HRM+Question+Bank+With+Solution

8/2/2019 HRM+Question+Bank+With+Solution

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Question Bank with solution (T.Y.B.M.S)

Subject : Human Resource Management

Q 1. Describe the HRP process? Or What do you understandby manpower planning? Explain the steps in manpowerplanning?

The objectives of HR plan must be derived from organizational objectives. Specific requirements interms of number and characteristics of employees should be derived from the organizational objectives.Organizational objectives are defined by the top management and the role of HRP is to sub serve theoverall objectives by ensuring availability and utilization of human resources.

Once the organizational objectives are defined by the top management and the role of HRP is to subserve the overall objectives by ensuring availability and utilization of human resources.Once the organizational objectives are specified, communicated and understood by all concerned, theHR department must specify its objectives with regard to HR utilization in the organization.

HR Demand Forecast

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Demand forecasting is the process of estimating the future quantity and quality of people required. Thebasis of forecast must be annual budget and long-term corporate plan, translated into activity levels foreach function and department.There are several good reasons to conduct demand forecasting

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

- Determine what staff-mix is required- Asses appropriate staffing levels in different parts of the organization- Prevent shortages of people- Monitor compliance with legal requirements with regard to reservation of jobs

HR Supply Forecast

Personnel demand analysis provides the manager with the means of estimating the number and kind of employees that will be required. The next logical step for the management is to determine whether itwill be able to procure the required number of personnel and the sources for such procurement. Thisinformation is provided by supply forecasting. Supply forecasting measures the number of people likelyto be available from within and outside an organization, after making allowance for absenteeism,internal movements and promotions, wastage and changes in hours, and other conditions of work.

reasons for supply forecast are- Helps quantify number of people and positions expected to be available- Helps clarify staff mixes that will exist in the future- Assess existing staffing levels in different parts of the organization- Prevents shortage of people- Monitors expected future compliance with legal requirements of job reservations

HR P ROGRAMMING

Once an organization‘s personnel and supply are forecast, the two must be reconciled or balanced inorder that vacancies can be filled by the right employees at the right time.

HR P LAN I MPLEMENTATION

Implementation requires converting an HR plan into action. A series of action programmes are initiatedas apart of HR plan implementation.

- Recruitment, Selection and Placement – after the job vacancies are known, efforts must be madeto identify sources and search for suitable candidates. The selection programme should beprofessionally designed.

- Training and Development – The training and development programme should cover thenumber of trainees required and programmes necessary for existing staff

- Retraining and Redeployment – new skills are to be imparted to existing staff when technologychanges

- Retention Plan – retention plan covers actions which would help reduce avoidable separationsof employees.

- Downsizing – where there is surplus employee, trimming of labour force will be necessary

C ONTROL AND E VALUATION

Control and evaluation represents the fifth and the final phase in the HRP process. The Hr plan shouldinclude budgets, targets and standards. It should also clarify responsibilities for implementation andcontrol, and establish reporting procedures, which will enable achievements to be monitored against theplan.




Q 2. What is personnel manual and how is it designed?MEANING AND DEFINITIONS OF PERSONNEL POLICIES:

Personnel policies are the principles and rules of conduct which "formulate, redefine, break into detailsand decide a number of actions" that govern the relationship with employees in the attainment of the

organization objectives. The scope of personnel policies is vast arid employees from all departments arecovered by personnel policies.

(1) According. to Edwin B. Flippo, "A policy is a man-made rule: or pre-determined course of

action that is established to guide the performance of work toward the organization objectives.

It is a type of standing plan that serves to guide subordinates in the execution of their tasks. "(2) According to Calhoon, "Personnel policies constitute guides to action. They furnish the

gei1eral standards or bases on which decisions are reached. Their genesis lies in an

organization’s values, philosophy, concepts and principles."

HOW TO PREPARE A PERSONNEL POLICY MANUAL?Preparation of personnel policy manual is a lengthy, costly and time-consuming activity. It involves lotof administrative work. Many persons are involved in this joint/collective activity.

(1) Lengthy procedure involved: The steps to be taken for the preparation of personnel policy

manual depend on the material on policy manual already available. If personnel policies onvarious aspects of personnel management have already been written, the task consists of gathering the policies together, arranging them in a logical order and writing them according tosome acceptable format. Each policy needs to be placed properly so that the manager using themanual will understand all aspects (objectives, application, etc.) of the policy easily, quicklyand correctly.

(2) Firm decision to prepare policy manual: The decision to prepare a manual is to be taken by thetop management of the company. It also has to decide who is going to be in charge of itspreparation. It is desirable to make one person responsible for the drafting of the manual.

(3) Giving suitable authority to In charge, Personnel Policy Manual: The person appointed for thepreparation of the manual should be given authority to set up a small committee which willassist in gathering the data necessary for the preparation of complete and comprehensivemanual. The major sources of information should also be decided. In some cases, manual

preparation is the revision and updating of the old manual or preparation of new manual.(4) Appointing of a small committee for manual preparation: The committee set up for the

preparation of manual should be small and functional. The initial task of the committee is tocollect data from individual departments. There should be time limit for the preparation of finaldraft of the manual.

(5) Interviewing supervisors for information collection: The supervisors are mainly responsible foradministering company policies and practices. The supervisors should be interviewed forunderstanding what is going on in the company at present. They (supervisors) will be useful infinding out whether the present policies (written or unwritten) are working and where they arenot working. Association of supervisors is important as it gives them opportunity to participatein the preparation or in the revision of the personnel manual.

(6) Preparing first draft of policy manual: After collecting the required data, views of supervisors,etc, the first draft of personnel policy manual should be prepared. The language of the draftshould be clear. The first draft of the manual should be flexible and open to additions andchanges.

(7) Circulating first draft for review and recommendations: Copies of the first draft should be takenand circulated among the supervisors and others directly concerned with the use of the manual.Their opinions should be collected for the preparation of final draft of the manual.

(8) Final printing of manual: The manual maybe large in the case of a large organizationmanufacturing and marketing wide product line.. A manual should have printed pages withproper binding so as to make it available in a book form. Sometimes, it is prepared in a loose-



leaf form. A printed manual in book form can be used for a longer period of three to five years.Thereafter, new updated and revised manual can be introduced by discarding the old one.

(9) Periodical revision and updating of the manual: Periodical revision and updating of personnelpolicy manual is necessary due to organizational and other changes. The jobs of manualpreparation are never finished as conditions inevitably and continuously change.

A personnel manager /HR manager or a manual coordinator should be appointed for this job Here, hecan draft the manual by using the steps noted above. The steps serve as guidelines for manual drafting.



Q 3. Why and how does job rotation take place? (Concept question)

Job rotation implies movement of employees from one job to another.With job rotation, a given employee performs different jobs, but more or less of thesame nature.

When an activity is no longer challenging, the employee would be rotated to another jobat the same level that has similar skill requirements.

Advantages of Job Rotation-

Job rotation is a way to overcome boredom and monotony.

It is likely to increase intrinsic reward potential of a job because of different skillsand abilities needed to perform it.

Workers become competent in several jobs rather than only one, which in turnbenefits the organization.

Knowing a variety of jobs improve the worker‘s self -image, provides personalgrowth and makes the worker more valuable to the organization.

Periodic job changing can also improve interdepartmental co-operation,employees become more understanding of each other‘s problems.

Disadvantages of Job Rotation

An employee does not gain a particular specialization.

Moving from one job to another also gets irritating because the normal routineof an employee is disturbed and also time is wasted in adjusting to the new job.The employee may feel alienated when he/she is rotated from job to job.

Training costs are increased



Q 4. Why and how does a transfer take place?

Firstly what is a transfer? A transfer involves a change in the job (accompanied by achange in the place of the job) of an employee without a change in responsibilities or

remuneration. A transfer differs from a promotion in that the latter involves a change inwhich a significant increase in responsibility, status and income occurs, but all theseelements are stagnant in case of a transfer. Another difference is that transfers are regularand frequent, as in banks and other government establishments, but promotions areinfrequent.

Reasons for transfersThe reasons for transfers vary from organization to organization and from individual toindividual within an organization. Broadly speaking, the following are the reasons fortransfers:

There is a shortage of employees in one department or plant because of aheavy demand, which necessitates a requirement of more employees. In

another department or plant, employees may be surplus because of slackened demand for the products manufactured by the company. This willlead to workers being idle and wastage of manpower. Workers are thustransferred from the surplus department to another department or plantwhere there is shortage of staff.

Incompatibilities between the worker and his or her boss or between oneworker and another worker.

Correction of a wrong initial placement of an employee. A change has taken place in the interests and capacities of an individual,

compelling him to transfer to a different job. Over a period of time, the productivity of an employee may decline because

of the monotony of his or her job. To break this monotony, the employee istransferred. The climate may be unsatisfactory for an employee‘s health. He or she may

request a transfer to a different place where his or her health will not beaffected by the climate.

Family related issues cause transfers, especially among female employeeslike when they get married and want to join their husbands.

Types of transfers1) Production transfers – as mentioned earlier, a shortage or surplus of the labour

force is common in different departments in a plant or several plants in anorganization. Surplus employees in a department have to be laid off, unless they

are transferred to another department. Transfers effected to avoid such imminentlay-offs are called production transfers.

2) Replacement transfers – replacement transfers are too intended to avoid imminentlay-offs, especially of senior employees. A junior employee may be replaced by asenior employee to avoid laying off the senior one. A replacement transfer usuallytakes place when all the operations are declining and it is carried out to retainlong-service employees as long as possible.



3) Versatility transfers – versatility transfers are done to make employees versatile

and competent in more than one skill. Clerical employees in banks, for exampleare transferred from one section to another so that they acquire the necessary skills

to attend to the various activities of the bank. Versatile transfers may be used as apreparation for production or replacement transfers.

4) Shift transfers – generally speaking, industrial establishments operate more thanone shift. Transfers between shifts are common, such transfers being made mostlyon a rotation basis. Transfers may also be effected on special requests fromemployees. Some request a transfer to the second shift or the night shift in order toavail the free time during the day to take up part time jobs.

5) Remedial transfers – remedial transfers are effected at the request of employeesand are therefore called personal transfers. Remedial transfers take place ininstances like

the initial placement of an employee may have been faulty or the worker may not get along with his or her supervisor or with other

workers in the department he or she may be getting too old to continue in his or her regular job or the type of job or working conditions may not be well adapted to his or her

personal health if the job is repetitive, the worker may stagnate and in all such instances

the employee would benefit by transfer to a different kind of work.



Q 5. Explain the HRM Model?

Nature of HRM

HumanResourcePlanning

Job Analysis

Recruitment

Selection

Placement

Training andDevelopment

Remuneration

Motivation

ParticipativeManagement

Communication

Safety andHealth

Welfare

Promotions etc

IndustrialRelations

Trade Unionism

DisputesAnd theirSettlement

Future of HRM

The HRM model contains all HR activities. When these activities are discharged effectively, they willresult in a competent and willing workforce who will help realize organizational goals. There is anothervariable in the model – environment. It may be stated that the HR function does not operate in vacuum.It is influenced by several internal and external forces like economic, technological, political, legal,organizational, and professional conditions.

Competentand willingworkforce

OrganizationalGoals

E n v i r o n m e n t



HRM: is a management function that helps manager‘s recruit, select, train, and develop members for an organization.

Human Resource Planning: is understood as the process of forecasting an organizations futuredemand for, and supply of, the right type of people in the right number.

Job Analysis: is the process of studying and collecting information relating to the operations andresponsibilities of a specific job. The immediate products of this analysis are job descriptions and jobspecification.

Recruitment: is the process of finding and attracting capable applicants for employment. The processbegins when new recruits are sought and ends when their applications are submitted. The result is apool of applicants from which new employees are selected.

Selection: is the process of differentiating between applicants in order to identify (and hire) those withgreater likelihood of success in a job.

Placement: is understood as the allocation of people to jobs. It is the assignment or re-assignment of an

employee to a new or different job.

Training and development: it is an attempt to improve current or future employee performance byincreasing an employee‘s ability to perform through learning, usually by changing the employee‘s

attitude or increasing his or her skills and knowledge. The need for training and development isdetermined by employee‘s performance deficiency, computed as follows: Training and development need = Standard performance – Actual performance

Remuneration: is the compensation an employee receives in return for his or her contribution to theorganization.

Motivation: is a process that starts with a psychological or physiological deficiency or need thatactivates behaviour or a drive that is aimed at a goal or an incentive.

Participative management: Workers participation may broadly be taken to cover all terms of association of workers and their representatives with the decision making process, ranging fromexchange of information, consultations, decisions and negotiations to more institutionalized forms suchas the presence of workers members on management or supervisory boards or even management byworkers themselves as practiced in Yugoslavia. ((ILO)

Communication: may be understood as the process of exchanging information, and understandingamong people.

Safety and health: Safety means freedom from the occurrence or risk of injury or loss. In order toensure the continuing good health of their employees, the HRM focuses on the need for healthyworkers and health services.

Welfare: as defined by ILO at its Asian Regional Conference, defined labour welfare as a term whichis understood to include such services, facilities, and amenities as may be established in or in thevicinity of undertakings to enable the person employed in them to perform their work in healthy,congenial surroundings and to provide them with amenities conducive to good health and high morale.

Promotions: means an improvement in pay, prestige, position and responsibilities of an employeewithin his or her organization.Transfer: involves a change in the job (accompanied by a change in the place of the job) of anemployee without a change in the responsibilities or remuneration.Separations: Lay-offs, resignations and dismissals separate employees from the employers.



Industrial relations: is concerned with the systems, rules and procedures used by unions andemployers to determine the reward for effort and other conditions of employment, to protect theinterests of the employed and their employers, and to regulate the ways in which employers treat theiremployees.

Trade Unions: are voluntary organizations of workers or employers formed to promote and protecttheir interests through collective action.

Disputes and their settlement: Industrial disputes mean any dispute or difference between employersand employers, or between employers and workmen, or between workmen and workmen, which isconnected with the employment or non-employment or terms of employment or with the conditions of labour of any person.



CONCEPT TESTING QUESTIONS

Q 1. Meaning and Definition (of all concepts for every chapter)

Q 2. Difference between: personnel management and HRM

Dimension Personnel Management HRM

1. Employment contract Careful delineation of written contracts

Aims to go ‗beyond‘contract.

2. Rules Importance of devising clearrules

Can do, outlook, impatiencewith rule

3. Guide to managementaction

Procedures Business need

4. Behaviour referent Norms/ customs andpractices

Values/mission

5. Managerial task vis-à-vislabour

Monitoring Nurturing

6. Key relations Labour management Customer

7. Initiatives Piecemeal Integrated

8. Speed of decision Slow Fast

9. Management role Transactional Transformational leadership

10. Communication Indirect Direct

11. Prized managementskills

Negotiation Facilitation

12. Selection Separate, marginal task Integrated, key task

13. Pay Job evaluation Performance related

14. Conditions Separately negotiated Harmonization

15. Labour management Collective-bargainingcontracts

Individual contracts

16. Job categories andgrades

Many Few

17. Job design Division of labour Team work

18. Conflict handling Reach temporary truce Manage climate and culture

19. Training anddevelopment

Controlled access to courses Learning companies

20. Focus of attention forinterventions

Personnel procedures Wide ranging cultural,structural and personnelstrategies

21. Respect for employees Labour is treated as a tool

which is expendable andreplaceable

People are treated as assets

to be used for the benefit of an organization, itsemployees and the societyas a whole

22. Shared interest Interests of the organizationare uppermost

Mutuality of interests

23. Evolution Precedes HRM Latest in the evolution of thesubject



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GROUP 1 (TOPICS COVERED)

Personnel managementHuman resource managementStrategic HRMNew trends in HRM

1] PERSONNEL MANAGEMENT

DEFINITIONS OF PERSONNEL MANAGEMENT/ HRMThe term personnel management is defined in different ways. The following definitions are worthnoting:(1) According to Edwin Flippo" Personnel management is the planning, organizing, directing, andcontrolling of the procurement, development, compensation, integration, maintenance, and separationof human resources to the end that individual, organizational and societal objectives areaccomplished".(2) According to George R. Terry, "Personnel management is concerned with the obtaining andmaintaining of a satisfactory and satisfied, work force". (3) According to Walter D. Scott, "Personnel management is concerned with the attaining of

maximum individual development; desirable working relationship between employer and employees,and an effective moulding of human resources as contrasted with physical resources".(4) According to British Institute of Personnel Management, London, "Personnel Management is thatpart of management which is concerned with the people at work and with their relationship within anenterprise".

OBJECTIVES/PURPOSES OF PERSONNEL MANAGEMENT / HUMAN RESOURCEMANAGEMENT:The basic objective of personnel management is to maintain efficient team of workers for the benefitof the organization. In addition, to provide opportunities of self-development to employees andfinally to maintain congenial work atmosphere and inter-personnel relations are the objectives of personnel management. Personnel management aims at giving fair treatment to employees as regardwages, 'welfare facilities, non-monetary benefits, working conditions and so on.The objectives of HRM are derived from the basic objectives of an organization. In order to achieve

organizational objectives, integration of employer's interest and employee interests is necessary.

The objectives of personnel management/HRM in any industrial organization can be summarized asunder.(1) To attain maximum individual development (self-development) of the members of anorganization and also to utilize available human resources (with the organization) fully andeffectively.(2) To mould effectively the human resources.(3) To establish desirable working relationships between employer and employees and betweengroups of employees.(4) To ensure satisfaction to the workers so that they are freely ready to work.(5) To improve the service rendered by the enterprise to the society through better employee morale,which leads to more efficient individual and group performance.

(6) To establish and maintain a productive and self respecting relationship among all the members of an organization.(7) To ensure the availability of a competent and willing workforce to the organization for itsprogress and prosperity.

(8) To help organization to achieve its goals by providing well trained, efficient and properlymotivated employees.

(9) To maintain high morale and good human relations within the organization for the benefit of employer and employees.





(10) To secure the integration of all the individuals and groups with the organization by reconcilingindividual/group goals with those of an organization.




2] HUMAN RESOURCE MANAGEMENT

MEANING AND DEFINITIONPersonnel refers to the employees working in an organization at different levels. Personnel management

(also called human resource management) is that aspect of total business management, which dealswith human relationships within an organization. Personnel represent human resource, which isdifferent from material resources.

Human resource is the most productive and most versatile. In addition, the manpower in anorganization needs human treatment. Employees have a capacity to feel, think and even to react.Management has to deal with the employees in a careful and tactful manner. Material resources such asland, machines, raw materials, equipment, etc. are easy to manage. This is because they have nocapacity to feel or think or react. This is not the case with human resource i.e. manpower. Man andmachines are not on par and must not be treated in the same manner. This is because of all the resourcesmanpower is the only resource, which does not depreciate, with the passage of time. According to PeterF. Druckert UtIle prosperity, if not the survival of any business depend on the performance of itsmanagers of tomorrow." The material resources alone will not help the organization to achieve itsobjectives. For this, effective co-ordination and utilization of material and human resources are

required. This suggests the importance of human resources.

The human resource is very important and useful. It should be nurtured and used for the benefit of theorganization. This is a challenging job before personnel manager/management. The organization canmake rapid progress only when the employees are satisfied and co-operative. On the other hand, theorganization will have to face various problems and difficulties, if the employees are not co-operativebut hostile. This indicates that human resource is most strategic and critical determinant of growth of abusiness unit. Every organization needs loyal, efficient and satisfied labour force. For this, adequateattention should be given to personnel management.

OBJECTIVES OF HRM

Same as objectives of personnel management (givenabove)

FUNCTIONS OF HRMA personnel manager has to perform the basic functions of management. These managerial functionsinclude' planning, organizing, directing and controlling personnel. The operative functions of thedepartment are: procurement of staff, development of staff through training, payment of compensationto staff i.e. wages and salaries, integration of manpower i.e. fair reconciliation of individual, social andorganizational goals and interests and maintenance of staff i.e. providing them safety at the work placeand also to offer welfare facilities and conveniences to employees. In brief, personnel managementinvolves the following operational functions:

(1) Procurement of manpower: Procurement means acquiring the manpower required by anorganization from time-to-time. The basic Principle in procurement is "right man for the right job". The procurement function includes manpower planning and forecasting, recruitment,selection, appointment, placement and induction of employees so as to have a team of efficientand capable employees for the benefits of the organization. Even promotions and transfers arecovered by this broad personnel function.



(2) Development of manpower: Development of manpower (human resource development) meansplanning and execution of the training programmes for all categories of employees in order todevelop new skills and qualities required for working at the higher level. Manpowerdevelopment is possible through training and career development programmes and not simplyby offering attractive wages to workers. Executive development programmes are introduced for

the benefit of higher-level managers Similarly; future manpower requirement will be, metinternally through HRD programmes. It aims at educating and training employees for theimprovement of overall performance of an organization. HRD (Human Resource Development)programmes are for education, training and development of existing manpower in anorganization. This is for facing new problems and challenges likely to develop in the nearfuture.

(3) Compensation payment to manpower employed: One function of HRM is to pay compensation(in monetary form) to employees for the services rendered. For this, a fair system of remuneration payment (wages and salaries) needs to be introduced. Remuneration to employeesshould be attractive so that the labour force will be satisfied and disputes, etc. will beminimized. Fair wage payment acts as a motivating factor.

(4) Integration of interests of manpower and the organization: Manpower is interested in wagepayment while organization is interested in higher profits, consumer loyalty, market reputationand so on. HRM has to reconcile the interests of the individual members of the organizationwith those of the organization.

(5) Maintenance of manpower: This manpower function relating to maintaining satisfiedmanpower in the organization through the provision of welfare facilities. For this, attentionneeds to be given to health and safety measures, maintenance of proper working conditions atthe work place, provision of welfare facilities and other non-monetary benefits so as to createefficient and satisfied labour force with high morale. Even collective bargaining and workersparticipation come within this broad personnel function.

(6) Provision of welfare facilities: Employees are offered various welfare facilities. They includemedical, educational, recreation, housing, transport and so on.

(7) Misc. functions: Misc functions under HRM include maintenance of service records of employees (which are used for promotions/transfers performance appraisal, etc.), promotionsand transfers of employees, maintaining cordial industrial relations, introduction of rationalgrievance procedure, performance evaluation of employees, career planning of employees,maintenance of discipline, administering the policies with regard to disciplinary action andcompliance of various labour laws.



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EVOLUTION OF HRM IN INDIA

The importance of personnel/human resources management is now universally accepted

and India is not an exception to this rule. In India, large business enterprises, public sectorenterprises and even medium and small enterprises appoint personnel manager or humanresources development (HRD) manager to look after the personnel functions such asrecruitment, promotions and transfers, training and manpower development, provision of welfare facilities, compensation management and so on. The term HRM is a relativelynew term emerged during the 1970s. It is now used as a better and meaningful substituteto personnel management. HRM is wider in scope and has its distinct philosophy.

The process of industrial development started in India rather late. It was during the BritishRule and that too after the First World War that textile, jute, iron and steel and otherorganised industries started in India. Recruitment, wage payment, welfare facilities andother personnel problems were noted only when labour class was employed on a largescale in the industrial sector. This is the starting period for personnel management inIndia. In the early British period and prior to that personnel management and personnelfunctions were absent, (Reference to some personnel functions and systematicmanagement of resources was made in Kautilya's Arthashastra during the 4th centuryBe.) as industrial activities were extremely limited. They were also conducted on a smallscale. As compared to India, the industrial growth was rapid in Europe. As a result, theconcept of personnel functions and personnel management made rapid progress. Theconcept of personnel management function in India is based on similar concept developedin Europe much earlier.

The personnel function in India has been the product(outcome) of various factors such asindustrial growth, labour, legislation, exploitation of workers in the early period and theirdemand for certain basic necessities of life. (e.g. fair wage, weekly, holiday, essential

facilities at the work place)The need for labour officers in Indian industry wasfelt/realized as early as 1929 for the protection of labour force in industrial units.

In 1931, the members of Bombay Mill owners' Association appointed Labour Officers intheir textile mills (on voluntary basis) for the settlement of grievances and disputes of employees. Similar arrangement was introduced in the jute mills in Bengal (under theleadership of Jute Mills Association). The labour welfare officers were given theresponsibility to promote sports and welfare activities and provide food shops (canteenfacility) to workers.

After Independence, many pro labour legislations were made for the protection andwelfare of workers. The scope of personnel management function was made more broadand liberal. Many provisions regarding recruitment, salary payment and conditions of

service were laid down. This gave recognition to the personnel management function inthe industrial establishments.

Gradually, the need of personnel management and its role in cordial labour relations andfair treatment to employees need were recognized by industrial organizations. Personneldepartments under the leadership of personnel managers were started in the companies.Liberal welfare facilities were introduced for the benefit of employees. Such measurestaken for the protection and welfare of employees enlarged the scope of personnel



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management. Even training and manpower development programmes added newdimensions to the activities of personnel management. Many companies have now,prepared well-defined personnel policies, grievance and other procedures and liberal

package of welfare facilities. Such additional activities/functions under personnelmanagement raised the importance and popularity of personnel department.

HRM ACTIVITIES/MODEL

Explained above in the full length questions

DIFFERENCE BETWEEN HRM AND PERSONNEL

MANAGEMENT

Explained above in the concept testing question

CHALLENGES FACING HRM IN INDIAWith organizations achieving a HRD climate, a basic source of human motivation toperform higher, human wastage has been reduced. So, whereas personnel managementregarded wages and salaries as the main source of motivation, Human ResourceManagement (HRM) regards creation of a congenial work climate (HRD climate), jobchallenges, creativity and opportunity for development as the motivating forces.

The challenges in HR that would be very critical are staffing. Thebiggest fear that such big corporate have is, if two or three wrongpeople get together, they can bring down the company. So, one ishiring the right kind of people, then right kind of values and the rightkind of professional competencies.

The other challenge is to continuously allow people to develop andgrow so that they have very high energy and the ability to energize others with the edge to resolve conflicts, and the ability to execute.You will also have to bear in mind that they also have aspirations. Somanaging the aspirations and rewarding them timely and accuratelybecome critical in such organizations.

A lot of companies expect their problems to disappear the moment HRis implemented. "HRM is a means to an end, not the end ".

The other reasons why HR implementations often fail include lack of preparation, lack of top management involvement, faulty selectionprocess, improper use of the HRM policies/department/funds, too high

expectations. Cost is an important factor while considering the implementation of

HR activities. The companies are trying to cut costs while conductingHR programmes and are exorbitantly spending on other unimportantactivities of the organization.

HRM is still in its stage of infancy, it yet has to evolve and becomemore a way of doing business or managing the organization.



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It shouldn‘t be used as a tool or remedial measure when the problem/crisis arises.

Nowadays, the employees are being forced to attend self-improvementand overall development programmes compulsorily without the staff‘s

knowledge/interest and companies are spending huge amounts on suchwelfare activities, which are absolutely redundant and should beeliminated from the system.

Pay packages and incentives have to be supplemented with somesupplementary packages but the company tries to replace the monetarybenefits by some workshops or seminars or presentations or trainingcourses which demotivate the workers because their expectations arebeing ignored in the bargain. We look at the career development of people very strongly. We do not believe that we should be the highestpaymasters.

3] STRATEGIC HRM

Strategic Management is defined as ‘ the set of managerial decisions and

actions that determine the long-term performance of a corporation. It

includes environmental scanning, strategy formulation , strategy

implementation and evaluation and control. The study of strategic

management, therefore, emphasizes monitoring and evaluating

environmental opportunities and threats in the light of a corporation’s

strengths and weaknesses.’ The strategic management process involves the following four processes.



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The advent of HRM has brought the linkage

between employer-employee relationship and

strategic management to sharp focus.Since Environmental Scanning helps identify threats and opportunities prevailing in theexternal and internal environment, HRM is of great help in locating opportunities andthreats.

HRM is in a unique position to supply competitive intelligence that may be useful inStrategy Formulation. Details regarding advanced incentive plans being used bycompetitors, opinion-survey data from employees that elicit information about customercomplaints, and information about pending legislation like labour laws or mandatory healthinsurance are some examples. The strengths and weaknesses of a company‘s humanresources can have a determining effect on the viability of a company‘s strategic options.

Unique HR capabilities serve as a driving force in strategy formulation. A company may

build it‘s new strategy around a competitive, advantage stemming from it‘s humanresource. The well known accounting and consultancy firm, Arthur Anderson, developedunique HR capabilities in training, which provides the firm with a competitive advantageenabling it to provide fast and uniform in-house training.

HRM supplies a company with a competent and willing workforce which is responsible forexecuting strategies i.e Strategy Implementation. For example Maruti Udyog andHindustan Motors are manufacturing cars, essentially using identical technology. The secretbehind the meteoric rise of Maruti is its workforce.

HRM supports strategy implementation in other ways too. For example human resourcetoday is heavily involved in the execution of a company‘s restructuring and downsizingstrategies, through outplacing employees, instituting performance linked pay plans,

reducing health care costs and retraining employees. And in an increasingly competitiveglobal market place, instituting HR practices that build employee commitment can helpimprove an organization‘s responsiveness.

Lastly Human Resource Management must be continuously evaluated to make strategicmanagement highly effective by supplying human resources who are competent andcommitted. Thus Strategic Human resource Management today is given due importanceand offers several financial and non-financial benefits to a company.



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4] NEW TRENDS IN HRM

MAINSTREAM economists perceive voluntary retirement as a measure to shed the workforce whose

marginal productivity is zero. Further, it is argued that this could be introduced in an industrial organizationfor maintaining its cost effectiveness in an increasingly competitive world. Moreover, voluntary retirementis accompanied by technological modernization that warrants the replacement of labor with capital.Technological modernization improves the productivity of existing workforce so much so that a section of the existing workforce becomes again redundant even as modernization enhances the installed capacity of the technology. The workforce that becomes redundant in this process has to retire or be retrenched.

The rationale behind the introduction of voluntary retirement scheme (VRS) in India is that any organizedindustrial organization has to operate within the existing legislative framework, which does not allow theorganization to shed the redundant workforce without adequate compensation

Employers refer to VRS as 'golden handshake', trade unions call it 'voluntary retrenchment scheme', and forthe government, it is 'unstated exit policy' which means that an exit policy which may not exist on paper.VRS is one of the strategies introduced in the early 1980s in central public sector undertakings (PSUs) toreduce the so-called surplus or redundant workforce. It gained publicity after the introduction of neweconomic policy in 1991. In India, the government employs more than 70 per cent of the organizedworkforce; it uses all its channels to reduce the organized sector of the workforce without antagonizing thetrade unions. It is envisaged in the new economic policy that VRS can provide minimum sustenancesecurity to the retired individual and his family.

Trade unions play a crucial role in introducing the VRS in any organized sector firm.

The main objective behind the scheme is to send out those who cannot be retrained in new skills. Thepremise of the argument appears to be weak. The liberalization policy, in its anxiety to modernize,restructure and globalize the products of Indian industry, is wasting precious labor force that could havebeen modernized through retraining and on-the-job training. Precious skills and abilities of the retrenchedworkforce are equated with worn out physical capital that may not be susceptible to repair ormodernization. Are human beings not capable of learning and modifying their knowledge, skills andapplying the same to produce higher output? The current emphasis on restructuring does not allow suchquestions.

The free economy and trade liberalization have ushered in the need for the enterprises to have a competitiveedge. Economic forces have led to organizational cost cutting, changes in production processes, explorationof new markets, plant relocations, modernizations, downsizing and structural changes.

Organizational adjustment at all levels has become extremely imperative. Over manning has crept intoalmost all industrial units on account of the inability of the enterprises to reduce or adjust workforce as perthe business needs. The sort of cuts that only happened in heavy industries has now become widespread.The days of nibbling away deadwood have long gone. It's time for the organizations to realign and focus onthe core competencies.

THE GOLDEN HANDSHAKE

Voluntary Retirement Scheme (VRS) is the latest mantra of many a corporate and Public sector units. Thecompany may decide to declare a VRS based on their HR plan and suitability. For a common salariedindividual this becomes a major decision.

The company as per their human resource policy declares VRS or the Voluntary Retirement Scheme. VRSis a scheme whereby the employee is offered to voluntarily retire from his services before his retirementdate. Subject to certain conditions the company offers VRS to its emp loyees It is the golden route to cut theexcess flab. The most humane technique to retrench the employees in the company today is the voluntaryretirement scheme. It is the golden handshake for the employees and the only option today for thecompanies to downsize their headcount. The scheme which is formally permitted by the Department of Public Enterprises and which provides the lucrative way for the employees to terminate their services andaccept VRS.



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This process should convince them that the posts in the organization have become redundant and not theperson and the organization still values the person. Since this process involves emotions and feelings, everycare must be taken by the management that the process must be carried out in such a manner that it keepsthe dignity of the employees but at the same time achieves the objective in a tactful manner.

PINK SLIP

A "pink slip" is a notice of dismissal or termination from one's job, also known as one's "walking papers."The term "pink slip" dates from the early 20th century, and originally referred to the practice of including apink-colored slip of paper in an employee's weekly pay envelope notifying the worker of his or hertermination. There does not seem to be any particular significance to the use of the color pink aside fromthe fact that it made the notice stand out from any other papers that might be in the envelope.

Though the "pink slip" in the pay envelope has probably been superseded by e-mail these days, "to be pink slipped" is still very much in use as shorthand for "to be fired."

INFORMATION GATHERED FROM: Human resource and personnel management-2nd edition -Aswathappa

Human Resources management-Kale & Ahmed Internet



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zI.

1) What are the challenges facing HRM? / Explain the changing role of HRM?

The 1990s have brought a revolutionary change in our business. Post- liberalisation ismarked by a shift from command economy to market driven economy; from shelteredmarket to competitive market; from monopoly to competition; and from domestic trade toglobal trade. Such a shift calls for a different approach to HR activities. During the pre-economic liberalization, the HR managers had aopted a reactive strategies to people‘sproblems. The need of the hour is proactive approach, a strategy which helps HRmanagers foresee events and take appropriate actions before the events occur.The major challenges are:

GlobalisationGlobalisation is increasingly viewed as a growth strategy by several companies. Growinginternalisation of business has its impact on HRM functions. The HR department isrequired to cope with the problems of unfamiliar laws, languages, practices, competitions,

attitudes, management styles, work ethics and more. HR managers are required to knowthat international operations have:More functions, such as taxation and co-ordination of departments.More heterogenous functions, such as co-ordination of multiple salary currenciesMore involvement in the employee‘s personal life, such as housing, health, education andrecreation.HR functions such as planning, staffing, remuneration and the like, therefore, will beaffected by globalisation.

Corporate ReorganisationsThe past three to four years brought us news about corporate mergers, takeovers andmassive reorganizations to fend off hostile take-over bids. It is difficult to imaginecircumstances that pose a greater challenge for HRM than reorganization resulting from

acquisition, merger, divestiture or a take-over threat.The reorganization will have impact on organizational levels and employees. Theemployees of both the ‗taking over‘ as well as the ‗taken over‘ companies will haveanxious moments because of 1. Fear of loss of jobs2. Job changes, including new roles and assignments3. Transfers to new geographic location4. Changes in remuneration5. Changes in career possibilities6. Changes in organisational power, status, an prestige,7. Staff changes, including new peers, supervisors, and subordinates, and8. Changes in corporate culture and loss of identity in the company.There is little indication that the pace of mergers and acquisitions will slacken in the

future. But an important key to the success of almost any merger or acquisition is themanagement of HR.

New organizatioanl formsThe practice of HRM is shaped by the organisational forms in which people areemployed. But the employment potential of these giant corporations is declining. Large





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production units have become increasingly a thing of the past, and large companies nowtend to consist of business units managed relatively independently.The consequence has been a higher profile of medium size and small sized firms as

employers. A majority of the population are employed in units with fewer than 200employees.This trend affects HRM in various waysSmaller firms and establishments means a more personalised style- not necessarily moreprogressive, but more fsce-to – face.Smaller units may require less complex and sophisticated systems of personnelmanagement, but may also be less able to sustain them in areas like managementdevelopment.Smaller unit are less able to sustain a specialist personnel management function.On the other hand, the business and human challenges of operating in this kind of environment are becoming greater. The contribution of HRM will then be in facilitatingthe processes, which support the development of the enterprise, rather than, as traditionalpersonnel management has one, in administering systems for controlling people.

The basic challenge to HRM an enterprise management comes from the changingcharacter of competition.Competition in many sectors is no longer between individualfirms, large or small, but between constellation of firms.

Changing demographics of workforceThe major challenge that has resulted from changing workforce demographics concernsdual career couples, couples where both partners are actively pursuing professionalcareers. Organizations have been accustomed to using job moves and physical relocationas an important means of developing talent. The increasing number of dual careerprofessionals limits individual flexibility in accepting such assignments.Another change in the workforce demographics relates to the growing number of employees who are young. Dormitories, gymnasium, breakfast, these are the kind of facilities that need to be provided to the workforce which has more of young employees.

Changed employee expectations With changes in work-force demographics, employee expectations and attitudes also haveshifted. Traditional allurements such as job security, attractive remuneration,housing andthe like do not attract and motivate today‘s workforce. Employees demand empowermentand expect quality with the management. Previous notions about managerial authority aregiving way to employee influence and involvement along with mechanisms for upwardcommunication and due process.Another expectation by the employee is that the electronic and telecommunicationrevolution will improve the quality of work life. Innovations in communication andcomputer technology will accelerate the pace of change, and as a result, lead to manyinnovations in HRM. Also, today‘s average worker demands better treatment, challenging

jobs and career advancement.

The HR manager must, therefore, redraw the profile of the worker and discover newmethods of hiring, training, remunerating and motivating employees.

Proactive industrial relations strategyThere is almost a metamorphosis at the industrial relations front. Strikes, lockouts andloss of mandays are declining considerably. This transformation is the result of socio-economic and political reasons.



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The challenge to the labour movement comes not so much from any destructive potentialintrinsic in HRM but from its capacity to co-opt and integrate workers into the enterpriseby building a relationship with them.

Not having to compete with the management for worker‘s loyalty, trade unions behavetowards their members exactly as any monopolistic organisation would. HRM comes as athreat to this cosy arrangement, for management is not only seeking to get back to theneglected employee, but doing so in an environment where there own unions had takenthem for granted.The need now is to adopt a proactive strategy towards industrial relations, an approachwhich should enable HR specialists to look into the challenges unfolding in the future andto be prepared to convert them into opportunities.

Contribution to the success of the OrganizationThe biggest challenge to an HR manager is to make all employees contribute to thesuccess of the organization in an ethical and socially resp onsible way. The society‘s well

being, to a large extent depends on its organisations, particularly business organisations.

It must be the endeavour of everybody to ensure success and stability of organizations.Responsibility is more on the HR manager as it is he who co-ordinates people‘s activitiesand it is the people who make or mar organizations.

Need for attitudinal change in PSUsWhile success of organizations in general is vital for society‘s well being, public sector undertakings tell a different story. It may be asserted that although most PSUs are strongin manpower, R&D, systems, manuals, principles, and procedures, they fail to use it andincur losses.Behind this phenomenon is the role of the personnel. Employees of loss making unitshave wrong attitudes towards their work and their organizations. Consequences are lowproductivity, absenteeism, militancy and other similar evils.These issues must be addressed by the HR manager.

Renewed focus on peopleThe good news for HR managers is that there is renewed focus on people inorganizations. For too long, managers believed in structures, strategies and systems. Butover the last decade, technological, competitive and market changes have eroded itseffectiveness.The top management must therefore nurture the ideas of the frontline engineers and salesrepresentatives, encourage interpersonal relationship and self monitoring and developpersonal communications with key people.The role of HR manager in the unfolding scenario is clear. He or she must make the focuson people justifiable and sustainable.

Managing the mangers

Managing the managers is another challenge before the HR manager. Mangers believethey are a class apart and expect remuneration which may be unreasonable and highlyexpensive.Managers instead of managing their allotted functions, assume the role of the employerand fire those whom they feel are too smart.Yet, managers are the individuals who run the show and an organisation cannot dowithout them.



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Protect the interests of weaker sectionsAnother important challenge for HRM is to protect the interest of weaker sections of thesociety. The dramatic increase of women, minorities and other backward communities in

the workforce has resulted in the need for organisations to re-examine their policies,practices and values.



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2) What is the role of Strategic HRM?

The role of HRM in formulating and implementing strategies is crucial. It is the peoplewho formulate and implement strategies and the people are supplied by HRM.

Role in Strategy Formulation:HRM is in a unique position to supply competitive intelligence that may be

useful in strategy formulation. Details regarding advanced incentive plans used bycompetitors, opinion survey data from employees that give information aboutcustomer complaints and information about pending legislation like labour laws ormandatory health insurance are some examples.

The strengths and weaknesses of a company‘s human resources can have adetermining effect on the viability of a company‘s strategic options. A company maybuild its new strategy around a competitive advantage stemming from its humanresource.

Role in Strategy Implementation:

HRM supplies the company with a competent and willing workforce, which isresponsible for executing strategies. HRM supports strategy implementation in otherways too. For example, human resource today is heavily involved in the execution of the company‘s downsizing and restructuring strategies, through out placing

employees, instituting performance-linked pay plans, reducing health-care costs andretraining employees. And, in an increasingly competitive global market place,instituting HR practices that build employee commitment can help improve anorganisation‘s responsiveness.

A well-designed strategy can fail if sufficient attention is not paid to the HRdimension. HR problems that arise when executing strategies may be traced to one of the following 3 causes:a. Disruption of social and political structuresb. Failure to match individuals‘ aptitudes with implementation tasks; and

c. Inadequate top-management support for implementation activities.

Strategic implementation poses a threat to many managers and employees in anorganisation. Guidelines which help ensure that human relationships facilitate but notdisrupt strategy implementation include open communication, co-opting as manymanagers and employees in the strategic management process and matching managerswith strategies through transfers, promotions, job enlargement and job enrichment.





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3) What is job evaluation? What are its objectives?

Job Evaluation

Concept

Job Evaluation is the process of analysis and assessment of jobs to ascertain reliably theirrelative worth, using the assessment as a basis for a balanced wage structure. JobEvaluation is used to establish a wage structure which is acceptable to both Managementand Labour by providing a relative value of every job in a plant or industry.

Definition

Job Evaluation may be defined as ―an attempt to determine and compare demands which

the normal performance of a particular job makes on normal workers without taking intoaccount into the individual abilities or performance of the workers concerned.

Objectives of Job Evaluation

The major objectives of job evaluation are to help management achieve:1. Equitability of wage structure within the firm, and

2. Consistency of the firm‘s overall wage structure with that of the industry in which thefirm operates.

Apart from these primary two objectives, job evaluation serves the following objectivesas well:1. Establishment of a sound wage foundation for incentive and bonus programmes.2. Maintenance of a consistent wage policy.3. Enable the management to gauge and control its payroll cost more accurately.4. Provide a framework for periodic review of wages and salaries.5. Classify functions, authority and responsibility which in turn aids in work

simplification and elimination of duplicate operations.6. Reduce grievances and labour turnover and, thereby, increase employee morale and

improvement management – employee relationships.

7. Serve as a basis for negotiation with the union or employees.8. Help in selecting, promoting, transferring and training employees.

Thus, we can say that job evaluation plays a key role in wage and salaryadministration and assists managers in meeting day-to-day problems.




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4) What are the methods of job evaluation?

Job evaluation methods are of two categories – non analytical and analytical

Non-Analytical Methods: - These methods make no use of detailed job factors. Each job is treated as a whole in determining its relative ranking.

Ranking Method Job – Grading Method

Analytical Methods: -

Point Ranking Method Factor Comparison Method

Ranking Method:

This is the simplest and the most inexpensive method of evaluation. The evaluation isdone by assessing the worth of each job on the basis of its title or on its contents, if thelatter is available. The job is not broken down into elements or factors. Each job iscompared with others and its place is determined.

Drawbacks – Job evaluation may be subjective, as the jobs are not broken into factors. Itis hard to measure whole jobs.

Job – Grading method:This method does not call for a detailed or quantitative analysis of job factors. It is basedon the job as a whole. Under this method the number of grades if first decided upon, andthe factors corresponding to these grades are then determined.

Facts about jobs are collected and are matched with the grades, which have beenestablished. The essential requirements of this method are to frame grade descriptions tocover discernible differences in degree of skill, responsibility and other jobcharacteristics. Job grades are arranged in the order of their importance in the form of aschedule. The lowest grade may cover jobs requiring greater physical work under closesupervision, but carrying little responsibility. Each succeeding grade reflects a higherlevel of skill and responsibility, with less and less supervision.

Advantages – It‘s simple and inexpensive. In organizations where number of jobs is small, this method yields satisfactory results.

Disadvantages –

Job description are vague and are not quantified.Difficulty in convincing employees about the inclusion of a job in a particular gradebecause of vagueness of grade descriptions.More job classification schedules need to be prepared because the same schedule cannotbe used for all types of jobs.

Point Ranking Method:



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this system starts with the selection of job factors, construction of degrees for eachfactor, and assignment of points to each degree. Different factors are selected for different

jobs, with accompanying differences in degrees and points. The range of grades and

scores is also predetermined- for example, from 210 to 230 points, the 5th

grade; 231 to251 points the 6th grade and so forth. A given fob is placed on a particular grade,depending on the number of points it scores.

Advantages – A job is split into a number of factors. The worth of each job is determined on the basis of its factors and not by considering the job as a whole.The procedure adopted is systematic and can easily be explained to the employees.The method is simple to understand and easy to administer.

Disadvantages – Employees may disagree with the points allotted and to factors and their degreesidentified.

Serious doubts are expressed about the range of points allotted and matching them withthe job grades, for example- a score range of 238 to 249 is grade seven and the next rangeof 250 to 271 is grade six. A variation of one point makes all the difference.

Factor Comparison Method:Under this method one begins with the selection of factors usually five of them- mentalrequirements, skill requirements, physical exertion, responsibility and job conditions.These factors are assumed to be constant for all the jobs. Each factor is rankedindividually with other jobs. For example – all jobs may be compared first by the factor‗ mental requirements‘. Then the skills factor, physical requirements, responsibility andworking conditions are ranked. Thus a job may rank near the top in skills but low inphysical requirements. The total point values are then assigned to each factor. The worthof a job is then obtained by adding together all the point values.

Advantage-Jobs of unlike nature – for example, manual, clerical, and supervisory may be evaluatedwith the same set of factors.

Disadvantage-The method is complicated and expensive.

5) Describe any method of job evaluation.Job evaluation methods are of two categories - non analytical and analytical. The non –

analytical methods include methods like ranking method job grading method. Whereasthe analytical methods include methods like point - ranking method and factor –

comparison method.




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Job – grading or Job classification method 1. It is based on the job as a whole and does not call for detailed or quantitative

analysis.

2. Under this method a number of grades is decided upon and the factorscorresponding to this grade are decided upon.

3. Then the facts about the jobs are collected and matched with the grades whichhave been established.

4. This classification can be done in the following manner.

GRADENATURE OF

TASKSDESCRIPTION SUPERVISION

1 Very simpleLargely physical in

natureClose supervision

2 Simple tasksSmall no. of clearly

defined rules and short

training period

Checked & closelysupevised

3Straight – forward

tasks

More complicatedroutines, requiring

knowledge & alertnesson the worker‘s part.

Subject to occasionalchecks

4Independent

arrangements of work

Exercise of someinitiative & detailed

familiarity with othersuch established

procedures.

Require littlesupervision

5 Routine work

Involving individualdegree of responsibility& control over a small

group of staff.

Answerable to non – routine queries.

6 Non – routine work

Involving co-ordianationof several lower gradefunctions, recognised

individual knowledge &control over a small

group of staff.

No follow up

7InidividualIndividual

tasksSpecialists knowledge

5. The essential requirement of job – grading method is to frame grade descriptionsto cover discernible differences in degree of skill, responsibility and other job

characteristics. Job grades are arranged in the order of their importance in theform of a schedule.

6. Each suceeding grade reflects a higer level of skill and responsibility with less andless supervision.

Advantages of Job – grading method

1. Simplicity and inexpressiveness2. Effective in organizations where number of jobs is small.



Formatted: Font color: Red










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Disadvantages of Job – grading method

1. The job grade descriptions are vague and not quatified.2. Difficulty in convincing the employees about inclusion of a job in a particular

grade because of the vagueness of the grade descriptions.3. More job classification shcedules need to be prepared because the same

schedule cannot be used for all types of jobs.





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6) What is Job Design?

Meaning:

Job Design involves conscious efforts to organise tasks, duties, and

responsibilities into a unit of work to attain certain objectives.Definition:Job design integrates work content (tasks,functions,relationships),therewards (extrinsic and intrinsic), and the qualifications required(skills,knowledge,abilities)for each job in a way that meets the needs of employees and the organisations.Three Steps of Job design:

1. Specification of individual tasks2. Specification of the method of performing each task 3. Combination of tasks into specific jobs to be assigned to individuals.

Key to successful job design lies in balancing the requirements of the

organisation and the job holder.Job design results in making the job specialised which could leads toboredom and degradation of job holder.

Factors affecting Job Design

OrganisationalFactors

Feedback

EnvironmentalFactors

BehaviouralFactors

Job Design Productive andSatisfying Job






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Organisational Factors of job design

Characteristics of Tasks: Complexity in a job may be a reflection of the number andvariety of tasks to be carried out, or the range and scope of the decisions that have to be

made, or the difficulty of predicting the outcome of decisions.

Work Flow: The flow of work in an organisation is strongly influenced by the nature of the product or service. The product or service usually suggests the sequence and balancebetween jobs if the work is to be done efficiently.

Ergonomics: Ergonomics is concerned with designing and shaping jobs to fit the physicalabilities and characteristics of individuals so that they can perform their jobs effectively.Ergonomics does not alter the nature of the job tasks, but the location of tools, switchesand other facilities, keeping in view that the handling of the job is the primaryconsideration.

Work Practices: Work practices are set ways of performing work. These methods may

arise from tradition or the collective wishes of the employees. Either way, the HRdepartment‘s flexibility to design jobs is limited, especially when such practices are partof a union – management relationship. Failure to consider work practices can haveundesirable outcomes.

Environmental Factors

Employees’ Abilities and Availability: Efficiency consideration must be balanced againstthe abilities and availability of the people who are to do the work. When Henry Fordmade use of the assembly line, for e.g., he was aware that most potential workers lackedany automobile – making experience. So, jobs were designed simple and required littletraining.

Social and Cultural Expectations: Literacy, knowledge and awareness among workershave improved considerably, so also their expectations from jobs. Hence, jobs must bedesigned to meet the expectations of workers. Also, when designing jobs for internationaloperations, the organisation should not neglect national and cultural differences like hoursof work, holidays, religious beliefs, management styles, and worker sophistication andattitudes which can affect the design of jobs across international borders, or it can lead todissatisfaction, low motivation and a low quality of work life.

Behavioural Elements

Higher level human needs are more significant in this context. Individuals inspired by

higher level needs find jobs challenging and satisfying which are high on the followingdimensions:

Feedback: Individuals must receive meaningful feedback about their performance,preferably by evaluating their own performance and defining the feedback. This impliesthat they should ideally work on a complete product or on a significant part of it.



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Autonomy: Autonomy is being responsible for what one does. Jobs that give workersauthority to make decisions will provide added responsibilities, which tend to increase theemployee‘s sense of recognition and self – esteem.

Use of Abilities: The job must be perceived by individuals as requiring them to useabilities they value in order to perform the job effectively.

Variety: Lack of variety may cause boredom. Boredom, in turn, leads to fatigue, whichcauses mistakes. By injecting variety into jobs, personnel specialists can reduce errorscaused by fatigue.

Techniques of Job Design

1. Work Simplification: In this technique, the job is simplified or specialised. A given job is broken down into small sub – parts and each part, is assigned to each individual.Work simplification involves i) mechanical pacing of work, ii) repetitive work

processes, iii) working on only one part of the product, iv) predetermining tools andtechniques, v) restricted interaction among employees and vi) few skill requirements.

2. Job Rotation: Job rotation is one answer to boredom which implies movement of employees from job to job. With job rotation, a given employee performs different

jobs, but more or less, jobs of the same nature.

3. Job Enlargement: Job enlargement involves expanding the number of tasks or dutiesassigned to a given job. It is naturally opposite to work simplification. Adding moretasks or duties to a job does not mean that new skills and abilities are needed toperform it.

4. Job Enrichment: Job enrichment seeks to improve both task efficiency and human

satisfaction by building into people‘s jobs, quite specifically, greater scope for personal achievement and recognition, more challenging and responsible work, andmore opportunity for individual advancement and growth. An enriched job will havemore responsibility and autonomy (vertical enrichment), more variety of tasks(horizontal enrichment), and more growth opportunities.

5. Autonomous or Self-Directed Team: A self – directed work team is a group of committed employees who are responsible for a ‗whole‘ work process or segment thatdelivers a product or service to an internal or external customer.

6. High-Performance Work Design: It is a means of improving performance in anenvironment where positive and demanding goals are set. It starts from the principleof autonomous group working and develops an approach which enables groups to

work effectively together in situations where the rate of innovation is high.Employees are needed to gain and apply new skills quickly with minimumsupervision for operational flexibility.





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Positive and Negative Outcomes of Job Design Approaches:

Job Design Approach Positive Outcome Negative Outcome

1. Work Simplification Job is highly specialised, so thatless trained and less paidemployee can perform.

Over simplification results inboredom with attendant risks of errors and resignations.

2. Job Rotation Job‘s intrinsic reward potential islikely to increase.Organisation too stands to gainbecause of the versatility of itsemployees. Worker‘s self image

will grow. There is enhancedinterdepartmental cooperation.

Jobs do not improve. Workersmay feel rootless and alienated.

3. Job Enlargement Claims to have motivationalimpact.

Mere adding one zero toanother zero – adding one moreboring task to another. Likelyto be resisted by employees.

4. Job Enrichment Increased motivation, reducedabsenteeism, psychologicalneeds of employees are met.Brings about empowered teams.

People may not like to acceptnew responsibilities. Unionresistance adds to the problem.Job enrichment, if notaccompanied by other jobinputs, will fail in its goal.

5. Autonomous Work Team

There is greater involvement of employees in decision – making,which brings in commitment.

There is resistance fromemployees, unions, andmanagers and supervisors.

6. High-PerformanceWork Design

Works in an environment of highrate of innovation andoperational freedom.

May not work in largebureaucratic organisation.



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II.

1. What is the meaning and definition of Human Resource Planning?

Meaning:

HRP is the process of forecasting an organisation‘s future demand for , and thesupply of, the right type of people in the right number. It is only after this that theHRM department can initiate a recruitment and selection process.

It is a sub-system in the total organisational planning. It facilitates the realisation of the company‘s objectives by providing the right type

and the right number of personnel. HRP is variously called manpower planning, personnel planning or employment

planning.

A few definitions of HRP are:

HRP includes the estimation of how many qualified people are

necessary to carry out the assigned activities, how many people will beavailable, and what, if anything must be done to ensure that personnelsupply equals personnel demand at the appropriate point in the future.

Human resources planning is the process by which an organisation ensures that ithas the right number and kind of people, at the right place, at the right time,capable of effectively and efficiently completing those tasks that will help theorganisation achieve its overall objectives. Human resources planning, then,translates the organisation‘s objectives and plans into the number of workersneeded to meet those objectives. Without a clear-cut planning, estimation of anorganisation‘s human resource need is reduced to mere guesswork.



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2. What is the importance of HRP?

Importance of Human Resource PlanningHuman Resource Planning (HRP) is understood as the process of forecasting anorganization‘s future demand for, and supply of, the right type of people in the rightnumber. It is only after this that the HRM department can initiate the recruitment andselection process. Human resource planning translates the organization‘s objectives and

plans into the number of workers needed to meet those objectives. Without a clear cut planning, estimation of an organisation‘s human resource need is reduced to mereguesswork. The following points highlight the importance of HRP.

1. Future Personal Needs:- Planning is significant as it helps determine futurepersonnel needs. Surplus or deficiency in staff strength, is the result of the absenceof or defective planning. All public sector enterprises find themselves overstaffednow as they never had any planning of their personnel requirements. They went on

a hiring spree upto the late 1980‘s. Since then, recruitment and selection have beenbanned, but the ban came too late. The private sector is no exception. As many as76.5 per cent of Indian organizations have surplus labour. The problem of excessstaff has become so heavy that many units are resorting to ―voluntary retirementschemes‖ (VRS) to remove the excess staff. Such surplus labour would not have

been there if there were HRP. Moreover, there is lack of succession planning inmost public sector units. Absence of succession planning has resulted in a situationwhere many organizations function without chief executives. Indian Airlines hasbeen headless for a period of 10 months and Gas Authority of India has beenheadless for 27 months. The anomaly of surplus labour, juxtaposed with the lack of top executives stems from the absence of or a defective HRP.

2. Coping with Change:- HRP enables an enterprise to cope with changes incompetitive forces, markets, technology, products, and government regulations.

Such changes generate changes in job content, skill demands, and number and typeof personnel. Shortage of people maybe noticed in some areas while surplus inother areas may occur.

3. Creating Highly Talented Personnel:- Jobs are getting highly intellectual andincumbents are getting vastly professionalized. L&T, an engineering giant, hasMBA‘s, engineers and technicians who collectively constitute 70% of the totalemployee strength of 20,000. The HR manager must use his ingenuity to attractand retain qualified and skilled personnel. These people are known for job hopping,thereby creating frequent shortages in the organization. Manpower planning helpsprevent such shortages.

4. Protection of Weaker Sections:- In matters of employment and promotion,sufficient representation needs to be given to SC/ST candidates, physicallyhandicapped, children of the socially and politically oppressed, and backward class

citizens. These groups enjoy a given percentage of jobs, notwithstanding theconstitutional provision, which guarantees equal opportunities to all. A well-conceived personnel planning programme would protect the interests of suchgroups.

5. International Strategies:- International expansion strategies depend upon HRP.The departments ability to fill key jobs with foreign nationals and the reassignmentof employees from within or across national borders is a major challenge facinginternational businesses. With a growing trend towards global operation, the need



39

for HRP will grow, as well as the need to integrate HRP more closely into theorganization strategic plans. HRP will grow increasingly important as the processof meeting staffing needs from foreign countries and the attendant cultural,

language, and developmental considerations grow complex. Without effective HRPand subsequent attention to employee recruitment, selection, placement,development and career planning, the growing competition for foreign executivesmay lad to expensive and strategically- disruptive turnover asmong key decisionmakers.

6. Foundation for Personnel Functions:- Manpower planning provides essentialinformation for designing and implementing personnel functions, such asrecruitment, selection, personnel movement (transfers, promotions, layoffs) andtraining and development.

7. Increasing Investment in Human Resource:- Another compelling reason forHRP is the investment an organization makes in its human resources. Human assetsas opposed to physical assets, can increase it value. An employee who graduallydevelops his/her skills and abilities becomes a more valuable resource. Because an

organization makes investments in its personnel either through direct training or job assignments, it is important that employees are used effectively throughouttheir careers. An increasing number of executives are acknowledging that thequality of the workforce can be responsible for significant differences in short-runand long-run performances.

8. Resistance to Change and Move:- There is a growing resistance amongemployees to change and move. There is also a growing emphasis on self-evaluation and on evaluation of loyalty and dedication to the organization. Allthese changes are making it more difficult for the organisation to assume that it canmove its employees around anywhere and anytime it wants, thus increasing theimportance and necessity of planning ahead.

9. Other Benefits:- Following are other potential benefits of HRP:- Upper management has a better view of the HR dimensions of business

decision. Personnel costs may be less because the management can anticipate

imbalances before they become unmanageable and expensive. More time is provided to locate talent Better opportunities exist to include women and minority groups in future

growth plans. Better planning of assignments to develop managers can be done Major and successful demands on local labour markets can be made.



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3. What are the objectives/specific goals of HRP?

HR plans need to be based on organizational objectives. In practice, this implies that theHR plan must be derived from organizational objectives. Specific requirements in terms

of numbers and characteristics of employee‘s should be derived from the organizationalobjectives.Organizational objectives are stated by the top management and the role of HRP is tosubserve the overall objectives by ensuring availability and utilization of humanresources.For example, if a modernization of the plant is planned by the top management in theirstrategic planning for the next five years, the human resources department has to startfrom this objective and plan for human resources and for the modernization, pre-modernization, and post modernization periods. HR planning must take care of recruitment, selection, training and development to meet the modernisation and postmodernisation as well as for additional recruitment wherever necessary. Separatingredundant labour and training and updating the existing labour must also include thehuman resource planning. Modernisation plan is bound to fail unless proper man power is

envisaged to cope with the modernisation.

Once the organizational objectives are specified, communicated and understood by allconcerned, the HR department must specify its objectives with regard to HR utilization inthe organization. They must focus on

Ensuring optimum use of human resources.

Keeping the organizational workforce to cope with the technological developmentand modernisation.

Streamlining uninterrupted supply of workforce to the functional needs of business from time to time.

Union constraints encountered in HRP and develop policies needed to handle theconstraints.

Automation of production and operations and what can be done of thosedisplaced.

Cutting down surplus, redundant manpower and retraining and redeploying themanpower appropriately.

Ensuring a career planning for every employee of the organization and makingsuccession programs. It means that human resource planning must includeobjectives for accomplishing organizational goals and individual aspirations of theemployees.

If the estimated results fall short of the objectives, reasons for failure must bedetermined through performance evaluation and the defects rectified. Also, the plan orthe objective must be revised whenever needed. Once the plan is finalized, effortsmust be made to implement it and make periodical evaluation of the results.



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4. What are the limitations and challenges of HRP?Planners face a few challenges while formulating an HRP. The major ones are thefollowing:

1) People question the importance of making HR practices future oriented and therole assigned to HR practitioners in formulation of organizational strategies. Theirargument is – there are people when needed. Offer attractive packages of benefitsto them to quit when you find them in surplus. When the task is so simple, whyelaborate time consuming planning for human resources? Surprisingly thisperception about HRP is also held by the top management.

2) HR practitioner perceived as experts in handling personal matters, but are notexperts in managing business. The personnel plan conceived and formulated byHR practitioners when enmeshed with the organizational plan, might make theoverall strategic plan itself defective.

3) HR information often is incompatible with the information used in strategyformulation. Strategic planning efforts have long been oriented towards financialforecasting often to the exclusion of other types of information. Financial

forecasting takes precedence over HRP.4) Conflicts may exist between long term and short term HR needs. For example,

there arises a conflict between the pressure to get the work done on time and longterm needs, such as preparing people for assuming greater responsibilities. Manymanagers are of the belief that HR needs can be met immediately because skillsare available in the market as long as wages and salaries are competitive. Thesemanagers fail to realize that by resorting to hiring or promoting depending onshort term needs alone, long term issues are neglected.

5) There is a conflict between quantitative and qualitative approaches to HRP. Somepeople view HRP as a numbers game designed to track the flow of people acrossdepartments. These people take a strictly quantitative approach to planning.Others take a qualitative approach and focus on individual employee concernssuch as promotability and career development. Best results would accrue if there

is a balance between quantitative and qualitative approaches.6) Non involvement of operating managers renders HRP ineffective. HRP is not

strictly an HR department function. Successful planning needs a co-ordinatedeffort on the part of operating mangers and HR personnel.



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5. What are the steps for a successful integrated HRP?

Steps for an integrated HRP

An integrated Human Resources Planning requires a human resource information system.A human resource information system (HRIS) is a systematic procedure for

collecting, storing, maintaining, retrieving and validating data needed by an organizationabout its human resources. The HRIS is usually a part of the organization‘s larger management information system (MIS). The HRIS need not be complex or evencomputerized. But computerization has its own advantage of providing more accurate andtimely data for decision making.

The steps in implementing an HRISAs with any major change, proper planning is an absolute necessity for successful

implementation of an HRIS. The steps outlined below describe the specific proceduresinvolved in successfully developing and implementing an HRIS.

Step 1. Inception of idea. The idea for having an HRIS must originate somewhere.

The originator of the idea should prepare a preliminary report showing the need for anHRIS and what it can do for the organizations.

Step 2. Feasibility study. Feasibility study evaluates the present system and detailsthe benefits of an HRIS. It evaluates the costs and benefits of an HRIS.

Step 3. Selecting a project team .Once the feasibility study has been accepted andthe resources allocated,a project team should be selected. The project team should consistof an HR representative who is knowledgeable about the organisation‘s HR functions

and activities and about the organization itself and representatives from both managementinformation systems and paytoll. As the project progresses, additional clerical peoplefrom the HR department will be needed to be added.

Step 4. Defining the requirements. A statement of requirements specifies in detailexactly what the HRIS will do. A large part of the statement of requirements normallydeals with the details of reports that will be produced. Naturally, the statement also

describes other specific requirements. This typically includes written descriptions of howusers collect and prepare data, obtain approvals, complete forms, retrieve data andperform other non technical tasks associated with HRIS use.

Step 5. Vendor analysis. This step determines what hardware and software areavailable that will best meet the organizations needs for the lowest price. This is adifficult task. The best approach is usually not to ask vendors if a particular package canmeet the organizations requirements but how it will meet those requirements. The resultsof this analysis will determine whether to purchase and ―off – the-shelf‖ package or develop the system internally.

Step 6. Package contract negotiation. After a vendor has been selected, the contractmust be negotiated. The contract stipulates the vendors responsibilities with regard tosoftware, installation, service maintenance, training and documentation.

Step 7. Training. Training usually begins as soon as possible after the contract has

been signed. First, the members of the project team are trained to use the HRIS. Towardsthe end of the implementation, the HR representative will train managers from otherdepartments in how to submit information to the HRIS and how to request informationfrom it.

Step 8. Tailoring the system. This step involves making changes to the system tobest fit the needs of the organization. A general rule of thumb is not to modify thevendor‘s package because modifications frequently cause problems an alternativeapproach is to develop programs that augment the vendors program rather than altering it.



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Step 9. Collecting the data. Prior to start-up of the system data must be collectedand entered into the system.

Step 10. Testing the system. Once the system has been tailored to the organizations

needs and the data entered a period of testing follows. The purpose of the testing phase isto verify the output of the HRIS and to make sure it is doing what it is supposed to do. Alreports should be critically analysed for accuracy.

Step 11. Starting up. Start-up begins when all the current actions are put into thesystem and reports are produced. It is wise to attend start-up during a lull period so thatmaximum possible time can be devoted to the HRIS. Even though the system has beentested some additional errors often surface during start-up.

Step 12. Running in parallel . Even after the new HRIS is tested it is desirable torun the new system in parallel with the old system for a period of time. This allows forthe comparison of outputs of both the system and examination of any inaccuracies.

Step 13. Maintainance. It normally takes several weeks or even months of the HRpeople to feel comfortable with the new system. During this stabilization period anyremaining errors and adjustments should be handled.

Step14. Evaluation. After the HRIS has been in place for a reasonable lengthy of time the system should be evaluated. Is the HRIS right for the organization and is it beingproperly used?

Following the above steps when implementing an HRIS will not guarantee successbut it will increase the profitability.

RRReeecccrrruuuiiitttmmmeeennnttt aaannnddd SSSeeellleeeccctttiiiooonnn

Theoretically speaking, Recruitment and Selection are 2 separate functions.Recruitment deals with the forming a pool of applicants for a particular job, whereasSelection deals with finding the best one of the lot.

MEANING AND DEFINITION In simple terms, recruitment is understood as the process of searching for and

obtaining applicants for jobs, from among whom the right people can be selected. Aformal definition of recruitment is:

“It is the process of finding and attracting capable applicants for employment. The process begins when new recruits are sought and ends

when their applications are submitted. The result is a pool of applicants

from which new employees are selected.”

PURPOSES AND IMPORTANCE The general purpose of recruitment is to provide a pool of potentially qualified job

candidates. Specifically, the purposes are to:

Determine the present and future requirements of the organization in conjunctionwith its personnel planning and job analysis activities

Increase the pool of job candidates at minimum cost Help increase the success rate of the selection process by reducing the number of

visibly, under qualified or overqualified job applicants








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Help reduce the probability that job applicants, once recruited and selected, willleave the organization only after a short period of time

Meet the organizations legal and social obligations regarding the composition of

its workforce Begin identifying and preparing potential job applicants who will be appropriate

candidates Increase organizational and individual effectiveness in the short term and long

term Evaluate the effectiveness of various recruiting techniques and sources for all

types of job applicants

Recruitment represents the first contact that a company makes with potentialemployees. It is through recruitment that many individuals will come to know acompany, and eventually decide whether they wish to work for it. A well-planned andwell-managed recruiting effort will result in high-quality applicants, whereas, ahaphazard and piecemeal effort will result in mediocre ones. High-quality employees

cannot be selected when better candidates do not know of job openings, are notinterested in working for the company, and do not apply. The recruitment processshould inform qualified individuals about employment opportunities, create a positiveimage of the company, provide enough information about the jobs so that applicantscan make comparisons with their qualifications and interests, and generate enthusiasmamong the best candidates so that they will apply for the vacant positions.

RECRUITMENT PLANNING

The first stage in the recruitment process is Recruitment Planning.Planning involves ht e translation of likely job vacancies and information about the natureof these jobs into a set of objectives or targets that specify the

(i) Number and(ii) Type of applicants to be contacted.

Number Of Contacts Organisations, nearly always, plan to attract more applicants than they will hire.

Some of those contacted will be uninterested, unqualified, or both. Each time arecruitment programme is contemplated, one task is to estimate the number of applicantsnecessary to fill all vacancies with qualified people.

Companies calculate yield ratios (yRs), which express the relationship of applicantinputs to outputs at various decision points. For example, assume that an organisationattempting to recruit sales people ran a series of newspaper advertisements. Theadvertisement generated resumes from 2000 applicants, of which 200 were judged to bepotentially qualified (yR = 10:1). Of these 200, 40 attended the interview for final

selection (yR = 5:1). Of these 40, 30 were actually qualified and offered jobs (yR = 4:3);and of the 30, 20 accepted (yR = 3:2). In this case, the overall yR is 100:1. Thus, arequirement of 30 hires, during a specified period, would mean a recruitment target of 3000.

The yRs must be used with circumspection. No yRs will be available for recruitingemployees for the first time, or for recruiting sources or methods that have not been tried.Recruiters in such cases have to depend upon their counterparts in other organisations ormake their own guesses.




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Type Of Applicants to be contacted This refers to the type of people to be informed about job openings. The type of

people depends on the tasks and responsibilities involved and the qualifications andexperience expected. These details are available through job description and jobspecification.



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EVALUATION AND CONTROL OF RECRUITMENT

Evaluation and control is necessary as considerable costs are incurred in the

recruitment process. The costs generally incurred are: Salaries for recruiters. Management and professional time spent on preparing job description, job

specifications, advertisements, agency liaison, and so forth. The cost of advertisements of other recruitment methods, that is, agency fees. Cost of producing supportive literature. Recruitment overheads and administrative expenses. Costs of overtime and outsourcing while the vacancies remain unfilled. Cost of recruiting unsuitable candidates for the selection process.

Questions should always be asked as to whether the recruitment methods used arevalid and whether the recruitment process itself is effective.

Statistical information on the cost of advertisements, time taken for the process,and the suitability of the candidates for consideration in the selection process should be

gathered and evaluated. However, exercises seem to be seldom carried out in practise.

Evaluation of Recruitment ProcessThe recruitment process has the objective of searching for and obtaining

applications from job-seekers in sufficient numbers and quality. Keeping this objective inmind, the evaluation might include:

Return rate of applications sent out. Number of suitable candidates for selection. Retention and performance of the candidates selected. Cost of the recruitment process. Time lapsed data. Comments on image projected.

Evaluation of Recruitment MethodsThe evaluation of recruitment methods might include:

Number of initial enquiries received which resulted in completed applicationforms.

Number of candidates at various stages of the recruitment and selection process,especially those short listed.

Number of candidates recruited. Number of candidates retained in the organisation after six months.

Philosophy of Recruiting:

The traditional philosophy of recruiting has been to get as many people to applyfor a job as possible. A large number of jobseekers waiting in queues would make thefinal selection difficult, often resulting in wrong selections. Job dissatisfaction and






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employee turnover are the consequences of this.A persuasive agreement can be made that matching the needs of the organisation to

the needs of the applicants will enhance the effectiveness of the recruitment process. The

result will be a workforce which is likely to stay with the organisation longer andperforms a higher level of effectiveness. Two approaches are available to bring about thismatch.

1. Realistic Job Previews (RJP):RJP provide complete job-related information, both positive and negative,

to the applicants. The information provided will help jobseekers to evaluate thecompatibility among the jobs and their personal ends before hiring decisions aremade. RJP's can result in self-selection process - job applicants can decidewhether to attend the interviews and test for final selection or withdrawthemselves in the initial stage. The following table contracts some of theoutcomes that can develop from traditional and realistic job previews.

Research on realistic recruiting shows a lower rate of employee turnover incase of employees recruited through RJP's, particularly for more complex jobsand higher levels of job satisfaction and performance, at the initial stages of employment. RJP's are more beneficial for organisations hiring at the entry level.,when there are innumerable applicants per position, and under conditions of relatively low employment. Otherwise, the approach may increase the cost of recruiting by increasing the average time it takes to fill each job.

Traditional Procedures

High rate of job offer

acceptance

Set initial jobexpectations too high

Work experience beliesexpectations

Job may or may not beattractive depending onindividual needs

Job is typically viewedas attractive

Work experienceconfirms expectations

Some accept, some

reject job offer

Set job expectationsrealistically

Realistic Procedures

Lower job survival,dissatisfaction, frequentthoughts of quitting

Higher job survival,satisfaction, nothoughts of quitting



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2. Job Compatibility Questionnaire (JCQ):JCQ was developed to determine whether an applicant's preferences for work

match the characteristics of the job. The JCQ is designed to collect information on all

aspects of a job, which have a bearing on employee performance, absenteeism,turnover and job satisfaction. The underlying assumption of the JCQ is that the greaterthe compatibility between an applicant's preferences for a job and the probability f employee effectiveness and longer the tenure.

The JCQ is a 400-tem instrument that measures job factors that are related toperformance, satisfaction, turnover and absenteeism. Items cover the following jobfactors: task requirements, physical environment, customer characteristics, peercharacteristics, leader characteristics, compensation preferences, task variety, jobautonomy, physical demands, and work schedule.

The JCQ is administered to jobseekers who are very familiar with either aspecific position to be filled and/or a target job under study. Respondents are asked toindicate the extent to which each JCQ item is descriptive of the job or position understudy.



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Recruitment process

Recruitment is a process of finding and attracting capable applicants foremployment. The process begins when new recruits are sought and ends when theirapplications are submitted. The result is a pool of applicants from which new employeesare selected. A well-planned and well-managed recruiting effort will result in high qualityapplicants, whereas a haphazard and piecemeal effort will result in a mediocre once.Several factors such as external factors like supply an demand unemployment rate, labourmarkets and political and legal considerations, internal factors like recruiting policy, size,cost of recruiting etc govern the recruiting process.

The process comprises of 5 inter related stages: -1. Planning2. Strategy development3. Searching

4.

Screening5. Evaluation and control

I Planning

The first stage in recruitment process is planning. Planning involvestranslation of likely job vacancies and information about the nature of these jobsinto a set of objectives or targets that specify the number and the type of applicantsto be contacted.

Number of contacts: organisations always plan to attract more applicantsthan they plan to hire. Some of those contacted will be uninterested unqualified orboth. Each time a recruitment process is contemplated, one task is to estimate the

number of applicants necessary to fill all the vacancies with qualified people.Type of contacts: this refers to the type of people to be informed about the job openings. The types of people depend on the tasks and responsibilitiesinvolved and the qualifications and experience expected. These details areavailable through job description and job specification.

II Strategy development

Once it is known how many and what type of recruits are required,consideration needs to be given to make or buy employees, technicalsophistication of recruitment and selection devices, geographic distribution of labour markets comprising job seekers, sources of recruitment, and sequencing theactivities in the recruitment process.

Make or buy refers to hire less skilled employees ad to invest in trainingand education programmes or hire skilled professionals. The second decision instrategic relates to the methods used in recruitment and selection. The advent of computers has made it possible for employers to scan national and internationalapplicants qualifications. It has also made possible for job seekers to gain betteraccess. In order to reduce costs, companies look into the national markets formanagerial employees, regional or local markets for technical employees, andlocal markets for clerical and blue-collar employees.



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The sources for recruitment may be internal or external. The internalsources would be present employees, referrals given by the employees, formeremployees or previous applicants. Whereas the external sources would be

consultants, headhunters, advertisements, employee exchanges, campusrecruitment, contractors, displaced persons, radio and television, acquisitions andmergers, competitors, international recruitment etc. then both the sources of recruitment are evaluated. Both have their own advantages and disadvantages.

III Searching

Once a recruitment plan and strategy are worked out, the search processcan begin. It involves two steps:

1. Source aviation2. Selling

1. Source Aviation:Typically sources and search methods are activated by issuances of anemployee requisition. This means that no actual recruiting takes place until linemanagers have verified that a vacancy does exist or will exist. If the organisationhas planned well and done a good job of developing its sources and searchmethods, activation soon results in a flood of applications and/or resumes. Theapplication received must be screened. Those who pass have to be contacted, andinvited for interview. Unsuccessful applicants must be sent letters of regret.

2. SellingThe second issue to be addressed in the searching process concerns

communication. Here, contacts are tightrope. On tone hand they want as manyapplications and on the other hand they must resist overselling of their virtues. In

selling the organisation both message and the media need attention. Selection of medium or media has to be done with lot of care.

IV Screening

Screening of applicants can be regarded as an integral part of recruitingprocess. The selection process will begin after the applicants have beenscrutinized and short-listed. Applications received in response to advertisementare screened and only the eligible applicants are called for interview.

The purpose of screening is to remove from the recruiting process, at anearly stage those applicants who are visibly unqualified for the job. Effectivescreening can save a great deal of time and money. Care must be taken thatpotentially good employees are not lost and women and minorities receive full

and fair consideration.In screening, clear job specifications are invaluable. Applications are

judged on the basis of their knowledge, skills, abilities, and interests required todo the job. The techniques used to screen applicants vary depending on thecandidate sources and recruiting methods used. Interviews and application blanksare used to screen walk ins. Campus recruiters and agency representative‘s use in

interviews and resumes. References checks are also useful in screening.



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V Evaluation and control

Evaluation and control is necessary as considerable costs are incurred inthe recruitment process. The costs generally incurred are

Salaries for recruiters Management and professional time spent on preparing job description, job

specification, advertisements, agency liaison, and so forth The cost of advertisement and other recruitment methods like agency fees Cost of producing supporting literature Recruitment overheads and administrative expenses Cost of overtime and outsourcing while the vacancies are remain unfilled Cost of recruiting unsuitable candidates for selection process

Questions should always be asked as to whether the recruitment methodsused are valid and whether the recruitment process itself is valid. Statisticalinformation on the cost of advertisements, time taken for the process etc shouldbe gathered and evaluated. However, exercises seem to be seldom carried out inpractice.

Evaluation of recruitment process: The recruitment process has the objective of searching for and obtaining

applications from job seekers in sufficient numbers and quality. Keeping in mind theseobjectives, the evaluation might include:

Return rate of application sent out Number of suitable candidates for selection

Retention and performance of the candidates selected Cost of recruitment process Time lapsed data Comments on image projected



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Evaluation of recruitment methods:The evaluation of recruitment methods include:

Number of initial inquiries received which resulted in completed application

forms. Number of candidates at various stages of the recruitment and selection process,

especially those short-listed. Number of candidates recruited Number of candidates retained in the organization after six months.

RECRUITMENT PROCESS



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Role of Selection (Selection Policy).

Selection is the process of picking individuals (out of the pool of job applicants) with requisite qualifications and competence to fill jobs in theorganization. A formal definition of selection is

―It is the process of differentiating between applicants in order to

identify (and hire) those with a greater likelihood of success in a job.‖

The role of selection in an organization‘s effectiveness is crucial for at least, tworeasons. First, work performance depends on individuals. The best way to improveperformance is to hire people who have the competence and the willingness to work.Arguing from the employee's viewpoint, poor or inappropriate choice can bedemoralizing to the individual concerned (who finds himself or herself in the wrong job)and demotivating to the rest of the work-force. Effective selection, therefore, assumes

greater relevance.Second, cost incurred in recruiting and hiring personnel speaks volumes about

the role of selection. Here is one instance to prove how expensive recruitment hasbecome. Pepsi had gone on a crash recruitment drive. Six people from the companytook over the entire Oberoi Business Center in Bombay for six days. 3000applications in response to an advertisement issued earlier were scanned, applicantswere asked to respond by fax within 100 hours. Finally, the short-listed persons wereflown in and interviewed. Quite an expensive affair by any standard!

Success

Failure

Failure SuccessPredicted Predicted

Outcomes of the Selection Process

Costs of wrong selection are much greater. The figure shows four possibleoutcomes of a selection decision. Two of these — 'true positive' ('high hit') and 'truenegative' (low hit') — are right selection decisions. The other two out-comes representselection errors. In the 'false positive error', a decision is made to hire an applicant basedon predicted success, but failure results. In 'false negative error', an applicant who would

have succeeded is rejected based on predictions of failure. In either case, selectors willhave erred. They may remember that the selection successes will be written in sand andfailures in stone.

An organization with a false positive error incurs three types of costs. The Firsttype is incurred while the person is employed. This can be the result of production orprofit losses, damaged company reputation, accidents due to negligence, absenteeism, andthe like. The second type of costs is associated with the training, transfer or terminatingthe services of the employee. Costs of replacing an employee with a fresh one — costs of

False Negative True PositiveError (‗High Hit‘)

True Negative False Positive

(‗Low Hit‘) Error



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hiring, training and replacements — constitute the third type of costs. Generally, the moreimportant the job, the greater the cost of the selection error.

In the case of false negative error, an applicant who would have succeeded is

rejected because of predicted failure. Most false negative errors go unnoticed except whenthe applicant belongs to a reserved category and files a discrimination charge. Costsassociated with this type of error are generally difficult to estimated

A careful selection will help an organization avoid costs associated with both falsepositive error as well as false negative error.

Explain the selection process

Selection is the process of picking individuals with requisite qualifications andcompetence to fill jobs in the organization. A formal definition of selection is it is theprocess of differentiating between applicants in order to identify those with a greaterlikelihood of success.

Selection is significant as it has its impact on work performance and employee

cost. Selection is generally done by the HR department often in consultation with the linemanagers.

Selection Process

Selection is a long process, commencing from the preliminary interview of theapplicants and ending with the contract of employment. In practice, the process differsamong organizations and between two different jobs within the same organization.Selection procedure for senior managers will be long-drawn and rigorous, but it is simpleand short while hiring shop-floor workers.

Environmental Factors Affecting Selection

Selection is influenced by several factors. More prominent among them aresupply and demand of specific skills in the labour market, unemployment rate, labour-market conditions, legal and political considerations, company‘s image, company‘s

policy, HRP, and cost of hiring. The last three constitute the internal environment and theremaining form the external environment of the selection process.

1. Preliminary Interview

The applications received from job seekers are subject to scrutinyso as to eliminate unqualified applicants. This is usually followed by apreliminary interview the purpose of which is more or less the same asscrutiny of applications, that is, elimination of unqualified applications.Scrutiny enables the HR specialists to eliminate unqualified jobseekers

based on the information supplied in their applications forms. Preliminaryinterview, on the other hand, helps reject misfits for reasons, which didnot appear in the application forms. Besides, preliminary interview, oftencalled ‗courtesy interview‘, is a good public relations exercise.

2. Selection Tests



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Job seekers who pass the screening and the preliminary interview are calledfor tests. Different types of tests may be administered, depending on the job andthe company. Generally, tests are used to determine the applicant‘s ability,

aptitude and personality. Ability tests assist in determining how well an individualcan perform tasks related to the job. An excellent example of this is the typing testgiven to a prospective employee for a secretarial job. An aptitude test helps todetermine a person‘s potential to learn in a given area. An example of such a testis the General Management Aptitude Test which many business students takeprior to gaining admission to a graduate business school programme.

Personality tests are given to measure a prospective employee‘s

motivation to function in a particular working environment.

There are various tests designed to assess a candidate‘s personality. The Bersenter Personality Inventory, for example, measures one‘s self -sufficiency, neurotic tendency, sociability, introversion and extroversion, locus of control, and self-confidence. The Thematic Apperception test (TAT) assesses an individual‘s achievement and motivational levels. Other personality tests, such as the California Psychological Inventory (CPI), the Thurstone Temperament Survey (TTS), MinnesotaMultiphasic Personality Inventory (MMPI), and Guildford-Zimmerman Temperament Survey, have been designed to assessspecific personality traits.

Aptitude tests indicate the ability or fitness of an individual to engagesuccessfully in any number of specialized activities. They cover such areas asclerical aptitude, numerical aptitude, mechanical aptitude, motor-coordination,finger dexterity and manual dexterity.

Interest tests are used to measure an individual‘s activity preferences. These tests are particularly useful for students considering many careers or employees deciding upon career changes.

Gra phology test is designed to analyse the handwriting of an individual. It has been said that an individual‘shandwriting can suggest the degree of energy, inhibitions and spontaneity, as well as d isclose the idiosyncracies, and elements of balance and control. For example, big letters and emphasis on capital letters indicate a tendency towards domination andcompetitiveness. A slant to the right, moderate pressure and good legibility show leadership potential. Employers usually consultgraphologists to supplement their usual personnel recruitment procedures. Polygraph tests are designed to ensure accuracy of theinformation given in the applications. Department stores, treasury offices and jewellery shops – that is those highly vulnerable totheft or swindling – may find polygraph tests useful.

3. Employment Interview

The next step in the selection process is employment interview. Aninterview is conducted at the beginning and at the end of the selection process.The emphasis here is on the latter.

Interview is a formal, in-depth conversation conducted to evaluate theapplicant‘s acceptability. It is considered to be an excellent selection device. Itspopularity stems from its flexibility. Interview can be adapted to unskilled,skilled, managerial and professional employees. It allows a two-way exchange of information, the interviewers learn about the applicant, and the applicant learnsabout the employer.

However, interviews do have shortcomings. Absence of reliability is one limitation. No two interviewers offersimilar scoring after interviewing an applicant. Lack of validity is another limitation. This is because, few departments use

standardized questions upon which validation studies can be conducted. Finally, biases of interviewers may cloud the objectivityof interviews.

The employment interview can be one-to-one, sequential or panel. Inone-to-one interview, there are only two participants – the interviewer and theinterviewee. This can be the same as the preliminary interview discussed earlier.The sequential interview takes the one-to-one a step further and involves a seriesof interviews, usually utilizing the strength and knowledge-base of each



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interviewer, so that each interviewer can ask questions in relation to his subjectarea of each candidate, as the candidate moves from room to room.

The panel interview consists of two or more interviewers and the figure

may go up to as many as 15. Any panel interview is less intimate and more formalthan the one-to-one, but if handled and organized well, it can provide a wealth of information. If not handled carefully, the panel interview can make the candidatefeel ill at ease and confused about whose question to answer and whom toaddress. Interviewers themselves are likely to experience nightmare, not knowingwho will ask which question and in what order.

4. Reference & Background Checks

Many employers request names, addresses, and telephone numbers of references, for the purpose of verifying information and perhaps, gainingadditional background information on an applicant. Although listed on theapplication form, references are not usually checked until an applicant hassuccessfully reached the fourth stage of a sequential selection process. When the

labour market is very tight, organizations sometimes hire applicants beforechecking references.

Previous employers, known public figures, university professors,neighbours or friends can act as references. Previous employers are preferable

because they are already aware of the applicant‘s performance. But, the problemwith the reference is the tendency on the part of the previous employer to over-rate the applicant‘s performance just to get rid of the person.

Organizations normally seek letters of references or telephone references. The latter is advantageous because of itsaccuracy and low cost. The telephone r eference also has the advantage of soliciting immediate, relatively candid comments, andattitudes can sometimes be inferred from hesitations and inflections in speech.

It may be stated that the information gathered through references hardly influence selection decisions. Thereasons are obvious:

The candidate approaches only those persons who would speak well about him. People may write favourably about the candidate in order to get rid of him.

People may not like to divulge the truth about a candidate, lest it might damage orruin his career.

In several cases, references are a formality and are seldom verified by theemployer.

5. Selection Decision

After obtaining information through the preceding steps,selection decision – the most critical of all the steps – must be made. Theother stages in the selection process have been used to narrow the number

of candidates. The final decision has to be made from the pool of individuals who pass the tests, interviews and reference checks.

The views of the line manager will be generally considered in the finalselection because it is he who is responsible for the performance of the employee.The HR manager plays a critical role in the final selection.

6. Physical Examination



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After the selection decision and before the job offer is made, the candidate is required to undergo a physicalfitness test. A job offer is, often, contingent upon the candidate being declared fit after the physical examination. The results of the medical fitness test are recorded in a statement and are preserved in the personnel records. There are several objectivesbehind a physical test. Obviously, one reason for a physical test is to detect if the individual carries any infectious diseases.Secondly, the test assists in determining whether an applicant is physically fit to perform the work. Third, the physical

examination information may be used to determine if there are certain physical capabilities which differentiate successful andless successful employees. Fourth, medical check-up protects applicants with health defects from undertaking work that could bedetrimental to themselves or might otherwise endanger the employer‘s property. Finally, such an examination will protect theemployer from workers‘ compensation claims that are not valid because the injuries or illnesses were present when employeewas hired.



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7. Job OfferThe next step in the selection process is job offer to those applicants who

have crossed all the previous hurdles. Job offer is made through a letter of

appointment. Such a letter generally contains a date by which the appointee mustreport on duty. The appointee must be given reasonable time for reporting. This isparticularly necessary when he is already in employment, in which case theappointee is required to obtain a relieving certificate from the previous employer.Again, a new job may require movement to another city which meansconsiderable preparation and movement of property.

The company may also want the individual to delay the date of reporting on duty. If the new employee‘s first jobupon joining the company is to go on training, the organization may request that the individual delays joining the company untilperhaps a week before such training begins. Naturally this practice cannot be abused especially if the individual is unemployedand does not have sufficient finances.

Decency demands that the rejected applicants be informed about their non-selection. Their applications may be preserved for future use, if any. It needs noemphasis that the applications of selected candidates must also be preserved for

future references.

8. Contracts of Employment

After the job offer has been made and the candidatesaccept the offer, certain documents need to be executed by theemployer and the candidate. One such document is the attestationform. This form contains certain vital details about the candidatewhich are authenticated and attested by him. Attestation form will be avalid record for future reference. There is also a need for preparing acontract of employment. The basic information that should beincluded in a written contract of employment will vary according tothe level of the job, but the following checklist sets out the typicalheadings.

Job Title Duties, including a phrase such as ―The employee will perform such duties and

will be responsible to such a person as the company may from time to timedirect.‖

Date when continuous employment starts and the basis for calculating service Rate of pay, allowances, overtime and shift rates, method of payments Hours of work including lunch break and overtime and shift arrangements Holiday arrangements Length of notice due to and from employee Grievance procedure

Disciplinary procedure Work Rules Arrangements for terminating employment Arrangements for union membership Special terms relating to rights to patents and designs, confidential information

and restraints on trade after termination of employment Employer‘s right to vary terms of the contract subject to proper notification being

given



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Alternatively called employment agreements or simply bonds, contracts of employment serve many usefulpurposes. Such contracts seek to restrain job hopers, to protect knowledge and information that might be vital to a company‘shealth bottom line, and to prevent competitors from poaching h ighly valued employees.

Great care is taken to draft the contract forms. Often, services of law firmsare engaged to get the forms drafted and finalized.

Most employers insist on agreements being signed by newly hiredemployees. But high employee turnover sectors such as software, advertising andmedia are more prone to use such contracts.

The drawback with the contracts is that it is impossible toenforce them. A determined employee is bound to leave theorganization, contract or no contract. The employee is prepared to paythe penalty for breaching the agreement or the new employer willprovide compensations. It is for this reason that several companieshave scrapped the contracts altogether. Lintas and Ogilvy and Mather

are examples.

Concluding the Selection ProcessContrary to popular perception, the selection process will not end with

executing the employment contract. There is another step – a more sensitive one-reassuring those candidates who have not been selected. Such candidates must betold that they were not selected not because of any serious deficiencies in theirpersonalities, but because their profiles did not match the requirements of theorganization. They must be told that those who were selected were done purely onrelative merit.

9. Evaluation of the Selection Programme

The broad test of the effectiveness of the selection processis the quality of the personnel hired. An organization must havecompetent and committed personnel. The selection process if properlydone will ensure availability of such employees. How to evaluate theeffectiveness of a selection programme? A periodic audit is the answer.Audit must be conducted by people who work independent of the HRdepartment.

Two alternative methods of selection are participative

selection and employee leasing. In participative selection, subordinatesparticipate in selection of their co-employees. Employee leasingrepresents the leasing of employees by a client company from a thirdparty.



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In our country, selection of blue-collared and white-collared employees isunsystematic. However, in case of managerial personnel, the process is fairlysystematic. International hiring is assuming greater relevance these days.

What are the Sources of Recruitment.

The sources of recruitment can be broadly categorized into internal and external sources-

External Environment

Internal Environment

Preliminary Interview

Selection Tests

Employment Interview

Reference & BackgroundAnal sis

Selection Decision

Physical Examination

Job Offer

Employment Contract

Evaluation

REJ

ECTED

APPLIC

ANT



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(I) Internal Recruitment – Internal recruitment seeks applicants for positions from

within the company. The various internal sources include

a. Promotions and Transfers – Promotion is an effective means using job posting and personnel records. Job

posting requires notifying vacant positions by posting notices, circulating publicationsor announcing at staff meetings and inviting employees to apply. Personnel recordshelp discover employees who are doing jobs below their educational qualifications orskill levels. Promotions has many advantages like it is good public relations, buildsmorale, encourages competent individuals who are ambitious, improves the

probability of good selection since information on the individual‘s performance isreadily available, is cheaper than going outside to recruit, those chosen internally arefamiliar with the organization thus reducing the orientation time and energy and alsoacts as a training device for developing middle-level and top-level managers.However, promotions restrict the field of selection preventing fresh blood & ideasfrom entering the organization. It also leads to inbreeding in the organization.

Transfers are also important in providing employees with a broad-based view of theorganization, necessary for future promotions.

b. Employee referrals-Employees can develop good prospects for their families and friends by

acquainting them with the advantages of a job with the company, furnishing themwith introduction and encouraging them to apply. This is a very effective means asmany qualified people can be reached at a very low cost to the company. The otheradvantages are that the employees would bring only those referrals that they feelwould be able to fit in the organization based on their own experience. Theorganization can be assured of the reliability and the character of the referrals. In thisway, the organization can also fulfill social obligations and create goodwill.

c. Former Employees-These include retired employees who are willing to work on a part-time basis,

individuals who left work and are willing to come back for higher compensations.Even retrenched employees are taken up once again. The advantage here is that thepeople are already known to the organization and there is no need to find out theirpast performance and character. Also, there is no need of an orientation programmefor them, since they are familiar with the organization.



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d. Dependents of deceased employees-Usually, banks follow this policy. If an employee dies, his / her spouse or son

or daughter are recruited in their place. This is usually an effective way to fulfill

social obligation and create goodwill.

(II) External Recruitment – External recruitment seeks applicants for positions fromsources outside the company. They have outnumbered the internal methods. The various

external sources include

a. Professional or Trade Associations – Many associations provide placement service to its members. It consists of

compiling job seeker‘s lists and providing access to members during regional or national conventions. Also, the publications of these associations carry classifiedadvertisements from employers interested in recruiting their members. These areparticularly useful for attracting highly educated, experienced or skilled personnel.Also, the recruiters can zero on in specific job seekers, especially for hard-to-fill

technical posts.

b. Advertisements -It is a popular method of seeking recruits, as many recruiters prefer

advertisements because of their wide reach. Want ads describe the job benefits,identify the employer and tell those interested how to apply. Newspaper is the mostcommon medium but for highly specialized recruits, advertisements may be placed inprofessional or business journals.

Advertisements must contain proper information like the job content, workingconditions, location of job, compensation including fringe benefits, job specifications,growth aspects, etc. The advertisement has to sell the idea that the company and jobare perfect for the candidate. Recruitment advertisements can also serve as corporateadvertisements to build company‘ image. It also cost effective.

c. Employment Exchanges-Employment Exchanges have been set up all over the country in deference to

the provision of the Employment Exchanges (Compulsory Notification of Vacancies)Act, 1959. The Act applies to all industrial establishments having 25 workers or moreeach. The Act requires all the industrial establishments to notify the vacancies beforethey are filled. The major functions of the exchanges are to increase the pool of possible applicants and to do the preliminary screening. Thus, employment exchangesact as a link between the employers and the prospective employees. These offices areparticularly useful to in recruiting blue-collar, white collar and technical workers.

d. Campus Recruitments-Colleges, universities, research laboratories, sports fields and institutes are

fertile ground for recruiters, particularly the institutes. Campus Recruitment is goingglobal with companies like HLL, Citibank, HCL-HP, ANZ Grindlays, L&T, Motorolaand Reliance looking for global markets. Some companies recruit a given number of candidates from these institutes every year. Campus recruitment is so much soughtafter that each college; university department or institute will have a placement officerto handle recruitment functions. However, it is often an expensive process, even if recruiting process produces job offers and acceptances eventually. A majority leave



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the organization within the first five years of their employment. Yet, it is a majorsource of recruitment for prestigious companies.

e. Walk-ins, Write-ins and Talk-ins-The most common and least expensive approach for candidates is direct

applications, in which job seekers submit unsolicited application letters or resumes.Direct applications can also provide a pool of potential employees to meet futureneeds. From employees‘ viewpoint, walk -ins are preferable as they are free from thehassles associated with other methods of recruitment. While direct applications areparticularly effective in filling entry-level and unskilled vacancies, someorganizations compile pools of potential employees from direct applications forskilled positions. Write-ins are those who send written enquiries. These jobseekers areasked to complete application forms for further processing. Talk-ins involves the jobaspirants meeting the recruiter (on an appropriated date) for detailed talks. Noapplication is required to be submitted to the recruiter.

f. Contractors-They are used to recruit casual workers. The names of the workers are not

entered in the company records and, to this extent; difficulties experienced inmaintaining permanent workers are avoided.

g. Consultants-They are in the profession for recruiting and selecting managerial and

executive personnel. They are useful as they have nationwide contacts and lendprofessionalism to the hiring process. They also keep prospective employer andemployee anonymous. However, the cost can be a deterrent factor.

h. Head Hunters-They are useful in specialized and skilled candidate working in a particular

company. An agent is sent to represent the recruiting company and offer is made tothe candidate. This is a useful source when both the companies involved are in thesame field, and the employee is reluctant to take the offer since he fears, that hiscompany is testing his loyalty.

i. Radio, Television and Internet-Radio and television are used to reach certain types of job applicants such as

skilled workers. Radio and television are used but sparingly, and that too, bygovernment departments only. Companies in the private sector are hesitant to use themedia because of high costs and also because they fear that such advertising willmake the companies look desperate and damage their conservative image. However,there is nothing inherently desperate about using radio and television. It depends uponwhat is said and how it is delivered. Internet is becoming a popular option for

recruitment today. There re specialized sites like naukri.com. Also, websites of companies have a separate section wherein; aspirants can submit their resumes andapplications. This provides a wider reach.

j. Competitors-This method is popularly known as ―poaching‖ or ―raiding‖ which involves

identifying the right people in rival companies, offering them better terms and luringthem away. For instance, several executives of HMT left to join Titan Watch



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Company. There are legal and ethical issues involved in raiding rival firms forpotential candidates. From the legal point of view, an employee is expected to join anew organization only after obtaining a ‗no objection certificate‘ from his/ her present

employer. Violating this requirement shall bind the employee to pay a few months‘salary to his/ her present employer as a punishment. However, there are many ethicalissues attached to it.

k. Mergers and Acquisitions-When organizations combine, they have a pool of employees, out of whom

some may not be necessary any longer. As a result, the new organization has, ineffect, a pool of qualified job applicants. As a result, new jobs may be created. Bothnew and old jobs may be readily staffed by drawing the best-qualified applicants fromthis employee pool. This method facilitates the immediate implementation of anorganization‘s strategic plan. It enables an organization to pursue a business plan,However, the need to displace employees and to integrate a large number of themrather quickly into a new organization means that the personnel-planning and

selection process becomes critical more than ever.

Evaluation Of External Recruitment

External sources of recruitment have both merits and demerits.

The merits are- The organization will have the benefit of new skills, new talents and new

experiences, if people are hired from external sources. The management will be able to fulfill reservation requirements in favour of

the disadvantaged sections of the society. Scope for resentment, heartburn and jealousy can be avoided by recruiting

from outside.

The demerits are- Better motivation and increased morale associated with promoting own

employees re lost to the organization. External recruitment is costly. If recruitment and selection processes are not properly carried out, chances of

right candidates being rejected and wrong applicants being selected occur. High training time is associated with external recruitment.



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METHODS AND TECHNIQUES OF TRAINING

A multitude of techniques are used to train employees. Training techniques

represent the medium of imparting skills and knowledge to employees. Trainingtechniques are means employed in the training methods. They are basically of two types.

Methods and Techniques of Training

1. Lectures: It is the verbal presentation of information by an instructor to a largeaudience. The lecturer is presumed to possess knowledge about the subject. Avirtue in this method is that it can be used for large groups and hence the cost of training per employee is very low. However, this method violates the principle of learning by practice. Also this type of communication is a one-waycommunication and there is no feedback from the audience because in case of very large groups it is difficult to have interactive sessions. Long lectures can alsocause Boredom.

2. Audio Visuals: This is an extension of the lecture method. This method includesslides, OHPs, video tapes and films. They can be used to provide a range of realistic examples examples of job conditions and situations in the condensedperiod of time. It also improves the quality of presentation to a great extent.

3. On- the – Job- Training: It is used primarily to teach workers how to do theirpresent jobs. Majority of the industrial training is on the job training. It isconducted at the work site and in the context of the job. Often, it is informal, aswhen experienced worker shows a trainee how to perform tasks. In this method,the focus of trainer‘s focus is on making a good product and not on good training

technique. It has several steps, the trainee first receives an overview of the job, it‘spurpose and the desired outcomes. The trainer then demonstrates how the job is tobe performed and to give trainee a model to copy. And since a model is given tothe trainee, the transferability to the job is very high. Then the employee isallowed to mimic the trainer‘s example. The trainee repeats these jobs until the jobis mastered.

4. Programmed Instruction (PI): In this method, training is offered without theintervention of the trainer. Information is provided to the employee in blocks, inform of books or through teaching machine. After going through each block of

On the Job Techniques Off the Job Techniques

Methods applied in theworkplace while theemployee is working.

Away from theworkplace




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material, the trainee goes through a test/ answers a question. Feedback in the formof correct answers is provided after each response. Thus PI involves:

Presenting questions, facts, and problems to the learner.

Allowing the person to respond Providing feedback on the accuracy of the answers If the answers are correct, he proceeds to the next block or else, repeats the

same.However it is an impersonal method and the scope of learning is less as comparedto other methods of training. Also the cost of preparing books, manuals andmachinery is very high.

5. Computer Assisted Instruction (CAI): This is an extension

of the PI method. In this method, the learner‘s response determines thefrequency and difficulty level of the next frame. This is possible thanks tothe speed, memory and the data manipulation capabilities of the computer.

6. Simulation: It is any equipment or technique that duplicates as nearly as the

possible the actual conditions encountered at the job. It is an attempt to create arealistic for decision-making. This method is most widely used in AeronauticalIndustry.

7. Vestibule Training: This method utilizes equipment which closely resemble theactual ones used in the job. It is performed in a special area set aside for thepurpose and not at the workplace. The emphasis is placed on learning skills thanon production. It is however difficult to duplicate pressures and realities of actualsituations. Even though the kind of tension or pressure may be the same but theemployee know it is just a technique and not a real situation. Also the employeesbehave differently in real situations than in simulations. Also additionalinvestment is required for the equipment.

8. Case study: It is a written description of an actual situation in the business, whichprovokes the reader to think and make decisions/ suggestions. The trainees readthe case, analyse it and develop alternative solutions, select the best one andimplement it. It is an ideal method to promote decision making skills. They alsoprovide transference to an extent. They allow participation through dicussion. Thisis the most effective method of developing problem solving skills.

The method /approach to analysis may not be given importance. Many atimes only the result at the end of the case may be considered and not the line of thinking to approach it. This is a major disadvantage since case studies mustprimarily be used to influence or mend the attitude or thinking of an individual.

9. Role Playing and Behavior Modeling: This method mainly focuses on emotional(human relation) issues than other ones. The essence is on creating a real lifesituation and have trainees assume parts of specific personalities (mostlyinterchanged roles of boss and subordinate to create empathy for one another).The consequence is better understanding of issues from the other‘s point of view.Concept of Behavior Modeling:



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Fundamental psychological process by which new patterns of behavior canbe acquired and existing ones can be altered.

― Vicarious process‖ learning takes place not by own experience but by

observation or imagination of others‘ action. It is referred to as ―copying‖, ―observational learning‖ or ―imitation‖

implying that it a behavior is learned or modified through observation of other‘s experiences.

This change may be videotaped and showed to the trainee and he canreview and critique it.

It also helps him see the negative consequences that result from not usingthe behavior as recommended.

10. Sensitivity Training: it uses small number of trainees usually less

than 12 in a group. They meet with a passive trainer and get an insightinto their own behavior and that of others. These meetings have no

agenda and take place away from the workplace. The discussionsfocus on why participants behave the way they do and how othersperceive them. The objective is to provide the participants withincreased awareness of their own behavior, the perception of othersabout them and increased understanding of group process. Examples:Laboratory training, encounter groups. Laboratory training is a formof group training primarily used to enhance interpersonal skills. It canbe used to develop desired behaviors for future job responsibilities. Atrained professional serves as a facilitator. However once the trainingis over employees get back to being the way they are.

11. Apprenticeships and Coaching: It is involved learning from moreexperienced employee/s. This method may be supplemented with other off-the-jobmethods for effectiveness. It is applied in cases of most craft workers, carpenters,plumbers and mechanics. This approach uses high levels of participation andfacilitates transferability. Coaching is similar to apprenticeships. But it is alwayshandled by a supervisor and not by the HR department. The person being trainedis called understudy. It is very similar to on the job training method. But in thatcase, more stress is laid on productivity, whereas here, the focus is on learning.

In this method skilled workforce is maintained – since the participation,feedback and job transference is very high. Immediate returns can be expectedfrom training – almost as soon as the training is over the desired outcomes can beseen in the trainee.

JOB DESCRIPTION:

Job description is an important document, which is basically descriptive in natureand contains a statement of job analysis. It provides both, organizational information(location in structure, authority, etc) and functional information (what the work is). Itdefines the scope of job activities, major responsibilities, and positioning of the job in the



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organization. It provides the worker, analyst and a supervisor with a clear idea of what thework must do to meet the demands of the job.

It concerns such functions as planning, coordinating and assigning responsibility.

Though job description is not assessment, it provides an important basis for establishingassessment standards and objectives.

Job description describes ―jobs‖ and not the ―job holders‖. The movement of employees due to promotion, quits, etc would create instability to job descriptions if people rather than jobs are described.

JOB SPECIFICATION:

The job specification takes the job description and answers the question, ―whathuman traits and experience are needed to do the job well?‖ It tells what kind of person torecruit and for what qualities that person should be tested.

Job specifications translate the job description into terms of the humanqualifications that are required for a successful performance of a job. They are intended to

serve as a guide in hiring and job evaluation. As a guide in hiring, they deal with suchcharacteristics as are available in an application bank, with testing interviews andchecking of references.

Job specification is developed with the cooperation of the personnel departmentand various supervisors in the whole organization. The personnel department co ordinatesthe writing of the job descriptions and job specifications and secures agreement on thequalifications required. These specifications relate to physical characteristics,psychological characteristics, personal characteristics, responsibilities and other featuresof a demographic nature.

PERFORMANCE APPRAISAL: A performance appraisal is a process of evaluating the performance and

qualifications of the employees in terms of the requirements of the job for which he isemployees, for purposes of administration including placement, selection for promotions,providing financial rewards and other actions which require differential treatment amongthe members of a group as distinguished from actions affecting all members equally.

Several methods and techniques of appraisal are available for measuring theperformance of an employee. Some of the traditional methods are

Straight Ranking Method Man-to-man Comparison Methods Grading Graphic Rating Scales Check Lists

Following are some of the modern methods: Assessment Centers

Appraisal by Results or Management by Objectives Human Asset Accounting Method

We will briefly discuss one of the modern methods of appraisal

Assessment centers:




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The most important feature of assessment center is job-related simulations. Thesesimulations involve characteristics that managers feel are important to the job success.The evaluators observe and evaluate participants as they perform activities.

Under this method, many evaluators join together to judge employee performance inseveral situations with the use of variety of criteria. It is used mostly to help selectemployees for the first level (lowest) supervisory positions. Assessments are made todetermine employee potential for purposes of promotion. The assessment is generallydone with the help of a couple of employees and involves a paper-and-pencil test,interviews and situational exercises.

Obtain top mgmt.commitment

Establish goals forprogramme

Do detailed job analysis

Define dimensions to beassessed

Develop policies forfeeding back data

Design physicalfacilities

Select exercises andparticipants

Design assessor trainingprogramme

Trainassessors

Conductprogramme

Provide feedback

Evaluate participantsand center against jobsuccess criteria

An Assessment CenterModel



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JOB ANALYSIS: An Important Employment Tool

Introduction:

All hiring decisions and supervisory evaluations should be made on objectivecriteria. A supervisor needs to know each job under his or her supervision, and thequalifications needed to perform it, to develop objective interview questions andobjectively evaluate an employee‘s performance. Human resource specialists who are

responsible for initial screening of job applicants and mediating performance appraisaldisputes must also understand the key components of the jobs in their organization.

Job analysis provides an objective basis for hiring, evaluating, training,accommodating and supervising persons with disabilities, as well as improving theefficiency of your organization. It is a logical process to determine: (1) purpose-thereason for the job, (2) essential functions-the job duties which are critical or fundamentalto the performance of the job, (3) job setting-the work station and conditions where theessential functions are performed, and (4) job qualifications-the minimal skills an

individual must possess to perform the essential functions. A job analysis describes the job, not the person who fills it.

Job Analysis is a process to identify and determine in detail the particular jobduties and requirements and the relative importance of these duties for a given job. JobAnalysis is a process where judgments are made about data collected on a job.

Purpose of Job Analysis1. To produce a basic job description of what the job is in the here and now

which can facilitate basic human resource problem solving.

2. To describe duties and characteristics in common with and different form

other positions or jobs. When pay is closely associated with levels of difficulty

these descriptions help foster a feeling of organizational fairness related to

pay issues.

The purpose of Job Analysis is thus to establish and document the 'job relatedness' of employment procedures such as training, selection,compensation, and performance appraisal.

Job Analysis should collect information on the following areas:

Duties and Tasks (frequency, duration, complexity) Work Environment (risks) Tools and Equipment ( eg. protective clothing) Relationships ( internal and external)

Requirements (The knowledge, skills, and abilities (KSA's)



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Methods of Job Analysis/ Data Gathering methods

Interviews – individual or group

Questionnaire Observation Critical incidents Photo tape recording Review of records

JOB DESCRIPTION Job description is an important document, which is basically descriptive in nature

and contains a statement of job analysis. It provides both, organizational information(location in structure, authority, etc) and functional information (what the work is). Itdefines the scope of job activities, major responsibilities, and positioning of the job in the

organization. It provides the worker, analyst and a supervisor with a clear idea of what thework must do to meet the demands of the job.

The content of job descriptions should identify and describe:

Mental Functions Relations with Others Physical Demands (strength, movement, auditory, vision, etc.) Environmental Conditions and Physical Surroundings Equipment Used Hazards

It concerns such functions as planning, coordinating and assigning responsibility.Though job description is not assessment, it provides an important basis for establishingassessment standards and objectives.

Job description describes ―jobs‖ and not the ―job holders‖. The movement of employees due to promotion, quits, etc would create instability to job descriptions if people rather than jobs are described.

Thus to sum it up all, Job descriptions, as a management tool, can greatly simplifyan organization's human resource management.

JOB EVALUATION The aim of job evaluation is to provide a systematic and consistent approach to

defining the relative worth of jobs within a workplace, single plant or multiple siteorganization. It is a process whereby jobs are placed in a rank order according to overalldemands placed upon the jobholder. It therefore provides a basis for a fair and orderlygrading structure.

Job evaluation does not determine actual pay. That is a separate operation,normally the subject of negotiation between management and employees or their tradeunion representatives. Only the job is evaluated, not the person doing it . It is a techniqueof job analysis, assessment and comparison and it is concerned with the demands of the

job, such as the experience and the responsibility required to carry out the job. It is not



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concerned with the total volume of work, the number of people required to do it, thescheduling of work, or the ability of the job holder.

Purpose of job evaluation

It can be beneficial when the existing grading structure is in need of review.

It can help establish or maintain the credibility and acceptability of agrading system.

It facilitates the accommodation of new or revised jobs into thegrading structure.

It can be used by organisations as a basis for job matching andexternal pay comparisons.

Improved Human Resource Management

In the past job evaluation has tended to be used more often for white collar, rather than manualemployees. However, there has been a steady increase in the use of job evaluation for all types of jobs. Theconcern for unit labour costs makes it vitally important for organisations, operating in highly competitivemarkets, to ensure that the grading level of their employees accurately reflects the relative importance of their jobs to the organization.

Properly introduced and maintained, job evaluation can help lay the foundation of fair and orderlypay structures and thus improve relationships.

Techniques of job evaluation: plz see above on page 30 some thing for info

Non-analytical

Job ranking - Each job is considered as a whole and placed in a ‗felt fair‘ rank order toproduce a league table.

Paired comparisons - Each job is compared as a whole with each other job in turn, andpoints (0, 1 or 2) awarded according to whether its overall importance is judged to be lessthan, equal to, or more than the other jobs.

Job classification - In job classification the number of grades is decided first and detailedgrade definitions produced. Representative (benchmark) jobs are evaluated to validate thedefinitions.

Analytical

Points rating – It breaks down each job into a number of factors, with the factorssometimes being further broken down into sub-factors. Points are awarded for each factoraccording to a predetermined scale and the total points decide a job‘s place in the rankingorder.

Tailor made or ―off the peg‖ - Factors and definitions more accurately reflect the

range of jobs to be evaluated and are arrived at through consensus; consequently they aremore likely to be acceptable to the workforce.

New Methods for Selection.

In recent years, new methods of selection have been found out by HR specialistthese approaches are deemed to be alternatives to the traditional methods of selection.

New Method Of Selection





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1. Participative Selection

Two interesting alternative are participative selection and employee leasing.Participative selection means that subordinates participate in the selection of their co-workers and supervisors. The idea is that such participation will improve quality, increase

support for the selected supervisor and co-workers, and improve employee morale.

2. Employee Leasing

In employee leasing, the client company leases employees from a third party, noton temporary basis, but rather are leased as full-time, long term help. An interestingfeature of this method is that the client company need not perform such personnelactivities as hiring, compensation or record keeping. Employees already workingelsewhere are leased. They are not directly employed by the company where they areworking. The advantages of employee leasing are significant. The client is relieved of many administrative burdens, as well as the need to employ specialized personnelemployees. Further, employees not recruited by one client are sent to another clientcompany for employment.

Training and Development Q) Meaning and Definition

A business' most important asset is often its people. Training and developing them can be

one of the most important investments a business can make. The right training can ensure

that your business has the right skills to tackle the future. It can also help attract and

retain good quality staff, as well as increasing the job satisfaction of those presently with

you - increasing the chances that they will satisfy your customers.

Training and development refer to the imparting to specific skills’ ability and knowledge

to an employee. A formal definition of training and development is:

“… it is any attempt to improve current or future employee performance by increasing anemployee’s ability to perform through learning, usually by changing the employee’s

attitudes or increasing his or her skills and knowledge.”

The need for training and development is determined by the employee’s performance

deficiency, computed as follows:

ParticipativeSelection

EmployeeLeasing

Training and Development need = Standard performance – Actual performance.



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We can make a distinction among training, education and development. Such distinctionenables us to acquire a better perspective about the meaning of the terms. Training, aswas started earlier, refers to the process of imparting specific skills. Education, on the

other hand, is confined to theoretical learning in the classrooms.



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T RAINING AND E DUCATION D IFFERENTIATED:`

Training Education

Application oriented Job experience Specific tasks

Narrow

perspective

Theoretical oriented Classroom learning General concepts Broad perspective

Development refers to those learning opportunities designed to help employees grow.

Development is not primarily skill-oriented. Instead, it provides general knowledge and

attitudes, which will be helpful to employees in higher positions. Efforts towards

development often depend on personal drive and ambition. Development activities, such

as those supplied by management development programmes, are generally voluntary.



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THE TRAINING PROCESS

(1) ORGANIZATIONAL OBJECTIVES AND STRATEGIES:

The first step in the training process in an organization is the assessment of its objectivesand strategies. What business are we in? At what level of quality do we wish to providethis product or service? Where do we want to be in the future? It is only after answeringthese and other related questions that the organization must assess the strengths andweaknesses of its human resources.

Organizational Objectives

and Strate ies

Assessment of Training

Needs

Establishment of Training

Goals

Devising Training

Pro ramme

Implementation of

Training programme

Evaluation of Results



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(2) ASSESSMENT OF TRAINING NEEDS:Organizations spend vast sums of money on training and development. Beforecommitting such huge resources, organizations would do well to assess the training needs

of the employees. Organizations that implement training programmes without conductingneeds assessment may be making errors.

Needs assessment occurs at two levels:a) Individualb) Group

Individual:An individual obviously needs training when his or her training falls short of standards,that is, when there is performance deficiency. Inadequacy in performance may be due tolack of skill or knowledge or any other problem. The problem of performance deficiencyis caused by absence of skills or knowledge can be remedied by training. Faulty selection,poor job design, uninspiring supervision or some personal problem may also result in

poor performance. Transfer, job redesign, improving quality of supervision, or dischargewill solve the problem.Individuals may also require new skills because of possible job transfers. Although jobtransfers are as common as organizational personal demands vary, they do not necessarilyrequire elaborate training efforts. Employees commonly require an orientation to newfacilities and jobs. Recently, however, economic forces have necessitated significantretraining efforts in order to assure continuous employment for many individuals.Group:Assessment of training needs occurs at group level too. Any change in the organization‘s

strategy necessitates training groups of employees. For example, when the organizationdecides to introduce a new line of products, sales personnel and production workers haveto be trained to produce, sell and service the new products. Training can also be usedwhen high scrap or accident rates, low morale and motivation, or other problems are

diagnosed.

Needs Assessment Methods:Several assessment methods for are available for assessing training needs. Some areuseful for organizational level needs assessment and others for individual needsassessment.

NEEDS ASSESSMENT METHODS

Group analysis

Organizational goals and

objectives

Personnel/skills inventories

Organizational climate

indices

Efficiency indices

Exit interviews

MBO or work planning

systems



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Benefits of Needs Assessment:Needs assessment helps diagnose the causeof performance deficiency of employees.

Causes require remedial actions. There arespecific benefits of needs assessment. Trainers may be informed about the

broader needs of the training group andtheir sponsoring organizations.

The sponsoring organizations are able toreduce the perception gap between theparticipant and his or her boss abouttheir needs and expectations from thetraining programme.

Trainers are able to pitch their courseinputs closer to the specific needs of theparticipants.

(3) ESTABLISHMENT OF TRAINING GOALS:

Once the training needs are assessed, training and developmental goals must be

established. With out clearly set goals, it is not possible to design a training and

development programme and, after it has been implemented, there will be no way of

measuring its effectiveness. Goals must be tangible, verifiable, and measurable. This is

easy where skill training is involved. For example, the successful trainee will be expected

to type 55 words per minute with two or three errors per page. But behavioral objectives

like attitudinal changes can be more difficult to state. Nevertheless, clear behavioral

standards of expected results are necessary so that the programme can be effectively

designed and results can be evaluated.

Individual analysis

Performance Appraisal

Work sampling

Interviews

Questionnaires

Attitude survey

Training progress

Rating scales



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(4) D EVISING THE T RAINING AND D EVELOPMENT P ROGRAMME

Every training and development programme must address the following vital issues:

1. Who are the trainees?

Trainees are selected on the basis of: Self Nomination Recommendations of the Supervisor By the HR Department itself

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

audiences. For example, rank-and-file employees and their supervisors

may effectively learn together about a new process and their respective

roles. It also helps facilitate group processes such as problem solving

and decision – making.

2. Who are the trainers?Training and development may be done by: Immediate Supervisors Co – workers Personnel Staff Specialists in other parts of the company Outside Consultants Industry Associations

Faculty Members at Universities

Who among these are selected to teach, often depends on where the program is held andthe skill that is being taught.

3. What Methods and Techniques of Training should be used?A multitude of methods and techniques is used to train employees.

Training techniques are the means employed in the training methods.

Training methods are categorized into two groups – on-the-job methods

and off-the-job methods. The most commonly used techniques are

shown in the table given below.

Who are the

trainees?

Who are the

trainers?

What methods

& techniques?

Where to conduct

the program?

What principles

of learning?

What should be the

level of training?

METHODS & TECHNIQUES OF TRAINING

On-the-Job Method Off-the-Job Method



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On-the-Job Method (OJT):Majority of industrial training is on the job training type. OJT method ismainly adopted while orienting new employees, introducing innovationsin products & services and in special skills training. OJT is conducted atthe work site and in the context of the job. Often, it is informal, as when

an experienced worker shows a trainee how to perform the job tasks. Off-the-Job Training Method:

Off-the-job training is mainly adopted for orienting new employees,introducing innovations in products and services, special skills training,safety education, creative, technical & professional education and sales,administrative, supervisory and managerial education. The advantagesand disadvantages of some of the important techniques of off-the-jobmethods are listed below:a) Lectures:Lecture is a verbal presentation of information by an instructor to a largeaudience. This method can be made effective when combined with other

means of training.b) Audio-Visuals:These include television slides, overheads, video-types, films and LCD

Projectors.c) Programmed Instruction (PI):Training is offered without the intervention of the trainer. Information isprovided to the trainee in blocks, either in a book form or through ateaching machine. PI involves:1. Presenting questions, facts, or problems to the learner.2. Allowing the person to respond.3. Providing feedback on the accuracy of his or her answers.

4.

If the answers are correct, the learner proceeds to the next block.d) Simulations:A simulator is any kind of equipment or technique that duplicates asnearly as possible the actual conditions encountered on the job. It is anattempt to create a realistic decision – making environment for thetrainee. The advantage of simulation is the opportunity to ‗create an

Orientation TrainingJob-Instruction Training

Job RotationCoaching

Simulation Lecture

Films & TelevisionConference/DiscussionProgrammed InstructionCase Study

VestibuleRole Play



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environment‘ similar to real situations the managers incur, but withoutthe high costs involved should the actions prove undesirable.

The other techniques of training are: Leadership games: exercises to teach different styles of leadership. Skill Games: Tests to develop analytical skills. Communication Games: exercises to build bias – free listening and

talking. Strategic Planners: Games to test ability to plan ahead. Team – building games: Exercises requiring collaborative efforts. Lateral Thinking: thinking randomly to come up with new ideas. Cross – cultural training: Programmes to teach specifics of varied

cultures.



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4. What should be the level of learning?The inputs passed on to trainees in training and development programmescan be taught at three basic levels.

Level I The trainee must acquire fundamental knowledge. This meansdeveloping a basic understanding of a field and becomingacquainted with the language, concepts and relationships involvedin it. E.g. Orientation Training

Level II The goal is skill development, or acquiring the ability to performin a particular skill area.

LevelIII

Aims at increased operational proficiency. This involvesobtaining additional experience and improving skills that havealready been developed.

All the inputs of training can be offered at the three levels. How effectivelythey are learned depends upon several principles of learning.

5. What should be the Principles of Learning?Training and development programmes are more likely to be effective whenthey incorporate the following principles of learning:

Motivation:Motivation to learn is the basic requisite of making training anddevelopment programmes effective. Motivation comes from awarenessthat training fetches some rise in status and pay. Internal pressures (self-esteem, quality of life, job satisfaction) are the most powerful motivators.At the same time the individual must also have the ability to learn.

Individual Differences:

Employee Motivation

Recognition of IndividualDifferences

Practice Opportunities

Reinforcement

Knowledge of ResultsGoals

Schedules of Training

Meaning of Material

Transfer of Learning

LEARNING

PRINCIPLES

Formatted: Font: 10 pt



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Individuals enjoy varying learning stimuli. Ability varies from individualto individual and this difference must be considered while organizingtraining programmes.

Practice Opportunities:People learn best through practice. The trainee should be given theopportunity to practice what is being taught. Practice is also essentialafter the individual has been successfully trained.

Reinforcement:Reinforcement is anything thata) Increases the strength of responseb) Tends to induce repetitions of the behavior that preceded the

reinforcement.Reinforcement could be positive and negative. Positive reinforcementstrengthens and increases behavior by the presentation of desirable

consequences. The reinforcement consists of a positive experience for theindividual. Example: if an employee does something well and iscomplemented by the boss, the probability that the behavior will berepeated will be strengthened.In negative reinforcement, the individual exhibits the desired behavior toavoid something unpleasant. Example: an employee who does somethingto avoid incurring a reprimand from his boss. The effect of negativereinforcement is avoidance of learning.

Knowledge of Results (feedback):Knowledge of results is a necessary condition for learning. Feedback about the performances will enable the learner to know where he or she

stands and to initiate corrective action if any deviation from the expectedgoal has taken place.

Goals:Goal setting can also accelerate learning, particularly when it isaccompanied by knowledge of results. Individuals generally performbetter and learn more quickly when they have goals, particularly if thegoals are specific and reasonably difficult.

Schedules of learning:One of the most well – established principles of learning is thatdistributed or spaced learning is superior to continuous learning.

Schedules of learning involve:

a) Duration of practice sessionsb) Duration of rest sessionsc) Positioning of rest pausesAll the three must be carefully planned and executed.

Meaning of material:



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A definite relationship has been established between learning andmeaningfulness of the subject learnt. The more meaningful the material,the better the learning process.

Transfer of Learning:What is learnt in training must be transferred to the job. The traditionalapproach to transfer has been to maximize the identical elements betweenthe training situation and the actual job. This may be possible for trainingskills such as maintaining a cash register, but not for teaching leadershipor conceptual skills. Often, what is learnt in a training session facesresistance back at the job. Techniques for overcoming resistance includecreating positive expectations on the part of trainee‘s supervisor, creatingopportunities to implement new behavior on the job, and ensuring that thebehavior is reinforced when it occurs.

Though, it is desirable that a training and development programme

incorporates all these principles, seldom is such a combination effected inpractice.

6. Where to conduct the programme?A training and development programme can be conducted:i. At the job itself

ii. On site but not the job – for example, in a training room in the company.iii. Off the site, such as in a university or college classroom, hotel, a resort,

or a conference center.(5) IMPLEMENTATION OF THE PROGRAMME:Once the training programme has been designed, it needs to be implemented.

Implementation is beset with certain problems:a) Most managers are action oriented and frequently say they are too busy to

engage in training efforts.b) Availability of trainers is a problem. In addition to possessing

communication skills, the trainers must know the company‘s philosophy,its objectives, its formal and informal organizations, and the goals of thetraining programme. Training requires a higher degree of creativity than,perhaps, any other personnel specialty.

c) Scheduling training around the present work is another problem.

Programme implementation involves action on the following lines:

a) Deciding the location and organizing training and other facilitiesb) Scheduling the training programmec) Conducting the programmed) Monitoring the progress of trainees

(6) EVALUATION OF THE PROGRAMME:The last stage in the training and development process is the evaluation of results. Since huge sums of money are spent in training and development,



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how far the programme has been successful must be judged or determined.Evaluation helps determine the results of the training and developmentprogramme. In practice, however, organizations either overlook or lack facilities for evaluation.

Need for Evaluation:

The main objective of evaluating the training programmes is to determine if they are accomplishing specific training objectives, that is, correctingperformance deficiencies. A second reason for evaluation is to ensure thatany changes in trainee capabilities are due to the training programme and notdue to any other conditions. Training programmes should be evaluated todetermine their cost effectiveness. Evaluation is useful to explain programmefailure, should it occur. Finally, credibility of training and development isgreatly enhanced when it is proved that the organization has benefited

tangibly from it.

Principles of Evaluation:Evaluation of the training programme must be based on the followingprogrammes:a) Evaluation specialists must be clear about the goals and purpose of evaluationb) Evaluation must be continuousc) Evaluation must be specificd) Evaluation must provide the means and focus for trainers to be able to appraise

themselves, their practices, and their products.e) Evaluation must be based on objective methods and standards.f) Realistic target dates must be set for each face of the evaluation process. A sense of

urgency must be developed, but deadlines that are unreasonably high will result inpoor evaluation.

There are various approaches to training evaluation. To get a valid measure of trainingeffectiveness, the personnel manager should accurately assess trainee‘s job performancetwo to four months after completion of training.Two writers have suggested that four basic categories of outcome can be measured.a) Reaction: evaluate the trainee‘s reaction to the programme. Did he like the

programme? Did he think it worthwhile?

b) Learning: did the trainee learn the principles, skills and the fact that the supervisor orthe trainee wanted him to learn?

c) Behavior: Whether the trainee‘s behavior on the job changed because of the trainingprogramme?

d) Results: what final results have been achieved? Did he learn how to work on

machine? Did scrappage costs decrease? Was turnover reduced? Are productionsquotas have been met?

Questionnaires or structured interviews with the immediate supervisors of the trainees are acceptable methods for obtaining feedback on training. Thesupervisor is asked to rate the former trainee on job proficiency directlyrelated to the training objectives.



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Besides, pre-and-post tests be administered to the training groups. Prior to the training, atest related to the training material is applied, and the results of this pre-test are comparedwith results on the same or similar test administered after the programme has been

completed.

Q) Objectives of Training and Development

Staying ahead in today's business world is more challenging than ever. Buildingtrust and promoting teamwork are just two expectations of any business leader.Training and development programs are designed to keep an organization at the front of its industry maximize performance and energize every level of the organization. Trainingand Development is also seen to strengthen the tie between employee development andstrategic operation objectives.

The objectives of Training and Development are as follows: -

Efficiency: Employees become efficient after undergoing training. Efficient employees

contribute to the growth of the organization.

Fewer accidents: Accidents, scrap and damage to machinery and equipment can be

avoided or minimized through training. Even dissatisfaction, complaints, absenteeism,

and turnover can be reduced if employees are trained well.

Meeting manpower needs: Future needs of employees will be met through training

and development programmes. Training serves as an effective source of recruitment.

Training is an investment in human resource with promise of better returns in future.

Improves quality: Better-informed workers are likely to make less operational

mistakes. Quality of products or services will definitely increase. This can be well

measured through the reduction in rejections.

Personal growth: Training programmes also deal with personality development of the

employees (through goal setting, motivation, leadership skills, etc.) thus they

personally gain through exposure to training programmes.

Obsolescence prevention: Training and development programs foster the initiative

and the creativity of the employees and help to prevent the manpower obsolescence,

which may be due to age, temperament, or the inability of the person to adapt himself

to technological changes.

Versatility in operations: Training makes the employees versatile in operations.All rounders can be transferred to any job. Flexibility is therefore ensured. Growthindicates prosperity, which is reflected in profits every year.

Employee stability: Training contributes to employee stability in at least 2 ways.Employees become efficient after undergoing training. Efficient employeescontribute to the growth of the organization. Growth renders stability to the work force. Further trained employees tend to stay with the organization.

Q) Effectiveness and Evaluation of Training and Development Effectiveness of TrainingTraining and Development programmes are most likely to be effective when theyincorporate the following principles



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1.Employee Motivation-motivation to learn is the basic requisite to make training anddevelopment programmes effective. Motivation comes from awareness that trainingfetches some rise in status and pay. Motivation alone is not enough; the individual must

have the ability to learn.

2.Recognition of individual differencesRegardless of individual differences, and whether a trainee is learning a new skill oracquiring knowledge of a given topic, the trainee should be given the opportunity topractice what he is taught. Practice is essential after individual is successfully trained.

3.Schedule of learningDuration of practice sessions, duration of rest sessions and positioning of rest pauses arethe three schedules, which must be carefully planned and executed for an effectivetraining programme.

Besides, Training can be made effective, if action on the following lines is initiated: -

1.It should be ensured that the management commits itself to allocate major resources andadequate time to training. This is what high performing organizations do. For exampleXEROX, invest 300 $ million annually or about 2.5% of its revenue on training. SimilarlyHewlet Packard spends about 5% of its annual revenue to train 87000 workers.

2.It should be ensured that training contributes to competitive strategies of the firm.Different strategies need different HR skills for implementation. Let training helpemployees at all levels acquire the needed skills.

3.Ensure that a comprehensive and systematic approach to training exists, and trainingand retraining are done at all levels on a continuous and ongoing basis.

4.Training can be made effective by making learning as one of the fundamental values of the company. This philosophy should percolate down to all employees in theorganization.

5.It should be ensured that there is proper linkage among organizational, operational andindividual training needs.

6.And finally to make training effective a system to evaluate the effectiveness of trainingneeds to be prepared so that the shortfalls can be easily looked at.

Why Training Fails? The benefits of training are not clear to the top management. The top management hardly rewards the supervisors for carrying out effective

training. The top management rarely plans and budgets systematically for training The middle management, without proper incentives from top management does not

account for training in production scheduling



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Without proper scheduling from above, first line supervisors have difficulty inproduction norms if employees are attending training programmes.

Trainers provide limited counseling and consulting services to the rest of the

organization. Evaluation of Training

Organizations are under pressure to justify various expenses. The training budgetis, often, not exempted from this purview. There are a number of questions raised on thevalue derived from training programmes — both directly and indirectly. Business headsand training managers are under pressure to prove the effectiveness of training

Thus it can be seen,The last and one of the most important stages in the training and development

process is the evaluation of results. Since huge sums of money are spent on training anddevelopment. how far the training has been useful must be judged/determined.Evaluation helps determine the results of the training and development programme.In practice is however seen, organizations either overlook or lack facilities for evaluation.

Need for evaluation: - The main objective of evaluating the training programme is to

determine if they are accomplishing specific training objectives,that is correctible performance deficiencies.

Secondly training programme should be evaluated to determinetheir cost effectiveness. Evaluation is useful to explain programmefailure, if it occurs.

And finally the credibility of training and development is greatlyenhanced when it is proved that the organization has benefitedtangibility from it.

Principle of evaluation

Evaluation of training programme must be based ob following principles1. The evaluation specialist must b clear about the goals and purposes of evaluation.2. Evaluation must be continuous.3. Evaluation must be specific.4. Evaluation must provide the means and focus for trainers to be able to appraise

themselves5. Evaluation must be based on objective methods and standards.6. Realistic target dates must be set for each phase of the evaluation process. A sense

of urgency must be developed, but deadlines that are unreasonably high will result

in poor evaluation.

Criteria for evaluation.HR professionals should try to collect four types of data while evaluation trainingprogrammes.I. Measures of reaction.Reaction measures reveal trainees‘ opinions regarding the training programme.



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II. LearningLearning measures assess the degree to which trainees have mastered the concepts,knowledge and skills of the training.

III. Behavioural changeBehavior indicates the performance of the learners.

IV. Organizational resultsThe purpose of collecting organizational results is to examine the impact of training onthe work group or the entire company.

Techniques of evaluationSeveral techniques of evaluation are being used in organizations. It may be stated that theusefulness of the methods is inversely proportional to the ease with which the evaluationcan be done.The following are the techniques of evaluation: -

1.Experimental and control groups.Each group is randomly elected, one to receive training and the other not to receivetraining.The random selection helps to assure the formation of the groups quite similar to eachother. Measures are taken of relevant indicators of success. (E.g.-words typed per minute,pieces produced per hour etc) before and after training for both groups.If the gain demonstrated by the experimental group is better than those by the controlgroup, the training programme is labeled as successful.

2.Longitudinal or time series analysisMeasurements are taken before the programme begins and are continued during and afterthe programme is completed. These results are plotted on a graph to determine whetherchanges have occurred and remain as a result of training effort. To further validate, that

change has occurred as a result of training and not another variable, a control group canbe included.

In order to conduct a thorough evaluation of a training programme, it is important toassess the costs and benefits associated with the programme. This is a difficult task, but itis useful in convincing the management about the usefulness of the training.Some of the costs that should be measured for a training programme include needsassessment costs, salaries of training department staff, purchase of equipment,programme development costs, trainers cost during the training period.The benefits to be compared to the costs are rupee payback associated with theimprovement in trainee‘s performance, their behavioral change and the longevity of theperiod during which the benefit would last.

Q) Follow – Up of Training

Following-up is the last step in the training process. Here, the training program isalready completed and the trainees go back to their departments or positions and startdoing the work assigned. However, the management feels that training / developmentis a means and not the end in itself. Training is essentially for achieving certainobjectives. Management will like to know actual results / benefits of training. For this,



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follow-up of training in the form of evaluation training is essential. Managementspent huge amount of money on training of employees and this expenditure shouldgive positive return in terms of higher efficiency, productivity, high morale, cordial

industrial relations and so on. For this, critical evaluation of training program isessential. This indicates the effectiveness of the training. Even suitable modification / improvement in the training program is possible after analyzing the results availablefrom such evaluation. In brief, evaluation helps determine the results of training anddevelopment program. Unfortunately, many organizations overlook this importantstep in the training process. In some companies, suitable facilities required forevolution of training are not available.

Follow-up is the key to ensuring that interventions improve performance. Variousfollow-up approaches in the work place are used to support trainers, supervisors,service providers and others responsible for implementing the performanceimprovement interventions.

The follow up technique will increase the probability that learning and behaviorchanges will "stick" back on the job. These techniques are easy to use, don't requirelarge amounts of time or organizational integration and cost very little. They can beadded on to existing training or designed with new training.

On the whole, follow – up action is required to ensure implementation of evaluationreport at every stage of training.

Q) Importance of Training and Development

Training and development programmes help remove performance

deficiencies in employees. This is particularly true when

(1) The deficiency is caused by a lack of ability rather than a lack of motivation toperform

(2) The individual(s) have the aptitude and motivation needed to learn to do the jobbetter, and

(3) Supervisors and peers are supportive of the desired behaviors.

There is greater stability, flexibility and capacity for growth in an organization. Trainingcontributes to employee stability in at least two ways. Employees become efficient afterundergoing training. Efficient employees contribute to the growth of the organization.Growth renders stability to the work force. Further, trained employees tend to stay with

the organization. They seldom leave the company. Training makes the employeesversatile in operations. All rounder can be transferred to any job. Flexibility is thereforeensured. Growth indicates prosperity, which is reflected in increased profits from year toyear. Nobody else but well trained employees can contribute to the prosperity of anorganization.



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Accidents, scrap and damage to machinery and equipment can be avoided or minimizedthrough training. Even dissatisfaction, complaints, absenteeism, and turnover can bereduced if employees are trained well.

Future need of employees will be met through training and development programmes.Organizations take fresh diploma holders or graduates as apprentices or managementtrainees. They are absorbed after course completion. Training serves as an effectivesource of recruitment. Training and development is an investment in human resourceswith a promise and it serves as an effective source of recruitment. Training anddevelopment is an investment in HR with a promise of better returns in future.

A company‘s training and development pays dividends to the employee and the

organization. Though no single training programme yields all the benefits, theorganization which devotes itself to training and development enhances its HRcapabilities and strengthens its competitive edge. At the same time, the employee‘s

personal and career goals are furthered, generally adding to his or her abilities and value

to the employer. Ultimately, the objectives of the HR department are also furthered.

Q How to identify training needs?

Needs assessment diagnoses present problems and future challenges to be metthrough training and development. Organizations spend vast sums of money(usually as a percentage on turnover) on training and development. Beforecommitting such huge resources, organizations would do well to assess thetraining needs of their employees. Organizations that implement trainingprogrammes without conducting needs assessment may be making errors. For ex-ample, a needs assessment exercise might reveal that less costly interventions (e.g.selection, compensation package, job redesign) could be used in lieu of training.Needs assessment occurs at two levels group and individual. An individual

obviously needs training when his or her performance falls short of standards, thatis, when there is performance deficiency. Inadequacy in performance may be dueto lack of skill or knowledge or any other problem. The problem of performancedeficiency caused by absence of skills or knowledge can be remedied by training.Faulty selection, poor job design, uninspiring supervision or some personalproblem may also result in poor performance. Transfer, job redesign, improvingquality of supervision, or discharge will solve the problem. Figure illustrates theassessment of individual training needs and remedial measures.

Performance Deficiency

Lack of

Training

Other Causes

Non- trainingMeasures

Formatted: Font: 12 pt



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Assessment of training needs must also focus on anticipated skills of an employee.Technology changes fast and new technology demands new skills. It is necessary

that the employee be trained to acquire new skills. This will help him/her toprogress in his or her career path. Training and development is essential to preparethe employee to handle more challenging tasks. Deputation to a part-time MBAprogramme is ideal to train and develop such employees. Individuals may alsorequire new skills because of possible job transfers. Although job transfers arecommon as organizational personnel demands vary, .hey do not necessarilyrequire elaborate training efforts. Employees commonly require only anorientation to new facilities and jobs. Recently, however, economic forces havenecessitated significant retraining efforts in order to assure continued employmentfor many individuals. Jobs have disappeared as technology, foreign competition,and the force of supply and demand are changing the face of our industry.Assessment of training needs occurs at the group level too. Any change in theorganization‘s strategy necessitates training of groups of employees. For example,

when the organization decides to introduce a new line of products, sales personneland production workers have to be trained to produce, sell and service the newproducts. Training can also be used when high scrap or accident rates, low moraleand motivation, or other problems are diagnosed. Although training is not a cure-all, such undesirable happenings reflect poorly trained work force.

Needs Assessment Methods: How are training needs assessed? Several methodsare available for the purpose. As shown in Fig. 9.4, some are useful fororganizational-level needs assessment and others for individual needs assessment.

Group or Organizational Analysis Organizational goals and objectives

Personnel/ skill inventories Organizational climate indices Efficiency indices Exit interviews MBO or work planning systems Quality circles Customer survey/satisfaction data Consideration of current and projected changes

Individual Analysis Performance appraisal Work sampling Interviews

Questionnaires Attitude survey Training progress Rating scales

Benefits of Needs Assessment: As was pointed above needs assessment helpsdiagnose the causes of performance deficiency in employees. Causes require



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remedial actions. This being a generalized statement, there are certain specificbenefits of need& assessment. They are:

1. Trainers may be informed about the broader needs of the training

group and their sponsoring organizations.2. The sponsoring organizations are able to reduce the perception gap

between the participant and his or her boss about their needs andexpectations from the training programme.

3. Trainers are able to pitch their course inputs closer to the specificneeds of the participants.



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Performance appraisal

Q) Give the meaning and definition of performanceappraisal and its objectives?

In simple terms, appraisal may be understood as the assessment of an individual‘sperformance in a systematic way, the performance being measured against such factors as

job knowledge, quality, and quantity of output, initiative, leadership abilities, supervision,dependability, co-operation, judgment, versatility, health, and the like. Assessment shouldnot be confined to past performance alone. Potentials of the employee for futureperformance must also be assessed.

A formal definition of performance appraisal is:―It is the systematic evaluation of the individual with respect to his or her performance onthe job and his or her potential for development.‖

A more comprehensive definition is:―Performance appraisal is a formal, structured system of measuring and evaluating an

employee‘s job related behaviors and outcomes to discover how and why the employee ispresently performing on the job and how the employee can perform more effectively inthe future so that the employee, organization, and society all benefit.‖

The second definition includes employee‘s behavior as part of the assessment. Behavior can be active or passive. Either way behavior affects job results. The other terms used forperformance appraisal are: performance rating, employee assessment, employee

performance review, personnel appraisal, performance evaluation, employee evaluation,and merit rating. In a formal sense, employee assessment is as old as the concept of management, and in an informal sense, it is probably as old as mankind. Nor performanceappraisal is done in isolation. It is linked to job analysis.

Objectives of performance appraisal.

Data relating to performance assessment of employees are recorded, stored, and used forseveral purposes. The main purposes for employee assessment are:

1) To effect promotions based on competence and performance

2)

To confirm the services of probationary employees upon their completing theprobationary period satisfactorily.

3) To assess the training and development need of employees.

4) To decide upon a pay raise.





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5) To let the employees know where they stand insofar as their performance isconcerned and to assist them with constructive criticism and guidance for thepurpose of their development.

6) To improve communication. Performance appraisal provides a format for dialoguebetween the superior and the subordinate, and improves understanding of personalgoals and concerns. This can also have the effect of increasing the trust betweenthe rater and the ratee.

7) Finally, performance appraisal can be used to determine whether HR programmessuch as selection, training, and transfer have been effective or not.

Q. What is the Performance Appraisal process?

The employee performance appraisal enables you to identify, evaluate and develop an individual'sperformance. It is a tool to encourage strong performers to maintain their high level of performance and tomotivate poor performers to do better.

Other important benefits of a formal appraisal process are:

Validation of hiring practices — are the right people in the right positions? Provision of an objective measuring tool on which compensation decisions, and

promotions can be based Identification of training needs — individually, departmentally and

organizationally Identification of employees who have the potential for advancement or who might

be better suited in other areas of the organization

1. Objectives Of An Appraisal:

1. Promotion, separation, and transfer decisions2. Feedback to the employee regarding how the organization viewed the employee's

performance3. Evaluations of relative contributions made by individuals and entire departments

in achieving higher level organization goals4. Criteria for evaluating the effectiveness of selection and placement decisions,

including the relevance of the information used in the decisions within theorganization

5. Reward decisions, including merit increases, promotions, and other rewards6. Ascertaining and diagnosing training and development decisions7. Criteria for evaluating the success of training and development decisions8. Information upon which work scheduling plans, budgeting, and human resources

planning can be used



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2. Establish Job Expectations:

Goals should be realistic, i.e., practical and achievable. Realistic goals provide a "balance" between what ishard and what is easy to achieve. Goals should motivate people to improve and to reach for attainable ends.For a goal to be motivational, the person must feel that the goal can be achieved. Impossible goals de-motivate and defeat the goal-setting process. Likewise, easy goals do not motivate any more thanunattainable goals. You should review your goals on a quarterly or semi-annual basis to check yourprogress and to make any necessary adjustments.

3. Design An Appraisal Programme:

(i) Formal versus Informal approach?

Many organizations encourage a mixture of both formal and informal approach. Theformal approach is used as the primary evaluation, where as the informal approach is usedmore for performance feedback.

(ii) Who are the raters?

Immediate supervisors, specialists from the hr department, subordinates, peers,committees, clients, or a combination of many.

(iii) What problems are encountered?

Leniency, severity, bias(iv) How to solve the problems?

Train the raters and appraisers(v) What should be evaluated?

Quality, quantity, timeliness, cost effectiveness, need for supervision, interpersonalimpact.

(vi) When to evaluate?

Once in three months, once in six months or once a year

4. Appraise Performances:

Use methods of appraisal such as psychological appraisals, assessment centers, ranking method,

performance tests and observations, essay method etc.

The formal performance appraisal process is one of assessing, summarizing anddeveloping the work performance of an employee. The performance appraisal processshould include at least two meetings convened by the supervisor with the employee.

5. Performance Interview:

Once appraisal has been made of employees, the raters should discuss and review the performance with theratees, so that they receive feed back about where they stand in the eyes of the superiors. Feedback isnecessary to effect improvement in performance. Performance interview has 3 goals:

(i) To change the behavior of employees whose performance does not meet organizationalrequirements or their own personal goals

(ii) To maintain the behavior of employees who perform in an acceptable manner(iii) To recognize superior performance behaviors so that they will be continued

6. Use Appraisal Data For Appropriate Purposes:

The Hr department must use the data and information generated through performance evaluation. Theemployers offer significant rewards to employees in the form of:

(i) Money to purchase goods and services, for luxury



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(ii) Opportunities to interact with other people in a favorable working environment(iii) Opportunities to learn grow and make full use of their potential etc.

Data & information outputs of a performance will be useful in the following areas of HRM:

(i) Remuneration administration(ii) Validation of selection programmes(iii) Employee training & development programmes(iv) Promotion, transfer & lay-off decisions(v) Grievance & discipline programmes(vi) HR planning

Q)Methods of Evaluation of Performance Appraisal

Numerous methods have been devised to measure the quantity and quality of employee‘s job performance. Each of the methods discuss could be effective for some purposes forsome organization as different organizations different methods. Broadly all theapproaches can be classified into past oriented and future oriented.

PAST ORIENTED

Rating Scales

This is the simplest and most popular method of appraising employee performance. Thetypical rating-scale system consists of several numeric scales, each representing a job-related performance criterion such as dependability, initiative, output, attendance, attitudeand the like. Each scale ranges from excellent to poor. The rater checks the appropriate

performance level on each criterion, then computes the employee‘s total numerical score.The number of points scored may be linked to salary increases, whereby so many pointsequal a rise of some percentage.Rating scales offer the advantages of adaptability, relatively easy use and low cost.Nearly every type of job can be evaluated with the rating scale, the only requirementbeing that the job performance criteria should be changed. This way a large number of employees can be rated in a short time, and the rater does not need any training to use the

scale.The disadvantages of this method are several. The raters biases are likely to influence theevaluation, and the biases are particularly pronounced on subjective criteria such as co-operation, attitude and initiative. Furthermore, numerical scoring gives an illusion of precision that is really unfounded

Man to Man comparison method:



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This technique was used by the US army, during the first world war. By this methodcertain factors are selected for the design by the rater for each factor. A scale of man isalso created for each selected factor. Each man to be rated is compared with the man in

the scale, and certain scores for each factor are awarded to him. So, instead of comparinga ―whole man‖ to a ―whole man‖ personnel are compared to the key man in respect of onefactor at a time. This method s used in job evaluation and is called the factor comparisonmethod. In performance appraisal it is not of much use because the designing of scales isa complicated task.

360-degree system of appraisal

Where appraisal are made by peers, superiors, subordinates and clients it is called 360-degree system of appraisal. First developed at GE, US in 1992, the system has becomepopular in our country too. GB (India), Reliance Industries, Crompton Greaves, Godrejsoaps, Infosys, Thermax and Thomas Cook are using the method with greater benefits.The Arthur Anderson survey (1997) reveal the20% of the organizations use the 360-

degree method. Here, besides assessing performance, other attributes of the assesse-talents, behavioural quirks, values, ethical standards, tempers and loyalty are evaluated bypeople who are best placed to do it.

Peer appraisal

Peers are in a better position to evaluate certain facts of job performance which thesubordinates or supervisors cannot do. Such facts include contribution to work groupprojects, interpersonal effectiveness, communication skills, reliability and initiative.Closeness of the working relationship and the amount of personal contacts place peers ina better position to make accurate assessments. Unfortunately, friendship or animositymay result in distortion of evaluation. Further, when reward allocation is based on peerevaluation, serious conflicts among co-workers may develop. Finally, all the peers may

join together to rate each other high.

FUTURE ORIENTED

MBO

The Management by objectives concept which was conceived by Peter Drucker, reflects amanagement philosophy which values and utilizes employee contributions.MBO wroks can be described in four steps:1) The organization, superiors and subordinates together or just the superiors aloneestablish the goals of the employee. This goal usually the desired outcome to be achievedand it can be used to evaluate performance.

2) Second step involves involves setting the performance standard for the subordinates ina previously arranged time period. As subordinates perform, they know fairly well whatthere is to do, what has been done, and what remains to be done.

3) Then the actual level of goal attained is compared to the goals agreed upon. Theevaluator figures out why the goals were not met and accordingly determines trainingneeds.



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4) The last step is establishing new goals and, possibly, new strategies for goals notpreviously attained. If the goals were succeeded the subordinate may have largerinvolvement in setting of his next goal otherwise the superior may have to do it alone.

However, this method has been criticised for not being applicable to jobs with little or noflexibility, such as assembly-line work. It works well with managerial personnel andemployees who have a fairly wide range of flexibility and self control in their jobs. And if this method is linked to employee rewards, the they are more likely to take up lesschallenging goals so that they are more likely to achieve them. Also if the rewards aresemi annual or annual, then the employees may take up short term goals and neglect theimportant long term goals. L&T follows MBO style of evaluation

Assessment centers:

Mainly used for executive hiring, assessment centers are now being used for evaluatingexecutive o supervisory potential. An assessment centre is a central location where

managers may come together to have their participation in job related exercises evaluatedby trained observers. The basic idea is to evaluate managers over a period of time, sayone to three days, by observing and evaluating their behaviour across a series of selectedexercises or work samples. Assesses are requested to participate in-basket exercises, work groups (without leaders), computer simulations, role playing, and other similar activitieswhich require the same attributes for successful performance, as in the actual job. Afterrecording their observations, the raters meet and discuss these observations. The decisionregarding the performance of each assessee is based upon this discussion of observations.Self evaluation and peer evaluation are also thrown in for final rating.

Q)What are the uses of Performance Appraisal?

Suitable Placement: Performance appraisal is useful for evaluating performance of subordinates and also for understanding their potentials. This information isavailable progressively and can be us purposefully for assigning duties toemployees as per their merits and potentials. Thus, placement of staff andperiodical adjustment in the placement can be made scientifically.

Assistance in Self-improvement: Performance appraisal gives the details of pluspoints and weaknesses of employees. In addition, they are given guidance forremoving their weaknesses and also for making their plus points moreconspicuous. In brief, performance appraisal assists the employees in self-development. This is possible through performance feedback to every employeeperiodically.

Incentive to Grown and Develop: Performance appraisal acts as an incentive toemployees to improve their performance, develop new qualities and secure higherpositions in the org. the employee with merit may be given special increments orpromotion to higher position. This motivates others to improve their performanceand qualities for similar benefits.



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Effective training programme: performance appraisal suggests the drawbacks andother weaknesses of employees. It is possible to remove such commonweaknesses and deficiencies of employees by adjusting their training programmes

accordingly.

Introduction of Sound Personnel Policies: transfers, promotions, wage rates anddismissal are the different areas of personnel management. These personnelpolicies are directly connected with the performance appraisal of employees. Suchpolicies become fair, impartial and acceptable to emp. When they are based onperformance appraisal.

Cordial Employer-Employees Relation: performance appraisal avoids or at leastminimizes grievances of employees as regards promotions, transfers, incrementsetc. Employees develop a sense of confidence that injustice will not be done toany employee as performance appraisal system is based on sound principles.Management is also not in a position to make partiality/ favouratism when

performance appraisal records are maintained properly and used when required.

Human Resource Planning and Development: performance appraisal facilitateshuman resource planning and development. It suggests the type of manpoweravailable. It is also possible to train or develop the existing manpower as per thefuture needs of the enterprise. This is possible through training and exec.Development programmes.

Employee Communication: performance appraisal facilitates directcommunication with the employees through appraisal interview and post appraisalinterviews. Such communication guides emp. And also provides more info. to themgmt. regarding the expectations and feelings of the employees.

High Employee Morale: scientific and impartial appraisal gets the support fromthe employees. They feel that the mgmt. gives due importance to them and isgenuinely interested I their career development and well being, this createspositive impact on the mental make-up of employees. They treat mgmt. as theirfriend, guide and well wisher. This raises the morale.



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A company needs job descriptions for positions such as executives, managers,technologists, entry-level people, and the like, so that people know where they fall withinthe organization. A pay structure helps answer questions about who's who, what eachperson's role is, and why people are compensated differently. It also helps humanresources personnel administer fairly any given pay philosophy. For example, a company

might want to pay everyone at market; or pay some people at market and some above it.Opportunities for incentives are also dealt with in the pay structure. For example, peoplewith strategic roles will have opportunities for higher incentives.

In most organizations wage and salary rates are still assigned to jobs. The relationshipsbetween the pay for jobs involve pay structure decisions. Although organizations oftenmake pay level decisions (how much to pay) and pay structure decisions (payrelationship) at the same time, these decisions and the process by which they are reachedrequire separate treatment.

Actually, wage structures represent wage relationships of all kinds. Analysis of wagedifferentials of any kind (geographic, industry, community, or occupation) deals withwage structure issues. But because our primary focus is on pay decisions in organizations,

our concern is with pay differences between jobs. In fact, determining the pay structure of an organization may be usefully described as putting dollar signs on jobs. Decisions onwage relationships among jobs within an organization are largely within the control of itsdecision makers. Wage level decisions are usually influenced more by forces external tothe organization than are wage structure decisions.

Some organizations pay for skills possessed by employees rather than for the jobsemployees hold. The rationale is usually serious and continual skill shortages experiencedby the organization. But most organizations measure employee contributions first in termsof the jobs employees hold. One interesting analysis of organizational compensationdecisions is that pay structure decisions are intended to achieve retention of employeesthrough prevention of dissatisfaction and encouragement of employee cooperation. Paylevel decisions, in this analysis, are intended to attract employees. To this analysis could

be added the statement that wage structure decisions are intended to encourage employeesto make a career with the organization and to accept training in preparation for higher-level jobs.

Lower-range — pay is between minimum pay and mid-range, is appropriate foremployees in the learning and development phase of their job; this range is

Q)The meaning of Pay Structure

A company's pay structure is its method of administering its pay philosophy. The twoleading types of pay structures are the internal equity method, which uses a tightlyconstructed grid to ensure that each job is compensated according to the jobs above andbelow it in a hierarchy, and market pricing, where each job in an organization is tied tothe prevailing market rate.



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typically for employees new to a position and whose competencies are not yetfully developed. Entry level pay falls in this range.

Mid-range — pay is appropriate for employees who are fully proficient in their job. This is the target market-based competitive pay for employees who are fullycompetent, possess the full skill set necessary to perform their job well, meet jobexpectations, and consistently demonstrate skills needed and fulfill responsibilitiesand duties.

Upper-range — pay is appropriate for employees who serve as role models,exhibiting an exceptional skill set and consistently exceeding all job expectations.These employees exemplify the best way of doing their job, go the "extra mile,"

share their knowledge, and leverage their strengths to benefit the Organisation.

Q)The Meaning of Pay Level

The compensation and benefit level is the average compensation paid to employees. This has twoimplications. The first is external: how does the organization compare with other organizations? Thisquestion is a strategic one of how the organization wishes to position itself in the marketplace. The secondimplication is internal. The average compensation is a reflection of the total compensation bill of theorganization. Labor is one of the claimants on organizational resources. The size of the compensation andbenefits bill is a reflection of who gets what within the organization.

The decision on compensation levels (how much will the organization pay?) may be themost important pay decision the organization makes. A potential employee's acceptanceusually turns on this decision, and a large segment of the employer's costs are determinedby it.

Compensation decisions are typically micro (individual) or macro (total organization)focused. Although organizations are under no constraint to separate these decisions, acourse of study should. In practice, most unsophisticated organizations make the decisionon compensation level (how much to pay) and compensation structure (relationships tocompetitors) at the same time. More administratively advanced organizations realize thatindividual decisions within a proper administrative structure are more consistent, fair, andcost-effective over time.

The compensation level decision may be considered the most important one forindividuals. In terms of both employee attraction and cost considerations, it is oftenconsidered by most managers as a primary consideration. Also, it seems essential torecognize that compensation level decisions can never be completely separate from job-mix, hiring standards, personal decisions, and internal labor markets/relationships. Forthese reasons, compensation level decisions are typically the focus of a manager‘s

attention. From the organization‘s perspective, however, one individual‘s compensation



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decision typically goes unnoticed at the end of the year. Structure decisions (and the levelof those structures) are what show up on an income statement.

The term compensation level simply means the average compensation paid to workers atsome level of analysis, e.g. the job, the department, the employing organization, anindustry, or the economy. The importance of the compensation level decision toorganizations rests on its influence in getting and perhaps keeping the desired quantityand quality of employees. If the compensation level is too low, the applicant pool maydry up and recruitment efforts may meet with little success. Equally serious, someemployees (often the best ones) may leave. At the extreme, the organization mayexperience difficulties with state and federal regulatory bodies administering minimumcompensation laws and prevailing wage laws. Also, the organization may be confrontedwith concerted organizing drives if no union is present, or pressing compensationdemands from existing unions. It is less apparent, but equally real, that a lowcompensation level may attract only less efficient workers, with the result that labor costsper unit of output rise.

If, on the other hand, the compensation level is too high, equally undesirable results arelikely. The competitive position of the organization may suffer. Turnover rates may dropbelow some desirable minimum so that the organization tends toward inflexibility orstagnation. Also, if compensation and salary levels are too high during periods of compensation controls by federal authorities, trouble may be forthcoming from theseofficials. Frequently, compensation and benefit level decisions are hidden in the type andstructure of benefit, fringe, and retirement plans.

Changes in compensation levels have the most drastic effects on total payroll. Of course,other compensation decisions have payroll effects, but usually not nearly as great.Substantial sums of money can be involved, and for this reason alone an organizationmust pay close attention to compensation levels (both competitively and internally).

Nor are employees and their representatives any less concerned with compensation leveldecisions. It is here that the absolute amount of the compensation or salary rate isdetermined. Also, it is here that unions exert their major effect, and here that memberloyalty is built or lost.

Finally, consumers and the general public have major interests in compensation level decisions, theconsumer because wages are a major element in prices, and the general public because wages and salariesrepresent the major portion of national income. Also, too frequent or too drastic changes in compensationlevels affect the health of our economy.

Q) Explain the Concepts of wages.

While evolving the wage policy, three concepts of wages are generally considered, namely,

1. Minimum Wages,2. Fair Wages, and3. Living Wages.



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Minimum WagesMinimum wage is the one that provides not merely the bare sustenance of life but also for

the preservation of the efficiency of the worker. For this purpose, the minimum wagemust also provide for some measure of education, medical requirements and amenities.Minimum wage may be tied by an agreement between the management and the workers,but is usually determined through legislation. This is more so in the unorganized sectorwhere labour is unionised. In the fixation of minimum wages, besides the needs of workers, other factors like ability of the concern to pay, nature of the jobs, and so on, arealso considered.

Fair WagesFair wage is understood in two ways. In a narrow sense, wage is fair if it is equal to therate prevailing in the same trade and in the neighbourhood for similar work. In a widersense, it will be fair if it is equal to the predominant rate for similar work throughout thecountry and for traders in general. Irrespective of the way in which fair wage is

understood, it can be fixed only by comparison with an accepted standard wage. Such astandard can be determined with reference to those industries where labour is wellorganized and has been able to bargain well with the employers.

Living WagesLiving wage is a step higher than fair wage. Living wage may be described as one whichshould enable the wage earner to provide for himself and his family not on the bareessentials of life like food, clothing and shelter, but a measure of frugal comfort includingeducation for children; protection against ill health; requirements of essential socialneeds; and/or measure of insurance against the more important misfortunes including oldage. A living wage must be fixed considering the general economic conditions of thecountry. The concept of living wage, therefore, varies from country to country. In themore advanced countries, living wage itself forms the basis for the minimum wage.

In India, minimum wage is determined mainly for sweated industries under theprovisions of the Minimum Wages Act, 1948. Fair wage is fixed for other industriesconsidering prevailing rates of wages, productivity of labour, capacity of the employer topay, level of national income and other related factors.

Tribunals, awards and wage boards play major role in fair wage fixation. Manypeople are of the opinion that living wage is a luxury for a developing country like Indiaand can therefore be deferred.

Question 1 – Theories Of Remuneration

Vroom’s Expectancy Theory

The Three Influencing Factors1. Valence: It refers to the strength of a person‘s preference for receiving a reward, is

unique to each employee and thus is a reflection of the concept of individual‘sdifferences. Managers should determine what an individual employee‘spreferences are, among a set of rewards. When a person prefers not attaining anoutcome, valence is a negative figure, and it goes without saying, that in thisinstance, the motivation is not at its highest level.



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2. Expectancy: It is the strength of belief that one‘s work -related effort will result incompletion of a task. Expectancies are stated as probabilities. The employee‘s

estimate of the degree to which performance will be determined by the amount of

effort extended. If individuals are efficient, they will believe that they have thenecessary capabilities to perform a task, fulfil role expectations, or meet achallenging situation successfully.

3. Instrumentality: It represents the employee‘s belief that a reward will be receivedonce the task is accomplished, based on the probability that the organization willvalue the employee‘s performance and will administer rewards suitably. If anemployee sees that promotions are based on performance, instrumentality will berated high. A low estimate of instrumentality will be made if the employee fails tosee such linkages between performance and reward.

The relationship between these three influencing factors is…

Valence Expectancy Instrumentality = Motivation

… where the combination that produces the strongest motivation, is high positive valence,high expectancy, and high instrumentality.

The expectancy theory focuses on the link between rewards and behaviour. Motivation,according to the theory, is the product of valence, instrumentality and expectancy;therefore, remunerating systems differ according to their impact on these motivationalcomponents. Valence of pay outcomes remains the same under different pay systems.Expectancy perceptions often have more to do with job design and training than paysystems. Generally speaking, pay systems differ most in their impact on instrumentality – the perceived link between behaviour and pay.

Skinner’s Reinforcement Theory

Employees‘ behaviour and the amount of effort they allocate to the various jobs, is verymuch a consequence of reinforcement.

Positive Reinforcement provides a favourable consequence that encourages repetition of behaviour. An employee may find that when high-quality work is done, the supervisorgives a reward of recognition, and as a result, behaviour is reinforced and the employeetends to want to do high-quality work once again.

Negative Reinforcement provides an unfavourable consequence that does not encouragerepetition of undesirable behaviour. For example, a strong disapproval can be showntowards tardy employees to make them aware if the fact that coming late to work is notallowed and not accepted. (However, it is also possible to motivate such an employee tocome on time, if the manager expresses strong approval of each on-time or early arrival).

Schedules of Reinforcement

1. Fixed Ratio: Schedule occurs when there is reinforcement after a certain numberof correct responses, e.g. payment of bonuses after a sale of certain number of items, which encourages the employees to sell more items.



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2. Fixed Interval: Schedule provides reinforcement after a certain period of time,e.g. a paycheck that arrives every two weeks, which an employee can alwaysdepend on, except in very unusual circumstances

3. Variable Ratio: Schedule is reinforced after a variable (but undisclosed) numberof correct responses, e.g. payment of bonuses after a sale of certain number of items, but here the specific number is unknown, and this provokes interest.

4. Variable Interval: Schedules give reinforcement after a variety of time periodse.g. a company‘s policies of making safety inspections of every department, four times a year, in order to encourage companies with safety regulations – theinspections are made on random basis, and the intervals between them vary.

The reinforcement theory postulates that a behaviour, which has a rewarding experience,is likely to be repeated. The implication for remuneration is that high employeeperformance followed by a monetary reward will make future employee performancemore likely. By the same token, a high performance not followed by a reward will makeits recurrence unlikely in future. The theory emphasises the importance of a person

actually experiencing the reward.

Adam’s Equity Theory

Employees work in a social system in which each is dependent to some degree on theothers. Employees interact with one another on tasks and on social occasions. Theyobserve one another, judge one another, and make comparisons. The equity theory buildson this notion of comparison, to add new dimensions to our overall understanding of employee motivation.

Equity theory says that employees weigh what they put into a job situation (input) againstwhat they get from it (reward), and then compare their input-reward ratio with the input-

reward ratio of relevant others.

One’s own rewards compared Others’ rewards

One’s own inputs to Others’ inputs

If they perceive their ratio to be equal to that of the relevant others with whom theycompare themselves, a state of equity is said to exist. They feel that their situation is fair,that justice prevails, and they will continue to contribute at about the same level.

If the ratios are unequal, inequity exists; that is, the employees tend to view themselves asunder-rewarded or over-rewarded. When inequities occur, they will experience tensionthat will create the motivation to reduce the inequity, in an attempt to correct them.

If employees feel over-rewarded, equity theory predicts that they will feel an imbalance intheir relationship with their employer and seek to restore that balance. They might work harder, they might discount the value of the rewards received, they could try to convinceother employees to ask for more rewards, or they might simply choose someone else forcomparison purposes.

Workers, who feel they have been under-rewarded, might lower the quantity or quality of their productivity, they could inflate the perceived value of the rewards received, or they



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could bargain for more actual rewards. Again, they could find someone else to compare(more favourably) with, or they might simply quit. In any event, they are reacting toinequity by bringing their inputs into balance with their outcomes.

Interpreting The Equity Model

Adam‘s equity theory puts forward that an employee who perceives inequity in his or her rewards seeks to restore equity. The theory emphasises equity in pay structure onemployees‘ remuneration.

A manager using the equity model should measure employee assessments of their inputsand outcomes, identify their choice of references and evaluate employee perceptions of inputs and outcomes.

Agency Theory

The agency theory focuses on the divergent interests and goals of the organisation‘s

stakeholders and the way that employee remuneration can be used to align these interestsand goals.

Employers and employees are the two stakeholders of a business unit, the formerassuming the role of principals and the latter the role of agents.

The remuneration payable to employees is the agency cost. It is natural that theemployees expect high agency costs while the employers seek to minimise it.

The agency theory says that the principal must choose a contracting scheme that helpsalign the interest of the agents with the principal‘s own interests.

These contracts can be classified as either behaviour-oriented (e.g. merit pay) or outcome-oriented (e.g. stock option schemes, profit sharing and commissions). In fact, outcome-oriented contracts seem to be the obvious solution, because as the profits go up, rewardsalso increase, and similarly, remuneration falls when profits go down.



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Question 2 – Remuneration Plans & Business Strategy

The general practice in devising remuneration is to pay what competitors pay or to adhereto the ‗corporate policy‘ but the actual remuneration plan should be integrated with thebusiness strategy of every organization, and should not be strictly a matter of what isbeing paid in the market place. It should be an assessment of what must be paid to attractand retain the right people, what the organisation can afford, and what will be required tomeet the organisation‘s strategic goals.

Business StrategyMarket Position

& Maturity

Remuneration

Strategy

Blend Of

Remuneration

Investing to growRapid growth to

maturityStimulate

entrepreneurship

High cash with aboveaverage incentive for

individualperformance. Modest

benefits.

Manage earnings &protect markets

Normal growth tomaturity

Rewardmanagement skills

Average cash withmoderate incentives

on individual, unit, orcorporate

performance.Standard benefits.

Harvest earnings – reinvest elsewhere

No real growth ordecline

Stress on costcontrol

Below-average cashwith small incentivetied to cost control.Standard benefits.

In companies that are growing rapidly, business strategy focuses on investing to grow.

The remuneration strategy should stimulate an enterprising and entrepreneurial style of management, with high cash payments, above-average incentives and modest benefits.

In companies witnessing a normal growth to maturity, business strategy is orientedprimarily towards managing earnings and protecting markets. The remuneration strategyshould aim at rewarding management skills and should be a blend of average cashpayments, moderate incentives and standard benefits.

In companies where there is no real growth or decline, the most appropriate strategy is toharvest earnings and reinvest them elsewhere. The remuneration strategy should stress oncontrol of costs, with below-average cash payments, modest incentives are tied directly tocontrol costs and standard benefits.

Thus, companies do the following, viewing remuneration from a strategic perspective:1. They recognise remuneration as a pivotal control and incentive mechanism that

can be used flexibly by the management to attain business objectives.2. They make the pay system an integral part of strategy formulation.3. They integrate pay considerations into strategic decision-making processes, such

as those that involve planning and control.4. They view the company‘s performance as the ultimate criterion of the success of

the strategic pay decisions and operational remuneration programs.



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Question 3 – a) Challenges affecting Remuneration &b) Concept of wages

a) Challenges affecting Remuneration

People who administer wage and salary face challenges, which often necessitateadjustments to a remuneration plan. The more important of the challenges are: -

Skill-based pay: In the traditional job-based pay, employees were paid on the bases of jobs the do. In the skill-based system, workers are paid on the basis of number of jobsthey are capable of doing. The purpose of this system was to motivate employees toacquire additional skills so that they become more useful to the organization. Skill-basedpay systems work well when,a) HRM philosophy is characterized by mutual trust and the conviction that theemployees have the ability and motivation to perform well.b) Technology and the organization structure changes frequently.c) Employee turnover is relatively high.d) Workers value teamwork and opportunity to participate.

Pay Reviews: Pay once determined should not remain constant. It must be reviewed andchanged often, but the question is ―how often?‖ Pay reviews may be made on pre-determined dates, anniversary dates or there could be flexible reviews. In fixed dates,wages and salaries of all the employees are reviewed and raised on a specific date of eachyear. In anniversary dates salaries may be reviewed at an interval of twelve months fromthe date when employee was hired. In organized industrial establishments pay reviews areheld once in three years. In government departments this is done once every ten-fifteenyears.

Pay-secrecy: Equity in remuneration is a significant factor in the employee performance.Perceived inequality in wages and salaries will demotivate and demoralize employees,which will lower employee performance. One way of avoiding this problem is to maintainpay-secrecy.

Comparable worth: One of the popular principles in employee remuneration is equalpay for equal work. Under equal remuneration act, male and female workers are to paidsame if their merit and seniority match. Beyond the concept of equal wages is the conceptof comparable wages, which implies that if there are two employees under different jobs,but receive same points under a point ranking method of job evaluation they have to bepaid the same.

International Pay: In increasing globalization of business international pay assumesgreater relevance. The amount of remuneration its composition and other factors poseserious challenge to HR manager.

b) Concept of wages

While evolving wage policy three concept of wages namely, I) Minimum wages, ii) fairwages and iii) Living wages are generally considered.



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Minimum wages: Minimum wages is the one, which provides not merely for baresustenance of life, but also for the preservation of the efficiency of the workers. Minimum

wages may be tied by an agreement between management and workers, but is usuallydetermined through legislation. This is more in an unorganised sector where labour isunionised.

Fair wages: It is understood in two ways. In narrow sense, wage is fair if it is equal to therate prevailing in the same trade and in the neighbourhood for similar work. In widersense, it will be fair if it is equal to the predominant rate for similar work through out thecountry.

Living wages: It is described as one in which it enables the wage earner to providehimself and his family not only bare essentials of life like food, cloting and shelter butalso education, essential social needs, medical help, insurance etc. A living wage must befixed considering general economic conditions of the country. It varies from country to

country.



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Question 4 – Promotion policies and Career planning

Promotion

Promotion means an improvement in pay, prestige, position and responsibilities of an employee within his organization. A mere shifting of an employee to a different

job which has better working hours, better location and more pleasant workingconditions, does not amount to a promotion. The new job is a promotion for theemployee only when it carries increased responsibility and enhanced pay.

Issues relating to employee promotion often figure in the negotiationsbetween employers and union leaders. But promotional matters rarely lead to amajor confrontation between them.

Purposes of Promotion

The purpose of promotion may be outlined as follows:

1) To motivate employees to higher productivity.2) To attract and retain the services of qualified and competent people3) To recognize and reward the efficiency of an employee4) To increase the effectiveness of the employee and of the organization.5) To fill up higher vacancies from within the organization.6) To build loyalty, morale, and a sense of belongingness in the employee.7) To impress upon others that opportunities are available to them too in the

organization, if they perform well.A promotion represents the ultimate accomplishment for some employees

Promotion Policy

The usual policy is to take merit into consideration. Sometimes length of service,education, training courses completed, previous work history, etc., are factors, which aregiven weight while deciding on a promotion. Although promotions are made on the basisof ability, hard work, co-operation, merit, honesty, many informal influences are powerfuldeterminants of a promotion policy.

For higher posts, persons are picked by the top executives:i. Who think and feel just as he does;

ii. Who value loyalty to him and to the organization; andiii. Who have social, political, economic and religious interests similar to his own.

Top executives tend to choose those who are carbon copies of themselves.








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Seniority versus Merit:

―Seniority‖ refers to length of service in the company or its various plants, or in its

departments, or in a particular position. Under straight plant wise seniority in all jobs,promotions go to the oldest employee, provided that he is fit for the job. Occupationalseniority may be within a department, within a division or in the entire plant.

Seniority offers certain rights and benefits. These are:

a) Some rights are based on competitive seniority among employees. Rights topromotion, transfer lay-off, and recall are such examples.

b) Other benefits have nothing to do with one man relative to another, e.g. a manmay be entitled to have 15 days casual leave in a year, a pension after thirty yearsand a certain amount of sick leave after six months service.

There is a great controversy on the question of whether promotions should be given onthe basis of seniority or ability. Trade unions are of the view that the promotions should

be given on the basis of seniority. While managements favour promotions on the basis of merit and ability.If a promotion is given to a qualified man in recognition of his performance or with aview to creating an incentive for him, then it should be based on his ability.If on the other hand, promotion is given to recognize and reward senior employees, then itshould be based on the basis of seniority.The most widely used basis for promotion combines both ability and seniority. The bestpolicy would be to ensure that whenever there are two employees of the equal seniority,ability or merit should be the deciding factor in a promotion. However there are twoemployees of the most equal competency, seniority should be the decisive factor. Such apolicy would satisfy the management, which prefers ability, and trade unions, whichprefer seniority.

CAREER PATH PLANNINGIf the organization (as well as the individual) does not have a through understanding of the requirements of available jobs and who jobs at succeeding levels relate to one another,effective carrer path planning is impossible.

Career Management: organizations focusing on their own maintenance and growth.Ultimately, it is the top managements responsibility to develop and implement a costeffective career-planning program. The program must fir the nature of the business, itscompetitive employment practices, and the current (a desired) organization structure. Thisprocess is complex because organizational career management combines areas thatpreviously have been regarded as individual issues: performance appraisal, development,transfer, and promotion. Before coaching and counseling take place, however it isimportant to identify characteristic career paths that employee tend to follow.

Career paths represent logical and possible sequences of position that caould be heldbased on analysis of what people actually do in an organization. Career path should:

Represent real progression possibilities, whether lateral or upward, withoutimplied ―normal‖ rates of progress or forced specialization in a technical area.

Be tentative and responsive to changes in job content, work prioritiesorganizational patters, and management needs.



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Be flexible, taking into consideration the compensating qualities of aparticular employee, managers, subordinates, or others who influence the waythat work is performed.

Specify the skills, knowledge and other attributes required to performeffectively at each position among the paths and specify how they can beacquired (if specifications are limitd to educational credentionals, age, andexpenses, some capable performance may be excluded from careeropportunities.

Data derived from HRM research are needed to define career paths in this manner.Behaviorally based analysis that can be expressed in quantitative terms are well suited tothis task since they focus directly on what people must do effectively in each job. Clusterof families of jobs requiring similar patters of behavior can then be identified.Once this is done, the next task is to identify career paths within and among the jobfamilies and to integrete the overall network of these paths into a single carrer system.This process is shown like this:

STEP 1 Analyse jobs to determine and similarities and differences among them.

STEP 2 Group jobs with similar behavioural requirements into job families.

STEP 3 Identify career paths within and among job families

STEP 4 Integrate the overall network of career paths into a single career system.



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Question 5 – What are the components of employeeremuneration and fringe benefits?

Remuneration is the compensation an employee receives in return for his or hercontribution to the organization. Remuneration occupies an important place in the life of an employee. His or her standard of living, status in the society, motivation, loyalty,and productivity depend upon the remuneration he or she receives. For the employer too,employee remuneration is significant because of its‘ contribution to the cost of production. Besides, many battles (in the form of strikes and lock-outs) are foughtbetween the employer and the employees on issues relating to wages or bonus. For HRMtoo, employees‘ remuneration is a major function. The HR specialist has a difficult task of

fixing wages and wage differentials acceptable to employees and their leaders.

An average employee in the organized sector is entitles to several benefits – both financialas well as non-financial. To be specific, typical remuneration of an employee comprises-

wages and salary, incentives, fringe benefits, perquisites, and non-monetary benefits. We will now discuss them in detail:-

1.Wages and Salary

Wages represent hourly rates of pay, and salary refers to the monthly rate of pay,irrespective of the number of hours put in by an employee. Wages and salaries are subjectto annual to small increments. They differ from employee to employee, and depend uponthe nature of job, seniority, and merit.

2.Incentives

Also called ‗payments by results‘, incentives are paid in addition to wages and salaries.Incentives depend upon productivity, sales, profit, or cost reduction efforts.These are:-I) individual incentive schemes and ii) group incentive programmes.Individual incentives are applicable to specific employee performance. Where a task demands group effort for completion, incentives are paid to the group as a whole. Theamount is later divided among group members on an equitable basis.

3.Fringe Benefits

These include such employee benefits as provident fund, gratuity, medical care,hospitalization accident relief, health and group insurance, canteen, uniform, recreationand the like. Other examples of fringe benefits are (A) Legally required payments i.e old

age ,survivors, disability and health insurance, workers compensation fund,unemployment compensation.(B) Contingent and deferred benefits i.e. pension plans,group life insurance, group health insurance, guaranteed annual wage, prepaid legalexpenses, military leave and pay, jury duty and bereavement paid leave, maternity leave,severence pay.(C) Payments for time not worked i.e vacations, holiday, voting payallowances.(D) Other benefits i.e. travel allowances, company car and subsidies, movingexpenses, uniform and tool expenses, employee meal allowances, discounts onemployer‘s goods and services, child care facilities.




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4.Perquisites

These are allowed to executives and include company car, club membership, paid

holidays, furnished house, stock option schemes and the like. Perquisites are offered toretain competent executives.

5.Non-Monetary Benefits

These include challenging job responsibilities, recognition of merit, growth prospects,competent supervision, comfortable working conditions, job sharing and flexitime.

The following diagram helps illustrate the above components better:-

Environment

DirectIndirect

Remuneration

Financial

Hourl

y and

mont

hly

rated WagesSalaries

Incentives,Individualplans andgroup plans

Fringe

BenefitP.FGratuityMedicalcareAccidentrelief

HealthInsurance

Perquisit

esCompany carClubmembershipPaid holidaysFurnishedhouse

Stock optionSchemes etc

Non -Financial

Job ContextChallenging jobResponsibilitiesRecognitionGrowth ProspectsSupervisionWorkingConditions

Job sharing etc



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Question 6 – Devising a Remuneration Plan

Any remuneration plan must be understandable, workable and acceptable. Theremuneration scheme must have two components – a base rate and the scope forincreasing the base rate. The remuneration plan must be determined keeping in mind therequisites and the components.

The persons responsible for determining a remuneration plan are advised to employsequential steps. (see figure ) as described below.

Job Description

Job Evaluation

Individual Pay for Each

Job within a Range

Job Hierarchy

Pay Survey

Pricing Jobs

Remuneration Modell

Job Description: Job description are crucial in designing pay systems, for, they help toidentify important job characteristics. They also help determine, define and weighcompensable factors (factors for which an organization is willing to pay-skill, experience,effort and working environment.

Job Evaluation: The next step in pay fixation is to establish relative worth of jobs byemploying job evaluation. A number of techniques are available to evaluate jobs. Forexample, in the point-ranking method of job evaluation, each job is analysed and definedin terms of the compensable factors an organization has agreed to adopt. Points areassigned to each degree of a compensable factor, such as responsibility.

Job Hierarchy: The points assigned to all compensable factors are aggregated. The totalpoints scored will help to establish the hierarchy of job worth, starting from the highestpoint total to the lowest point total.

Pay Surveys: Job hierarchy being established, the next step is to establish paydifferentials. Before fixing wage and salary differentials, prevailing wage and salary ratesin the labour market need to be ascertained. Hence the relevance of pay surveys.



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One way of collecting pay details is to conduct a survey. This requires that a sample of key jobs and a sample of companies need to be selected. Questionnaires could be mailedto select companies, requesting them to furnish pay details relating to key jobs.

Information can also be collected over the telephone.

There are also other sources of collecting pay details. Labour departments of thegovernment, trade unions, and professional bodies, and consulting firms provide copiousamount of information about the prevailing wage and salary rates.

Job evaluation helps establish job hierarchy. Through surveys, the rate for key jobs in thelabour market is also known. The next logical step is to determine pay structures.

Pricing Jobs: In pricing jobs, the job evaluation worth is matched with the labour marketworth. Two activities need to be performed: (i) establishing the appropriate pay level foreach job, and (ii) grouping the different pay levels into pay grades.

Pay levels: in order to set a pay level, the points assigned and the survey wage rates arecombined through the use of a graph called scatter gram. In the figure below, the verticalaxis represent pay rates. The horizontal axis is used for points. The total points and thewage rates for each key job are plotted to obtain the scatter gram.

100 200 300 400 500 600 700 800 900 1000

10

9

8

7

6

5

4

Point Values

W a g e s

o r S a l a r i e s

Key Job A

Non-Key

Job B

Wage-trend

Line

The development of a wage-trend line

Thus, each dot in the above figure represents the intersection of the point value and themarket-determined wage rate fir a particular key job. For example, key job A is worth

500 points and is paid Rs. 60 per hour. Similarly, key job B earns 700 points and has aprevailing rate of Rs. 70 per hour.

The dots that represent key jobs can be used to draw a wage-trend line as, close to asmany points as possible, employing a statistical technique called least squares method of

regression. This method relates point values to wage rates in the labour market. If theemployer wants to lead or lag behind in the market rate by a given percentage, the wage-trend line can be moved up or down by the same percentage.



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Determining pay grades: A pay grade comprises jobs of approximately equal difficulty orimportance. Where point-ranking method of job evaluation is used, the grade consists of

jobs falling within a range of points. It is convenient to organize jobs into groups, alsocalled classes, so that there are limited number of wage rates. Where individual jobs areretained, an organization will have hundreds of remuneration rates. The existence of hundreds of separate wage rates would be meaningless as differences between jobs mightbe just a few rupees.

Where grouping of jobs is done, the wage-curve line is to be replaced with a series of ascending dashes, as shown in the figure below. Thus all jobs in the same class willreceive the same wage rate. A job valued at 105 points, for example, receives the samepay as a job with 145 points.

100 150 200 250 300 350 400 450 500 550

A m o u n t , $

0 101 151 201 251 301 351 401 451 501

I II III IV V VI VII VIII IX X

0

The impact of job classes on the wage-trend line



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Question 7 – Traditional Methods of Remuneration

Wages in the widest economic sense mean any economic compensation paid by theemployer under some contract to his workers for the services rendered by them. Some of the traditional methods of remuneration are:

1. Time Rate Wage

This is the oldest and the most common method of fixing wages. Under this system,workers are paid according to the work done during a certain period of time, at the rate of so much per hour, per day, per week, per fortnight or per month or any other fixed periodof time. The essential point is that the production of a worker is not taken intoconsideration in fixing the wages; he is paid at the settle rate as soon as the timecontracted for is spent.

Merits:It is simple, for the amount earned by the worker can be easily calculated.As there is no time limit for the execution of the job, workmen are not in a hurry to finishit and this may mean that they will pay attention to the quality of their work.All workmen employed for a particular kind of job receive the same wages, this preventill-will and jealousy among them.

Demerits:It does not take into account the fact that men are of different abilities and that if all thepersons are paid equally, better workmen will have no incentive to work harder andbetter. They will therefore be drawn to the level of the least efficient workman.As there is no specific demand on the worker that a piece of work needs to be completedin a given period of time, there is always the possibility of a systematic evasion of work

by workmen.As no record of an individual worker‘s output is maintained, it becomes difficult for theemployer to determine his relative efficiency for purposes of promotion.

2. Piece Rate Wage

Under this system, workers are paid according to the amount of work done or the numberof units completed, the rate of each unit being settled in advance, irrespective of the timetaken to do the task. This does not mean that a worker can take any time to complete a jobbecause if his performance far exceeds the time, which his employer expects he wouldtake, the overhead charge for each unit of article will increase. This is indirect implicationthat a worker should not take more than the average time. If he consistently takes moretime than the average time, he does it at the risk of losing his job.

Under this plan, a worker, working in given conditions and with given machinery, is paidexactly ni proportion to his physical output. He is paid in direct proportion to his output,the actual amount of pay per unit of service being approximately equal to the marginalvalue of his service in assisting to produce that output.

This system is generally adopted in jobs of repetitive nature, where tasks can be readilymeasured, inspected and counted.



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Merits:It pays the workman according to his efficiency as reflected in the amount of work turned

out by him. It satisfies an industrious and efficient worker for he finds that his efficiencyis adequately rewarded.Supervision charges are not so heavy, for workers are likely to be while away their timesince they know that their wages are dependent on the amount of work turned out bythem.

Demerits:In spite of the advantages accruing to the management as well as to the workmen, thesystem is not particularly favoured by workers. The main reason for this is that thefixation of piece rate by the employer is not done on a scientific basis.As the workers wish to perform their work at breakneck speed, they generally consumemore power, overwork the machines, and do not try to avoid the wastage of materials.This results in a high cost of production and lower profits.

Trade Unions are often opposed to this system, for it encourages rivalry among workersand endangers their solidarity in labour disputes.

3. Balance or Debt Method

This is a combination of time and piece rates. The worker is guaranteed an hourly or aday-rate with an alternative piece rate. If the earnings of a worker calculated at the piecerate exceed the amount, which he would have earned if paid on time basis, he gets creditfor the balance, i.e., the excess piece rate earnings over the time rate earnings. If his piecerate earnings are equal to his time rate earnings, the question of excess payment does notarise. Where piece rate earnings are less than time rate earnings, he is paid on the basis of the time rate; but the excess which he is paid is carried forward as a debt against him to

be recovered from any future balance of piece work earnings over time work earnings.This system presupposes the fixation of time and piece rates on a scientific basis.

The obvious merit of this system is that an efficient worker has an opportunity to increasehis wages. At the same time, workers of ordinary ability, by getting the guaranteed timewage, are given sufficient incentive to attain the same standard, even though the excesspaid to them is later deducted from their future credit balance.

These are the traditional methods of Remuneration. These methods of remuneration arequantity based more than quality based. This where we see a major difference betweenTraditional and Modern methods of Remuneration.



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Modern Methods of Remuneration

Pay is a motivator that rewards the contribution that employees make to an organization.

Many organisations have devised pay methods that link individual or team performanceto a pay system that rewards them. Alternatively, pay has been used to recognise suchfactors as individual development, responsibility, risk-taking and loyalty or experience.

The various modern methods of remuneration are:

1. Market Based Pay

This system uses a direct market pricing approach for all of a firm‘s jobs. This type of paystructure is feasible if all jobs are benchmark jobs and direct matches can be found in themarket. Pay surveys can be used to determine the market prices of the jobs in question.This type of pay system may be used in entrepreneurial start-up firms, research and

development units, and sales organizations. Larger firms with more diverse jobs,however, may have to rely on market pricing only for benchmark jobs and use jobevaluation in order to price non-benchmark jobs.

2. Competency Based Pay or Skill or Knowledge based Pay

Under such a system, workers are paid not on the basis of the job they currently are doingbut, rather, on the basis of the number of jobs they are capable of doing, that is, on the

basis of their skills or their depth of knowledge, both of which are termed ‗competencies‘.In a world of slimmed down big companies and agile small ones, the last thing anymanager wants to hear from an employee is ―It‘s not my job.‖ To see how such a system

might work in practice, consider Polaroid‘s pay system.

Competency based Pay at Polaroid Corporation

Polaroid initiated a company wide, competency based pay system in April 1990. Polaroidemployees are encouraged to form work teams and to redesign their work functions inorder to make them more efficient. Although Polaroid‘s system inc ludes everyone fromthe mailroom clerk to the chief executive officer, it has been more effective in themanufacturing part of the business.

Polaroid‘s manufacturing employees have learned skills in a number of different areas,rather than focusing on a single job. In addition, the work teams have picked up some of the responsibilities of supervisors such as scheduling assignments and overtime.Employees who have succeeded at the new jobs have received more money. ―Their pay

has gone beyond what was traditionally the top‖, said the manager.

The focus of Polaroid‘s white-collar employees has been on learning new technologies.But here, the process has not worked as smoothly. Part of the problem is that skills, orcompetencies, are not so easy to measure in managerial jobs. But that will not stopcompanies from attempting to apply this scheme to their white-collar workforces.―Slowly, but surely we‘re becoming a skill-based society where your market value is tiedto what you can do and what your skill set is … In this new world, where skills and



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knowledge are what really count, it doesn‘t make sense to treat people as jobholders. Itmakes sense to treat them as people with specific skills, and to pay them for those skills.‖

3. Variable Pay

Variable pay links employees' earnings to how well or badly an organisation, departmentor unit/section performs. In a successful period the potential for employees to earn morecould be substantive. However, where corporate performance is deemed to be poor theworkforce has to take more responsibility for this and ultimately be prepared to face afinancial penalty.The potential to be rewarded well can make variable pay attractive to employees.Employers are also attracted to the concept because of its ability to promote a commoninterest for improved performance between staff and management.In the private sector variable pay is often linked to profit sharing and share optionschemes.

Profit sharing links cash bonuses to organisational performance. Payments are made froma profit sharing pool that is determined by the Board of Directors. Typically individualpayments are a fixed percentage of salary although under some schemes eligibilitydepends on individual performance.Share option schemes give employees the right to buy/ own shares in a company. It isclaimed that this can assist recruitment in a competitive market by giving staff a chance toshare in the wealth that they have created.

4. Team pay

Team pay is a method of linking the pay of employees to the level of performance thatthey have achieved in a team. By reinforcing group performance through the recognition

of team working, it can harness the collective potential of employees. It is claimed thatthis should lead to improvement in service delivery areas.Team performance can only be improved by financial reward if the individuals within itare strongly motivated by money. However, an even more crucial factor is the amount of money that is available for this purpose. If employees deem that this amount is derisory itwill have a limited impact as a mechanism for raising performance and productivity.Equally important is how team pay is to be awarded. A common method of linking pay toperformance is to pay non-recurring bonuses. These can be shared with teams in a varietyof ways including even cash sums, scaled or stepped cash sums or most popularly, as apercentage of basic salary.



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Question 8 – What are the factors influencing remuneration?

A number of factors influence the remuneration payable to employees. They can be

categorized into 1. External and 2. Internal factors.

External Factors: Factors external to an organization are labour, market, cost of living, labour unions, government legislations, and the economy.

Labour Market: Demand for and supply of labour influence wage and salaryfixation. A low wage may be fixed when the supply of labour exceeds the demand for it.A higher wage will have to be paid when the demand exceeds supply, as in the case of skilled labour. A paradoxical situation is prevailing in our country – excessiveunemployement is being juxtaposed with shortage of labour. While unskilled labour isavailable in plenty, there is shortage of technicians, computer specialists and professionalmanagers.

Going rate of pay is another labour – related factor influencing employee remuneration.Going rates are those that are paid by different units of an industry in a locality and bycomparable units of the same industry located elsewhere.Productivity of labour also influences wage fixation. Productivity can arise due toincreased effort of the worker, or as a result of the factors beyond the control of theworker such as improved technology, sophisticated machines and equipment, bettermanagement, and the like. Greater effort of the worker is rewarded through piece – rate orother forms of incentive payments. While productivity can be measured in terms of anyone of the several factors such as capital equipment, materials, fuel, labour, what mattersmost is labour productivity. Its is the relationship between the input of labour measured inman – hours and the output of the entire economy, or of a particular industry or plantmeasured in terms of money or in physical terms.

Cost of living: This criterion matters during periods of rising prices, and its forgottenwhen prices are stable of falling. The justification for cost of living as a criterion for wagefixation is that the real wages of workers should not be allowed to be whittled down byprice increases. A rise in the cost of living is sought to be compensated by payment of dearness allowance, basic pay to remain undisturbed.

Labour unions: The presence or absence of labour organizations, often determinethe quantum of wages paid to employees. Employers in non – unionized factories enjoythe freedom to fix wages and salaries as they please. Because of large – scaleunemployment, these employers hire workers at little or even less then legal minimumwages. They employees of strong unionized companies too, have no freedom in wage andsalary fixation. They are forced to yield to the pressure of labour representatives in

determining and revising pay scales.

Labour Laws: Some of the central laws which have a bearing on employee

remuneration are the Payment of Wages Act, 1936; the Minimum Wages Act, 1948; thePayment of Bonus Act, 1965; the Payment of Gratuity Act, 1972. The Payment of WagesAct was passed to regulate payment of wages to certain classes of persons employed inthe industry. It also seeks to protect workers against irregularities in payment of wagesand unauthorized deductions by the employers. The Minimum Wages Act enables the



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central and the state governments to fix minimum rates of wages payable to employees insweated industries. The Payment of Bonus Act provides for payment of a specified rate of bonus to employees in certain establishments. The Gratuity Act provides for payment of

gratuity to employees after they attain superannuation.In addition to legal enactments there are wage boards, tribunals and fair wagescommittees, which aim at providing a decent standard of living to workers.

The Economy: the last external factor that‘s has its impact on wage and salary

fixation is the state of economy. While it is possible for some organizations to thrive in arecession, there is no question that the economy affects remuneration decisions. Ex, adepressed economy will probably increase the labour supply. This, in turn, should serveto lower the going wage rate. In most cases the cost of living will rise in an expandingeconomy. Since the cost of living is commonly used as a pay standard, the economy‘shealth exerts a major impact upon pay decisions. Labour unions, the government, and thesociety are all less likely to press for pay increases in a depressed economy.

The Internal Environment: Among the internal factors which have an impacton pay structure are the company‘s strategy, job evaluation, performance appraisal, ands

the worker himself or herself.

Business Strategy: The overall strategy which a company pursues shoulddetermine the remuneration to its employees. Where the strategy of the enterprise is toachieve rapid growth, remuneration should be higher than what competitors pay. Wherethe strategy is to maintain and protect current earnings, because of the declining fortunesof the company, remuneration level needs to be average or even below average.

Job Evaluation and Performance Appraisal: Job evaluation helps

establish satisfactory wage differential among jobs. Performance appraisal helps awardpay increases to employees who show improved performance.

The Employee: Several employee – related factors interact to determine his or herremuneration. These include performance, seniority, experience, potential, and even sheerluck.Performance is always rewarded with a pay increase. Rewarding performance motivatesthe employee to do better. Managements prefer performance to effect pay increases butunions view seniority as the most objective criterion for pay increases. Experience makesan employee gain valuable insights and should therefore be rewarded. Potential is uselessif it is never realized. Yet, organizations do pay some individuals based on their potential.Young managers are paid higher because of their potential to perform even if they areshort of experience. Some people have luck to be at the right place at the right time.



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Question 9 – Participative managementa) Meaning and Definition

b) Philosophy

Meaning and Definition

International Labour Organization Definition for Participative management―Workers‘ participation, may broadly, be taken to cover all terms of association of workers and their representatives with the decision making process, ranging fromexchange of information, consultations, decisions and negotiations to more institutionalforms such as the presence of workers‘ member on management supervisory boards or

even management by workers themselves as practiced in Yugoslavia‖.

Meaning – Participative management involves associating employees at every level in the

decision making process. Participation may be at the board level, collective bargaining, job enlargement, job enrichment, suggestion schemes, quality circles, and empoweredteams.

Participative management is also called Employee involvement.

Philosophy of participation

In an organization there are 3 groups of managerial decisions, which directly affect theworkers of that organization. They are social, personnel and economic decisions.Economic decisions include financial aspects, personnel decisions include recruitmentand selection and other such aspects, and finally social decisions include welfare, safetyhealth and other issues.

But it is a debatable issue as to how much a worker must be allowed to participate and towhat extent does he have a say in the decision making process. There are two differentways of looking at it. One is where workers should sit with management as equalmembers and contribute to the decision making process. And on the other hand thesecond option would be that the workers could only contribute to the decision-makingthrough their representatives. Thus the scope of participation of the workers is a debatableissue in the organizations today.

Given all the above, participative management emphasizes the pertinence of this approachto knowledge-based organizations, and the benefits derived from a management approachand organizational design that emphasizes and supports lateral networks, enhancedflexibility, and respect for worker knowledge and motivation. The workers‘ self -esteem,

job satisfaction, and cooperative with the management will also improve. The resultsoften are reduced conflict and stress, more commitment to goals, and better acceptance of a change. Employees may also reduce turnover and absences when they begin to feel thatworking conditions are satisfactory and that they are becoming more successful in their

jobs. They identify themselves with the work and this leads to an improved performance.Finally, the act of participation in itself establishes better communication, as peoplemutually discuss work problems.



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The pros and cons of direct participation from different

perspectives:



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Question 10 – Definition, meaning & objectives of pay systems.

Pay is a key factor affecting relationships at work. The level and distribution of pay and

benefits can have a considerable effect on the efficiency of any organisation, and on themorale and productivity of the workforce. It is therefore vital that organisations developpay systems that are appropriate for them, that provide value for money, and that rewardworkers fairly for the work they perform. Pay systems are methods of rewarding peoplefor their contribution to the organisation. Ideally, systems should be clear and simple tofollow so that workers can easily know how they are affected. Pay systems provide thefoundation for financial reward systems

Pay systems provide the bases on which an organisation rewards workers for theirindividual contribution, skill and performance.The hallmarks of success in pay systems are understandability, workability, andacceptability. The broad objective in developing pay systems is to assign a monetaryvalue to each job in the organisation (base rate) and to develop an orderly procedure for

increasing the base rate, i.e. based on merit, inflation, or a combination of the two.

Pay systems can be an effective method to reward performance excellence and reinforceeveryone‘s alignment towards company goals. It is a key link between the company‘sstrategic direction and the people that make it happen. This ensures that high-performanceworkplace practices become part of your company‘s coordinated organizational

development.

Pay systems fall into two main categories:

• Those where pay does not vary in relation to achievements or performance, (basic ratesystems), and

• Those where pay, or part pay, does vary in relation to results/profits/performance(including the acquisition of skills).

There are also systems where pay, and any enhancement, is related to the gaining of extraskills or competencies that can allow a worker to carry out a wider range of work, or work at a higher level, and provide opportunities for greater job satisfaction.

Basic rate systems are the easiest to operate, and apply to many workers. The workerreceives a fixed rate per hour, week or month. The traditional argument for other systemsis that basic rate schemes provide only sufficient motivation to workers to achieve acertain level of performance. If there is a need to improve performance beyond that levelsome incentive may be needed.

Substantial numbers of workers however, have part (though generally not all) of their paybased on incentive, or variable, systems. Their earnings can therefore vary according totheir own performance, that of their team or group, or perhaps that of the enterprise as awhole.



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Incentive schemes:

Incentive schemes may be short or long-term. Schemes based on individual performance,such as weekly or monthly production bonuses or commission on sales, generally offer ashort-term incentive. Longer-term schemes such as profit sharing and share optionschemes may not provide as much incentive to individual workers as schemes based onpersonal performance. They can, however, help to generate in workers a long-terminterest in the success of the organisation.

It has long been recognized that pay is not the only factor that might produce enhancedperformance. As well as the job-related factors mentioned earlier, additional payments,non-contributory pension schemes, and non-cash benefits such as cars, life insurance, andassistance towards child care (e.g. workplace nurseries/crèches) may all play a part.Nevertheless, the prospect of higher pay for increased output/quality often provides anincentive and many schemes are introduced in the clear expectation that performance will

thereby be improved.

Organisations often use a combination of systems to provide greater flexibility in the paypackage to address particular needs. For instance they may have a basic rate for the job,with a top-up increase that is self-financing, and an element for individual performance.

Objectives of pay systems: To increase productivity /quality and bring about operational excellence

Control costs associated with labour and workforce

To recruit, retain and motivate suitably qualified workers

To align employees personal objectives with the company‘s overall mission andgoals.

To build trust between the workers/employees and the top management. To link pay with company performance so that the company can afford its staff

costs even in recessions.

Changing the overall attitude & culture of the organisation

To simplify existing systems and gaining employee confidence.

To reduce ambiguity and conflicts between the management and staff related topay.

The meaning of Pay StructureA company's pay structure is its method of administering its pay philosophy. The twoleading types of pay structures are the internal equity method, which uses a tightlyconstructed grid to ensure that each job is compensated according to the jobs above and

below it in a hierarchy, and market pricing, where each job in an organization is tied tothe prevailing market rate.

A company needs job descriptions for positions such as executives, managers,technologists, entry-level people, and the like, so that people know where they fall withinthe organization. A pay structure helps answer questions about who's who, what eachperson's role is, and why people are compensated differently. It also helps humanresources personnel administer fairly any given pay philosophy. For example, a company



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might want to pay everyone at market; or pay some people at market and some above it.Opportunities for incentives are also dealt with in the pay structure. For example, peoplewith strategic roles will have opportunities for higher incentives.

In most organizations wage and salary rates are still assigned to jobs. The relationshipsbetween the pay for jobs involve pay structure decisions. Although organizations oftenmake pay level decisions (how much to pay) and pay structure decisions (payrelationship) at the same time, these decisions and the process by which they are reachedrequire separate treatment.

Actually, wage structures represent wage relationships of all kinds. Analysis of wagedifferentials of any kind (geographic, industry, community, or occupation) deals withwage structure issues. But because our primary focus is on pay decisions in organizations,our concern is with pay differences between jobs. In fact, determining the pay structure of an organization may be usefully described as putting dollar signs on jobs. Decisions onwage relationships among jobs within an organization are largely within the control of its

decision makers. Wage level decisions are usually influenced more by forces external tothe organization than are wage structure decisions.

Some organizations pay for skills possessed by employees rather than for the jobsemployees hold. The rationale is usually serious and continual skill shortages experiencedby the organization. But most organizations measure employee contributions first in termsof the jobs employees hold. One interesting analysis of organizational compensationdecisions is that pay structure decisions are intended to achieve retention of employeesthrough prevention of dissatisfaction and encouragement of employee cooperation. Paylevel decisions, in this analysis, are intended to attract employees. To this analysis couldbe added the statement that wage structure decisions are intended to encourage employeesto make a career with the organization and to accept training in preparation for higher-level jobs.

Lower-range — pay is between minimum pay and mid-range, is appropriate foremployees in the learning and development phase of their job; this range is typically foremployees new to a position and whose competencies are not yet fully developed. Entry-level pay falls in this range.

Mid-range — pay is appropriate for employees who are fully proficient in their job.This is the target market-based competitive pay for employees who are fully competent,possess the full skill set necessary to perform their job well, meet job expectations, andconsistently demonstrate skills needed and fulfil responsibilities and duties.

Upper-range — pay is appropriate for employees who serve as role models,

exhibiting an exceptional skill set and consistently exceeding all job expectations. Theseemployees exemplify the best way of doing their job, go the "extra mile," share theirknowledge, and leverage their strengths to benefit the Organisation.



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Question 11 – The Meaning of Pay Level

The compensation and benefit level is the average compensation paid to employees. Thishas two implications. The first is external: how does the organization compare with otherorganizations? This question is a strategic one of how the organization wishes to positionitself in the marketplace. The second implication is internal. The average compensation isa reflection of the total compensation bill of the organization. Labour is one of theclaimants on organizational resources. The size of the compensation and benefits bill is areflection of who gets what within the organization.The decision on compensation levels (how much will the organization pay?) may be themost important pay decision the organization makes. A potential employee's acceptanceusually turns on this decision, and a large segment of the employer's costs are determinedby it.Compensation decisions are typically micro (individual) or macro (total organization)focused. Although organizations are under no constraint to separate these decisions, acourse of study should. In practice, most unsophisticated organizations make the decisionon compensation level (how much to pay) and compensation structure (relationships tocompetitors) at the same time. More administratively advanced organizations realize thatindividual decisions within a proper administrative structure are more consistent, fair, andcost-effective over time.The compensation level decision may be considered the most important one forindividuals. In terms of both employee attraction and cost considerations, most managersoften consider it as a primary consideration. Also, it seems essential to recognize thatcompensation level decisions can never be completely separate from job-mix, hiringstandards, personal decisions, and internal labour markets/relationships. For thesereasons, compensation level decisions are typically the focus of a manager‘s attention.

From the organization‘s perspective, however, one individual‘s compensation decisiontypically goes unnoticed at the end of the year. Structure decisions (and the level of thosestructures) are what show up on an income statement.The term compensation level simply means the average compensation paid to workers atsome level of analysis, e.g. the job, the department, the employing organization, anindustry, or the economy. The importance of the compensation level decision toorganizations rests on its influence in getting and perhaps keeping the desired quantityand quality of employees. If the compensation level is too low, the applicant pool maydry up and recruitment efforts may meet with little success. Equally serious, someemployees (often the best ones) may leave. At the extreme, the organization mayexperience difficulties with state and federal regulatory bodies administering minimumcompensation laws and prevailing wage laws. Also, the organization may be confrontedwith concerted organizing drives if no union is present, or pressing compensationdemands from existing unions. It is less apparent, but equally real, that a lowcompensation level may attract only less efficient workers, with the result that labourcosts per unit of output rise.If, on the other hand, the compensation level is too high, equally undesirable results arelikely. The competitive position of the organization may suffer. Turnover rates may dropbelow some desirable minimum so that the organization tends toward inflexibility orstagnation. Also, if compensation and salary levels are too high during periods of compensation controls by federal authorities, trouble may be forthcoming from theseofficials. Frequently, compensation and benefit level decisions are hidden in the type andstructure of benefit, fringe, and retirement plans.



Changes in compensation levels have the most drastic effects on total payroll. Of course,other compensation decisions have payroll effects, but usually not nearly as great.Substantial sums of money can be involved, and for this reason alone an organization

must pay close attention to compensation levels (both competitively and internally).Nor are employees and their representatives any less concerned with compensation leveldecisions. It is here that the absolute amount of the compensation or salary rate isdetermined. Also, it is here that unions exert their major effect, and here that memberloyalty is built or lost.Finally, consumers and the general public have major interests in compensation leveldecisions, the consumer because wages are a major element in prices, and the generalpublic because wages and salaries represent the major portion of national income. Also,too frequent or too drastic changes in compensation levels affect the health of oureconomy.

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