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Notes for Human Resource Management, Human Aspects of Management. S5 Mechanical kerala university elective module 3
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HUMAN RESOURCE MANAGEMENT
Human Resource Management (HRM) is the function within an organization that focuses on
recruitment of, management of, and providing direction for the people who work in the
organization.
Human resource management (HRM, or simply HR) is the management of an organization's
workforce, or human resources. It is responsible for the attraction, selection, training,
assessment, and rewarding of employees, while also overseeing organizational leadership
and culture, and ensuring compliance with employment and labor laws.
Personnel management is essentially “workforce” centered whereas human resource
management is “resource” centered.
Figure 1.1 Human Resource Cycle
Personnel vs Human Resources at Various Levels
Human Resources denotes the total sum of all the components - skills, creative ability etc. -
with all the people (employed, self-employed, unemployed, employers, owners etc.)
whereas personnel is limited to employees of organisations only.
Human Resources, even at the organisation level, includes all resources of all the people
who contribute their services to the achievement of organisational goals and also others
who contribute their services to create hurdles in the achievement of the said goals.
Personnel management as defined by the Indian Institute of Personnel Management
“Personnel management is a responsibility of all those who manage people as well as being
a description of the work of those who are employed as specialists. It is that part of
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management which is concerned with people at work and with their relationships within an
enterprise. It applies not only to industry and commerce but to all fields of employment.”
PERSONNEL VS HUMAN RESOURCES MANAGEMENT
Personnel Management Human Resources Management
1. Personnel means persons employed. Personnel management is the management of people, skills employed.
1. Human Resources management is the management of employees’ knowledge, abilities, talents, aptitudes, creative abilities etc.
2. Employee in personnel management is mostly treated as an economic man as his services are exchanged for wage / salary.
2. Employee in human resource management is treated not only as economic man but also as social and psychological man. Thus, the complete man is viewed under this approach.
3. Employee is viewed as a commodity or tool or equipment which can be purchased.
3. Employee is treated as a resource.
4. Employees are treated as cost centres and therefore management controls the cost of labour.
4. Employees are treated as profit centres and therefore, invests capital for human resource development and future utility.
5. Employees are used mostly for the organisational benefit.
5. Employees are used for the multiple benefits of the organisation, employees and their family members.
6. Personnel function is treated as only an Auxiliary function.
6. Human resources management is a Strategic Management function.
Functions of Human Resources Management:
There are two broad functions of H R M. They are
1. Managerial Functions 2. Operational Functions
Managerial Functions:
Managerial functions of Personnel management include planning, organising, directing, co-
ordinating and controlling.
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Planning:
It is the charting out of programmes and changes in advance in the achievement of
organisational goals. Hence, it involves planning of human resources requirements,
recruitment, selection, training etc. It also involves forecasting of personnel needs, changing
values, attitudes and behaviour of their employees and their impact on the organisation.
Organising:
In the words of J.C. Massie, an organisation is a "structure and process by which co-
operative groups of human beings allocated its tasks among its members, identifies
relationships and integrates its activities towards a common objective." Given the complex
relationships that exist between specialised departments and the general departments,
many top managers seek the advice of personnel manager. In this manner, the organisation
establishes relationships among the employees so that they can together contribute to the
achievement of organisational goals.
Directing:
After planning and organising comes the execution of the plan. The willing and effective co-
operation of employees towards the achievement of organisation's goal has to be brought
about by proper direction. Identifying and utilising maximum potentials of people is possible
through motivation and command. Direction, therefore, is an important managerial function
in ensuring optimum employee contribution.
Co-ordinating:
It is the task of matrixing various employees’ efforts to ensure successful goal achievement.
The Personnel manager co-ordinates various managers at different levels as far as the
personnel functions are concerned.
Controlling:
After planning, organising, directing and co-ordinating, the various activities, the
performance is to be verified in order to know, at various points of time, whether the
activities are performed as per plans and directions. It involves checking, verifying and
comparing actual with the plans, identification of deviations if any and correcting the
deviations. Auditing training programmes, analysing labour turnover, overseeing morale
surveys, conducting exit interviews are some of the controlling functions of personnel
management.
Operative Functions:
The operative functions of H R M relate to employment, development,
compensation and relations. All these are interacted by managerial functions. Also, they are
to be performed in conjunction with management functions.
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Human Resources Planning
Recruitment EMPLOYMENT Selection Induction
Placement Performance Appraisal
Training HUMAN RESOURCE Management Development DEVELOPMENT Career Planning & Development Organisation Change & Organisation Development
Job Evaluation COMPENSATION Wage & Salary Administration MANAGEMENT Fringe Benefits Motivation
Morale HUMAN RELATIONS Job Satisfaction
Communication Grievance & Disciplinary Procedures Quality of Work Life & Quality Circles
ORGANISATIONAL DESIGN ---- JOB DESIGN ---- JOB ANALYSIS
Functions of H R M
Employment:
Employment function is securing and employing the people having required level of human
resources essential for achieving the organisational objectives. It involves job analysis,
human resources planning, recruitment, selection, placement, induction and handling
internal mobility.
Job Analysis:
It is the study and collection of data relating to the operations and responsibilities of a
specific job. It includes:
a. Collection of data and information and facts relating to the various aspects of jobs
including men, machines and materials.
b. Drawing up of job description, job specification, job requirements and employee
specification with which nature, levels and quantum human resources can be finalised.
c. Providing the guidelines, plans and the basis for job design and for all operative
functions of H R M.
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Human Resources Planning:
This is the process which assures the organisation that it will have adequate number of
qualified persons, at requisite times, performing in a way to satisfy the needs of the
organisation and also provide satisfaction to the individual employee, so employed.
The process involves:
a. Estimating the present and future requirements of human resources based on
objectives and long range plans of the organisation.
b. Calculation of net human resource requirements based on the present availability of
human resources.
c. Taking suitable steps to identify, mould, change and develop the strength of existing
employees so as to meet the future requirements.
d. Preparation of action plans to acquire the balance human resources from outside the
organisation and to develop the existing employees.
Recruitment:
It is the process of searching for future employees (requirement) and ensuring they apply
for jobs in the organisation.
It involves:
a. Identification of existing sources of candidates and developing them.
b. Seeking out and identifying new sources of applicants.
c. Motivating the right type of candidates to apply for jobs in the organisation.
d. Ensuring a healthy balance between internal and external sources
Selection:
It is the process of ascertaining the qualifications, experience, skill, knowledge etc. of an
applicant to ascertain his / her suitability for the job applied for.
This includes:
a. Developing application blanks.
b. Creating and developing valid and reliable testing techniques.
c. Formulating interviewing techniques.
d. Checking of references.
e. Setting up for medical examination policy and procedure.
f. Line Managers to be involved in the decision making.
g. Sending letters of appointment.
h. Employing the selected candidates, when he reports for duty
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Placement:
It is the process of allotting to the selected candidate the most suitable job, as per the job
requirements and employee specifications.
This function includes:
a. Counselling the concerned managers regarding the placement
b. Overseeing the follow-up studies, employee performance appraisal to monitor
employee adjustment to the job, in the coming days.
c. Correcting wrong / misjudged placements, if any.
Induction and Orientation:
These are procedures by which a new employee is rehabilitated in the new surroundings
and introduced to the practices, procedures, policies, people etc. of the organisation.
It includes:
a. Familiarising the employee with company philosophy, objectives, policies, career
planning and development, company product, market share, history, culture, etc.
b. Introduce the new employee to the people - his colleagues, supervisors and
subordinates.
c. Mould the employee by orientation methods to the new working conditions.
Human Resources Development:
This process involves improving, moulding, and developing the skills, knowledge, creativity,
attitude, aptitude, values, commitment etc. based on the present and future job and
company requirements.
Performance Appraisal:
It is the continuous and systematic evaluation of individual employees with respect to their
performance and their potential for future development. It includes:
a. Enunciating policies, procedures and techniques.
b. Assisting functional managers.
c. Reviewing and summarising reports.
d. Evaluating the effectiveness of various programmes.
Training:
It is the process of transmitting the employees the technical and operating skills and
knowledge. It includes:
a. Identification of training needs of the individuals and for the organisation.
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b. Developing appropriate training programmes.
c. Assisting and advising the management in the conduct of training programmes.
d. Transmitting requisite job skills and job knowledge to the employees.
e. Assess the effectiveness of training programmes.
Management Development:
It is the process of designing and conducting appropriate executive development
programmes so as to develop the managerial and human relations of skills of the
employees.
It includes:
a. Identification of the areas in which management development is needed.
b. Conducting development programmes.
c. Motivating executives / managers.
d. Designing special development programmes / assessment procedures for
promotions.
e. Utilising the services of specialists - both internal and external for development and /
or Institutional (external) development programmes.
f. Evaluating the effectiveness of executive development programmes.
Career Planning and Development:
It is the planning of one's career and implementation of career plans by means of education,
training, job search and acquiring of work experience.
It includes:
a. Internal mobility - vertical and horizontal transfers, promotion and demotion.
b. Transfer - process of placing employees in the same level jobs where they can be
utilised more effectively as per the needs of the organisation. This also means - developing
transfer policies, offering assistance and guidance to employees under transfer orders and
evaluating transfer policy periodically.
c. Promotion - it deals with the upward assignment of employees to occupy higher
positions (with better status and pay) in consonance with resources of employees and job
requirement. The Department must ensure that:
i. equitable, fair and consistent promotions are formulated and administered.
ii. managers and employees are given assistance and guidance on the subject of
promotion.
iii. execution of promotional policies are as per policies and procedures.
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d. Demotion - is the downward assignment of, an employee in an organisation. The
Department must ensure that:
i. equitable, fair and consistent demotion policies are drawn up.
ii. assisting and advising employees regarding demotions.
iii. ensure fair implementation of demotion policies and procedures.
Organisation Development:
The planned process drawn up to improve organisational effectiveness through changes in
individual and group behaviour, culture and systems of the organisation - drawing models
from applied behavioural science.
Compensation Management:
The process of providing equitable, fair and adequate remuneration to the employees. This
per se involves - Job evaluation, wage and salary administration, incentives, bonus, fringe
benefits, social security measures and so on.
a. Job Evaluation - the process of determining the relative worth of jobs:
i. Select suitable job evaluation techniques.
ii. Classify jobs in to various categories.
iii. Determining relative worth of jobs in various categories.
b. Wage and Salary Administration - developing and operating an appropriate wage
and salary programme. It will necessitate:
i. Initiate a wage and salary survey.
ii. Determining wage / salary rates based on various factors.
iii. Proper administration of Wage and Salary Programmes.
iv. The periodical evaluation of its effectiveness.
c. Incentives - formulation administration and reviewing the schemes of payment of
financial incentives in addition to regular wages and
i. Formulation of incentive schemes.
ii. Assisting managers on its operation.
iii. Periodical review to evaluate effectiveness and relevance.
d. Bonus - payment of statutory bonus according to the Payment of Bonus Act, 1965,
and its latest amendments.
e. Fringe Benefits - various benefits at the peripheral area of the wage. Organisation
provides these primarily to motivate the employees and to meet their contingencies.
Benefits include:
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i. Disablement benefit.
ii. Housing facilities.
iii. Educational facilities to employees’ children.
iv. Canteen facilities.
v. Conveyance facilities.
vi. Credit facilities.
vii. Legal assistance.
viii. Medical, maternity and welfare facilities.
ix. Company stores.
f. Social security measures -These measures are in addition to fringe benefits, which
include :
i. Workmen's compensation to those workers (or their dependants) who are involved
in accidents.
ii. Disablement benefits and allowance.
iii. Dependent benefits.
iv. Retirement benefits like Provident Fund, Pension, Gratuity etc.
Human Relations:
Administering various human resources policies like employment development and
compensation and interactions among the employees on one hand and employees and the,
management on the other, create a sense of working relationship between workers and
management and trade unions.
Basically they are all interactions between human beings. Human relations, is
therefore, is an important area in management which integrates people into work situations
in a way that motivates people to work together with economic, psychological and social
satisfaction thereby increasing their productivity. Hence Human Resources Management
functions will centre around:
a. Understanding perception, personality, learning, intra and inter personal relations,
inter and intra group relations.
b. Motivating all employees.
c. Promoting employee morale.
d. Developing communication skills.
e. Developing leadership skills.
f. Redressing satisfactorily through a well defined grievance procedure.
g. Handling disciplinary cases by established disciplinary procedures and in all fairness.
h. Providing adequate counselling to solve employees' personal, work and family
problems, thereby releasing their stress and strain.
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Objectives of Human Resource Management
1. Create and utilise capable and motivated workforce, to achieve the basic
organisational goals.
2. To establish and maintain proper and sound organisational structure and healthy
working relationships among all its employees.
3. To ensure the integration of individual group's goals with those of the organisation.
4. To create facilities for individuals and groups to develop so as to be in tune with the
growth of the organisation.
5. Proper and optimum utilisation of human resources.
6. Ensuring adequate and equitable wages, incentives and other benefits so that
satisfied individuals and groups are motivated to take on challenges.
7. Maintain high employee morale.
8. Continuously upgrading the skill and knowledge levels of employees, by training and
development programmes.
9. Ensure opportunity for participation in management to the extent possible.
10. Provide acceptable and effective leadership.
HRM Model
The HRM model contains all HR activities. When these activities are discharged effectively,
they will result in a competent and willing workforce who will help realize organizational
goals. There is another variable 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.
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
future demand 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
and responsibilities of a specific job. The immediate products of this analysis are job
descriptions and job specification.
Recruitment: 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.
Selection: is the process of differentiating between applicants in order to identify (and hire)
those with greater 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.
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Nature of HRM
Human
Resource
Planning
Job Analysis
Recruitment
Selection
Placement
Training and
Development
Remuneration
Motivation
Participative
Management
Communication
Safety and
Health
Welfare
Promotions etc
Industrial
Relations
Trade Unionism
Disputes
And their
Settlement
Future of HRM Figure 1.2 HRM Model
Training and development: it is an attempt to improve current or future employee
performance by increasing 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
Competent
and willing
workforce
Organizational
Goals
En
viro
nm
ent
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training and development is determined 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 the organization.
Motivation: is a process that starts with a psychological or physiological deficiency or need
that activates behavior 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 from exchange of information, consultations, decisions and negotiations to more
institutionalized forms such as the presence of workers members on management or
supervisory boards or even management by workers themselves as practiced in Yugoslavia.
((ILO)
Communication: may be understood as the process of exchanging information, and
understanding among people.
Safety and health: Safety means freedom from the occurrence or risk of injury or loss. In
order to ensure the continuing good health of their employees, the HRM focuses on the
need for healthy workers and health services.
Welfare: as defined by ILO at its Asian Regional Conference, defined labour welfare as a
term which is understood to include such services, facilities, and amenities as may be
established in or in the vicinity 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
employee within his or her organization.
Transfer: involves a change in the job (accompanied by a change in the place of the job) of
an employee 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
and employers to determine the reward for effort and other conditions of employment, to
protect the interests of the employed and their employers, and to regulate the ways in
which employers treat their employees.
Trade Unions: are voluntary organizations of workers or employers formed to promote and
protect their interests through collective action.
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Disputes and their settlement: Industrial disputes mean any dispute or difference between
employers and employers, or between employers and workmen, or between workmen and
workmen, which is connected with the employment or non-employment or terms of
employment or with the conditions of labour of any person.
R O L E O F H R M A N A G E R S
1. Humanitarian Role: Reminding moral and ethical obligations to employees.
2. Counsellor: Consultations to employees about marital, health, mental, physical and career problems.
3. Mediator: Playing the role of a peacemaker during disputes, conflicts between individuals and groups or management.
4. Spokesman: To represent the company in Media and other forums because he has better overall picture of his company’s operations.
5. Problem Solver: Solving problems of overall human resource management and long-term organizational planning.
6. Change Agent: Introducing and implementing institutional changes and installing organizational development programs
7. Management of Manpower Resources: Broadly concerned with leadership both in the group and individual relationships and labour-management relations.
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 sector
enterprises and even medium and small enterprises appoint personnel manager or human
resources development (HRD) manager to look after the personnel functions such as
recruitment, promotions and transfers, training and manpower development, provision of
welfare facilities, compensation management and so on. The term HRM is a relatively new
term emerged during the 1970s. It is now used as a better and meaningful substitute to
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 British
Rule and that too after the First World War that textile, jute, iron and steel and other
organised industries started in India. Recruitment, wage payment, welfare facilities and
other personnel problems were noted only when labour class was employed on a large scale
in the industrial sector. This is the starting period for personnel management in India. In the
early British period and prior to that personnel management and personnel functions were
absent, (Reference to some personnel functions and systematic management of resources
was made in Kautilya's Arthashastra during the 4th century Be.) as industrial activities were
extremely limited. They were also conducted on a small scale. As compared to India, the
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industrial growth was rapid in Europe. As a result, the concept of personnel functions and
personnel management made rapid progress. The concept of personnel management
function in India is based on similar concept developed in Europe much earlier.
The personnel function in India has been the product(outcome) of various factors such as
industrial growth, labour, legislation, exploitation of workers in the early period and their
demand 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 was felt/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 in
their 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 the
leadership of Jute Mills Association). The labour welfare officers were given the
responsibility to promote sports and welfare activities and provide food shops (canteen
facility) to workers.
After Independence, many pro labour legislations were made for the protection and welfare
of workers. The scope of personnel management function was made more broad and
liberal. Many provisions regarding recruitment, salary payment and conditions of service
were laid down. This gave recognition to the personnel management function in the
industrial establishments.
Gradually, the need of personnel management and its role in cordial labour relations and
fair treatment to employees need were recognized by industrial organizations. Personnel
departments under the leadership of personnel managers were started in the companies.
Liberal welfare facilities were introduced for the benefit of employees. Such measures taken
for the protection and welfare of employees enlarged the scope of personnel management.
Even training and manpower development programmes added new dimensions 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 personnel management raised the importance
and popularity of personnel department.
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MAN POWER PLANNING (HUMAN RESOUCE PLANNING)
Def. of human resource planning Human resource planning can be defined as the
process of identifying the number of people required by an organization in terms of quantity
and quality. All human resource management activities start with human resource planning.
So we can say that human resource planning is the principle/primary activity of human
resource management.
From human resource planning the organization identifies how many people it has
currently and how many people will be required in future. Based on this information major
human resource decisions are taken.
Process of HRP/MP//steps in HRP/MP
Human resource planning can be defined as the process of identifying the number of
people required by an organization in terms of quantity and quality. All human resource
management activities start with human resource planning. So we can say that human
resource planning is the principle/primary activity of human resource management.
The process of HRP involves various steps they can be explained with the help of the
following diagram.
1. Personnel requirement forecast :-
This is the very first step in HRP process. Here the HRP department finds out
department wise requirements of people for the company. The requirement consists of
number of people required as well as qualification they must posses.
2. Personnel supply forecast :-
In this step, HR department finds out how many people are actually available
in the departments of the company. The supply involves/includes number of people along
with their qualification.
3. Comparison:-
Based on the information collected in the 1st and 2nd step, the HR department makes
a comparison and finds out the difference. Two possibilities arise from this comparison
a. No difference :-
It is possible that personnel requirement = personnel supplied. In this case
there is no difference. Hence no change is required.
b. Yes, there is a difference :-
There may be difference between supply and requirement. The difference
may be
i. Personnel surplus
ii. Personnel shortage
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Human resource planning
Personal requirement Forecast Personal supply forecast
Yes No
Requirement = supply
Personnel (100=125) Personnel (100=75)
Surplus Shortage
Layoff Overtime
Termination Recruitment/hiring
VRS Subcontracting
4. Personnel surplus :-
When the supply of personnel is more than the requirement, we have personnel
surplus. We require 100 people, but have 125 people. That is we have a surplus of 25
people. Since extra employees increase expenditure of company the company must try to
remove excess staff by methods of
i. Layoff
ii. Termination
iii. VRS/CRS
5. Personnel shortage :-
When supply is less than the requirement, we have personnel shortage. We require
100 people; we have only 75 i.e. we are short of 25 people. In such case the HR department
can adopt methods like Overtime, Recruitment, Sub-contracting to obtain new employee
Comparison
Differences
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Advantages of HRP/need/importance/role/benefits
Human resource planning can be defined as the process of identifying the number of
people required by an organization in terms of quantity and quality. All human resource
management activities start with human resource planning. So we can say that human
resource planning is the principle/primary activity of human resource management.
The process of HRP plays a very important role in the organization. The importance
of HRP can be explained as follows.
1. Anticipating future requirement :-
Through this process of HRP, the company is able to find out how many people will
be required in future. Based on this requirement the company could take further actions.
This method also helps the company to identify the number of jobs which will become
vacant in the near future.
2. Recruitment and selection process :-
The recruitment and selection process is a very costly affair for a company. Many
companies spend lakhs of rupees on this process. Therefore recruitment and selection must
be carried out only if it is extremely necessary. HRP process helps to identify whether
recruitment and selection are necessary or not.
3. Placement of personnel :-
Since the HRP process is conducted for the entire organization, we can identify the
requirements for each and every department. Based on the requirement, we can identify
existing employees and place them on those jobs which are vacant.
4. Performance appraisal :-
HRP make performance appraisal more meaningful. Since feedback is provided in
performance appraisal and employee is informed about his future chances in same
company, the employee is motivated to work better. Information for all this is collected
from HRP process.
5. Promotion opportunity :-
HRP identifies vacancies in the entire organization including all the branches of all
the company. Therefore when the company implements promotion policy it can undertake
its activities in a very smooth manner.
Limitations of Human Resource Planning
Human resource planning can be defined as the process of identifying the number of
people required by an organization in terms of quantity and quality. All human resource
management activities start with human resource planning. So we can say that human
resource planning is the principle/primary activity of human resource management.
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Although HRP is a very advantageous method it has some limitations which can be
explained as follows
1. The future is uncertain :-
The future in any country is uncertain i.e. there are political, cultural, technological
changes taking place every day. This effects the employment situation. Accordingly the
company may have to appoint or remove people. Therefore HRP can only be a guiding
factor. We cannot rely too much on it and do every action according to it.
2. Conservative attitude of top management :-
Much top management adopts a conservative attitude and is not ready to make
changes. The process of HRP involves either appointing. Therefore it becomes very
difficult to implement HRP in organization because top management does not support
the decisions of other department.
3. Problem of surplus staff :-
HRP gives a clear out solution for excess staff i.e. Termination, layoff, VRS,. However
when certain employees are removed from company it mostly affects the psyche of
the existing employee, and they start feeling insecure, stressed out and do not believe in
the company. This is a limitation of HRP i.e. it does not provide alternative solution like
re-training so that employee need not be removed from the company.
4. Time consuming activity :-
HRP collects information from all departments, regarding demand and supply of
personnel. This information is collected in detail and each and every job is considered.
Therefore the activity takes up a lot of time.
5. Expensive process :-
The solution provided by process of HRP incurs expense E.g. VRS, overtime, etc.
company has to spend a lot of money in carrying out the activity. Hence we can say the
process is expensive.
Reasons for increased importance for HRP/Factors affecting HRP in the organization.
Human resource planning can be defined as the process of identifying the number of people
required by an organization in terms of quantity and quality. All human resource
management activities start with human resource planning. So we can say that human
resource planning is the principle/primary activity of human resource management.
1. Employment :-
HRP is affected by the employment situation in the country i.e. in countries where there
is greater unemployment; there may be more pressure on the company, from
government to appoint more people. Similarly some company may force shortage of
skilled labour and they may have to appoint people from other countries.
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2. Technical changes in the society :-
Technology changes at a very fast speed and new people having the required
knowledge are required for the company. In some cases, company may retain existing
employees and teach them the new technology and in some cases, the company have to
remove existing people and appoint new people.
3. Organizational changes :-
Changes take place within the organization from time to time i.e. the company
diversify into new products or close down business in some areas etc. in such cases the
HRP process i.e. appointing or removing people will change according to situation.
4. Demographic changes :-
Demographic changes refer to things referring to age, population, composition of
work force etc. A number of people retire every year. A new batch of graduates with
specialization turns out every year. This can change the appointment or the removal in
the company.
5. Shortage of skill due to labour turnover :-
Industries having high labour turnover rate, the HRP will change constantly i.e.
many new appointments will take place. This also affects the way HRP is implemented.
6. Multicultural workforce :-
Workers from different countries travel to other countries in search of job. When a
company plans its HRP it needs to take into account this factor also.
7. Pressure groups :-
Company has to keep in mind certain pleasure. Groups like human rights activist,
woman activist, media etc. as they are very capable for creating problems for the
company, when issues concerning these groups arise, appointment or retrenchment
becomes difficult.
Definition of VRS VRS refers to voluntary retirement scheme, when company faces the
problem of surplus labour, they have to remove the extra workers. This needs to be done to
avoid increase in cost. One of the methods used by the companies is the methods used by
companies is the VRS scheme.Under this scheme people have put in 20 or more number of
years of service are given an option to opt for early retirement benefits and some other
amount which is due to them are paid when they leave the company.
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RECRUITMENT
Recruitment means to estimate the available vacancies and to make suitable arrangements
for their selection and appointment. Recruitment refers to “Discovering potential applicants
for actual or anticipated organizational vacancies. Recruitment is a process “To discover the
source of manpower to meet the requirements of staffing, to employ effective measures for
attracting potential manpower in adequate number”. Recruitment is the process of
identifying the sources for prospective candidates and to stimulate them to apply for the
job. It’s linking activity bringing together those with jobs and those seeking jobs. It locates
the source of manpower to meet the requirements and job specifications. In recruitment
process available vacancies are given wide publicity and suitable candidates are encouraged
to submit application so as to have a pool of eligible candidates for scientific selection.
In recruitment, information is collected from interested candidates. For these different
sources of recruitment such as newspaper advertisement, employment exchange, internal
promotions, etc. are used. In the recruitment, a pool of eligible and interested candidates is
created for the selection of most suitable candidate. Recruitment represents the first
contact that a company makes with potential employees.
Recruitment is a positive function in which publicity is given to the jobs available in the
organization and interested candidates (qualified job applicants) are encouraged to submit
applications for the purpose of selection.
Definition of Recreuitment
According to Edwin Flippo, “Recruitment is the process of searching for prospective
employees and stimulating them to apply for jobs in the organization.
Objectives of Recruitment
The objectives of recruitment are as follows:
(i) To attract people with multi-dimensional skills and experiences that suits the present
and future organizational strategies,
(ii) To induct outsider with a new perspective to lead the company,
(iii) To infuse fresh blood at all levels of the organization,
(iv) To develop an organizational culture that attracts competent people to the
company,
(v) To search or head hunt/head pouch people whose skills fit the company’s values,
(vi) To search for talents globally and not just within the company.
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Purpose of Recruitment
Recruitment has three major purposes:
1) To increase the pool of job applicants with minimum cost.
2) To meet the organization’s legal and social obligations regarding the demographic
composition of its workforce.
3) To help increase the success rte of the selection process by reducing the percentage
of applicants who are either poorly qualified or have the wrong skills.
Need for Recruitment
The need for recruitment may be due to the following reasons/situations:
(a) Vacancies due to promotions, transfers, retirement, termination, permanent
disability, death and labour turnover.
(b) Creation of new vacancies due to growth, expansion and diversification of business
activities of an enterprise. In addition, new vacancies are possible due to job respecification.
RECRUITMENT PROCESS
Recruitment is a 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. A well-planned and well-managed recruiting effort will result in high quality
applicants, whereas a haphazard and piecemeal effort will result in a mediocre once. Several
factors such as external factors like supply an demand unemployment rate, labour markets
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. Planning
2. Strategy development
3. Searching
4. Screening
5. Evaluation and control
I Planning
The first stage in recruitment process is planning. Planning involves translation of likely job
vacancies and information about the nature of these jobs into a set of objectives or targets
that specify the number and the type of applicants to be contacted.
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Number of contacts: organisations always plan to attract more applicants than they plan to
hire. Some of those contacted will be uninterested unqualified or both. 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 responsibilities involved and the qualifications
and experience expected. These details are available 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, technical sophistication of recruitment and selection
devices, geographic distribution of labour markets comprising job seekers, sources of
recruitment, and sequencing the activities in the recruitment process.
Make or buy refers to hire less skilled employees ad to invest in training and education
programmes or hire skilled professionals. The second decision in strategic relates to the
methods used in recruitment and selection. The advent of computers has made it possible
for employers to scan national and international applicants qualifications. It has also made
possible for job seekers to gain better access. In order to reduce costs, companies look into
the national markets for managerial employees, regional or local markets for technical
employees, and local markets for clerical and blue-collar employees.
The sources for recruitment may be internal or external. The internal sources would be
present employees, referrals given by the employees, former employees or previous
applicants. Whereas the external sources would be consultants, headhunters,
advertisements, employee exchanges, campus recruitment, contractors, displaced persons,
radio and television, acquisitions and mergers, 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 process can begin. It
involves two steps:
1. Source aviation
2. Selling
1. Source Aviation:
Typically sources and search methods are activated by issuances of an employee requisition.
This means that no actual recruiting takes place until line managers have verified that a
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vacancy does exist or will exist. If the organisation has planned well and done a good job of
developing its sources and search methods, activation soon results in a flood of applications
and/or resumes. The application received must be screened. Those who pass have to be
contacted, and invited for interview. Unsuccessful applicants must be sent letters of regret.
2. Selling
The second issue to be addressed in the searching process concerns communication. Here,
contacts are tightrope. On tone hand they want as many applications 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 recruiting process. The
selection process will begin after the applicants have been scrutinized and short-listed.
Applications received in response to advertisement are screened and only the eligible
applicants are called for interview.
The purpose of screening is to remove from the recruiting process, at an early stage those
applicants who are visibly unqualified for the job. Effective screening can save a great deal
of time and money. Care must be taken that potentially 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 to do the job. The techniques used to
screen applicants vary depending on the candidate sources and recruiting methods used.
Interviews and application blanks are used to screen walk ins. Campus recruiters and agency
representative’s use in interviews and resumes. References checks are also useful in
screening.
V Evaluation and control
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
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
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Questions should always be asked as to whether the recruitment methods used are valid
and whether the recruitment process itself is valid. Statistical information on the cost of
advertisements, time taken for the process etc should be gathered and evaluated. However,
exercises seem to be seldom carried out in practice.
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.
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SELECTION
Selection is one of the most important of all functions in the management of personnel.
Selection is more closely related to recruitment because both are concerned with
processing individuals to place them in a job. Selection is next to recruitment. After
identifying the sources of human resources, searching for prospective employees and
stimulating them to apply for jobs in an organization, the management has to perform the
function of selecting the right employees at the right time. “Right man at the right job” is
the basic principle in selection. Selection is the process of collecting and evaluating
information about an individual in order to extend an offer of employment. It is the process
of logically choosing individuals who possess the necessary skills, abilities and personality to
successfully fill specific jobs in the organization.
Selection means a process by which the qualified personnel can be choosen from the
applicants who have offered their services to the organization for employment. Thus
selection process is negative function because it attempt to eliminate applicants, leaving the
best to be selected. In the words of Dale Yodev, “Selection is the process in which
candidates for employment are divided into two classes – those who are to be offered
employment and those who are not”. In short, selection is the process of choosing a person
suitable for the job out of several persons.
The objective of the selection decision is to chose the individual who can most successfully
perform the job from the pool of qualified candidates. The selection procedures are the
system of functions and devices adopted in a given company to ascertain whether the
candidate’s specification is matched with the job specification and requirements or not. The
selection procedures cannot be effective until and unless:
1) Requirements of the job to be filled, have been clearly specified (job analysis, etc)
2) Employee specifications (physical, mental, social, and behavioral, etc) have been
clearly specified.
3) Candidates for screening have been attracted.
Thus, the development of job analyses, human resource planning and recruitment are
necessary prerequisites to the selection process. The breakdown in any of these processes
can make even the best selection system ineffective.
Importance of Selection
The importance of selection may be judged from the following facts:-
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1) Procurement of Qualified and Skilled Workers: - Scientific selection facilitates the
procurement of well qualified and skilled workers in the organization. It is in the interest of
the organization in order to maintain the supremacy over the other competitive firms.
Selection of skilled personnel reduces the labour cost and increases the production.
Selection of skilled personnel also facilitates the expansion in the size of the business.
2) Reduce Cost of Training and Development:- Proper selection of candidates reduces
the cost of training because qualified personnel have better grasping power. They can
understand the technique of work better and in less time. Further, the organization can
develop different training programmes for different persons on the basis of their individual
differences, thus reducing the time and cost of training considerably.
3) Absence of Personnel Problems: - Proper selection of personnel reduces personnel
problems in the organization. Many problems like labour turnover, absenteeism and
monotony shall not be experienced in their severity in the organization. Labour relation will
be better because workers will be fully satisfied by the work. Skilled workers help the
management to expand the business and to earn more profits and in turn management
compensates, the workers with high wages, benefits etc.
Meaning and Definition of Placement
Placement means offering of the job to the finally selected candidate. One the employee is
selected he should be placed on a suitable job. According to Pigors and Myres, placement
may be defined as “the determination of the job to which an accepted candidate is to be
assigned, and his assignment to that job. It is matching of what the supervisor has reason to
think he can dos with the job demands(job requirements); it is matching of what he
imposes(in strain, working condition) and what offers is the form of pay roll, companionship
with other promotional possibilities etc.” A proper placement reduced the employee
turnover, absenteeism and accident rate and improves the morale. Placement is not an easy
process. It is very difficult for a new employee who is quite unknown to the job and
environment. For this reason, the employee is generally put on a probation period ranging
from one year to two years. At the end of the probation period, if the employee show a
good performance, he is confirmed as a regular employee of the organization. Thus, the
probation period or trial period is a transition period at the end of which management has
to take decision whether the employee should be made regular or discharged from the job.
Principle of Placement
Following principles are followed at the time of placement of an employee:
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1) The man should be placed on the job according to requirements of the job. The job
should not be adjusted according to the qualifications or requirements of the man. “Job
first, man next” should be the principle of placement.
2) The job should be offered to the man according to his qualifications. Neither higher,
nor lower job should be offered to the new employee.
3) The employee should be made conversant with the conditions prevailing in the
industry and all things relating to the job. He should also be made aware of the penalties if
he commits a wrong.
4) While introducing the job to the new employee, an effort should be mad to develop
a sense of loyalty and cooperation in him so that he may realize his responsibilities better
towards the job and the organization.
Types of Selection Test
Different selection test are adopted by different organization depending upon their
requirements. These tests are specialized test which have been scientifically tested and
hence they are also known as scientific test. Different types of test can be explained with
the help of following diagram,
Types of selection test
Aptitude Test Intelligence Test Personality Test Performance test
1.Mental ability/ Intelligence test
2.Medical aptitude test
3. Psycho motor test
I. Aptitude test :-
Aptitude tests are test which assess the potential and ability of a candidate. It
enables to find out whether the candidate is suitable for the job. The job may
be managerial technical or clerical. The different types of aptitude test are
a. Mental ability/mental intelligence test :-
This test is used to measure the over all intelligence and
intellectual ability of the candidate to deal with problems. It judges the decision making
abilities.
b. Mechanical aptitude test :-
This test deals with the ability of the candidate to do mechanical work.
It is used to judge and measure the specialized knowledge and problem
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solving ability. It is used for technical and maintenance staff.
c. Psycho motor test :-
This test judges the motor skills the hand and eye co-ordination and
evaluates the ability to do jobs like packing, quality testing, quality
inspection etc.
II. Intelligence test :-
This test measures the numerical skills and reasoning abilities of the
candidates. Such abilities become important in decision making. The test
consists of logical reasoning ability, data interpretation, comprehension skills
and basic language skills.
III. Personality test :-
In this test the emotional ability or the emotional quotient is tested. This test
judges the ability to work in a group, inter personal skills,ability to understand
and handle conflicts and judge motivation levels. This test is becoming very
popular now days.
IV. Performance test :-
This test judges and evaluates the acquired knowledge and experience of the
knowledge and experience of the individual and his speed and accuracy in
performing a job. It is used to test performance of typist, data entry operators
etc.
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TRAINING AND DEVELOPMENT
Training plays an important role in human resource development. It comes next to
recruitment and selection. In fact, the main purpose of training is to develop the
human resources present within the employees. In brief, training is the watchword
of present dynamic business world. Training is necessary due to technological
changes rapidly taking place in the industrial field. New machines, new methods and
new techniques are introduced in the production, marketing and other aspect of
business.
Training is for developing overall personality of an employee. It also creates
positive attitude towards fellow employees, job and the organization where he is
working. Training is the responsibility of the management as it is basically for raising
the efficiency and productivity of employees.
The purpose of training is to achieve a change in the behaviour of those trained
and to enable them to do their jobs in a better way. The trainees will acquire new
manipulative skills, technical knowledge, problem solving ability or attitudes etc.
training is not a one step process but is a continuous or never-ending process.
Training makes newly recruited workers fully productive in the minimum of time.
Even for old workers, training is necessary to refresh them and enable them to keep
up with new methods and techniques. In short training is the act of improving or
updating the knowledge and skill of an employee for performing a particular job.
Definition of Training:-
According to Edwin Flippo, training is “the act of increasing the knowledge and
skill of an employee for doing a particular job”.
Principles of Employee Training:-
A sound training programme must possess the following characteristics:
1. Training programme should be less expensive.
2. Training programme should be developed for all in the organization and not
for a particular group.
3. The programme should be conducted by a senior and experienced supervisor
or executive of the concern or by the training director who is incharge of the training
section under personnel department.
4. Training programme should be designed taking in view the interests of both
employer and employees.
Training and Development need = Standard performance – Actual performance.
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5. It is not essential to follow the single method of training for all the
employees. The purpose of training is to develop the men and therefore more than
one method may be followed for different groups.
6. Training should be followed by a reward. A reward should be provided at the
conclusion of the training such as promotion or a better job so that employees may
be motivated.
7. Sufficient time should be provided to practice what has been learned by the
employees.
Meaning and Importance:-
After an employee is selected, placed and introduced he or she must be provided
with training facilities. Training is the act of increasing the knowledge and skill of an
employee for doing a particular job. Training is a short-term educational process and
utilizing a systematic and organized procedure by which employees learn technical
knowledge and skills for a definite purpose. In other words training improves,
changes, moulds the employee’s knowledge, skill, behaviour, aptitude, and attitude
towards the requirements of the job and organization. Training refers to the
teaching and learning activities carried on for the primary purpose of helping
members of an organization, to acquire and apply the knowledge, skills, abilities and
attitudes needed by a particular job and organization.
Training is the most important technique of human resource development. As
stated earlier, no organization can get a candidate who exactly matches with the job
and the organizational requirements. Hence, training is important to develop the
employee and make him suitable to the job. Trained employees would be a valuable
asset to an organisation. Organizational efficiency, productivity, progress and
development to a greater extent depend on training. Organizational objectives like
viability, stability and growth can also be achieved through training.
Need for Employee Training:-
The need for training of employee is universally accepted and practical training in
the form of information, instructions and guidance is given to all categories of
employees. It is a must for raising efficiency of employees. Training is necessary in
the present competitive and ever changing industrial world. Specifically, the need for
training arises due to the following reasons:
I. To match the employee specifications with the job requirements and
organizational needs: Management finds deviations between employee’s present
specifications and the job requirements and organizational needs. Training is needed
to fill these gaps by developing and moulding the employee’s skill, knowledge,
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attitude, behaviour etc. to the tune of the job requirements and organizational
needs.
II. Organizational viability and the transformation process: The primary goal of
most of the organizations is that their viability is continuously influenced by
environmental pressure. If the organisation does not adapt itself to the changing
factors in the environment, it will lose its market share. If the organisation desires to
adapt these changes, first it has to train the employees to impart specific skills and
knowledge in order to enable them to contribute to the organizational efficiency and
to cope with the changing environment.
III. Technological advances: Every organization in order to survive and to be
effective should adopt the latest technology, i.e., mechanization, computerization
and automation. Adoption of latest technological means and methods, will not be
complete until they are manned by employees possessing skill to operate them. So,
organization should train the employees to enrich them in the areas of changing
technical skills and knowledge from time to time.
IV. Organizational complexity: With the emergence of increased mechanization
and automation, manufacturing of multiple products and by-products or dealing in
services of diversified lines, extension of operations to various regions of the country
or in overseas countries, organisation of most of the companies has become
complex. This creates the complex problems of co-ordination and integration of
activities adaptable for and adaptable to the expanding and diversifying situations.
This situation calls for training in the skills of co-ordination, integration and
adaptability to the requirements of growth, diversification and expansion.
V. Human relations: Trends in approach towards personnel management has
changed form the commodity approach to partnership approach, crossing the
human relations approach. So today, managements of most of the organizations has
to maintain human relations besides maintaining sound industrial relations although
hitherto the managers are not accustomed to deal with the workers accordingly. So
training in human relations is necessary to deal with human problems (including
alienation, inter-personal and inter-group conflicts etc.) and to maintain human
relations.
VI. Change in the job assignment: Training is also necessary when the existing
employee is promoted to the higher level in the organisation and when there is
some new job or occupation due to transfer. Training is also necessary to equip the
old employees with the advanced disciplines, techniques or technology.
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Objectives/Purposes of Employee Training:-
1) To raise efficiency and productivity of employees and the organization as a
whole. This means to maintain and improve the work performance of employees.
2) To create a pool of well trained, capable and loyal employees at all levels and
thereby to make provision to meet the future needs of an organization.
3) To provide opportunities of growth and self-development (career planning)
to employees and thereby to motivate them for promotion and other monetary
benefits. In addition, to give safety and security to the life and health of employees.
4) To avoid accidents and wastages of all kinds. In addition, to develop
balanced, healthy and safety attitudes among the employees.
5) To meet the challenges posed by new developments in the field of science
and technology.
6) To improve the quality of production and thereby to create market demand
and reputation in the business world.
7) To develop positive attitude and behaviour pattern required by an employee
in order to perform a given job efficiently. In other words, the purpose of training is
to improve the culture of the organisation.
8) To develop certain personal qualities among employees which can serve as
personal assets on long term basis.
Selection of Trainees:-
Once you have decided what training is necessary and where it is needed, the
next decision is who should be trained? For a small business, this question is crucial.
Training an employee is expensive, especially when he or she leaves your firm for a
better job. Therefore, it is important to carefully select who will be trained.
Training programs should be designed to consider the ability of the employee to
learn the material and to use it effectively, and to make the most efficient use of
resources possible. It is also important that employees be motivated by the training
experience. Employee failure in the program is not only damaging to the employee
but a waste of money as well. Selecting the right trainees is important to the success
of the program.
Training Goals:-
The goals of the training program should relate directly to the needs outlined
above. Course objectives should clearly state what behavior or skill will be changed
as a result of the training and should relate to the mission and strategic plan of the
company. Goals should include milestones to help take the employee from where he
or she is today to where the firm wants him or her in the future. Setting goals helps
to evaluate the training program and also to motivate employees. Allowing
employees to participate in setting goals increases the probability of success.
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Evaluation of Training Programme:-
The process of training evaluation has been defined as “any attempt to obtain
information on the effects of training performance, and to assess the value of
training in the light of that information.” Evaluation leads to controlling and
correcting the training programme. Hamblin suggested five levels at which
evaluation of training can take place, viz., reactions, learning, job behaviour,
organization and ultimate value.
i. REACTIONS:-
Training programme is evaluated on the basis of trainee’s reactions to the usefulness
of coverage of the matter, depth of the course content, method of presentation,
teaching methods etc.
ii. LEARNING:-
Training programme, trainer’s ability and trainee ability are evaluated on the basis of
quantity of content learned and time in which it is learned and the learner’s ability to
use or apply, the content he learned.
iii. JOB BEHAVIOUR:-
This evaluation includes the manner and extent to which the trainee has applied his
learning to his job.
iv. ORGANISATION:-
This evaluation measures the use of training, learning and change in the job
behaviour of the department/organization in the form of increased productivity,
quality, morale, sales turnover and the like.
v. ULTIMATE VALUE:-
It is the measurement of ultimate result of the contributions of the training
programme to the company goals like survival, growth, profitability etc., and to the
individual goals like development of personality and social goals like maximizing
social benefit.
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PROCESS/PROCEDURE OF TRAINING
Determining training need of employee
Select a target group for training
Preparing trainers
Developing training packages
Presentation
Performance
Follow up
1. Determining training needs of employee :- In the very 1st step of training procedure, the HR department, identifies the
number of people requiring training, specific area in which they need training,
the age group of employee, the level in organization etc. in some cases the
employee may be totally new to the organization. Here the general introduction
training is required. Some employees may have problems in specific areas; here
the training must be specific. This entire information is collected by HR
department.
2. Selecting target group :- Based on information collected in step 1 the HR department divides
employee into groups based on the following.
i. Age group of the employee to be trained
ii The area in which training is required
iii Level of the employee in the organization
iv The intensity of training etc.
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3. Preparing trainers :- Once the employees have been divided into groups, the HR department
arranges for trainers. Trainers can be in house trainers or specialized trainers
from outside. The trainers are given details by HR department, like number of
people in the group, their age, their level in organization, the result desired at
the end of training, the area of training, the number of days of training, the
training budget, facilities available etc.
4. Preparing training packages :- Based on the information provided by trainers, he prepares entire training
schedule i.e. number of days, number of sessions for each day, topics to be
handled each day, depth of which the subject should be covered, the
methodology for each session, the tests to be given foe each session,
handout/printed material to be given in each session etc.
5. Presentation :- On the first day of training program the trainer introduces himself and
specifies the need and objective of the program. This is done so that employees
get the right idea about the objectives. He then actually starts the program. The
performance of each employee is tracked by the trained and necessary feedback
is provided.
6. Performance :- At the end of training program the participants reports back to their office or
branches. They prepare report on the entire training program and what they
have learned. They the start using whatever they have learnt during their
training. Their progress and performance is constantly tracked and suitable
incentives are given if the participant is able to use whatever he has learnt in
training.
7. Follow up :- Based on the employee performance, after training, the HR department is
able to identify what is exactly wrong with training program and suitable
correction is made in the training programmes in the future.
ASSESSMENT OF TRAINING NEEDS:
Organizations spend vast sums of money on training and development. Before
committing such huge resources, organizations would do well to assess the training
needs of the employees. Organizations that implement training programmes without
conducting needs assessment may be making errors.
Needs assessment occurs at two levels:
a) Individual
b) Group
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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 to lack of skill or knowledge or any other problem. The problem of
performance deficiency is 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 discharge will solve the problem.
Individuals may also require new skills because of possible job transfers. Although
job transfers are as common as organizational personal demands vary, they do not
necessarily require elaborate training efforts. Employees commonly require an
orientation to new facilities and jobs. Recently, however, economic forces have
necessitated significant retraining 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 organization decides to introduce a new line of products, sales personnel
and production workers have to be trained to produce, sell and service the new
products. Training can also be used when 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 are
useful for organizational level needs assessment and others for individual needs
assessment.
Benefits of Needs Assessment:
Needs assessment helps diagnose the cause of performance deficiency of
employees. Causes require remedial actions. There are specific benefits of needs
assessment.
Trainers may be informed about the broader needs of the training group and
their sponsoring organizations.
The sponsoring organizations are able to reduce the perception gap between the
participant and his or her boss about their needs and expectations from the
training programme.
Trainers are able to pitch their course inputs closer to the specific needs of the
participants.
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METHODS OF TRAINING FOR MANAGERS/ METHODS OF
DEVELOPMENT / MANAGERIAL DEVELOPMENT/ EXECUTIVE
DEVELOPMENT
An organization has to take steps for training programmes for supervisory staff and
managers such training programs are called management development
programmes. Management development programme acts as a key factor for the
survival and growth of a business unit.
Management development programme includes systematic review to identify the
members of the management who can be expected to raise their managerial
effectiveness through training and special assignments.
Management development is a way to improving the culture of the organization so
that it could be geared to excellence. Leading houses like Tatas, Birlas, Bajaj and
others have started taking keen interest in management development.
They believe that “People move organizations – not machines.”
Definition:-
“The term Development here refers to those learning opportunities designed to help
employees to grow.”
NEEDS ASSESSMENT METHODS
Group analysis
Organizational goals and
objectives
Personnel/skills 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
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Objectives of Development
1. Attitude Tuning:- it is done to broaden the mind of employees by providing
them with opportunities for an inter change of experiences within and
outside. Development helps in correcting the narrowness of outlook,
emotional stability, analytical ability, acquiring long term perception,
professional ethics, and social objectives.
2. Motivation:- one of the objectives of development is to boost individual and
collective moral and motivate the employees through words and deeds.
3. Leadership:- To build and maintain an appropriate working climate, develop
decision making abilities and delegation through adaptive leadership.
4. Communication:- communication helps in maintaining good inter personal
and inter group relations, it also helps in Conflict settlement, compromises.
5. Paradigm Shift:- To prepare the employee both the new and the old to meet
the present as well as changing requirement of the job and the organization.
Importance of Development
1. Increase in moral and motivation of employees:- Development increases
employees moral and motivation by inculcating sense of better self
confidence. Higher efficiency and productivity gives higher job satisfaction,
which motivates him to work attentively.
2. Better human relations:- development gives the employees an opportunity
to cultivate better inter personal and human relations. Development in the
sense is sharing of experiences and helps in improving the quality of human
relations. This facilitates smooth and harmonious functioning of the
organization.
3. Development and promotion:- Development not only improves the
knowledge and skills for doing the existing job successfully but also helps the
employees with abilities and attitudes needed for higher positions. In a way
development aids in contribution to growth of their personality.
4. Accuracy:- it makes the employee more proficient and competent and
enables him to avoid mistakes. It helps an individual in making better
decision and solving efficiently.
ON THE JOB METHOD :- On the job method refers to training given to personnel
inside the company. There are different methods of on the job training.
1. Job rotation
This method enables the company to train managerial personnel in
departmental work. They are taught everything about the department. Starting
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from the lowest level job in the department to the highest level job. This helps
when the person takes over as a manager and is required to check whether his
juniors are doing the job properly or not. Every minute detail is studied.
2. Planned progression :-
In this method juniors are assigned a certain job of their senior in addition to
their own job. The method allows the employee to slowly learn the job of his
senior so that when he is promoted to his senior’s job it becomes very easy for
him to adjust to the new situation. It also provides a chance to learn higher level
jobs.
Methods of training managers
On the job training Off the job training
Job rotation Classroom method
Planned progression Simulation
Coaching and counseling Business games
Under study Committees
Junior boards Conferences
Readings
In-basket training
3. Coaching and counseling :-
Coaching refers to actually teaching a job to a junior. The senior person who
is the coach actually teaches his junior regarding how the work must be handled
and how decisions must be taken, the different techniques that can be used on
the job, how to handle pressure. There is active participation from the senior.
Counseling refers to advising the junior employee as and when he faces
problems. The counselor superior plays an advisory role and does not actively
teach employees.
4. Under study :-
In this method of training a junior is deputed to work under a senior. He
takes orders from the senior, observes the senior, attends meetings with him,
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learns about decision making and handling of day to day problems. The method
is used when the senior is on the verge of retirement and the job will be taken
over by the junior.
5. Junior board :-
In this method a group of junior level managers are identified and they work
together in a group called junior board. They function just like the board of
directors. They identify certain problems, they study the problem and provide
suggestions. This method improves team work and decision making ability. It
gives an idea about the intensity of problem faced by the company. Only
promising and capable junior level managers are selected for this method.
OFF THE JOB TRAINING METHOD :- Off the job training refers to method of training given
outside the company. The different methods adopted here are
1. Classroom method :- The classroom method is used when a group of managers have to be trained in
theoretical aspects. The training involves using lectures, audio visuals, case study, role
play method, group discussions etc. The method is interactive and provides very good
results.
2. Simulation :- Simulation involves creating an atmosphere which is very similar to the original work
environment. The method helps to train managers in handling stress, taking immediate
decisions, handling pressure on the jobs etc. An actual feel of the real job environment is
given here.
3. Business games :- This method involves providing a market situation to the trainee manager and asking
him to provide solutions. If there are many people to be trained they can be divided into
groups and each group becomes a separate team and play against each other.
4. Committee :- A committee refers to a group of people who are officially appointed to look into a
problem and provide solutions. Trainee managers are put in the committee to identify
and study a problem in the organization and to provide suggestions on how they will
solve the problem and to explain what they learnt from it.
5. Conference :- Conferences are conducted by various companies to have elaborate discussions on
specific topics. The company which organizes the conference invites trainee managers
from different companies and calls for experts in different fields to give presentations or
lectures. The trainee managers can ask their doubts to these experts and understand
how problems can be solved on the job.
6. Readings :- This method involves encouraging the trainee manager to increase his reading
related to his subject and then asking him to make a presentation on what he has learnt.
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Information can be collected by trainee manager from books, magazines and internet
etc.
7. In basket training :- The method is adopted from the ‘IN’ and ‘OUT’ baskets normally found in the
manager’s cabin. In this method the training is given to the manager to handle files
coming in and to finish his work and take decisions within a specified time limit. The
trainee manager is taught how to prioritize his work, the activities which are important
for his job and how to take decisions within limited time.
Difference between Training and Development:
Training Development
Nature Tangible in nature.
Training is more specific, job-related information.
Intangible in nature. Development is more
general in nature, especially at the top level
management level.
Importance Training is important because technology is
improving and changing.
Development is important to adapt to new
technology and changing patterns in organization.
Skills Training deals with non-
human skills. Development deals with
human skills.
Directed towards
Training is normally directed at operative
employees and relates to technical aspects.
It is directed at managerial personnel to acquire
conceptual and human skills.
Methodology Greater emphasis on ON-
JOB methods Greater emphasis on OFF
the Job methods.
Frequency
Training is less frequent; it is carried out mostly at
induction and every succeeding stage of the
job.
It is more frequent and continuous in nature.
Who imparts Mostly the supervisors
impart training
Supervisors, external experts and self undertake
development.
Relevance Training is of more
relevance at junior-levels.
Development is of higher relevance at middle and
senior levels.
Cost involved Imparting is less expensive Imparting development is
more expensive.
Duration Training courses are
designed mostly for short term.
It involves a broader long-term education for a long
run term.
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OFF THE JOB TRAINING
Trainings conducted in simulated environments, classrooms, seminars, etc are called
Off the Job Training.
Advantages of Off-the-Job Training
1. Trainers are usually experienced enough to train
2. It is systematically organized
3. Efficiently created programs may add lot of value
Disadvantages of Off-the-Job Training:
1. It is not directly in the context of job
2. It is often formal
3. It may not be based on experience.
4. It is expensive.
5. Trainees may not be much motivated
6. It is artificial in nature
“Off the Job Training” Methods
1. Classroom Lectures: Advantage – It can be used for large groups. Cost
per trainee is low. Disadvantages – Low interest of employees . It is
not learning by practice. It is One-way communication. No authentic
feedback mechanism. Likely to lead to boredom for employees.
2. Audio-Visual: It can be done using Films, Televisions, Video, and
Presentations etc. Advantages – Wide range of realistic examples,
quality control possible. Disadvantages – One-way communication,
No feedback mechanism. No flexibility for different audience.
3. Simulation: Creating a real life situation for decision-making and
understanding the actual job conditions give it. Ensures active
participation of all trainees. Can be very effective but needs good
conductors.
4. Case Studies: It is a written description of an actual situation in the past
in same organisation or some where else and trainees are supposed
to analyze and give their conclusions in writing. This is another
excellent method to ensure full and whole hearted participation of
employees and generates good interest among them. Case is later
discussed by instructor with all the pros and cons of each option. It is
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an ideal method to promote decision-making abilities within the
constraints of limited data.
5. Role Plays: Here trainees assume the part of the specific personalities
in a case study and enact it in front of the audience. It is more
emotional orientation and improves interpersonal relationships.
Attitudinal change is another result. These are generally used in MDP.
6. Sensitivity Trainings: This is more from the point of view of behavioural
assessment as to how an individual will conduct himself and behave
towards others under different circumstances. There is no pre-
planned agenda and it is instant. Advantages – increased ability to
empathize, listening skills, openness, tolerance, and conflict
resolution skills. Disadvantage – Participants may resort to their old
habits after the training.
7. Programmed Instructions: Provided in the form of blocks either in book
or a teaching machine using questions and feedbacks without the
intervention of trainer. Advantages – Self paced, trainees can progress
at their own speed, strong motivation for repeat learning, material is
structured and self-contained. Disadvantages – Scope for learning is
less; cost of books, manuals or machinery is expensive.
8. Computer Aided Instructions: It is extension of PI method, by using
computers. Advantages – Provides accountabilities, modifiable to
technological innovations, flexible to time. Disadvantages – High cost.
9. Laboratory Training.
I N D U C T I O N & O R I E N A T I O N
Induction and Orientation are the procedure that a new employee has to go through
in the organisation. Every employee starting from the lower most, say, from peon to
CEO, need orientation course when they join the organisation. A new employee
carries with him a lot of apprehension about place, job, colleagues, organisational
culture, and so on. On the day of reporting, he needs to know his office/work place,
routine, amenities, functional and reporting channels, etc.
Definition
“It is a Planned Introduction of employees to their jobs, their co-workers and the
organization per se.”
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Difference Between Induction and Orientation
Induction refers to formal training programs that an employee has to complete
before he is put on job. Like in Military, before a new recruit is sent to border, he is
trained for a few months in Drill/Parade, physical fitness, weapon handling, etc. This
is called Induction.
Orientation is the information given to the new employees to make him aware of the
comfort issues - where the facilities are, what time lunch is, who are the people he
would be working with and so forth.
Orientation conveys following information:
1. Organisation’s geography/layout
2. Organisational set up (Structure)
3. Daily Work Routine
4. Organization Profile, History, Objectives, Products and Services, etc
5. Introduction to colleagues/immediate superiors and subordinates.
6. Importance of Jobs to the organization
7. Detailed Orientation Presentation covering policies, work rules and employee
benefits.
P U R P O S E O F O R I E N T A T I O N
The idea of Orientation programme is to make the new employees feel “at home” in
new environment. Any employee while joining a new organisation is anxious about
the new set-up, new colleagues, his own performance vis a vis other more
experienced employees in the organisation, his work place, his exact responsibilities,
etc. A structured information and introduction system will make his transitory period
short and reduce his anxiety quickly. He will begin to perform to his potential quickly.
T Y P E S O F O R I E N T A T I O N P R O G R A M S
1. Formal or Informal: In informal orientation, new employees are put on the jobs
and they are expected to acclimatise themselves with the work and the
organisation. In contrast, in formal orientation, an employee goes through a
structured introduction programme.
2. Individual or Collective: Another choice is to be made whether new employees
are to be inducted in group or individually.
3. Serial or Disjunctive: Orientation becomes serial when the person relinquishing
the post hands over the position to the new incumbent. It becomes disjunctive
when the new employee occupies a vacant position with no one to hand him
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over the position. He learns the prevalent practices and history slowly from his
subordinates and superiors on gradual basis.
4. Investiture or Divestiture: This is the final strategic choice which relates to
decision regarding allowing the new employees to affect the organisation with
his identity/ideas/functional methods or asking him to modify his identity to
merge with existing culture of the organisation. This is more applicable to high
positions who may have been hired with a view to bring in their experiences and
methods of management to the organisation.
How long should the induction process take?
It starts when the job ad is written, continues through the selection process and is
not complete until the new team member is comfortable as a full contributor to the
organization's goals.
The first hour on day one is a critical component - signing on, issuing keys and
passwords, explaining no go zones, emergency procedures, meeting the people that
you will interact with all have to be done immediately. Until they are done the
newcomer is on the payroll, but is not employed.
After that it is a matter of just in time training - expanding the content as new duties
are undertaken.
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PERFORMANCE APPRAISAL
Meaning of Performance Appraisal
Performance appraisal may be understood as the assessment of individual’s performance in
a systematic way, the performance being measured against factors such as job knowledge,
quality and quantity output, initiative, leadership abilities, supervision, dependability, co-
operation, judgment, versatility, health and the like. Assessment should be confined to past
performance alone. Potentials of the employee for future performance must also be
assessed.
Performance appraisal is a method of evaluating the behavior of employees in the work
spot, normally including both the quantitative and qualitative aspect of job performance.
Performances here refer to the degree of accomplishment of the tasks that make up an
individual’s job. It indicates how well an individual is fulfilling the job demands. Often the
term is confused with effort, but performance is always measured in terms of result and not
efforts.
A formal definition of performance appraisal is “it is the systematic evaluation of the
individual with respect to his or her performance on the job and his or her potential for
development.”
Features of Performance Appraisal
1) Performance appraisal is the systematic description of an employee’s job relevant
strengths and weaknesses.
2) The basic purpose is to find out how well the employee is performing the job and
establish a plan of improvement.
3) Appraisals are arranged periodically according to a definite plan.
4) Performance appraisal is not job evaluation. It refers to how well someone is doing
the assigned job. Job evaluation determines how much a job is worth to the
organization and there for, what range of pay should be assigned to the job.
5) Performance appraisal is a continuous process in every large scale organization.
Process of Performance Appraisal
1. Establish Performance Standards.
Appraisal systems require performance standards, which serve as benchmarks against which
performance is measured. In order to be useful, standards should relate to the desired
results of each job. Appraisals must have a clear- cut criteria. Performance standards must
be both to the appraiser and the appraise. The performance standards of goals must be
developed after a thorough analysis of the job. Goals must be written down. They must be
measurable within certain time and cost considerations.
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Performance appraisal is planned, developed and implemented through a series of steps:
Figure 6.1 Process of Performance Appraisal
2. Communicate the Standards.
Performance appraisal involves attract two parties; the appraiser who does the appraisal
and the appraise whose performance is being evaluated. Both are expected to do certain
things. The appraiser should prepare job descriptions clearly, help appraise set his goals and
targets; analysis results objectively; offer coaching and guidance to appraise whenever
required and reward good results. The appraiser should be very clear about what he is doing
and why he is doing. For this purpose, the performance standards must be communicated
to appraise and their reactions are noted initially. These standards must be revised or
modified as and when required.
3. Measure Actual Performance.
After the performance standards are set and accepted, the next step is to measure actual
performance. This requires the use of dependable performance measures, the ratings used
to evaluate performance. Performance measures in order to be helpful must be easy to use,
reliable and report on the critical behaviors that determine performance. Generally,
ESTABLISHING PERFORMANCE STANDARD
CONNUNICATION OF PERFORMANCE
STANDARDS
MEASUREMENT OF ACTUAL PERFORMANCE
COMPARISON OF ACTUAL PERFORMANCE
WITH THE STANDARDS
FOLLOW UP ACTIONS
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managers regarding how to measure actual performance use four common sources of
information: personal observation, statistical reports, oral reports and written reports.
4. Compare Actual Performance with Standards and Discuss the Appraisal.
Actual performance may be better than expected and sometimes it may even go off the
track. The assessment of another person's contribution and ability is not an easy task. It has
serious emotional overtones as it affects the self-esteem of the appraise. Any appraisal
asked on subjective criteria is likely to be questioned by the appraisers and leave him quite
dejected and unhappy when the appraisal turns out to be negative.
5. Taking Corrective Action, if Necessary.
Corrective action is of two types: The one, which puts out the fires immediately and the
other one, which strikes at the root of the problems permanently. Immediate action sets
things right and get things back or track, whereas the basic corrective action gets to the
source of deviations and seems to adjust the difference permanently. Basic corrective step
seek to find out how and why performance deviate.
Methods of Performance Appraisal:
Methods of Performance Appraisal
A) Traditional Methods B) Modern Methods
Confidential report 1. Human resource accounting
Ranking 2. Management by objective
Graphical rating scale 3. Assessment centre
Checklists 4. BARS( Behaviorally Anchored
Forced distribution Rating Scale )
Critical incidents
Essay evaluation
Group appraisals
Traditional methods (Past Oriented):
1. Confidential report method
It is mostly used in government organizations. It is a descriptive report generally prepared at
the end of the year, by the employee’s immediate superior. The report highlights the
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strengths, weaknesses, major mistakes, merits, good work done etc. of the subordinate. The
impression of the superior about the superior is merely recorded here. It does not offer any
feedback to appraise. It is a narrative method of performance appraisal since the report is
not made public and hence no freedom is available, the subjective analysis of the superior is
likely to be hotly contested.
2. Essay Appraisal
Under this method the rater is asked to express the strong as well as the weak points of the
employee’s behavior. This technique is normally used with a combination of the graphical
rating scale because the rater an elaborately present the scale by sustaining an explanation
for his rating. In it, the rater considers the following factors:
-Job knowledge and potential of the employee.
-Employees understanding about the company’s programmes, policies, objective, etc.
-The employees general planning, organizing and controlling ability.
-The employee’s relation with the co-workers and superiors.
-The attitude and perceptions of the worker, in general.
3. Group appraisal
In this method an employee is appraised by a group of appraisers. This group consists of the
immediate supervisor of the employee, other supervisors who have close contact with
employee’s work, manager or head of department or consultant. The head of department
or manager may be the chairman of the group and the supervisor may act as the coordinate
for the group activities. The immediate supervisor enlighten other members about the job
characteristics, demand, standards or performance etc. then the group appraise the
performance of the employee, compares the performance with the standards, finds out the
deviation, discusses the reasons, therefore suggests ways for improvement of performance,
prepares an action plan, studies the need for change in the job analysis and standards and
recommends changes, if necessary. This method eliminates “personal bias” to a large
extent, as performance is evaluated by multiple rates. However, it is very time consuming
process.
B) Modern Methods (Future Oriented):
1. Human resource accounting
HRA is a sophisticated way to measure in financial terms the effectiveness of the personal
manager activities and the use of people in an organization. It is process of accounting
people as an organization resource. It tries to place a value on the organizational human
resources as assets and not as expenses. This method shows the investment the
organization makes in the people and how the value of these people change over a time.
The acquisition of employee is compared with the replacement cost from time to time. In
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brief, in this method the employees’ performance is evaluated in terms of costs and
contributions of employees.
2. Management by objectives
It is the modern method of evaluating the performance of personnel. Managers have
become increasingly aware that the traditional performance evaluation systems are
characterized by facing goals. The concept of MBO is actually the outcome the pioneering
work of Drucker, Mcgreger and Odioine in management science. MBO can be described as
the process whereby the superior and subordinate manager of an organization jointly
identify its common goals, each individual’s areas of operations, responsibility in terms of
results expected of him and use these measures as a guide for operating the unit and
assessing the contributions of each of its members. MBO thus represents more than an
evaluation process.
The MBO can be described in four steps:
The first step is to establish the goals each subordinate is to attain. The goals
typically refer to the desired outcome to be achieved. The goals can be then used to
evaluate the employee performance
The second step involves setting of the performance standard fro the subordinates
in a previously arranged time period.
In the third step, the actual level of goal attainment is compared with the goals
agreed upon. The evaluator explores the reasons or the goals that were not met and
the goals that were exceeded. This step helps to determine the training needs. It also
alerts the superior of the conditions that may affect but over which the subordinate
has no control.
The final step involves establishing new goals and, possibly, new strategies for goals
that previously not attained. At this point, subordinate and superior involvement in
the goal setting may change. Subordinates who successively reach the established
goals may be allowed to participate more in the goal setting process the next time.
The process is repeated.
3. Assessment center
In this approach individuals from various departments are brought together to spend two or
three days working on an individual or a group assignment similar to the ones they would be
handling when promoted. Observers rank the performance of each and every participant in
order to merit since assessment centers are basically meant for evaluating the potential of
candidates to be considered for promotion, training on development, they offer an excellent
means for conducting evaluation process in an objective way. All assesses get an equal
opportunity to show their talents and capabilities based on merit.
Essential Features of an Assessment Centre
While the specific objectives for which the assessment centre is set up may vary in
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making a promotion decision, diagnosing training needs, developing managerial skills,
placement, etc., there are some essential steps that are common in all assessment centres.
The essential features of an assessment centre are:
a. Job analysis: The aim of conducting job analysis is to reveal the details of the target job its
illustrative tasks, problems, and situations that a jobholder is likely to face in a given
situation. Through job analysis, the dimensions like the skills, qualities, attributes,
knowledge, motivation, tasks required for effective performance of a target job are
systematically identified. These dimensions provide the framework for developing the
instruments to evaluate or assess the participants and for giving the feedback.
b. Multiple assessment techniques: The assessment centre aims at providing multiple
opportunities to observe the complex behaviour of the participants and assess it against the
dimensions identified in the job analysis. A variety of assessment techniques can be used,
ensuring that these are the appropriate ways of observing one or more of the dimensions.
These can include - interviews, psychological tests, questionnaires, situational exercises, etc.
c. Situational exercises: These exercises are simulations that portray the most important
aspects of target jobs. Typically, a situational exercise tries to present the participant with a
complex set of stimuli that he is likely to deal with on the job. For example, an in-basket
exercise that captures the typical sample of tasks one is likely to encounter in a job.
d. Behavioural responses: Situational exercises provide a lot of opportunity to oversee the
behaviour of participants, which are indicators of complex competences.
e. Behavioural observations: The assessors are trained to focus on the behaviour of the
participants. These observations give a specific statement of observable actions and even
actual words.
f. Multiple assessors: The basis for using multiple assessors is that this helps in ironing out
individual biases. Different backgrounds and experiences of a group help to provide a rich
perspective to the centre. It is recommended that a line manager, an HR manager, an
outside consultant and others, familiar with the target job, may be included in the assessor
panel. There should be at least three assessors to make observations on each participant's
performance.
g. Trained assessors: It is important that the assessors have thorough training in assessment
skills and also have a common frame of reference regarding the objectives, design and
implementation programme of the centre. Specifically, training should be imparted on
observing and recording behaviours, classifying behaviour into directions, making
judgements about the performance levels, communicating individual judgements and
understanding to others, integrating behavioural observations from different sources, etc. If
required, make evaluation an overall success and give suggestions for future development.
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h. Integration of observations: Regarding integration of observations, there are two schools of
thought on its methodology. Traditionally, the judgemental method has been used in which
the assessors use their pre-knowledge, wisdom and discretion in noting, classifying and
integrating observations to derive an overall rating. The alternative method is found to be
especially appropriate for some assessment situations, for instance, while screening a large
number of candidates, for low level jobs. This is the statistical method. Here predetermined
weights are assigned to dimensions and scores on exercises. These are then combined using
a formula.
4. Behaviorally Anchored Rating Scale
This method is also known as behavioral expectation scale. This method represent he latest
innovation in the performance appraisal. It is the combination of the rating scale and critical
incident techniques of employee performance evaluation. The critical incidents serve as the
anchor statement on a scale and the rating form usually contains six to eight specifically
defined performance dimensions.
360° PERFORMANCE APPRAISAL
The appraisal may be any person who has thorough knowledge about the job contents,
contents to be appraised, standards of contents and who observes the employee's by
performing a job. The appraisal should be capable of determining what is more important
and what is relatively less important. He should prepare reports and made judgments
without bias. Typical appraisals are supervisors, peers. Subordinates, employees
themselves, user of service and consultants. Performance Appraisal by all these parties is
called 360° Performance Appraisal.
1. Supervisors
Supervisors include superiors of the employee, other superiors having knowledge about the
work of the employee and department head or manager. General practice is that immediate
superior appraises the performance, which in turn is reviewed by the departmental head/
managers. This is because superiors are responsible free managing their subordinates and
they have the opportunity to observe, direct and control the subordinate continuously.
Moreover, they are accountable for the successful performance of their subordinates.
Sometimes other supervisors, who have close contact with employee work also appraise
with a view to provide additional information.
2. Peers
Peer appraisal may be reliable of the workgroup is stable over a reasonably long period of
time and performs tasks that require interaction.
3. Subordinates
In developed countries, the concept of change superiors rated by subordinates in being used
in most organizations. Such a method can be useful provided the relationships between
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superiors and subordinates art cordial. Subordinate's ratings in such cases can be quite
useful in identifying competent superiors.
4. Self-Appraisal
If individuals understand the objectives they are expected to achieve and the standards by
which they are to be evaluated, they are to a great extent in the best position to appraise
their own performance. Also, since employee development means self-development,
employees who appraise their own performance may become highly motivated.
5. Users of Services/Customers
The customers on users of services can, better judge employee performance in service
organizations relating to behaviors, promptness, speed in doing the job and accuracy.
Example, students better judge a teacher’s performance.
6. Consultants
Sometimes consultants may be engaged for appraisal when employees or employers do not
trust the supervisory appraisal and management does not trust the self-appraisal and the
appraisal done by subordinates. In such situation, the consultants are trained and they
observe the employee at work for sufficiently long periods for the purpose of appraisal.
7. When to appraise?
Informal appraisals are conducted whenever the supervisor or personnel manager feel it
necessary. However, systematic appraisals are conducted on a regular basis; say for
example, every six month or annually.
Requirements of A Good Appraisal System:
1) It must be easily understandable:
If the system is too much complex or to time consuming, it may be anchored to the ground
by its own dead weight of complicated forms which nobody but the experts understand.
2) It musty has support of all line people who administer it:
If the line people think that there role is not very important then they will not consider the
system seriously. Similarly, if the people find that the system is too theoretical, too
ambitious, or that has been foisted on them by the ivory-tower staff consultants who have
no comprehension of the demand then they will recent it.
3) The system should be sufficiently grounded in the requirement of the organization:
It should reflect the value system of the organization. In fact functioning as a definition of
performance, it should tell he employee what set of activities or what qualities are
considered desirable by the organization. As such it should have linkage with the job
description.
4) The system should be both valid and reliable:
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The validity of the ratings is the degree to which they are truly indicative of the intrinsic
merit of the employees. The reliability of the ratings is the consistency with which the
ratings are made, either by different sectors, one by one rater at different times. Both
validity and reliability result from objectivity. The appraisal system of many organizations
lacks this objectivity and bunches all employees into one or two top ranks without taking
into account their merits. This raises outstanding performances but also raises doubts about
the validity of the system.
5) The system should have built-in incentive:
This means that the reward should follow satisfactory performance. Many authors however,
advocate against the direct linkage between the appraisal and rewards. In their opinion,
such a connection throttles downward communication of performance appraisal because
superiors do not like being questioned by disgruntled subordinates.
6) The system should be open and participative:
It should involve employees in goal-setting process. This helps in planning performance
better.
7) The systems should focus more on the development and growth:
Of the employee than on generating data for administrative decision making related to
promotions, increments, etc. the system must help in identifying employee’s strengths and
weaknesses and indicate corrective actions. For example it may reveal that goals need to be
modified on; there is need for classification of duties or for additional training or job
rotation or job enrichment.
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WAGE AND SALARY ADMINISTRATION
CONCEPTS OF WAGES.
While evolving the wage policy, three concepts of wages are generally considered, namely,
1. Minimum Wages,
2. Fair Wages, and
3. Living Wages.
Minimum Wages
Minimum 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 wage must
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 sector
where 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, are also
considered.
Fair Wages
Fair wage is understood in two ways. In a narrow sense, wage is fair if it is equal to the rate
prevailing in the same trade and in the neighbourhood for similar work. In a wider sense, it
will be fair if it is equal to the predominant rate for similar work throughout the country 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 a standard can be
determined with reference to those industries where labour is well organized and has been
able to bargain well with the employers.
Living Wages
Living wage is a step higher than fair wage. Living wage may be described as one which
should enable the wage earner to provide for himself and his family not on the bare
essentials of life like food, clothing and shelter, but a measure of frugal comfort including
education for children; protection against ill health; requirements of essential social needs;
and/or measure of insurance against the more important misfortunes including old age. A
living wage must be fixed considering the general economic conditions of the country. The
concept of living wage, therefore, varies from country to country. In the more advanced
countries, living wage itself forms the basis for the minimum wage.
In India, minimum wage is determined mainly for sweated industries under the
provisions of the Minimum Wages Act, 1948. Fair wage is fixed for other industries
considering prevailing rates of wages, productivity of labour, capacity of the employer to
pay, level of national income and other related factors.
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Tribunals, awards and wage boards play major role in fair wage fixation. Many people
are of the opinion that living wage is a luxury for a developing country like India and can
therefore be deferred.
Incentive Systems of Wage Payment
The wage plan should be highly incentive means it should encourage workers to take more
initiative and interest in the work, produce more and also earn more. The wage plan which
serves all these purposes is called incentive wage plan. Such an incentive plan is beneficial
to both - employers and employees as well as it is useful for the rapid industrial growth.
Incentives include monetary as weft as non-monetary benefits offered. There is motivation
to work hard and to earn more. In every incentive plan, wages are linked with the given
output. Incentives are not fixed like wages and salaries. They vary from individual to
individual and from period to period.
ILO defines incentives as "payment by results". Incentives can also be described as
"incentive systems of payment".
According to Dale Yoder, “Incentive wages relate earnings to productivity and may use
premiums, bonuses, or a variety of rates to compensate for superior performance” Piece
rate system is the oldest incentive wage plan which is also useful for attracting and retaining
qualified personnel in the organisation and for motivating personnel to higher levels of
performance. In many incentive plans, a combination of time rate and piece rate sysh3ms is
used. Such combination creates an ideal incentive plan.
Features/Requisites of a Good Incentive Plan:
Simplicity:
A good incentive plan is one which is easy to understand and simple to operate. An average
worker must be able to know the incentive offered and what he is expected to do. The
monetary as well as non-monetary benefits offered must be made clear to all workers.
Encourage initiative:
A good incentive plan should create initiative among workers to work more and to earn
more. It must offer more income to workers and more profit/production to the firm or
company.
Definiteness and flexibility:
A good incentive plan should be definite. This means frequent changes should not be made
as regard rates, etc. as such changes create confusion and doubts in the minds of workers.
Such plan must give clear benefits to workers
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In addition, an ideal incentive plan should be flexible. It should take care of technological
and other changes taking place from time-to-time. There should be suitable provision for
such adjustment. Flexibility makes incentive plan adaptable.
Wide coverage and equitable:
A good incentive plan should not be for employees in certain departments only. It should
have a wide coverage and almost all employees should be covered in such plan. Such wide
coverage makes the plan popular at all levels and among all categories of workers.
An incentive plan should be equitable. This means it should provide equal opportunity to all
employees to show efficiency and earn more. This avoids dissatisfaction among employees
and makes the plan just and fair to all employees.
Guarantee of minimum wage payment:
An incentive wage plan should include certain minimum wage payment to every worker per
month. This should be irrespective of the production he gives. Such provision of guarantee
payments creates a sense of security and confidence among workers.
Scientific fixation of standard workload:
Under the incentive plan, extra payment is given for the extra work i.e. work which is over
and above certain quality. Such standard work-load must be clear, specific and fixed with
scientific time studies so that majority of employees will be able to give extra production for
extra payment.
Justice to employer and employees:
A good incentive plan should do justice to both parties. The employer must get additional
production along with extra profit and the workers must get extra payment for extra
production.
Challenges affecting Remuneration
People who administer wage and salary face challenges, which often necessitate
adjustments 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 jobs they are
capable of doing. The purpose of this system was to motivate employees to acquire
additional skills so that they become more useful to the organization. Skill-based pay
systems work well when,
a) HRM philosophy is characterized by mutual trust and the conviction that the employees
have the ability and motivation to perform well.
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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 and
changed 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 each
year. In anniversary dates salaries may be reviewed at an interval of twelve months from
the date when employee was hired. In organized industrial establishments pay reviews are
held once in three years. In government departments this is done once every ten-fifteen
years.
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 maintain pay-
secrecy.
Comparable worth: One of the popular principles in employee remuneration is equal pay
for equal work. Under equal remuneration act, male and female workers are to paid same if
their merit and seniority match. Beyond the concept of equal wages is the concept of
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 be paid
the same.
International Pay: In increasing globalization of business international pay assumes greater
relevance. The amount of remuneration its composition and other factors pose serious
challenge to HR manager.
Components of Employee Remuneration and Fringe Benefits
Remuneration is the compensation an employee receives in return for his or her
contribution 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 fought between the
employer and the employees on issues relating to wages or bonus. For HRM too,
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.
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An average employee in the organized sector is entitles to several benefits –both financial as
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 subject
to annual to small increments. They differ from employee to employee, and depend upon
the 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. The amount 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, recreation and
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 legal expenses, 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 pay allowances.(D) Other benefits i.e. travel
allowances, company car and subsidies, moving expenses, uniform and tool expenses,
employee meal allowances, discounts on employer’s goods and services, child care facilities.
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 to retain
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.
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Devising a Remuneration Plan
Any remuneration plan must be understandable, workable and acceptable. The
remuneration scheme must have two components – a base rate and the scope for
increasing the base rate. The remuneration plan must be determined keeping in mind the
requisites and the components.
The persons responsible for determining a remuneration plan are advised to employ
sequential steps. (see figure ) as described below.
Job Description
Job Evaluation
Individual Pay for Each
Job within a Range
Job Hierarchy
Pay Survey
Pricing Jobs
Figure 7.1 Remuneration Model
Job Description: Job description are crucial in designing pay systems, for, they help to
identify important job characteristics. They also help determine, define and weigh
compensable 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 by
employing job evaluation. A number of techniques are available to evaluate jobs. For
example, in the point-ranking method of job evaluation, each job is analysed and defined in
terms of the compensable factors an organization has agreed to adopt. Points are assigned
to each degree of a compensable factor, such as responsibility.
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Job Hierarchy: The points assigned to all compensable factors are aggregated. The total
points scored will help to establish the hierarchy of job worth, starting from the highest
point total to the lowest point total.
Pay Surveys: Job hierarchy being established, the next step is to establish pay differentials.
Before fixing wage and salary differentials, prevailing wage and salary rates in the labour
market need to be ascertained. Hence the relevance of pay surveys.
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 mailed to
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 the
government, trade unions, and professional bodies, and consulting firms provide copious
amount of information about the prevailing wage and salary rates.
Job evaluation helps establish job hierarchy. Through surveys, the rate for key jobs in the
labour 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 market
worth. Two activities need to be performed: (i) establishing the appropriate pay level for
each 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 are
combined through the use of a graph called scatter gram. In the figure below, the vertical
axis represent pay rates. The horizontal axis is used for points. The total points and the wage
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
Wa
ges or S
alaries
Key Job A
Non-Key
Job B
Wage-trend
Line
Figure 7.2 Development of a wage-trend line
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Thus, each dot in the above figure represents the intersection of the point value and the
market-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 a prevailing
rate of Rs. 70 per hour.
The dots that represent key jobs can be used to draw a wage-trend line as, close to as many
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 the
employer 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.
Determining pay grades: A pay grade comprises jobs of approximately equal difficulty or
importance. 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, also called
classes, so that there are limited number of wage rates. Where individual jobs are retained,
an organization will have hundreds of remuneration rates. The existence of hundreds of
separate wage rates would be meaningless as differences between jobs might be 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 will receive
the same wage rate. A job valued at 105 points, for example, receives the same pay as a job
with 145 points.
100 150 200 250 300 350 400 450 500 550
Am
ou
nt, $
0 101 151 201 251 301 351 401 451 501
I II III IV V VI VII VIII IX X
0
Figure 7.3 Impact of job classes on the wage-trend line
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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 performance to a
pay system that rewards them. Alternatively, pay has been used to recognise such factors
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 pay
structure is feasible if all jobs are benchmark jobs and direct matches can be found in the
market. 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 job evaluation 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 doing
but, 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 any manager
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. Polaroid
employees are encouraged to form work teams and to redesign their work functions in
order to make them more efficient. Although Polaroid’s system includes everyone from the
mailroom clerk to the chief executive officer, it has been more effective in the
manufacturing 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, or
competencies, are not so easy to measure in managerial jobs. But that will not stop
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companies 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 tied to what you
can do and what your skill set is … In this new world, where skills and knowledge are what
really count, it doesn’t make sense to treat people as jobholders. It makes 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, department or
unit/section performs. In a successful period the potential for employees to earn more
could be substantive. However, where corporate performance is deemed to be poor the
workforce has to take more responsibility for this and ultimately be prepared to face a
financial 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 common
interest for improved performance between staff and management.
In the private sector variable pay is often linked to profit sharing and share option schemes.
Profit sharing links cash bonuses to organisational performance. Payments are made from a
profit sharing pool that is determined by the Board of Directors. Typically individual
payments are a fixed percentage of salary although under some schemes eligibility depends
on individual performance.
Share option schemes give employees the right to buy/ own shares in a company. It is
claimed that this can assist recruitment in a competitive market by giving staff a chance to
share 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 that they
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 that this should
lead to improvement in service delivery areas.
Team performance can only be improved by financial reward if the individuals within it are
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 it will 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 to
performance is to pay non-recurring bonuses. These can be shared with teams in a variety
of ways including even cash sums, scaled or stepped cash sums or most popularly, as a
percentage of basic salary.
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GRIEVANCE HANDLING
Introduction
Expressions such as problem, discontentment, deep problem etc. can be used to describe a
grievance. Dissatisfaction or discontent is not a grievance. They initially find expression in
the form of a complaint. When a complaint remains unattended and the employee
concerned feels a sense of lack of justice and fair play, the dissatisfaction grows and
assumes the status of a grievance.
Dissatisfaction: maybe defined as anything that disturbs an employee, whether or not such
unrest is expressed in word e.g. engineers and technicians may be upset because they are
suddenly instructed to observe regular hours.
Complaint: It is a spoken or written dissatisfaction, brought to the attention of the
supervisor and the union leader. The complaint may or may not specially assign a cause for
dissatisfaction e.g. "four times this morning I have had to chase around looking for the
pliers".
Grievance: It is simply a complaint, which has been formally presented in writing, to a
management representative or a union official. However for most of the people, the word
"grievance" suggests a complaint that has been ignored, overridden or dismissed without
due consideration.
ILO defines a grievance as a complaint of one or more workers related to:
- Wages and allowance
- Conditions of work
- Interpretation of service conditions covering such as OT, Leave, Transfer,
Promotion, Seniority, Job Assignment & Termination of Service"
The National Commission on Labour Observed that "Complaints affecting one or more
individual workers in respect of their workers
- Wage payments, OT, Leave, Transfer Promotion, Seniority, Work Assignment &
Discharges Constitute Grievances".
Definition: According to Michael Jucius, " A grievance can be any discontent or
dissatisfaction, whether expressed or not, whether valid or not, and arising out of anything
connected with the company that an employee thinks, believes, or even feels as unfair,
unjust, or inequitable."
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Let us understand this definition. A grievance means any discontentment or dissatisfaction
in an employee arising out of anything related to the enterprise where he is working. It
may not be expressed and even may not be valid.
It arises when an employee feels that something has happened or is going to happen which
is unfair, unjust or inequitable. Thus, a grievance represents a situation in which an
employee feels that something unfavorable to him has happened or is going to happen. In
an industrial enterprise, an employee may have grievance because of long hours of work,
non-fulfillment of terms of service by the management, unfair treatment in promotion,
poor working facilities, etc.
Nature of Grievance:
Grievances are symptoms of conflicts in the enterprise. Just like smoke could mean
fire, similarly grievances could lead to serious problem if it is not addressed immediately! So
they should be handled very promptly and efficiently. Coping with grievances forms an
important part of any job. The manner in which a manager deal with grievances determines
his efficiency of dealing with subordinates. A manager is successful if he is able to build a
team of satisfied workers by removing their grievances.
While dealing with grievances of subordinates, it is necessary to keep in mind the following
points:
- A grievance may or may not be real.
- Grievance may arise out of not one cause but multifarious causes.
- Every individual does not give expression to his grievances.
The complaints of employees relating to interpretation and implementation of agreements,
labour legislations, various personnel policies, rules and regulations, past practices, code of
conduct are very much grievances.
The grievances may relate to either one employee (individual grievances) or group of
employees (group grievances). Individual and group grievances are to be redressed through
grievance procedure, which we would be studying in detail a little later in the class.
Individual employee or group of employees concerned and manager concerned play vital
role in grievance procedure.
Anyway, Please understand that differences between employees and employers relating to
various personnel policies, wage levels and variety of benefits, awards, rules and
regulations are conflicts. Conflicts are to be settled through collective bargaining. Trade
unions and management participate in collective bargaining for settling disputes. Thus,
conflicts have wider policy implications as compared to grievances.
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Forms of Grievances.
A grievance may take any of the following forms:
- Factual,
- Imaginary,
- Disguised.
Factual: When an employee is dissatisfied with his job, for genuine or factual
reasons like a breach of terms of employment or any other reasons that are clearly
attributed to the management, he is said to have a factual grievance. Thus, factual
grievances arise when the legitimate needs are unfulfilled. The problem that he has
is real and not virtual
Imaginary: When an employee's grievance or dissatisfaction is not because of any
factual or valid reason but because of wrong perception, wrong attitude or wrong
information he has. Such a grievance is called an imaginary grievance. Though it is
not the fault of management, the responsibility of dealing with it still rests with the
management. So the problem is not real. It is in the mind or just a feeling towards
someone or something. So be careful your grievances could be very much imaginary!
Disguised: An employee may have dissatisfaction for reasons that are unknown to
himself. This may be because of pressures and frustrations that an employee is
feeling from other sources like his personal life. I am sure you will agree that if you
have fought at home and come to the institute, you cannot concentrate in the class.
Similarly if you have had a bad day in the institute, that will reflect in the mood at
home. We are all humans and are sensitive to the environment that we operate in!.
The managers have to detect the disguised grievances and attend to them by
counseling the concerned employees. They have to find out the root cause of the
problem rather than find quick fix solutions to them.
Identifying Grievances (Discovery of Grievances)
- It is so beautifully described that good management redresses grievances as
they arise; excellent management anticipates and prevents them from arising. An
effective manager thus has to be proactive. A manager can know about the
problems even before they turn into actual grievances through several means such
as:
Exit interviews
Suggestions boxes
Opinion surveys
Open door policy.
(A) Exit interview: Employees usually quit organizations due to dissatisfaction or better
prospects elsewhere. Exit interviews, if conducted carefully, can provide important
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information about employees' grievances. This can help the management to gather
feedback and to genuinely incorporate feedback. The management should carefully
act upon the information drawn from such employees .It should be careful that the
discontentment is reduced so that no more employees quit the organization
because of similar reasons.
(B) Gripe Boxes: These are boxes in which the employees can drop their anonymous
complaints. They are different from the suggestion boxes in which employees drop
their named suggestion with an intention to receive rewards It is normally said that
if you want to progress in life, you should be close to critics. These gripe boxes can
perform the role of critics for the organisation. The management should carefully
act upon the information thus gathered. Now I don't want to sound repetitive by
saying that the internal customers of an organisation should be satisfied if the
external customers are to be kept happy.
(C) Opinion Survey: The management can be proactive by conducting group meetings,
periodical interviews with employees, collective bargaining sessions etc. through
which one can get information about employees' dissatisfaction before it turns into
a grievance.
(D) Open-door Policy. Some organisation extend a general invitation to their employees
to informally drop in the manager's room any time and talk over their grievances.
This can be very effective because it ca n nip the evil in the bud. That is it can take
care of the problem before it gets out of hand. In fact the management should hold
formal and informal get together with the employees. The management should also
remember that the employees might just need a patient hearing at times. They
need blow off the steam as we hear it more commonly.
What leads to a grievance?
Causes of grievances
In order to handle the grievances efficiently, it is necessary to find and analyse
the grievances of the subordinates. If a grievance is found to be genuine or real (factual),
the corrective action should be taken immediately. But if the grievance arises due to
imagination or disturbed frame of mind of the worker, then it is necessary to explain and
clear up the matter. Before dealing with the grievances, their causes must be diagnosed.
But when the grievances are not given expression by the subordinates, it is manager's job to
detect the possible grievances and their causes. He may realise the existence of grievances
because of high turnover, high rate of absenteeism and poor quality of work. These
problems will go on multiplying if the causes of grievances are not cured.
The causes of grievances may be broadly classified into the following categories:
- Grievances resulting from working conditions
- Improper matching of the worker with the job.
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- Changes in schedules or procedures.
- Non-availability of proper tools, machines and equipment for doing
The job
- Unreasonably high production standards.
- Poor working conditions.
- Bad employer - employee relationship, etc.
- Grievances resulting from management policy
Wage payment and job rates.
Leave.
Overtime.
Seniority and Promotional.
Transfer.
Disciplinary action.
Lack of employee development
plan.
Lack of role clarity.
(3) Grievances resulting from personal maladjustment
- Over - ambition.
- Excessive self-esteem or what we better know as ego.
- Impractical attitude to life etc.
Effects of Grievances:
- Frustration
- Alienation
- Demotivation
- Slackness
- Low Productivity
- Increase in Wastage & Costs
- Absenteeism
- In discipline
- Labor unrest
Establishing a Grievance Procedure.
It is advisable to set up an effective grievance procedure in the organization. The procedure
should be flexible enough to meet the requirements of the organization. It should be simple
so that an average employee is able to understand it. Though such a procedure will vary in
different organizations, yet the following principles should be observed while laying down a
procedure:
1. A grievance should be dealt with in the first instance at the lowest level: that is, an
employee should raise his grievance with his immediate superior. It may be simple
to settle it on the spot and that will be the end of it. Even if it cannot be settled at
that level, the man's superior will know what is happening. This is necessary not only
to maintain his authority, but also to prevent him from being aggrieved, as he will
certainly be, if he is by-passed and hears of the complaint from his own superior.
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2. It must be made clear to the employee what line of appeal is available. If he cannot
get satisfaction from his immediate superior, he should know the next higher
authority to which he can go.
3. Since delay causes frustration and tempers may rise and rumors spread around the
work, it is essential that grievances should be dealt with speedily. As it is said that a
stitch in time saves nine, similarly the problems of the employees should be taken
care of by the management least it should become a major for the management.
4. The grievance procedure should be set up with the participation of the employees
and it should be applicable to all in the organisation. The policies and rules regarding
grievances should be laid down after taking inputs from the employees and it should
be uniformly applicable to all in the organisation. It should be agreed that there
would be no recourse to the official machinery of conciliation unless the procedure
has been carried out and there is still dissatisfaction, and moreover, there must be
no direct action on either side, which might prejudice the case or raise tempers
while the grievance is being investigated.
5. Can you explain to me that why do we need to take inputs from the employees
while framing the policies? Yes... it is necessary because it is going to be applicable
to the employees and not only that; if the employees have contributed to the
policies then their commitment is higher.
6. Open - Door Policy and the step- ladder procedure
Open door policy:
Under this policy, any employee can take his grievance to the chief boss and talk
over the problem. As the name suggests, the management keeps its doors open for
the employees to share their problems. It is said that this policy can remove the
cause of grievance quickly. Though this policy appears to the attractive, it has some
prerequisites.
The open door policy is workable only in small organizations. In big organizations,
the top management does not have the time to attend to innumerable routine
grievances daily that is the work of lower-level managers.
Under this policy, the front-line supervisor who should be the first man to know
about the grievances of his subordinates is by passed. This provokes him in two
ways. First, he thinks the man who skipped him is disrespectful. Secondly, he fears
that he will incur his superior's displeasure because of his failure to handle his
subordinates will interpret this.
Step-Ladder Procedure
Under the step-ladder procedure, the employee with a grievance has to proceed
step by step unless he is able to redress his grievance. According to the Model
Grievance Procedure, an aggrieved employee shall first present his grievance
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verbally in person to the officer designated by the management for this purpose. An
answer shall be given within 48 hours. If he is dissatisfied with the answer, the
worker will present his grievance to the head of the department, who will give his
answer within 3 days. If the worker is dissatisfied with the answer, he may ask that
his grievance should be referred to the Grievance Committee, which shall make its
recommendations within 7 days to the manger. The management must implement
unanimous recommendations of this committee. A dissatisfied worker can apply to
the management for a revision of its decision within on week's time.
ESSENTIALS OF A GRIEVANCE PROCEDURE:
A grievance procedure should incorporate the following features:
1. Conformity with existing legislation: The procedure should be designed in
conformity with the existing statutory provisions. Where practicable, the procedure
can make use of such machinery as the law might have already provided for.
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2. Acceptability: Everybody must accept the grievance procedure. In order to be
generally acceptable, it must ensure the following:
- A sense of fair-play and justice to the worker,
- Reasonable exercise of authority to the manager, and
- Adequate participation of the union.
3. Simplicity: The following points should be noted in this regard:
- The procedure should be simple enough to be understood by every employee.
- The steps should be as few as possible.
- Channels for handling grievances should be carefully developed.
- Employees must know the authorities to be contacted at various levels.
- Information about the procedure should be thoroughly disseminated among all
employees through pictures, charts, diagrams, etc.
4. Promptness: Speedy settlement of a grievance is the cornerstone of a sound
personnel policy. It should be remembered that justice delayed is justice denied. The
procedure should aim at a rapid disposal of the grievance. This can be achieved by
incorporating the following feature in the procedure:
• As far as possible, grievances should be settled at the lowest level
• No matter should ordinarily be taken up at more than two levels, i.e.
normally there should be only one appeal.
• Different types of grievances may be referred to appropriate authorities.
• Time limit should be placed at each step and it should be rigidly followed at
each level.
5. Training: In order to ensure effective working of the grievance procedure, it is
necessary that supervisors and the union representatives should be given training in
working of the grievance procedure. All the policies should be conveyed to the
concerned parties.
6. Follow-up: The personnel department should review the working of the grievance
procedure periodically and necessary changes should be introduced to make it more
effective. This is generally ignored by the organizations. A regular follow up of the
system increase the faith of the people in the system. Therefore it is necessary that
the grievance procedure should be reviewed whenever it is so required.
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COMPENSATION MANAGEMENT
MEANING OF FRINGE BENEFITS Fringe benefits may be defined as wide range of benefits and services that employees receive as an integral part of their total compensation package. They are based on critical job factors and performance. Fringe benefits constitute indirect compensation as they are usually extended as a condition of employment and not directly related to performance of concerned employee. Fringe benefits are supplements to regular wages received by the workers at a cost of employers. They include benefits such as paid vacation, pension, health and insurance plans, etc. Such benefits are computable in terms of money and the amount of benefit is generally not predetermined.
The purpose of fringe benefits is to retain efficient and capable people in the organisation over a long period. They foster loyalty and acts as a security base for the employees.
FEATURES OF FRINGE BENEFITS:
Different from regular wages: Fringe benefits are different from regular wages as such
benefits are those payments, which an employee enjoys in addition to wages he
receives. It is a supplementary payment and provides support to an employee.
Employee motivation: Fringe benefits are not given to employees for performing
certain jobs. The purpose is to encourage them to take more interest in the assigned
work.
Useful but avoidable expenditure: Fringe benefits constitute a labour cost for the
employer.
Not directly linked with efforts: Fringe benefits are not direct reward for the efforts
made or the production given by an employee.
Beneficial to all employees: Fringe benefits are a labour cost but its benefits should be
made available to the entire labour force and not to a small group of employees.
OBJECTIVES OF FRINGE BENEFITS:
To supplement direct remuneration: Fringe benefits supplement regular pay of
employed. It raises the total earnings of an employee and provides better life
and welfare to him.
Employers prefer fringe benefits: employers prefer this indirect remuneration to
direct pay increase.
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To retain competent employees: Fringe benefits create satisfied labour force. In
addition, the management can attract and retain competent personnel in the
organisation by offering liberal packet of fringe benefits.
To develop good corporate image: Fringe benefits help to develop a good
corporate image.
To raise employee morale: Liberal package of Fringe raises the morale of
employees.
LIMITATIONS OF FRINGE BENEFITS: There are some limitations of Fringe Benefits. These are:
Fringe Benefits may lead to unhealthy competition among employees
The expected benefit may not be available if the monetary benefits are not adequately attractive to employees.
The motivation may not be as per expectation if the implementation of the benefits scheme is not transparent.
ADVANTAGES OF FRINGE BENEFITS
There are certain advantages of Fringe benefits. These are:
Fringe benefits provide support to remuneration paid to employees.
Fringe benefits improve efficiency and productivity of employees.
Fringe benefits act as an added attraction to the employees.
Fringe benefits reduce monotony and fatigue of employees. They make employees efficient and co-operative for whatever organisational changes required to be introduced.
Fringe benefits raise morale of the employees. They develop affinity for the organisation.
Fringe benefits develop good corporate image and raise market standing of the organisation.
Fringe benefits act as a motivating force. They motivate employees and induce them to work for the progress and prosperity of the organisation.
TYPES OF FRINGES/ FRINGE BENEFITS: (1) Payment for time not worked by the employee:
Holidays.
Vacations.
Leave with pay and allowances. (2) Contingent and deferred benefits:
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Pension payment.
Group life insurance benefit.
Group health insurance.
Sick leave, maternity leave, child care leave, etc.
Suggestion/service award
Severance pay. (3) Legally required payments:
Old age, disability and health insurance
Unemployment compensation
Worker's compensation. (4) Misc. benefits:
Travel allowances.
Company car and membership of clubs, etc
Moving expenses.
Child care facilities.
Tool expenses and meal allowances, etc.
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LABOUR LEGISLATION
Introduction:
The term `labour legislation’ is used to cover all the laws which have been enacted to deal
with “employment and non-employment” wages, working conditions, industrial relations,
social security and welfare of persons employed in industries.
Need for labour legislation in India:
=> Organized industry in a planned economy calls for the spirit of co-operation and mutual
dependence for attaining the common purpose of greater, better and cheaper production.
=> Since this has not been happening voluntarily, the need for State intervention.
=> In India, labour legislation is treated as an arm of the State for the regulation of working
and living conditions of workers.
The need for labour legislation may be summarized as under:
o Necessary for the health, safety, and welfare of workers;
o Necessary to protect workers against oppressive terms as individual worker is
economically weak and has little bargaining power;
o To encourage and facilitate the workers in the organization;
o To deal with industrial disputes;
o To enforce social insurance and labour welfare schemes.
Objectives:
The objectives of labour legislations are two-fold:
o Preservation of the health, safety and welfare of workers;
o Maintenance of good relations between employers and employees.
PRINCIPLES OF LABOUR LEGISLATION:
Social Justice:
o The essence of democracy is ensuring social justice to all sections of the community.
o This demands the protection of those who cannot protect themselves.
o In modern industrial set-up, workers, left to themselves, are unable to protect their
interest.
o Therefore, the State has to intervene to help them by granting them freedom of
association, the power of collective bargaining and by providing for mediation or arbitration
in the case of industrial conflict.
Social Equity:
o Legislation based on this principle provides for achievement of definite standards.
Standards in terms of living, position in society etc. of the working population.
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These standards for the working class can be achieved by bringing about changes in the Law
of our land.
o Power to change the Law is exercised by the government.
Existing laws may be amended to meet the changed standards.
National Economy:
Measures have to be provided through legislation to:
Ensure normal growth of industry for the benefit of the nation as a whole;
Satisfy the physical and intellectual needs of the citizens;
Ensure the growth of industrial efficiency such as to adjust the wage system with a
view to increase the productivity and prosperity of the workers.
International Uniformity:
o Since its inception, securing minimum standards (for the working population – worldwide)
on a uniform basis in respect of all labour matters has been the main objective of ILO.
o To this end, conventions are passed at the conferences of ILO.
o As a member of the ILO, adopting these conventions would require appropriate legislation
to be brought about.
o The influence of international labour conventions has been significant in shaping the
course of labour legislation in India.