This is one primary reason from where the need of outsourcing came into the picture.
Mainly with the developed countries like US and UK, the skilled and proficient labor
available in these countries is very expensive according to the minimum wage policies
available with them. So, the processes like marketing, Sales, web development etc they
started outsourcing to the developing countries like India where they could find goodquality
skilled labor with very fewer wages.
 
SKILLEDSPECIFICVENDORS
These outsourcing vendors are the ones specialized in the task assigned as they have the
good number of skilled labor with them, who knows all the complexities of the task and
readywithallthepossiblesolutionsrequiredwhichmakestheprocesshandlingsmoother than
having done in-house by hiring people as it turns out to be less feasible in terms of
quality. Being skilled specific it helps the business to improve the effectiveness of thejob.
 
SAVESONINFRASTRUCTUREAND TECHNOLOG

One important aspect of outsourcing is it eliminates the need of investing more in

infrastructure and further technologies. Outsourced business partner shares the
responsibilityand do invest in them which again saves on the business capital and makes
the business person use that fund to procure more needed and latest technologies related
tocorebusinessactivitieswhichturnouttobeamorebeneficialdealforany
organizationraisingtheneedofoutsourcing.

11
 
RISK SHARING

When one needs to take all the responsibilities related to business and the whole risk lies
on them, then they use to refrain them from doing certain things. It turns out to be one
demotivating factor actually. And at the same time, if one outsources certain business
activities it certainly divides the risk also as one need not worry about the loss of data
during a technical crisis, accident, natural calamities or market fluctuation. Your
outsourced business partner will always be there to assist you in any such kind of crisis.
This definitely is one important factor and raises the need for outsourcing.


DEALSWITHTALENTSHORTAGE

One of the reasons why outsourcing is considered is the lack of required resources in a
particular country or locality. While choosing an outsourcing agency one does their
homework well and choose the area where require an amount of skilled resourceavailable
that too in a cost-effective manner. India is being considered on priority while
outsourcingas it‘s been a pool of highlyskilled and technologicallysound resources with
effective English communication skills.


IMPROVEDCUSTOMERSERVICES

Byrelyingonmoreskilledandqualifiedpeopleforspecifiedjobs youtendtoservebetter quality

to your clientele which ensures more satisfied customers giving you morebusiness and
increasing your revenue which definitely calls for the need of outsourcing.

AREA OFOUTSOURCINGIN HR

• WorkforceAdministrationSolution

• HRMSModel

• Recruitment

• LearningandPerformance

12
 • LeaveAdministration

• Timeandattendance

• Employeeself-service and queryresolution

• Payroll and Benefit Administration

• Payroll

• Administration

• Tax Processing

• Flexible Benefits/Compensation

• Regional Payroll Solution

• Document Management system

MANAGEMENT DEVELOPMENT

Management Development is a systematic process of training and growth by which

managerial personnel gain and apply skill,knowledge, altitudeeand insights to manage the
work in their organization effectively and efficiently. In other words, it is managements'
responsibility of ensuring the success of the organization.

It is continuous process of learning. It implies that there will be a change in knowledge

and behavior of the individuals undergoing development programme. The employee will
be able to perform his present job better and will increase his potential for future work.

DEFINITION:
“A conscious and systematic process to control the development of managerial resources in
the organisation for the achievement of goals and strategies”. - Yoder

13
CHARACTERISTICS OF MANAGEMENT DEVELOPMENT

1. Itisanorganisedprocessoflearningratherthanahaphazardortrialanderrorapproach.

2. Itisalongtermprocessasmanagerialskillscannotbedevelopedovernight.

3. It is an ongoing exercise rather than a―one-shot ‖affair. Itcontinuesthroughoutan

executive‘s entire professional career because there is no end to learning.

4. Managementdevelopmentaimsatpreparingmanagersforbetterperformanceand helping
them to realise their full potential.

5. Executivedevelopmentisguidedself-development.Anexecutivecanprovide
opportunities for development of its present and potential managers.

NEED OFMANAGEMENT DEVELOPMENT

• SocialObligation
Organization is a part of society. Society has expectations, demands for its growth and
development from societal members including organization/s functioning in the society.

• EffectofGlobalization
Because of globalization, multinational corporations (MNCs) and trans-national
corporations (TNCs) have entered in the market resulting in, stiff competition amongstthe
market players. In such a situation, it becomes difficult for the domestic companies to
survive in the context of quality goods they supply and the price they fix for the
customers.

• EffectiveFunctioningofLineManagement
Line management/technocrats are well conversant with technicalities of production
activities but, they may lack adequate skill, abilities in human relations development and
conceptual areas of the company. For effective functioning of their work they need
improvement, development of their skills in those areas where they lack.

14
• ExcellentQualityofWorkof Non-TechnicalHigher Management
Technical skill is required for excellent performance by nontechnical managers.
Requirement of technical skill of management personnel varies in degree considering
grade/strata of the management to which they belong. Higher level management mayneed
some knowledge/skill in technical areas and so, for better functioning they need to
acquire skill in this area.

• Useof Latest Technologies

Every organization needs to use latest technologies in its operational and serviceactivities
so that, quality goods at minimum cost can be produced to face competition with the
market players but, these latest technologies cannot be effectively used if, the managers
are not given proper training to have acquaintances with technologies, its operative areas,
use, effectiveness, probable problems, etc.

• Changein Economic Policy

Change in economic policy creates a new business climate and work culture in
organization where re-inventing of management practices appears to be of much
necessity. New areas are required to be explored for expansion and diversification of
business; continuous improvement of quality in services and products needs to be
emphasised; issues like retention of customers and search out for new customer be
prioritized.

• Smooth and Effective Functioning of Business Activities

Workers perform business and industrial activities under the guidance and supervision of
management. Management personnel play the role of guide, coach, motivator, leader of
the people at work. Workers can be effective if the decisions, directions, guidance of the
management are proper, perfect and accurate.

15
CAREER DEVELOPMENT

Career development is the series of activities or the on-going process of developing one's
career. It involves training on new skills, moving to higher job responsibilities, making a
career change within thesame organization, movingto a different organization or starting
one's own business

AccordingtoEdwinFlippo,―Acareerissequenceofseparatebutrelatedworkactivities that
provide continuity, order and meaning to a person‘s life.‖ It is not merely a series of
work-related experiences, but consists of a series of properly sequenced role experiences
leadingtoanincreasinglevelofresponsibility,status,powerandrewards.Itrepresentsan
organised path taken by an individual across time and space

NEED FOR EFFECTIVE CAREER DEVELOPMENT

i. Making Available Needed Talent:

Career development is a natural extension of strategic and employee training. Identifying staff
requirements over the intermediate and long-term is necessary when a firm sets long-term goals
andobjectives.Careerdevelopmentwillhelporganizationsinputtingtherightpeopleintheright job.
ii. Attracting and Retaining Talents:
There is always a scarcity for talented people and there is competition to secure their services.
Talented people always prefer to work in organizations which care for their future concern and
exhibit greater loyalty and commitment to organizations where there is career advancement. As
career development is an important aspect of work life as well as personal life, people prefer to
join firms which offer challenges, responsibility and opportunities for advancement.
iii. Reduced Employee Frustration:
Along with educational level and knowledge, the aspirational level of occupations is also
increasing. When these levels are not met due to economic stagnation frustration sets in. When
organizations downsize to cut costs, employee career paths, career tracks and career ladders tend
to collapse resulting in aggravation of frustration. Career counseling comes a long way in
reducing frustration.

16
 iv. EnhancingCulturalDiversity:
Fast changing scenarios in globalization reflects a varied combination of workforce representing
different types of races, nationalities, religious faiths, ages and values in the workplaces.
Effective career development programmes provide access to all levels of employees.
v. ImprovingOrganizationalGoodwill:
It is quite natural that if employees think their organizations care about their long-term well-
being through career development they are likely to respond in kind by projecting positive
images about their organizations. Career development does help organization in impressing
image and goodwill.

vi. Motivatingforbest result:

Normally the career development will motivate the employee to attain the result effectively with
maximumamountofinterestandwish;sincetheir personal growthisgrantedforsustainalability.

vii. MaximizingInterestonachievingtaskorwork:
When the employees are motivated that induce the mount of happiness and interest among
theemployees to do give their full support on their respective works.

viii. Reducingabsentee:
The ultimate fact or in career development is to minimize the amount of absentee and make the employee
to maintain the proper percentage of attendance for providing best performance.

STEPSINCAREERDEVELOPMENT (PROCESS)

• IdentifyingCareerNeeds
Some large organizations have assessment centres or conduct career development
workshops wherein a group of employees are brought together to undergo psychological
testing, simulation exercises, and depth interviews.

• DevelopingCareer Opportunities
Career opportunities are identified through job analysis. The manager should identify
career path for employees in the organization. He/she should discuss with the employees
what jobs are available in the organizational hierarchy and at the same time find wherethe
employee would want to go up in the organization in future.

17
 • Integration of Employee Needs with Career Opportunities
It is necessary to align the needs and aspirations of the employees with career
opportunities in order to ensure right people will be available to meet the organizational
manpower requirements. Therefore, emphasis is placed on the training, on- and off-the-
job, counselling and coaching by supervisor, and planned rotation in positions of varying
functions and in different locations.

• Regular Monitoring
It is necessary to regularly monitor the progress of the employee towards his/her career
development plans and see that the support is being provided to develop those career
plans.
STRATEGIESINCAREERDEVELOPMENT

Individual strategy

 Do itNow
Suppose you have made decisions that will have an impact on your career. Do not
delay in implementing the decisions. Do not wait for an auspicious day to come; for
completing an academic activity, for settling down, and for any other reasons.
 KnowYourself
You need to know your own strengths and weaknesses. Take the help of someone,
whom you like and regard, to help you to identify your strengths and
weaknesses.Youmustknowhowotherssee
you;viewyourbehaviouralpattern,andopinionsthey possess. You must have the ear to
hear what others are telling about you.
 AnalyzeCareer Opportunities
Try and examine the sources of career opportunities. There are many sources of
information concerning occupations and career opportunities. Many B -schools are
publishing placement manuals or brochures containing information regarding career
opportunities. You may also collect information from some of your friends orrelatives
who keep themselves informed. Spend few hours browsing the internet to determine
what potential employers are seeking.

18
 EstablishCareer Goals
In the preceding three steps, you have learned that you should not delay in
implementing decisions, you need know yourself, and you must analyse career
opportunities. Using these as your arsenal, you should now develop your specific
career goals.

 ObtainFeedback
Feedback from relevant people help one correct his/her errors. You are required to
think and plan how you will gather feedbacks from others with regard to your self-
analysis and current career planning.
 ManageYour Career
Managingcareerisnotjust implementingyourplan.Itisnotaone-shotoperation;but rather
an on-going process. The self-management spreads over your entire working life. You
need to constantly look for opportunities, and take advantage of them.

Organizational Strategy
 Improving Human Resource Planning
Considering and analysing the targets of the organization, it should develop the job
specifications and recruit personnel of the required quantity and requisite quality.
 Improving Dissemination of Career Option Information
Employees always remain impatient to know about their career and the various career
options available. Companies having career planning system should share the
information with the employees through administrative manuals, circulars, or other
documents. The information calms their restless minds and they can concentrate on
the work assigned to them.
 InitialCareer Counseling

Career counseling is a way of periodic performance appraisal. In addition to

appraising performance, counseling provides excellent opportunity to discuss career
problems of employees; their goals, and opportunities available for developing in
career.

19
  Support of Education and Training
Education and training system supports all levels of employees to improve their
careers. The prerequisites for further career growth are first identified, and need-
based training is conducted accordingly. Furthermore, for enhancing an employee s
overall growth, education is imparted.

 Job Posting
Employees aspire to advance in their careers. In larger organizations, the aspirations
are higher. Employees need to get information for advancement in their careers.
Organizations must provide all employees with information concerning job openings.
 Special Assignments and JobRotation
Doing the same job over a long period of time generates boredom. Employees should
get the opportunity of gaining new experience by way of performing special
assignments and through job rotation. These actions enable employees to learn new
things first-hand and performing them in different settings. Simultaneously,
management can also ascertain the capacity and potential of an employee to accept
challenges, working in new settings, and with new people.
 Career Development Workshops
Considering the importance of employees‘ career development, organizations are
arranging workshops and seminars as essential career development activities. These
workshops clearly indicate organizations‘ concern for career development.
 Flexible Rewards and Promotional System
Organizations use both financial and non-financial rewards to recognize employees.
The scope of rewards and determining success criteria are really limited; presumably
due to limited thinking about them.

SELF-MANAGEMENT

Self-assessment is essential for self-management. Self-assessment is researching within

you; finding who you are, what you like or love, what you have to offer, and so forth.
Self-management enables you to take decisions about your career. Findings of self-
assessment should be recorded on paper.

20
Self-assessment includes some vital aspects such as:
 Achievements,
 Skills and abilities,
 Personal values,

 Interests,
 Disabilities,
 Personal and family circumstances ,etc.
i. Achievements:

Thinking deeply and writing down your achievements enables you to rediscover
yourself. The easiest way of reflecting your achievements is to start with your
academic achievements at your school or university. Do not hesitate to include your
achievements in co-curricular activities. Identify what led you to select a course of
study. Think about the strengths you have developed along with specific knowledge
gained.
ii. Skills and Abilities:

While pursuing self-analysis, never underestimate yourself; never say, have “I don’t
have any skills” You must have many skills and abilities which are unknown to you.
Skill is a vital element of Mckinsey‘s 7-S framework. Skills are the essence of what
we contribute to the world. Skills bring perfection.
iii. Personal Values:

A value guide a person to lay importance over things, turn him on and off gives
happiness in circumstances or otherwise, helps to decide the extent of integrity he
needs in his work or life, exercise power and responsibility in the work place, and so
on.
iv. Interests:

There are many things that generate your interests. First, you make a list of 25 or 30
things you love to do. There after, pickup the favourites and shortlist the interests. The
job you are doing must have some of these. Give some thoughts to areas which
fascinate and mesmerize you the most, that is, production, quality control, quality
system, maintenance, purchase or planning, administrative, computational, scientific,
indoor or outdoor work, etc.

21
v. Disabilities (If Known):
Your disabilities cannot stop you from achieving that you most aspire for. Yourstrong
will always supports you to reach your goal. Be honest with your known disabilities
or physical impairments that may impact upon what you want to do. You may have
allergies, colour blindness, back problems, asthma, etc. The presence of anyone or
two disabilities does not mean you cannot do a particular job. You need to be aware
of how you would manage any roadblocks restricting you to achieve. Your strong will
lead you to success.
vi. Personal and Family Circumstances:
You now know your achievements, skills and abilities, personal values, interests, etc.
Prepare yourself to face the impacts of these on your employment in terms of hours,
financial commitments, limitations, etc. You will definitely be able to overcome the
roadblocks.

1
UNIT–IV–Human Resource Management

2
 PERFORMANCE APPRAISAL

Nature, objectives and importance- Modern techniques of performance appraisal- potential appraisal
and employee counseling- job changes- Compensation- concept and policies- job evaluation- methods
of wage payments and fringe benefits- performance linked compensation.

NATUREOFPERFORMANCE APPRAISAL

Performance Appraisal refers to all the formal procedures used in working organizations to
evaluate the personalities and contribution of group members.

DEFINITION:

”‘Performance Appraisal is a formal, structured system of measuring and evaluating an

employee‘s job related behavior and outcomes to discover how and why the employee is
presently performing on the job and how the employee can perform more effectively in thefuture
so that the employee, organization and society all benefit”.

OBJECTIVESOFPERFORMANCE APPRAISAL
 Basisforjobchangeandpromotion

 Trainingand development program

 Feedbacktothe employee

 Incentivetoallthe employees

 Providetherationalfoundation forthepayment of price,rate ,wages,bonus etc.,

 Evaluatingtheeffectivenessofdevicesusedfortheselectionandclassificationof
workers.

IMPORTANCEOFPERFORMANCE APPRAISAL
 Theperformanceappraisalbooststhemoraleoftheemployeesandmotivatesthemto work
more
 Ithelptoanalyze anindividual‘sperformanceandtheirrole

 Itis the best wayto identifythe weakareas andthestrength areas of theemployee.

3
  Itestablishesamerit-basedsystemthatmotivatestheemployeestoputtheirbestfoot
forward.
 Itprovidesasystematicapproachforreachingouttothemanagementforclearingout
expectations and to have discussions about future plans.
 It is a very effective way to promote employees based on their performances.

 It is used to scale the level of contribution of employees in the business

 It is used to provide salary high and job rotation.

 Ithelpsthemanagerstoarrangerefreshmentsandcareeranddevelopmentprograms for
the employees as per their performance evaluation.
 It is apart piecerate system in wages administration.

METHODS(OR)TECHNIQUES OFPERFORMANCEAPPRAISAL

Figure1

4
I. Traditional Methods

1. RankingMethod:
The oldest and simplest method of performance appraisal is to compare one man with all other
men and place him in a simple rank order. In this way, ordering is done from best to worst of all
individuals comprising the group.

2. PairedComparison Method
PairedComparisonMethodisahandytool fordecisionmaking;itdescribesvaluesandcompares them to
each other. It's oftendifficult to choosethebest option when you havedifferent ones that are far
apart. This method is also known as the Paired Comparison Method and Pairwise Comparison.

3. Gradescale
Itisasystematicevaluationofanindividualwithrespecttoperformanceonthejobandindividual's potential for
development Grading Scale Method.

TheGradingscalemethodisaperformanceappraisalmethodthatratesemployeesaccordingto using
evaluators records their judgments about performance on a scale .

4. Forceddistribution method
Theforceddistributionmethodofperformanceappraisalderivesitsnamefrom thefactthatthose
responsible for providing evaluations, the raters, are ―forced‖ to distribute ratings for the
individuals being evaluated into a ―pre-specified‖ performance distribution.

5. ForcedChoicemethod
It consists of a number of statements which describe an individual being rated. These statements
are grouped into two, three or four. Sometimes all groups of the form are made of favorable
statements. Sometimes all have unfavorable statements only and sometimes they have both
statements. Nevertheless, the rate is compelled to check a ‗most‘ and a ‗least‘ in each group-
hence the term ‗forced choice‘.
6. Checklistmethod
This consists of a member of statements about the worker and his behavior. Each statement on
this list is assigned a value depending upon its importance. Both statements and their values are
derived from preliminary research in which the pooled judgments of persons familiar with the
job are used.

5
 7. Criticalincidentmethod
Inthismethodthefirststeptodrawupforeachjobalistofcriticaljobrequirements,thatis, those
requirements which are vital for success or failure on the job.
8. Graphicscalemethod
As the very name implies these methods provide some kind of a scale for measuring absolute
difference between individuals. The scales used are generally of two types;

i. Discrete ii. Continuous

9. Essayevaluationmethod
Essay Appraisal is a traditional form of Appraisal also known as ―Free Form method.‖ It
involves a description of the performance of an employee by his superior which needs to be
based on facts and often includes examples to support the information.

10. Fieldreviewmethod
Thepersonnelofficermeetssmallgroupsofratersfromeachsupervisoryunitandgoesover each
employee‘s rating with them to

 Help the group arriveata consensus

 Determine that each rater conceives of the standards similarly.
 Identify areas of inter-related disagreement

11. Confidential method

A confidential report by the immediate supervisor is still a major determinant of the
subordinate‘s promotion or transfer. The format and pattern of this report varies with each
organization.
II.ModernMethods

1. MBO(Managementby Objectives)

Introduced by Prof. Peter Drucker. It is a process whereby the superior and subordinate
managers of an organization jointly identify its common goals, define each individual‘s major
areas of responsibility in terms of results expected of him or use these measures as guides for
operating the unit and assessing the contributions of each of its members.

6
2. 360Degree Feedback
In this method, performance information is collected‗all-around‘an employee,fromhis
supervisors, subordinates, press, and internal and external customers. It is used for Training &
Development rather than for pay increase.

3. Assessment center Method

The purpose of this method is to test the candidates in asocial situation, usinganumber
of assessors and a variety of procedures. Evaluators observe and evaluate participants as they
perform activities common found in these higher level jobs. Many evaluators join together to
judge employee use of a variety of criteria.
4. Behaviourly anchored rating system(BARS)
Behaviorally anchored rating scales (BARS) are scales used to rate performance.It is an
appraisal method that aims to combine the benefits of narratives, critical incidents, and
quantified ratings by anchoring a quantified scale with specific narrative examples of good,
moderate, and poor performance
5. Psychologicalappraisals
Thismethodfocusesonanalyzinganemployee'sfutureperformanceratherthantheirpastwork.
Qualified psychologists conduct a variety of tests (in-depth interviews, psychological tests,
discussions, and more) to identify an employee's emotional, intellectual, and other related traits

NEEDFORMODERNPERFORMANCEAPPRAISALMETHODS

 Definegoalsclearly
 Providereal-time feedback
 Enhanceemployeeperformance
 Spottraininganddevelopmentneeds
 Offerinsightsoncounter-productivetasks
 Improveemployeeengagementandretention

7
PITFALLS(OR)DISADVANTAGESOFPERFORMANCE APPRAISAL
 Thelack ofobjectivity

Bias is generally defined as an inclination or prejudice for or against one person or

group, especially in a way considered to be unfair. In the context of performance
evaluation, this bias is directed towards the employees or teams that are being
assessed and it has an impact on their overall performance review.

 Thehalo effect

This typeofproblemariseswhenthepersoncarryingouttheappraisal generalizesthe

positive or negative impression to several individual performance categories, thus
resulting an overall performance assessment influenced by this type of extrapolation.

 Theregency effect

It implies the evaluator‘s tendency to focus on an employee‘s recent activities,

behaviours and performance (good or bad), rather the performance registered
throughout an extended period of time. An employee‘s errors or increased
performance shortly before the beginning of the performance review period should
not be defining for the overall employee assessment. An unbiased and fair appraisal
should take into consideration the performance registered throughout the entire
appraisal period.

 The Additional Workload

Most of the managers are packed with many works and they are busy with their own
schedules and plans, In-spite of all those things they are forced to do this kind of
work. So they may be felt that, this process could be a additional work load to them.
 The contrast tendency

In this case, evaluators are faced with three types of errors: the strictness tendency,
when almost all those evaluated are rated below average, the central tendency, when
no one is rated really bad or really good in terms of performance, and the leniency
tendency, when all those assessed are considered to have performed above average.

8
  The prejudice(stereotype)

It entails the identification of an employee with a certain group and the assumption
that the characteristics of that group apply to the employee as well. Irrespective of its
positive or negative nature, this type of approach prevents the evaluator from
identifying the characteristics of individuals and getting to know them in order to
conduct an objective and fair evaluation of their performance.

 The distribution altendency

In this case, evaluators are faced with three types of errors: the strictness tendency,
when almost all those evaluated are rated below average, the central tendency, when
no one is rated really bad or really good in terms of performance, and the leniency
tendency, when all those assessed are considered to have performed above average.

 Lack of Continuous Assessment

Normally most of the assessments will be done only the time of month or year end ,
so may not get the real and actual output or contribution of employees during the
particular period. The result may vary if we don‘t have a Continuous assessment.

POTENTIAL APPRAISAL

The potential appraisal refers to the appraisal i.e. identification of the hidden talents and
skills of a person. The person might or might not be aware of them. Potential appraisal is
a future–oriented appraisal whose main objective is to identify and evaluate the potential
of the employees to assume higher positions and responsibilities in the organizational
hierarchy. Many organizations consider and use potential appraisal as a part of the
performance appraisal process.

PURPOSE OF POTENTIAL APPRAISAL

 To inform employees of their future prospects
 To enable the organization to draft a management succession programme;
 Toupdate trainingand recruitment activities
 To advise employees about the work to be done to enhance their career opportunities

9
TECHNIQUES OFPOTENTIAL APPRAISAL
 Self– appraisals
 Peer appraisals
 Superior appraisals
 MBO
 Psychologicalandpsychometric tests

 Management gameslikeroleplaying
 Leadershipexercisesetc.

DIFFERENCEBETWEENPOTENTIALAPPRAISALANDPERFORMANCEAPPRAISAL

PotentialAppraisal PerformanceAppraisal

• Forward looking process • Backward looking process

• Based on forecasting • Based on existing data
• Focus on finding Hidden Talents • Focus on finding level of
• Scope for Employee Empowerment productivity
• Leads for Confidence • Scope for Employee development
• Part of Motivation • Leads for Corrections
• Part of competitive enhancement

Table 1
COUNSELLING

Counselling is a method of understanding and helping people who have technical, personal and
emotional or adjustment problems that usually has emotional contents that an employee with the
objective of reducing it so that performance is maintained at adequate level or even improved
upon

DEFINITION:
According to Keith Davis – “Employee counselling involves a discussion of an emotional
problem with an employee with the general objective of decreasing it”.

10
NEEDFOREMPLOYEECOUNSELLING

 Thereisaneedfortheemployeestocomeoutfromtheproblems,givesanewwayto deal with

the problems.
 The employees need to know as to how much the employer care for the employee.

 There is also a need to identify the work related problems and the poor performance.

 Thereisaneedtoincreasetheproductivityofemployeeandtheconfidenceaboutthe work.

OBJECTIVESOFEMPLOYEE COUNSELLING

 Counselling is an exchange of ideas and feelings between two persons.

 It is concerned with both personal and work problems.
 Counselling may be performed by both professionals and non-professionals.
 Counselling is usually confidential so as to have free talk and discussion.

 It tries to improve organizational performance by helping the employees to copewith

their problems

JOB CHANGES

Job Change: A job change is a revision to an employee's existing job description thatdoes
not represent a new position for the employee and is not a promotion. Job descriptions
can regularly be updated to reflect duties the employee is expected to perform to meet the
work needs of the department. A job change will not normally result in a change in
compensation.

OBJECTIVES:

 Tomaximizeemployee efficiency.
 Toimproveorganizationaleffectiveness.
 Toensure discipline.
 Tocopewith changesinoperations

11
CAUSESOFJOB CHANGE
 Changesinthestructureoftheorganizationinvolvingjobredesign,jobregrouping etc
 Changes in technology.
 Changes in political environment.
 Changes in demand of trade union.
 Fluctuation in volume of work due to expansion, diversification etc.

 Changes in legal policies

 Changes in the knowledge, skills and values of employees.

TRANSFER& PROMOTION

Transfer: A transfer is a lateral move to a vacant position in either the employee's current
department or a new department. A transfer will not normally result in a change in
compensation.

Promotion: A promotion is a move by an employee to a vacant position at a higher grade

level either within the current department or in a new department. Promotions generally
result in a salary increase at the time of promotion

OBJECTIVES&NEEDOFTRANSFER&PROMOTION

 To Meet Organizational Needs

 To Satisfy Employee Needs
 To Better Utilize Employee
 To Make the Employee More Versatile
 To Adjust the Workforce
 To Provide Relief
 To Punish Employee
 To Direct the company
 To lead the workforce

12
TYPESOFTRANSFER

(A) Production Transfers:

In order to stabilize the employment in the company and avoidance of lay off, an employee may
be transferred from one department to another department. Such a transfer is known as
production transfer.

(B) Replacement Transfers:

An employee with a long service may be transferred in some other department to replace a
person with a shorter service.

(C) Versatility Transfers:

The versatility transfers are made for the purpose of preparing the employees for production and
replacement transfer. An employee is trained on different jobs so as adjust him on a different job
when there is no work at his seat or job.

(D) Shift Transfers:

In case of manufacturing concerns, there are normally three shifts. Usually these shifts are
rotating. In case shift assignments are not rotating, an employee maybe transferred from one sift
to another shift.

(E) Remedial Transfers:

In case an employee does not feel comfortable on his job, he may be transferred to some other
job. His initial placement might be faulty; his health might have gone down; he may not be
getting along with his supervisor or workers i.e., he might have developed personal friction with
his boss or fellow employees.

(F) Miscellaneous Transfers:

Transfers may also be classified as temporary or permanent transfers. If a transfer is from one
department to another, it is known as departmental transfer. If a transfer is made within the
department, such a transfer is known as sectional transfer. An employee may be transferred from
one plant to another plant. Such a transfer is known as inter-plant transfer.

13
TYPES OF PROMOTION

(a) Limited Promotion

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

(b) Dry Promotion

Dry promotion is a promotion as a result of which there is no increase in the employee spay. Dry
promotions are those which are given in lieu of increases in compensation. It is usually made
decorative by giving a new and longer title to the employee.
(c) Multiple Chain Promotion
Multiple chain promotion provide for a systematic linking of each position to several other
positions. Such promotions identify multi-promotional opportunities through clearly defined
avenues of approach to and exist from each position in the organization.
(d) Up and Out Promotion
Up and Out Promotion often leads to termination of services. In this type of promotion, a person
must either earn a promotion or seek employment elsewhere.
(e) Horizontal and Vertical Promotion
These kind of promotion will be given based on Organizational Hierarchy and the level of
management in the company. Promoting the employee from bottom level to top level is Vertical
promotion, the same way promoting the employees from Production department to operation
department is Horizontal promotion.

JOB EVALUATION

Finding the financial value or worth of assigned task or work, by using this method a company
can easily fix the wages to their employees

MERITS OFJOB EVALUATION

 It is the only logical and systematic way of doing wage and salary administration.

 Anexerciseisjobevaluationstabilizesinternalnormsandstandards.Otherwise,there
would be chaos in measuring what each job is expected to do.

14
  It removes wage inequalities because it links the job worth to the wages.
 It ensures proper wagecadres and classifications–also wage differentials.
 Jobs are properly classified as unskilled, semiskilled, etc.

 Helpful for recruitment.

 It helps in promotions.

 Forjobrotationandtraining.Itisthebasisforresolvingjobanomalies,wage
anomalies (high job paid low, low job paid high)and such other complaints.

METHODS:
 Ranking
 Grading method
 Point rating method
 Factor comparison method

COMPENSATION
MEANINGOFCOMPENSATION
Compensation is the practice of the organization that involves givingmonetaryas well as
non-monetary rewards to the employees, in order to compensate for the time they allocate totheir
job. Compensation management involves ―maximizing the return on human capital.‖

Components of Compensation:
 Basicpay - For the skill of employee
 Increment - For continued learning of the skill year after year.
 Incentive - For efficiency of employee
 Dearness allowances- For cost of living.
 Overtime - For clearing extra workload which cannot be done during
normal hours.
 H.R.A. - Allowance for rent.
 C.C.A. - To meet additional cost of living in metros.

15
  Social SecuritySchemes-likeESIandPFandpension.

 Welfare-fringebenefits-perquisites-liketransport,medicalfacilities,housing,
schooling, etc. - not related to efficiency or skill
 Bonus-Sharingtheprofitforemployee motivation.

FACTORSINFLUENCINGREMUNERATION

ExternalFactors

Labour Market
 
Cost ofLiving
 
Society Economy
 
Government Legislation
 
Labour Unions

InternalFactors

Business Strategy
 
Job evaluation
 
Job Requirements
 
IncrementSystem
 
Capacityofthe Organization
 
PerformanceAppraisal

WAGEPAYMENTSANDINCENTIVESPLANS
The establishment of an implementation of sound policies and practices of employee
compensation. It includes such areas as job evaluation, development and maintenance of wage
structures, wage changes, wage surveys and related issues.

Payment made usually at the end of the day‘s work. The term further denotes payment made to
workers doing physical work.

Advantages
• Attract And Retain The Employees
• Builds High Morale
• Satisfied Employees
• Image of Progressive Employer

16
 • Ensure Minimum Wages
• Harmonious Industrial Relations
• No Favoritism/Bias

BASICKINDSORTYPESOFWAGEPLANS

A) Time rate system

Timeratesystemisamethodofwagepaymenttoworkersbasedontimespentbythem for the

production of output

MERITS ANDDEMERITS
Merits:
• Itissimple,wage canbe easilycalculated

• Asthereisnotimelimitforexecutionworkerspayattentiontothequalityoftheir work
• Samewagesarepaidtosamekindofjob,avoidsjealousyamongworkersslowand study
peace of the worker, there is no rough handling of machinery
• This is a profitable system where output cannot be measured

• It ensures a stable in come to

workers Demerits
• All the persons are paid equally without considering ability difference
• Labourchangesforaparticularjobdonotremainconstant,hencequotingratesfora
particular piece of work becomes difficult
• Asthereisnospecificdemandfortheperiodoftimeofworkthereispossibilityof
systematic evasion.
• The employees does not know the amount of work d one by each other,so
total expenditure on wages cannot be adequately assessed
• Asnorecordofworkersoutputismaintained,itbecomesdifficultfortheemployees to
determine the efficiency for the purpose of promotion

17
B) Piecewageplan

Pieceratesystemisamethodofwagepaymenttoworkersbased onthequantityofoutput they

have produced

MeritsandDemerits

Merits
• Payis accordingto theworkers efficiencyas reflected in the amount of work.
• Efficiencyoftheworkersisadequatelyrewardedwhichgiveshimadirectstimulusto
increased his production
• Supervisionislessrequiredsincewagedependsupontheamountofworkdoneor output
shown by the worker
• Forthecontinuityoftheworkbreakdownispreventedbytheworkerwhichinturn reduces
the maintenance charge
• Directlabourcostperunitofproductionremainconstanthencecalculationofcostfor filling
tenders becomes easy
• Notonlyasoutputincreasewageincrease,themethodofproductionalsoincreases

Demerits

• Rateper pieceor output idsnot doneon scientificbasis

• Rate is donebyruleof thumbmethod
• Workerswishtoperformtheirworkatspeed,mayconsumemorepowerandresult in high
cost of production
• Excessivespeedingof workmayresult inwear and tear
• Tradeunionoftenappose tothis systemandmightleadtolabour disputes

C) IncentiveScheme

It is an extra motivation. They are designed to stimulate human effort by rewarding the
person, over and above the time rated remuneration, for improvements in the present or targeted
results.

18
 MeritsandDemerits

Merits
• Strengthensproductivity
• Advantagesforbothworkersandemployers.
• Reducessupervision.
• Low absenteeism.
• Healthyindustrial relations andreduces chances of dispute.
• Betterscheme fordevelopinghumanresource.
• Developsthefeelingof co-operationamongworkers.

Demerits

• There is possibility of reducing productivity.

• Difficult to consider and achieve psychological and socialdimensions.
• Employment is uncertain.
• Difficult to measure proportionate value of the extra swork done.
Varioustypesof incentive plans

1. HalseyPlan
HalseyPlan. Definition: Under HalseyPlan, the standard time for the completion of a job
is fixed and the rate per hour is then determined. The usual bonus share paid to theworker
is 50% of the time saved multiplied by the rate per hour (time-rate).
2. RowanPlan
Under Rowan Plan, the standard time for the completion of a job and the rate per hour is
fixed. If the time taken by the worker is more than the standard time, then he is paid
according to the time rate, i.e. time taken multiplied by the rate per hour.
3. Halseypremiumplan
Halsey premium plan. A wage incentive program established as the first in the US
industry. The incentive program was created by Frederick A. Halsey as a method for
improving the straight piece-rate system in an effort to reduce wage rate cutting by
management.

19
4. Rowanpremiumplan
Rowan premium plan is one of important incentive wage plan which was made by James
Rowan of David Rowan and Co. As per this plan, there is guarantee of minimum wage
with time rate. But worker has right to get bonus on the basis of his time saved.
5. Taylor’sdifferentialpiecerate system
Taylor's differential piece-rate system posits that the worker who exceeds the standard
output within the stipulated time must be paid a high rate for high production. On the
other hand, the worker is paid a low rate if he fails to reach the level of output within the
standard time
6. Taylor’sdifferentialpiecerate scheme
Taylor's differential piece-rate system posits that the worker who exceeds the standard
output within the stipulated time must be paid a high rate for high production. On the
other hand, the worker is paid a low rate if he fails to reach the level of output within the
standard time.
7. Budeaux multiplepiecerate
Merrick'smultiplepiecerateisamodificationofTaylor;sdifferentialplan.Inthismethod three
price rates are used to calculate the wages: 1.Standard piece rate up to 83% of the
standard output. 2.10% above the standard rate if output is between 83%-100% 3.20%
above the standard rate if output is more than 100%
8. MerricksPlan
The Merrick Differential Piece-Rate System is a modification of Taylor's differential
piece-rate system in which three piece-rates are used to distinguish between thebeginners,
the average workers, and the superior workers, against two piece-rates in Taylor's system.

9. Ganttstask/bonusplan.
Under Gantt Task System, the standard time is fixedfor the completion of a task based on
a careful time and motion study. If the worker completes the task within the standard
time,thenhisefficiencyis100%andinadditiontothetimewages,heisalsopaida bonus of 20%
on the wages earned.
10. Group incentive programs
Group incentive programs are award programs that deliver lump–sum cash payments,
time–off awards, and/or informal recognition items to groups of employees who meet or
exceed pre–established levels of organizational performance.

20
FRINGEBENEFITS

The term fringe benefits refers to the extra benefits provided to employees in addition to
the normal compensation paid in the form of wage or salary. They are paid to all
employees (unlike incentives which are paid to specific employees whose work is above
standard) based on their membership in the organization.

The Bureau of Labor Statistics defines benefits as ―non-wage compensation provided to

employees.‖ Put succinctly, the benefit is provided in exchange for the services the
employee provides that isn‘t included in their salary or hourly compensation.

(a) Statutorybenefits–TheEmployeesProvidentFundScheme,GratuityorPension
Schemes and Employees State Insurance Scheme.

(b) Non-statutory benefits – Payments towards Employees Provident Fund Scheme,

Gratuity and Pension Fund contribution, medical facilities, canteens, uniform andrecreational
facilities.

OBJECTIVES OF FRINGE BENEFITS

 To create and improve sound industrial relations
 To boost up employee morale.
 To motivate the employees by identifying and satisfying their unsatisfied needs.
 To provide qualitative work environment and work life.

 Toprovidesecuritytotheemployeesagainstsocialriskslikeoldagebenefitsand
maternity benefits.
 Toprotectthehealthoftheemployeesandtoprovidesafetytotheemployeesagainst
accidents.
 Topromoteemployee‘swelfarebyprovidingwelfaremeasureslikerecreation
facilities.
 Tocreateasenseofbelongingnessamongemployeesandtoretainthem.Hence, fringe
benefits are called golden hand-cuffs.
 To meet requirements of various legislations relating to fringe benefits

21
BENEFITS&CATEGORIESOFFRINGEBENEFITS:
 Paidleave(sick,holiday, personalandvacationdays)
 Supplementarypay(overtime,shiftdifferentialslikeweekendorholidaypay)

 Insurance(life,health, disability)
 Retirement plans(pension,401(k)contributions)
 Legally required benefits(socialsecurity,taxes,workers‘compensation).

TYPESOFFRINGE BENEFITS
 Employee Holidays
 Health& LifeInsurance
 Canteen, Rest room& Welfareactivity
 Education,Hospitality&Transport
 OldAgeand Retirement Benefits
 Personnel Identification,Participationand Stimulation
 Retrenchment Compensation

 Lay-off Compensation
 Gym memberships& Wellnessprograms
 Personal use of companycars
 Free housing
 Cash awards
 Employee free meals/snacks
 Employee discounts
 Housing allowance
 Tuition Wavers
 Sickleave(forfulltime employees)

22
PERFORMANCE LINKED COMPENSATION

A performance-linked compensation (PLC) is a form of payment from an employer to an

employee, which is directly related to the performance output of an employee and which may be
specified in an employment contract.

It is a kind of payment mode based on excellence on the job. It is mainly depends on how ones
work on their task.

Example: The Salesmen compensation is purely depends on the amount of sales what he did, if
its high the incentive also increase ,if its low the incentive also decrease. It may be applicable

 Performance linked Compensation in Salary

 Performance linked Compensation in Wages
 Performance linked Compensation in Incentives
 Performance linked Compensation in Bonus
 Performance linked Compensation in Other financial Remuneration

1
UNIT–V–Human Resource Management

2
 MAINTAINENCE

Employeehealthandsafety-employeewelfare-socialsecurity-Employer-Employeerelations- Grievance
handling and redressal- Industrial Disputes- causes and settlement machinery.

EMPLOYEEHEALTH& SAFETY

Employee health and safety is a cross-disciplinary area concerned with protecting the safety,
health and welfare of people engaged in work or employment. The goal of all occupational health
and safety programs is to foster a safe work environment

It is a must to provide required safety training programs for all employees who should
necessarily include emergency action plan training and how to treat you while injured and alone.
Make sure the employees are well efficient at the time of crisis by holding fire and emergency
drills from time to time.

Employment health &safety records are useful in determining:

• Employment history and occupational exposure records;
• Injuries and illnesses on the job; and
• Workers‘compensationrecords.

SAFETYPROCESSIN WORKPLACE
 Safety Policy:
It contains a declaration of the employer‘s intent towards the safety of employees and
means to realize it. It includes causes, extent and remedies for accidents at workplace.The
policy specifies the company‘s goals and responsibilities and caveats and sanctions for
failing to fulfill them.
 ProvisionofPhysicalHealth Services:
Many organizations render periodical physical health check-up services to their
employees. Regular medical check-ups of employees help detect the signs and symptoms
of tension, stress, ulcers, depression and other diseases resulting from the exposure to
harmful gases or other irritants.

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  MentalHealthServices:
In order to reduce the risk of mental breakdowns because of tension, pressure and
depression and mental illness, a mental health service is provided to the employees in
different ways such as psychiatric counseling, co-operation and consultation with
specialists, educating employees about the importance of mental health andestablishment,
development and maintenance of harmonious human relations at workplace.
 EmployeeAssistance Programs:
These are specially designed to deal with stress-related problems of the employees and
help in diagnosis, treatment, screeningand prevention of both work and non-work related
problems. These programs provide real help to professionals and do not carry any
negative implications.

 FitnessPrograms:
These programs focus on overall health of employees and include both disease
identification as well as lifestyle modification. The most common programs carried outby
the organizations are hypertension identification, physical fitness, exercise, nutrition,
smoking and drinking cessation, diet control and personal and work-related stress
management.
 Awareness Programs:
Conducting the workshops about sexually transmitted diseases such as HIV AIDS help a
lot in raising the awareness of employees towards such dreadful diseases. Such programs
clear out the confusion and disruption in the workforce.

IMPORTANCEOFWORKPLACEHEALTH&SAFETY

• KeepingPeopleSafe
Most employers would agree that preventing accidents and potential death to
employees is a natural priority. Most safety issues don't arise out of nefarious
intentions but come when businesses cut corners and don't take the time to train their
employees properly on safety protocols.

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• Injuries Cost Timeand Money
The Occupational Health and Safety Administration estimates that employers pay
nearly1millioneachweekinworkers'compensationcosts.Employersarerequiredto have
workers' compensation insurance policies, but injuries increase the basic costs. Also,
if an employer is underinsured, the gap of coverage is the responsibility of the
employer.
• Fewer Injuries Increase Productivity

Workplace injuries and unsafe working environments are bad for employee morale.
An employee who is concerned about being hurt isn't able to devote full attention to
daily work tasks. Employers who maintain a safe and healthy work environment and
conduct employee training on safety build a stronger relationship with employees.
Employees no longer feel like a means to an end but part of a team working together.
This creates loyalty and increases team morale, which has a direct correlation to
productivity.
• Increase Public Perception
A company that operates in an unsafe manner can turn away customers. A restaurant
that uses unsafe cooking practices isn't going to attract customers because they fear
illness. Similarly, customers don't want to walk into a cluttered store with potential
tripping hazards. Business owners must understand that safety goes well beyond their
employees. When thinking about productivity, positive team morale increasespositive
customer interactions, which leads to customer retention and loyalty
• Minimizing Legal Liabilities
The Department of Labor oversees the Occupational Safety and Health Act. Simply
put, the act states that people have a right to feel and be safe at work. It sets forth
minimum standards for various industries and work environments. Current OSHA
posters must be posted in places where all employees can read and review them at
will. Should employers violate safety laws, legal and financial ramifications may
occur?
• Employee Motivation
Employees are getting motivation if the personal health and safety is ensured in their
organization. This will help the employees to give their best in all the task and
assignment in the business.

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 • Continuous flow of work
Once the employees are getting fulfillment in all the criteria in terms of safety and
health, they can give their without any break and they could maintain the flow of
work in the long run.

TOOLSFOREFFECTIVEHEALTHANDSAFETYPROGRAM

 Management training
 Workplace inspections
 Task analysis and procedures
 Accident/incident investigation
 Task observation
 Emergency prepared ness
 Organizational rules
 Accident/incident analysis
 Employee training
 Personal protective equipment(PPE)
 Engineering controls
 Group meetings
 General promotion
 Off-the-job safety
 Evaluation and continuous improvement

EMPLOYEEWELFARE

Employeewelfaredefinesas“effortstomakelifeworthlivingforworkmen”.“Employee
welfareisa comprehensive term including various services,benefits and facilities offered
to employees & by the employers. Through such generous fringe benefits the employer
makes life worth living for employees”.

Employee welfare entails all those activities of employer which are directed towards
providing the employees with certain facilities and services in addition to wages or
salaries.

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 The verylogic behind providing welfare schemes is to create efficient, healthy, loyal and
satisfied labor force for the organization. The purpose of providing such facilities is to
make their work life better and also to raise their standard of living.

OBJECTIVESOFEMPLOYEE WELFARE

 To give expression to philanthropicandpaternalistic feelings.

 To win over employee‘s loyaltyand increasetheir morale.

 To combat tradeunionismand socialist ideas.

 To buildup stablelabourforce, toreducelabourturnover and absenteeism.

 To develop efficiency and productivity among workers.

 To save one self from heavy taxes on surplus profits.

 To earn good will and enhance public image.

 To reduce the threat of further government intervention.

 To make recruitment more effective (becausethesebenefitsaddtojobappeal.

BENEFITSOFWELFAREMEASURES

 Employeewelfaremeasuresincreasetheproductivityoforganizationandpromote
healthy industrial relations thereby maintaining industrial peace.
 Facilities like housing schemes, medical benefits, and education and recreation
facilities for workers families help in raising their standards of living. This makes
workers to pay more attention towards work and thus increases their productivity.
 Theyprovidebetterphysicalandmentalhealthtoworkersandthuspromoteahealthy work
environment
 Thesocialevilsprevalentamongthelaborssuchassubstanceabuse,etcarereduced to a
greater extent by the welfare policies.
 Employersgetstablelaborforcebyprovidingwelfarefacilities.Workerstakeactive
interest in their jobs and work with a feeling of involvement and participation.

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IMPORTANCEOFEMPLOYEE WELFARE
 Improvement of Industrial Relations
 Creation of Permanent Labour Force
 Increase in General Efficiencyand Income of Workers
 Enhancement of the Morale of Workers
 Development of the Sense of Belonging
 ChangeinOutlookofEmployers
 Improvement of the Moraland MentalHealth ofWorkers
 Benefit to the Society

SOCIAL SECURITY

Social security is a dynamic concept which is considered in all advanced countries of the
world as an indispensable chapter of the national programme. With the development of
the idea of the welfare state, it has been considered to be most essential for the industrial
workers, though it includes all sections of the society.

Social security is that security which the society furnishes through appropriate
organisation against certain risks or contingencies to which its members are exposed.
Theserisksareessentiallycontingenciesagainst which the individual cannot afford by his
small means and by his ability or foresight alone.

CHARACTERISTICSOFSOCIAL SECURITY

 Social security is an instrument of ensuring social and economic justice.

 In a welfare state, social security isan essentialpart of public policy.

 Social security is not static;it is adynamic concept which changes withthechangein

social and economic conditions prevailing in a country at a particular point of time.
 Thebasicaimofsocialsecurityistoprovideprotectiontopeopleofsmallmeans against
risks or contingencies.

 Thecontingencieswhichmayimpairaperson‘sabilitytosupporthimselfandhis family
may include sickness, old age, invalidity, unemployment, death etc.

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  Socialsecuritymeasuresare generallyguided bysocial legislations.

 Social security measures provide for cash payment to affected persons to partly
compensate them for the loss of income due to any of the contingencies mentioned in
point
 Social security is a must for the protection and stability of the labour force. Social
securityis a wise investment made bythe state which yields good social dividends in
the long run.

TYPESOFSOCIALSECURITYSCHEMES

A) Social Insurance
Asystemofcompulsorycontributiontoenabletheprovisionofstateassistanceinsickness, unemployment, etc

B) SocialAssistance
• Medical care
Many employees in the public and private sector depend on medical benefits
to support theirhealth and well-being, as well as that oftheirfamilymembers.
Employers big and small offer medical benefits in an effort to maintain a
healthy work environment. Medical benefits significantly reduce the costs
associated with common medical occurrences such as check-up and wellness
visits, pre-natal care or emergency care.
• Sickness benefit
Paid sick leave/sickness benefit provides wage and job security to workers
and itallows them totake thejob andincome-protectedleavewhen they
aresick.Non-provisionofpaidsickleave,sicknessbenefitandinjurybenefit
amounts to work insecurity

• Oldageorretirementbenefit
It is a fund into which a sum of money is added during an employee's
employment yearsandfromwhichpaymentsaredrawntosupporttheperson's
retirementfrom work in the form of periodic payments. A pension may be a
"defined benefit plan", where a fixed sum is paid regularly to a person, or a
"defined contribution plan", under which a fixed sum is invested that then
becomes available at retirement age.

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 • Employment injury benefit
Temporary incapacity for work resulting from such a condition, total
orpartiallossofearningcapacity,likelytobepermanent,and.thelossofsupport
suffered by dependents as the result of the death of the breadwinner.
• Familybenefit
The Family Benefit fund Scheme(FBF)was introduced with effectfrom
1stJanuary1974.InthecaseofdeathofaGovernmentServantwhilein service, a sum
of Rs.1,50,000/(Rupees One lakh and fifty only) shall be paidto the nominee
of the Government Servant. Children of employees are getting preference in
the jobs in most of the companies.
• Maternitybenefit
Apaymentorotherallowancemadebythestateoranemployertoawoman during
pregnancy or after childbirth.
• Survivor’sbenefit
Survivors'Benefits.Survivors'benefitsarepaymentsmadetofamilymembers
when a worker dies. The payments are intended to help ease the financial
strain caused bytheloss oftheworker's income. When awageearner dies, his or
her spouse and unmarried minor children are entitled to receive benefits

C) Public Service
Public service is a service intended to serve all members of a community. It is usually provided
by government to people living with in its jurisdiction,either directly or by financing provision of
services.
EMPLOYER&EMPLOYEERELATION

Employer-employee relations has become one of the most delicate and complex problems of
modern industrial society. Industrial progress is impossible without labour management
cooperation and industrial harmony. Therefore, it is in the interest of all to create and maintain
good relations between employers and employees.

Employer-employee relations mean the relationships between employers and employees in

industrial organisations. According to Dale Yoder, the term employer-employee relations refers
to the whole field of relationship among people, human relationship that exist because of the
necessary collaboration of men and women in the employment process of modern industry.

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NEEDOFEMPLOYER-EMPLOYEERELATION
1. Productivity

Strong employment relations create a pleasant atmosphere within the work environment;
it increases the employee motivation and can also be increased through improved
employee morale. Companies that have invested into employee relations programs have
experienced increases in the productivity, and therefore the increased productivity leadsto
increases in profits for the business.

2. EmployeeLoyalty

Creating the productive and pleasant work environment has a drastic effect on an
employee‘s loyalty to the business, it encourages a loyal workforce. Having such a
workforce improves employee retention, in doing so the cost of recruitment, hiring and
training is cut drastically. For most businesses the high cost of employee turnover
outweighs the cost of the employee relations program that they have in place. Another
benefit is that when the employee turnover is low it ensures that the employer has a
trained and skilled set of employees.

3. Conflict Reduction
When a work environment is efficient and friendly the extent of conflict within the
workplace is reduced. Less conflict results in the employees being able to concentrate on
the tasks at hand and they are therefore more productive.
All theresearch and statistics lead to oneconclusion, ‗Ahappyworkforce is aproductive
workforce‘.Creatingasoundandefficientwork environmentwithgoodmanagementand a
strong employer- employee relation can be the vital key to any businesses success or
failure. Good luck.

4. AchievingStrongEmploymentRelations
The first implicating factor is good management. You may ask, why? Through research
and surveys it was found that an employee who respects their employer is more likely to
over-achieve in their designated duties, this creates a goal setting environment where the
productivity levels are high.

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5. Motivatingour employees
Encouragementcanbe achievedsimplythrough applauding your workers everyonce in a
while, both publicly and privately. It is known throughout all levels of management that
happy employees make productive employees

6. SetGoals
Achieving strong employee relations is also providing your employees with the image of
ambition and success. A saying that should be considered is ‗Under-promise, Over-
deliver‘. This phrase is a great managerial mantra. Consider this; do you want to be the
person who has wildly optimistic goals that they never meet, or do you want to be the
person who sets measured goals and ends up exceeding them by leaps and bounds?
Although this is focused on image it also is focused on reputation, these are important
when seeking respect from your employees.

7. Delegate
Delegation of work/tasks throughout any business is important. Through delegation you
are taking an opportunity to teach and empower your employees. This also allows you
and the employees to acknowledge and understand their strengths and weaknesses. These
are a few points to consider when delegating tasks.

8. CommunicateEffectively
Whencreatingaworkenvironmentwithaneffectivecommunicationnetworkthereisone key
factor that is vital. It is to ‗Keep your door open‘. Regularly remind and reinforcethat
your door is always open to any inquiries or concerns, and that you as a manager or
business owner are willing and ready to listen. Maintaining an open channel of
communication will make you aware of problems quickly, which is beneficial for quick
resolution.

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GRIEVANCES

Grievance is anydiscontent or dissatisfaction, whether expressed or not and whether valid or not
arising out of anything connected with the company that an employee thinks, believes or even
feels , is unfair, unjust or inequitable.

Employers are, often, bombarded with grievances of various kinds from workers almost on a
daily basis. The employer might be the target in most cases. At other times, workers may target
the supervisors and even their co-workers. Such grievances may be real or imaginary, valid, or
invalid, genuine or false. They might look silly and completely baseless at times.

DEFINITION:

Dale S. Beach defines grievance as “anydissatisfaction or feelingof injustice in connection with

one‘s employment situation that is brought to the attention of management”.

CAUSESOFGRIEVANCES

A. Resulting fromworking conditions

• Impropermatchingoftheworkerwiththejob
Normally, the qualification or experience of the employee may not sufficient
to handle the task in the higher post. It may create the grievances among the
employees in the company.
• Changesin schedulesorprocedures
Theremaybeachangesinschedulesorproceduresintheworkingslotsof
employee depends on the project and task where they are working.
• Inadequatetools,machinesandequipments
Insufficientequipmentmayleadsfordelayinoutputorresultinthebusiness
process.
• Tightproduction standards
Thelevelofstandardandbenchmarkwillmaketheemployeestofeel
complicated to do all the work.
• Badworking conditions
Thebadworkingconditionofworkingplacewillmaketheemployeestode-
motivate and dis-courage in their work.

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 • Failureto maintainproper discipline
Normally,theemployeeswillfollowthepositivedisciplineinthecompany; failing
which they supposed to face more complications.
• Poorrelationshipwiththe supervisor
Thenegativeandpoorrelationshipwiththesupervisorwillleadtogrievances and
disputes among the employees and employer relationship.

B. Resultingfrommanagement policy
• Wagepayment
Improperwagepaymentsystemwillcreatethebiasamongtheemployeesthat make
them to feel negative in the work spot.

• Leave
Properleavesystemshouldbefollowedintheorganization,whichhelpsthe
employees to get relax and self-motivation.
• Overtime
Continuous over time will leadforboredomamongtheemployeesthatde-
motivate them in their work.
• Transfer
Unpredicted transfer will affect the employees to start and follow the
work easily in the company.
• Promotion,demotion and discharges
Promotionordemotionwillcreatethehighamountchallengesintheworking
process of organization
• Lack of career planning and development plan
Thecareerplanningis a basefordevelopment ofemployeein the company. If
there is no proper system of career planning, employees could not give their
full dedication in the work.
• Hostility towards a labour union
Influence of trade union will make the changes of employee‘s life personally
and officially. Most of the time the trade union will play the dual role in the
company .

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OBJECTIVES OF THE GRIEVANCE HANDLING

• To enable the employee to airtheirgrievance

• To clarify the nature of the grievance

• To investigate thereasons for dissatisfaction

• To obtain, where possible, aspeedy resolution to the problem

• To take appropriate action sandensure that promises are kept

• Toinformtheemployeeoftheirrighttotakethegrievancetothenextstageofthe
procedure, in the event of an unsuccessful resolution

BENEFITSOFGRIEVANCE HANDLING PROCEDURE

• It encourages employees to raise concerns without fear of reprisal.

• It provides a fairand speedy means of dealingwith complaints.

• It prevents minordisagreements developing into more serious disputes.

• It serves as anoutletfor employee frustrations and discontents.

• Itsavesemployer‘stimeandmoneyassolutionsarefoundforworkplaceproblems.It helps
to build an organizational climate based on openness and trust.

EFFECTS(OR)RESULTOFGRIEVANCE
A) On the Basis of production
• Low quality of production

• Low productivity

• Increase in the wastage ofmaterial,spoilage/ leakage of machinery

• Increase in the cost of production per unit

B) On the Basisof employees

• Increase in the rate of absenteeism and turnover

• Reduction in the levelofcommitment,sincerityand punctuality

• Increaseintheincidence ofaccidents
• Reductioninthelevelofemployeemorale

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 C) OntheBasisof managers
• Strained superior-sub ordinate relations
• Increase in the degreeof supervision and control
• Increase in disciplinecases
• Increase in unrest and thereby machinery to maintain industrial

STEPSTOOVERCOMEGRIEVANCE
1. Acknowledge dissatisfaction
2. Define the problem
3. Getthe facts
4. Analyzeand decide
5. Followup

INDUSTRIAL DISPUTES

Anindustrialdisputecanbeviewedasfrictionordisagreementbetweentwoormoreparties involved, due

to the difference in their perceptions, opinions, mindsets, attitudes and values.

It may occur due to the misunderstanding of

• Employer and employee;
• Employee and employeeor;
• Employer and employer.
• On a massive level, conflicts canevenarise between the government and the public.
Industrial disputes are sometimes observed as a result of poor industrial relations in the
organization.

OUTCOMESOFINDUSTRIAL DISPUTES

I) Strikes
 a)Primary
 Gherao
 Boycott
 Stay away Strike
 Pen Down Strike
 Token Strike

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  Lightening Strike
 Go slow
 Work to rule
 b) Secondary
• Sympathy Strike
c) Others
 General Strike
 Political Strike
 Particular Strike
 Bandh

II) Lockouts
 Gherao
Gherao, meaning "encirclement", is a word which denotes a tactic used by labour
activists and union leaders in India, it is similar to picketing. Usually, a group of people
would surround a politician or a government building until their demands are met, or
answers given
 Boycott
A boycott is an act of voluntary and intentional abstention from using, buying, or dealing
with a person, organization, or country as an expression of protest, usually for moral,
social, political, or environmental reasons.
 Stay away Strike
Astayaway,alsoknownasastay-awayorstay-away,isaformofprotestwherepeople are told
to "stay away" from work, similar to a general strike.

 Pen Down Strike

A labor action in which employees come to work but do not do any work. The term
connotes that this takes place in an office setting as opposed to an industrial setting. A
pen-down strike is analogous to a slow down.
 TokenStrike
A situation in which a group of workers refuses to work,but only for a short period:They
called a 24 hour token strike

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  LightningStrike
A strike by workers after little or no warning, especially without official union backing

 Goslow
A deliberates lackening of the rate of production by organized labourasatacticin
industrial conflict. They will do the work very slowly.
 Worktorule

Work-to-rule is a job action in which employees do no more than the minimum required
by the rules of their contract, and precisely follow all safety or other regulations, which
may cause a slowdown or decrease in productivity, as they are no longer working during
breaks or during unpaid extended hours and weekends.

 Sympathystrike

Asympathystrikeiswhenoneunionstrikesinsupportforanotherinvolvedinadispute, even
though the first union has no disagreement with the employer A refusal to work by one
worker or group of workers to support the efforts of another group of strikers is a
sympathy strike.

 GeneralStrike
General strike action, also called labor strike, labour strike, or simply strike, is a work
stoppage, caused by the mass refusal of employees to work. A strike usually takes placein
response to employee grievances. Strikes became common during the Industrial
Revolution, when mass labor became important in factories and mines.

TYPESOFINDUSTRIALDISPUTES
• Interest Disputes or rights disputes
• Grievance disputes
• Recognition disputes
• Unfair labour practices disputes
CAUSESOFINDUSTRIALDISPUTES

• Economic Causes
• Managerial Causes
• Government Machinery

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 • Joint Management Councils(JMC)
• WageBoards
• Voluntary Arbitration
• Other Causes

1. Economic Causes
(a) Wages:
The demand for wage increase is the prime-most cause of the industrial disputes. A large
number of strikes are being organized to raise a voice against theriseinpricesandcostof
living.
(b) DearnessAllowanceandBonus:
Increase in cost of living was the main cause of the demand of dearness allowance bythe
workers to equate their wages with the rise in prices. Bonus also plays an important role
as a cause of industrial dispute. It is interesting to note that in 1966, 49 percent of the
disputes were related to wages and bonus.
(c) Working Conditionand WorkingHours:
The working conditions in Indian industries are not hygienic. There is not ample
provision of water, heating, lighting, safety etc. Working hours are also greater. The
demand of palatable working conditions and shorter hours of work are also responsible
for labour disputes.
(d) ModernisationandAutomationofPlantandMachinery:
The attempt at modernisation and introduction of automatic machinery to replace labour
has been the major cause of disputes in India. Workers go on strike, off and on, to resist
rationalisation and automation.

(e) HighIndustrialProfits:
Duringandaftertheworldwars,pricesofthecommoditieswentupandtheindustrialists earned
huge profits. In order to get share in the prosperityof the industry, it naturallyled to the
resentment on their part. The increased profits also led to the demands of higher wages
and bonus.

(f) DemandforOtherFacilities:
Demand for other facilities for meeting out their basic needs such as medical, education,
housing, etc., encourage the workers to resort to direct action because such facilities were
denied by the employers.

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2. ManagerialCauses
(a) Denialof RecognitiontoTrade Unions:
Failure on the part of the employer to recognise the trade unions or to recognise the rival
union for representation, insult of trade union leaders by the employers are some of the
examples of autocratic managerial attitude worth mentioning as the causes of industrial
disputes. The attitude of employers towards the labour associations had never been
sympathetic.
(b) DefectiveRecruitmentPolicies:
The recruitment practices in Indian industries are defective. Recruitment is generally
made by the contractors who exploit the workers and suppress their individuality. The
defective promotion, demotion, transfer and placement policies encourage dissatisfaction
among workers.
(c) IrregularLay-Off andRetrenchment:
Lay-off and retrenchment are reasons to be mentioned for encouraging industrialdisputes.
Indian employers follow the policy of ‗Hire and Fire‘. As a matter of practice, workers
arenot madepermanent for a prettylong timeto deprive them of theirlegitimate rights.
(d) Defianceof Agreementsand Codes:
The employers regularly defy the provisions of collective bargaining agreements
andcodeofconductandcodeofdisciplinewithaviewtoharassorexploittheemployees and just
encourage strife.
(e) DefectiveLeadership:
Inefficient leadership is also one of the causes of disputes. Leadership from the
management and from the workers is quite incompetent to induce the workers to getthem
worked. The employers‘representatives are not delegated sufficient authority to negotiate
with the workers.

3. GovernmentMachinery
(i) Enactmentsare Ineffective:
(a) Theirrelevancyinthecontextofthechallengesofpresentindustrialclimate/culture, as
many has not been convinced of their utility satisfactorily;

20
 (b) Improper and inadequate implementation by many employers;
(c) Incapability of understanding and answering imperatives of development.
(ii) LittleConfidenceoverSettlement Machinery:
Both employers and employees have little confidence over the Conciliation Machineryas
it could succeed in settling a very negligible number of disputes so far. Both employers
and employees are litigation-minded.
4. JointManagementCouncils(JMC)
Just to make a start labour participation in management, the Government in its Industrial
Resolution 1956, decided to set up Joint Management Councils. This step also remained
ineffectiveandnotmuchheadwayismadeinthisdirection.Currently,therearehardly80 JMCs
and even out of them a good number are not effective.
5. Wage Boards
Wages and allowances is the main issue in industrial disputes. The Government of India
set up wage boards for various industries. The main function of wage boards is to fix the
fair wage in various industries.
6. Voluntary Arbitration
The object of the Act is to require employers to diffuse with sufficient precision, the
conditions of employment in the establishments- under him and to let the workers know.
Such conditions include conditions of recruitment, discharge, disciplinary action,holiday,
leave etc., of the workers
7. Other Causes
.(a)Multiplicityoftradeunionsinthesameindustry/unitandrivalryamongtheworkers has
destroyed the solidarity of the working class.

(b) In some undertakings, there is nounionat all recognized or un recognised.

(c) The workers generally are uncertain with the activities except wages.

SETTLEMENT MACHINERY OF DISPUTES

Arbitration:
Arbitration is defined as a method of resolving a dispute with the professional help of a
neutral third party who specializes in resolving labor-management, collective or
individual conflicts and delivering a final legal decision.

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 Aggrievedemployee:
An aggrieved employee shall meet the officer designated by the Management for the
purpose of handling grievances or the alternate officer designated to handle the grievance
in his absence and present to him his grievance in writing in the prescribed Grievance
Record Form

Frontline manager:
Front-line management is the level of management that oversees a company's primary
production activities. Front-line managers have critical value to a company's success
because they must motivate employees who perform those critical production duties.They
also must generate efficient productivity and control costs.

Union representative:
Trade union representative is an employee who will represent and defend the rights of
workers.Representatives are entitled to raise any concerns with management on behalf of
union members

Middle level management:

Middlemanagementisatthecenterofahierarchicalorganization,subordinatetothe senior
management but above the lowest levels of operational staff.

Middle level union leader:

They are the middle agent of tradeunions who connecting the employees and the
employees for mutual communication.

Top management:
Top-level management are your executives such as a CEO, CFO, President and Vice
President. These top managers are responsible for setting the overall direction of a
company and making sure that major organizational objectives are achieved.

Top Union Leaders:

They are the head of trade union , who control and lead the entire union.Normally, theywill
participate in the extreme case , where the union members could not solve the issues.

22
Figure 1

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