Unit 3 Human Resource Management

Introduction---Definition

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.

Objectives

• Societal Objectives: seek to ensure that the organization becomes socially responsible to
the needs and challenges of the society while minimizing the negative impact of such
demands upon the organization. The failure of the organizations to use their resources
for the society’s benefit in ethical ways may lead to restriction.

• Organizational Objectives: it recognizes the role of HRM in bringing about

organizational effectiveness. It makes sure that HRM is not a standalone department,
but rather a means to assist the organization with its primary objectives. The HR
department exists to serve the rest of the organization.

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

appropriate to the organization’s needs. Human resources are to be adjusted to suit the
organization’s demands. The department’s value should not become too expensive at
the cost of the organization it serves.

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

as far as these goals enhance the individual’s contribution to the organization. Personal
objectives of employees must be met if they are to be maintained, retained and
motivated. Otherwise employee performance and satisfaction may decline giving rise to
employee turnover.
Functions of HRM

The functions can be grouped as follows:

• Strategic HR Management: As a part of maintaining organizational competitiveness,

strategic planning for HR effectiveness can be increased through the use of HR metrics
and HR technology. Human resource planning (HRP) function determine the number and
type of employees needed to accomplish organizational goals. HRP includes creating
venture teams with a balanced skill-mix, recruiting the right people, and voluntary team
assignment. This function analyzes and determines personnel needs in order to create
effective innovation teams. The basic HRP strategy is staffing and employee
development.

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

laws and regulations affects all other HR activities.

• Staffing: The aim of staffing is to provide a sufficient supply of qualified individuals to fill
jobs in an organization. Job analysis, recruitment and selection are the main functions
under staffing.

• Talent Management and Development: Beginning with the orientation of new

employees, talent management and development includes different types of training.
Orientation is the first step towards helping a new employee to adjust himself to the
new job and the employer. It is a method to acquaint new employees with particular
 aspects of their new job, including pay and benefit programmes, working hours and
company rules and expectations.

• Risk Management and Worker Protection: HRM addresses various workplace risks to
ensure protection of workers by meeting legal requirements and being more responsive
to concerns for workplace health and safety along with disaster and recovery planning.

• Employee and Labor Relations: The relationship between managers and their
employees must be handled legally and effectively. Employer and employee rights must
be addressed. It is important to develop, communicate, and update HR policies and
procedures so that managers and employees alike know what is expected.

• Compensation management : Compensation in the form of pay, incentives and benefits

are the rewards given to the employees for performing organizational work.
Compensation management is the method for determining how much employees
should be paid for performing certain jobs.

Compensation affects staffing in that people are generally attracted to organizations offering
a higher level of pay in exchange for the work performed.

To be competitive, employers develop and refine their basic compensation systems and may use
variable pay programs such as incentive rewards, promotion from within the team, recognition
rewards, balancing team and individual rewards etc.

 Staffing

In the simplest terms, staffing is ‘putting people to jobs’. It begins with workforce planning and
includes different other function like recruitment, selection, training, development, promotion,
compensation and performance appraisal of work force.

In other words, staffing is that part of the process of management which is concerned with
obtaining, utilizing and maintaining a satisfactory and satisfied work force.

There are three aspects of staffing: recruitment, selection and training. Next we will discuss
recruitment in detail.

Recruitment

• Recruitment refers to the process of finding possible candidates for a job or a function. It
has been defined as ‘the process of searching for prospective employees and stimulating
them to apply for jobs in an organisation.’
 • The object of recruitment is to attract potential employees with the necessary
characteristics or qualification, in the adequate number for the jobs available. It locates
available people for the job and invites them to apply for the job in the organisation.

The various activities involved with the process of recruitment includes

(a) identification of the different sources of labour supply,

(b) assessment of their validity,

(c) choosing the most suitable source or sources,

(d) inviting applications from the prospective candidates, for the vacancies.

Sources of Recruitment

Internal Sources: There are two important sources of internal recruitment, namely, transfers
and promotions, which are discussed below:

(i) Transfers: It involves shifting of an employee from one job to another, one department to
another or from one shift to another, without a substantive change in the responsibilities and
status of the employee. It may lead to changes in duties and responsibilities, working condition
etc., but not necessarily salary. Transfer isa good source of filling the vacancies with employees
from over-staffed departments.

(ii) Promotions: Business enterprises generally follow the practice of filling higher jobs by
promoting employees from lower jobs. Promotion leads to shifting an employee to a higher
position, carrying higher responsibilities, facilities, status and pay.

Merits of Internal Sources

• Filling vacancies in higher jobs from within the organisation or through internal transfers
has the following merits:

(i) Employees are motivated to improve their performance. A promotion at a higher level may
lead to a chain of promotion at lower levels in the organisation. This motivates the employees
to improve their performance through learning and practice. Employees work with commitment
and loyalty and remain satisfied with their jobs. Also, peace prevails in the enterprise because of
promotional avenues;

(ii) Internal recruitment also simplifies the process of selection and placement. The candidates
that are already working in the enterprise can be evaluated more accurately and economically.
This is a more reliable way of recruitment since the candidates are already known to the
organisation;
(iii) Transfer is a tool of training the employees to prepare them for higher jobs. Also, people
recruited from within the organisation do not need induction training;

(iv) Transfer has the benefit of shifting workforce from the surplus departments to those where
there is shortage of staff;

(v) Filling of jobs internally is cheaper as compared to getting candidates from external sources.

Limitations of Internal Sources

The limitations of using internal sources of recruitment are as follows:

(i) When vacancies are filled through internal promotions, the scope for induction of fresh talent
is reduced. Hence, complete reliance on internal recruitment involves danger of ‘inbreeding’ by
stopping ‘infusion of new blood’ into the organisation;

(ii) The employees may become lethargic if they are sure of timebound promotions;

(iii) A new enterprise cannot use internal sources of recruitment. No organisation can fill all its
vacancies from internal sources;

(iv) The spirit of competition among the employees may be hampered; and

(v) Frequent transfers of employees may often reduce the productivity of the organisation.

External Sources

An enterprise has to tap external sources for various positions because all the vacancies cannot
be filled through internal recruitment. The existing staff may be insufficient or they may not
fulfill the eligibility criteria of the jobs to be filled.

(i) Direct Recruitment: Under the direct recruitment, a notice is placed on the notice-
board of the enterprise specifying the details of the jobs available. Jobseekers
assemble outside the premises of the organisation on the specified date and
selection is done on the spot. The practice of direct recruitment is followed usually
for casual vacancies of unskilled or semiskilled jobs. Such workers are known as
casual or ‘badli’ workers and they are paid remuneration on daily wage basis. This
method of recruitment is very inexpensive as it does not involve any cost of
advertising the vacancies. It is suitable for filling casual vacancies when there is a
rush of work or when some permanent workers are absent.
(ii) Casual Callers: Many reputed business organisations keep a database of unsolicited
applicants in their offices. Such job-seekers can be a valuable source of manpower. A
list of such job-seekers can be prepared and can be screened to fill the vacancies as
 they arise. The major merit of this source of recruitment is that it reduces the cost of
recruiting workforce in comparison to other sources.
(iii) Advertisement: Advertisement in newspapers or trade and professional journals is
generally used when a wider choice is required. Most of the senior positions of
industry as well as commerce are filled by this method. The advantage of advertising
vacancies is that more information about the organisation and job can be given in
the advertisement. Advertisement gives the management a wider range of
candidates from which to choose. Advertisements may be placed in leading
newspapers. Its disadvantage is that it may bring in a flood of response, and many
times, from quite unsuitable candidates.
(iv) Employment Exchange: Employment exchanges run by the Government are
regarded as a good source of recruitment for unskilled and skilled operative jobs. In
some cases, compulsory notification of vacancies to employment exchange is
required by law. Thus, employment exchanges help to match personnel demand and
supply by serving as link between job-seekers and employers. Unfortunately, the
records of employment exchange are often not up to date and many of the
candidates referred by them may not be found suitable.
(v) Placement Agencies and Management Consultants: In technical and professional
areas, private agencies and professional bodies appear to be doing substantive work.
Placement agencies provide a nationwide service in matching personnel demand and
supply. These agencies compile bio-data of a large number of candidates and
recommend suitable names to their clients. Such agencies charge fee for their
services and they are useful where extensive screening is required. These
professional recruiters can entice the needed top
(vi) Campus Recruitment: Colleges and institutes of management and technology have
become a popular source of recruitment for technical, professional and managerial
jobs. Many big organisations maintain a close liaison with the universities, vocational
schools and management institutes to recruit qualified personnel for various jobs.
Recruitment from educational institutions is a well-established practice of
businesses. This is referred to as campus recruitment.
(vii) Recommendations of Employees: Applicants introduced by present employees, or
their friends and relatives may prove to be a good source of recruitment. Such
applicants are likely to be good employees because their background is sufficiently
known. A type of preliminary screening takes place because the present employees
know both the company and the candidates and they would try to satisfy both.
(viii) Labour Contractors: Labour contractors maintain close contacts with labourers and
they can provide the required number of unskilled workers at short notice. Workers
are recruited through labour contractors who are themselves employees of the
 organisation. The disadvantages of this system are that if the contractor himself
decides to leave the organisation, all the workers employed through him will follow
suit.
(ix) Web Publishing: Internet is becoming a common source of recruitment these days.
There are certain websites specifically designed and dedicated for the purpose of
providing information about both job seekers and job opening. In fact, websites are
very commonly visited both by the prospective employees and the organisations
searching for suitable people.

Merits of External Sources

The advantages of using external sources of recruitment are as follows:

(i) Qualified Personnel: By using external sources of recruitment, the management can
attract qualified and trained people to apply for vacant jobs in the organisation.

(ii) Wider Choice: When vacancies are advertised widely, a large number of applicants from
outside the organisation apply. The management has a wider choice while selecting the
people for employment.

(iii) Fresh Talent: The present employees may be insufficient or they may not fulfil the
specifications of the jobs to be filled. External recruitment provides wider choice and brings
new blood in the organisation. However, it is expensive and time-consuming.

(iv) Competitive Spirit: If a company taps external sources, the existing staff will have to
compete with the outsiders. They will work harder to show better performance.

Limitations of External Sources

1. Dissatisfaction among existing staff: External recruitment may lead to dissatisfaction and
frustration among existing employees. They may feel that their chances of promotion
are reduced.

2. Lengthy process: Recruitment from external sources takes a long time. The business has
to notify the vacancies and wait for applications to initiate the selection process.

3. Costly process: It is very costly to recruit staff from external sources. A lot of money has
to be spent on advertisement and processing of applications.

Process of Recruitment & Selection

a. Job Requisition

The first essential step is job requisition, which gives the recruiting agency information
regarding each job. This is done through 'job analysis' and 'job specification'. Job analysis is the
study of all facts relating to a job and its work environment; physical and social which
potentially impacts performance. Job specification is a statement of the physical, mental and
temperamental qualities desirable for accomplishing a job. This exercise helps in categorising
the requirements of a job, detailing facts regarding:

(a) Qualifications required of the job; general educational qualifications and technical,
whichever specified;

(b) Specific skill, ability or aptitude (if) required has to be determined and laid down to help
chose the right selection test;

(c) Previous job experience if required to put premium on continuity;

(d) Personal and physical attributes desired; and;

(e) Age and domicile requirements if any

b. Designing Application Forms

Application forms may be designed to procure the required information from applicants, as per
job descriptions and specifications. A well designed application form is a prerequisite for the
success of the recruitment process. If employees send applications on plain sheets of paper, all
facts may not be procured making some kind of alternate arrangement such as correspondence
with candidates necessary to get additional information. A well designed application form
obviates the need for contingent measures. Hence application design is about both fact and
value. The two are intermixed in real life situations.

c. Advertisement

The recruiting agency notifies vacancies to identified sources through well- articulated
advertisements. Care should be taken in drafting advertisements as well, as there are legal
implications inherent. Advertisement is an attempt to secure best talents for the post and fulfil
constitutional requirements of giving equal opportunity to all eligible candidates. Modes of
Inviting Applications

There are many ways in which vacancies can be announced to interested people. The most
commonly employed are;

(i) Newspapers,

(ii) Trade or professional journals,

(iii) Notice boards in field offices

(iv) Employment exchange

(v) Employment job centers,

(vi) Department of social welfare (in vacancies reserved for scheduled castes and tribes
backward classes, etc.),

(vii) Directorate general of re-settlement, ministry of defense, in respect of vacancies reserved

for ex-servicemen.

d. Scrutiny of Applications

The next stage is scrutiny of applications. The purpose of scrutiny is to sift out less desirable
candidates. Scrutiny of eligible candidates can ensure if information required of a candidate is
complete and whether he fulfils all requisite criteria of eligibility apart from meeting essential
minimum prescribed qualifications.

e. Selection

The recruiting agency arranges an examination or interview or both, to select the suitable
candidate(s). After selection, a list of selected candidates is prepared in the order of merit and
published. The list generally contains more names than the actual number of vacancies as
sometimes some candidates may not join for some reason.

f. Communication
The suitable candidates selected are informed while unsuccessful candidates may or may not be
informed. The information given to selected candidates must not be ambiguous. Terms and
conditions governing appointment should be clearly spelt out. Letter of appointment is issued
after selection. It is a communication to the employee that she/he has been selected for the
job. The appointment letter, depending on the rules of the organisation, is subject to police
report and medical examination

g. Placement

The progress of the new employee is observed during the probation period and followed by
confirmation of service of the employee, if found fit.

Personnel– Training & Development

Importance of Training and Development

When jobs were simple, easy to learn and influenced to only a small degree by technological
changes, there was little need for employees to upgrade or alter their skills. But the rapid
changes taking place during the last quarter century in our highly sophisticated and complex
society have created increased pressures for organisations to readapt the products and services
produced, the manner in which products and services are produced and offered, the types of
jobs required and the types of skills necessary to complete these jobs. Thus, as jobs have
become more complex the importance of employee training has increased.
Benefits to the organisation

The benefits of training and development to an organisation are as follows:

(i) Training is a systematic learning, always better than hit and trial methods which lead to
wastage of efforts and money.

(ii) It enhances employee productivity both in terms of quantity and quality, leading to higher
profits.

(iii) Training equips the future manager who can take over incase of emergency.

(iv) Training increases employee morale and reduces absenteeism and employee turnover.

(v) It helps in obtaining effective response to fast changing environment – technological and
economic.

Benefits to the Employee

The benefits of training and development activity to the employees are as follows:

(i) Improved skills and knowledge due to training lead to better career of the individual.

(ii) Increased performance by the individual help him to earn more.

(iii) Training makes the employee more efficient to handle machines. Thus, less prone to
accidents.

(iv) Training increases the satisfaction and morale of employees.

Training, Development and Education

• Training is any process by which the aptitudes, skills and abilities of employees to
perform specific jobs are increased. It is a process of learning new skills and application
of knowledge. It attempts to improve their performance on the current job or prepare
them for any intended job.

• Education is the process of increasing the knowledge and understanding of employees. It

is the understanding and interpretation of knowledge. Education imparts qualities of
mind and character and understanding of the basic principles and develop the capacities
of analysis, synthesis and objectivity.

• Development refers to the learning opportunities designed to help employees growth. It

covers not only those activities which improve job performance but also those which
bring about growth of the personality, help individuals in the progress towards maturity
 and actualisation of their potential capacities so that they become not only good
employees but better men and women.

Difference between Training and Development

Training Methods

There are various methods of training. These are broadly categorised into two groups: On-the-
Job and Off-the- Job methods.

On-the-Job methods refer to the methods that are applied to the workplace, while the
employee is actually working.

Off-the-Job methods are used away from the work place. The former means learning while
doing, while the latter means learning before doing.

On the Job Methods

 Apprenticeship Programmes: Apprenticeship programmes put the trainee under the

guidance of a master worker. These are designed to acquire a higher level of skill. People
seeking to enter skilled jobs, to become, for example, plumbers, electricians or iron-
workers, are often required to undergo apprenticeship training. These apprentices are
trainees who spend a prescribed amount of time working with an experienced guide, or
trainer.
 Coaching: In this method, the superior guides and instructs the trainee as a coach. The
coach or counselor sets mutually agreed upon goals, suggests how to achieve these
goals, periodically reviews the trainees progress and suggests changes required in
behavior and performance. The trainee works directly with a senior manager and the
manager takes full responsibility for the trainee’s coaching. Classically the trainee is
being groomed to replace the senior manager and relieve him from some of his duties.
This gives a chance for the trainee to learn the job also.
 Internship Training: It is a joint programme of training in which educational institutions
and business firms cooperate. Selected candidates carry on regular studies for the
prescribed period. They also work in some factory or office to acquire practical
knowledge and skills.
 Job Rotation: This kind of training involves shifting the trainee from one department to
another or from one job to another. This enables the trainee to gain a broader
understanding of all parts of the business and how the organisation as a whole
functions. The trainee gets fully involved in the department operations and also gets a
chance to test her own aptitude and ability. Job rotation allows trainees to interact with
other employees facilitating future cooperation among departments.

Off the Job Methods

 Class Room Lectures/ Conferences: The lecture or conference approach is well adapted
to conveying specific information-rules, procedures or methods. The use of audiovisuals
or demonstrations can often make a formal classroom presentation more interesting
while increasing retention and offering a vehicle for clarifying more difficult points.
 Films: They can provide information and explicitly demonstrate skills that are not easily
represented by the other techniques. Used in conjunction with conference discussions,
it is a very effective method in certain cases.
 Case Study: Taken from actual experiences of organisations, cases represent attempts to
describe, as accurately as possible real problems that managers have faced. Trainees
study the cases to determine problems, analyse causes, develop alternative solutions,
select what they believe to be the best solution, and implement it.
 Computer Modelling: It simulates the work environment by programming a computer to
imitate some of the realities of the job and allows learning to take place without the risk
or high costs that would be incurred if a mistake were made in real life situation.
 Vestibule Training: Employees learn their jobs on the equipment they will be using, but
the training is conducted away from the actual work floor. Actual work environments are
created in a class room and employees use the same materials, files and equipment. This
is usually done when employees are required to handle sophisticated machinery and
equipment.
 Programmed Instruction: This method incorporates a prearranged and proposed
acquisition of some specific skills or general knowledge. Information is broken into
meaningful units and these units are arranged in a proper way to form a logical and
sequential learning package i.e. from simple to complex. The trainee goes through these
units by answering questions or filling the blanks.

Induction -This is a training which is imparted to a new employee at the time when he or
she joins the organisation. This training is imparted to them to build up their confidence
in the organisation and to give them information about the various procedures, rules
and regulations. They are introduced to their work environment and the fellow
employees in order to promote a feeling of belongingness and loyalty amongst them.

Skill Enhancement- Skill enhancement programs are focused around training that
combines the best practices from education, psychology, social work, career counselling,
sports, and technology training. Through skill training a person can improve their overall
performance in any identified area and in so doing can improve the overall quality of life.

Performance appraisal- It is a systematic process of appraising an employee’s current

and past performance relative to his/her performance parameters. The employee’s
performance should be based on organizational expectations and employee’s actual
performance. The idea that performance evaluation improves employee’s performance
is not a new one but it is seen in the roots of development of mankind. Each person is
motivated when he is told about his actual performance and accepts what were his/her
previous mistakes. Performance appraisal process may be held annually or monthly as
per needed.

Merit rating- Merit rating is the systematic evaluation of the performance of an

employee on the job in terms of the requirements of the job. It may also be ascertained
by comparing the superiority of an employee over others. Quantity and quality of work,
attendance, obedience, skill, desire to learn, loyalty, family background, personality, etc.
are some of the factors that are taken into consideration in assessing merit.
Leadership and Motivation

The dominant behaviour pattern of a leader-manager in relation to his subordinates is known as

leadership style. There are three basic styles of leadership as follows: Task Oriented

 Autocratic or Authoritative Style

 Democratic or Participative Style and
 Laissez-faire or Free-rein Style.

Autocratic or Authoritative Style

An autocratic leader centralises power and decision-making in himself and exercises complete
control over the subordinates. In this style subordinates are compelled to follow the orders of
the leader under threat of penalties. They have no opportunity to take part in goal-setting, or
take initiative or make suggestions. They are subject to close supervision and, thus have a
tendency to avoid responsibility. The autocratic manager has little concern for the well-being of
employees, who suffer from frustration and low morale. They do not have any sense of
&longing to the organisation and try to work as little as possible. Limitations :4t should be clear
from the above that there are several limitations of the autocratic style of leadership.

i) It suits in low morale due to the inn& dissatisfaction of employees.

ii) Efficiency of production goes down in the long run.
iii) It does not permit development of future managers from among capable
subordinates.
Despite the above limitations, autocratic leadership can be successfully applied in the following
situations:

i) When subordinates are incompetent and inexperienced.

ii) The leader prefers to be active and dominant in decision-making.

iii) The company endorses fear and punishment for disciplinary techniques.

iv) There is a little room for error in final accomplishment.

v) Under conditions of stress when great speed and efficiency are required.

Since the leader-manager takes all decisions in autocratic style, there is uniformity and
consistency in decision-making.

Democratic or Participative Style

The democratic style is also known as participative style. In this style, decisions are taken by the
leader in consultation with the subordinates and with their participation in the decision-making
process. The participative leader encourages subordinates to make suggestions and take
initiative in setting goals and implementing decisions. This enables subordinates to satisfy their
social and ego needs, which in turn, lead to their commitment to the organisation goals and
higher productivity. Frequent interaction between the manager and subordinates helps to build
up mutual faith and confidence.

Several benefits can be derived from the participative style of leadership as listed below:

 It helps subordinates to develop their potential abilities and assume greater

responsibilities.
 It provides job satisfaction and improves the morale of employees.
 The group performance can be sustained at a high level due to the satisfied and cohesive
nature of the group.

However, the democratic style cannot be regarded a the best style under all circumstances. Its
limitations are as follows:

i) Decisions taken through consultation may cause delay and require compromises to meet
different viewpoints.

ii) A few vocal individuals may dominate the decision-making process.

iii) No one individual may take the responsibility for implementing the decision taken by the
group as a whole.

Laissez Faire Leadership Style

Laissez 'faire leadership style is just the opposite of autocratic style. A manager, who adopts this
style, completely gives up his leadership role. The subordinate group is allowed to make
decisions and it is left to the members of the group to do as they like. The role of any leader is
absent. The group members enjoy full freedom as regards goal-setting and acting on it. Hence,
there is chaos and mismanagement of group goals. However, laissez faire leadership is found to
be quite suitable where the subordinates are well-trained, competent and the leader-manager
$able to fully delegate the powers of decision-making and action to the subordinates:

Laissez faire style is suitable in the following situations:

i) when leader is interested in delegating decision-making fully.

ii) subordinates are well trained and highly knowledgeable.
iii) organisation gods- have been communicated well,

Maslow’s Need Hierarchy Theory of Motivation

Maslow’s Need Hierarchy Theory of Motivation: Since motivation is highly complex, many
researchers have studied about motivation from several dimensions and developed some
theories. These theories help to develop understanding about motivation phenomenon. Among
these, Maslow’s Need Hierarchy Theory is considered fundamental to understanding of
motivation. Let us examine it in detail.

Abraham Maslow, a well-known psychologist in a classic paper published in 1943, outlined the
elements of an overall theory of motivation. His theory was based on human needs. He felt that
within every human being, there exists a hierarchy of five needs. These are:

(i) Basic Physiological Needs: These needs are most basic in the hierarchy and corresponds to
primary needs. Hunger, thirst, shelter, sleep and sex are some examples of these needs. In the
organisational context, basic salary helps to satisfy these needs.

(ii) Safety/Security Needs: These needs provide security and protection from physical and
emotional harm. Examples: job security, stability of income, Pension plans etc.,

(iii) Affiliation/Belonging Needs: These needs refer to affection, sense of belongingness,

acceptance and friendship.

(iv) Esteem Needs: These include factors such as self-respect, autonomy status, recognition and
attention.

(v) Self Actualisation Needs: It is the highest level of need in the hierarchy. It refers to the drive
to become what one is capable of becoming. These needs include growth, self-fulfillment and
achievement of goals.

Maslow’s theory is based on the following assumptions:

(i) People’s behaviour is based on their needs. Satisfaction of such needs influences their
behaviour.

(ii) People’s needs are in hierarchical order, starting from basic needs to other higher level
needs.

(iii) A satisfied need can no longer motivate a person; only next higher level need can motivate
him.

(iv) A person moves to the next higher level of the hierarchy only when the lower need is
satisfied.

Maslow’s Theory focuses on the needs as the basis for motivation. This theory is widely
recognized and appreciated. However, some of his propositions are questioned on his
classification of needs and hierarchy of needs. But, despite such criticism, the theory is still
relevant because needs, no matter how they are classified, are important to understand the
behaviour. It helps managers to realise that need level of employee should be identified to
provide motivation to them.