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Human Resource Management by Raja Rao Pagidipalli


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Human Resource Management by Raja Rao Pagidipalli

Human Resource Management by Raja Rao Pagidipalli

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  • 1. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 1
  • 2. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 2I - UNITINTRODUCTION TO HRMIntroduction:According to Leon C. Megginson, the term human resources (HR) can be thought of as“the total knowledge, skills, creative abilities, talents and aptitudes of an organization’sworkforce, as well as the value, attitudes and beliefs of the individuals involved.” Theterm human resources can also be explained in the sense that it is a resource like anynatural resource. It does mean that the management can get and use the skill,knowledge, ability etc., through the development of skills, tapping and utilizing themagain and again by developing a positive attitude among employees. The aspect of‘attitude’ among the human resources aspects gained significance along withglobalization. Managing of these human resources deals with the above areas and alsoprovides an answer to the question referred above. Now, we shall discuss the meaning ofhuman resources management (HRM) and other areas.Meaning and Definition of HRMIn simple sense, human resources management means employing people, developingtheir resources, utilizing, maintaining and compensating their services in tune with thejob and organizational requirements with a view to contribute to the goals of theorganization, individual and the society. Michael J. Jucius defined PersonnelManagement as “the field of management which has to do with planning, organizing,and controlling the functions of procuring, developing, maintaining and utilizing alabour force, such that the:ü Objectives for which the company is established are attained economically andeffectively,ü Objectives of all levels of personnel are serve to the highest possible degree, andü Objective of society are duly considered and served.”According to Pulapa Subba Rao, human resources management (HRM) is managing(planning, organizing, directing and controlling) the functions of employing, developing,compensating and utilizing human resources, resulting In the creation and developmentof human and industrial relations which would shape the future policies and practices ofhuman resource management, with a view to contribute proportionately (due to them)to the organizational, individual and social goals.
  • 3. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 3Differences between Personnel Management and Human ResourcesManagement:Personnel Management is different from Human Resources Management. Personnelmeans persons employed. Hence, personnel management views the man as economicman who works for money or salary. Human resources management treats the people ashuman beings having economic, social and psychological needs. Thus, HRM is broaderin scope compared to personnel management. John Storey differentiated personnelmanagement from human resources management.Functions of HRMThe functions of HRM can be broadly classified into two categories:Managerial functions and Operative functions.I.Managerial Functions: Managerial functions of personnel management involveplanning, organizing, directing and controlling. All these functions influence theoperative functions.v Planning:It is a predetermined course of action. Planning pertains to formulating strategiesof personnel programmers and changes in advance that will contribute to theorganizational goals. In other words, it involves planning of human resources,requirements, recruitment, selection, training etc.v Organizing:An organization is a means to an end. It is essential to carry out the determinedcourse of action. In the words of J.C. Massie, an organization is a “structure and aprocess by which a co-operative group of human beings allocates its task amongits members, identifies relationships and integrates its activities towards acommon objective.”v Directing:The next logical function after completing planning and organizing is theexecution of the plan. The basic function of personnel management at any level ismotivating, commanding, leading and activating people. The willing and effectiveco-operation of employees for the attainment of organizational goals is possiblethrough proper direction.v Controlling:After planning, organizing and directing various actives of personnelmanagement, the performance is to be verified in order to know that thepersonnel functions are performed in conformity with the actual with the plans,identification of deviations if any and correcting of identified deviations.
  • 4. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 4II. Operative Functions: The operative functions of human resources managementare related to specific activities of personnel management - Employment, Development,Compensation and Relations. All these functions are interacted with managerialfunctions. Further, these functions are to be performed in conjunction withmanagement functions.1. Employment: It is the first operative function of HRM. Employment is concernedwith securing and employing the people possessing required kind and level of humanresources necessary to achieve the organizational objectives. It covers the functions suchas job analysis, HR Planning, recruitment, selection, placement, induction and internalmobility.Job Analysis: It is the process of study and collection of information relating tothe operations and responsibilities of a specific job. It includes collection of data,information, facts and ideas relating to various aspects of jobs including men,machines and materials.Human Resources Planning: It is a process for determination and assuringthat the organization will have an adequate number of qualified persons,available at proper times, performing jobs which would meet the needs of theorganization and which would provide satisfaction for the individuals involved. Itinvolves estimation of present and future requirements and supply of humanresources based on objectives and long range plans of the organization.Recruitment: It is the process of searching for prospective employees andstimulating them to apply for jobs in an organization. It deals with identificationof existing sources of applicants and creation/identification of new sources ofapplicants.Selection: It is the process of ascertaining the qualifications, experiences, skills,knowledge etc., of an applicant with a view to appraising his/her suitability to ajob. This function includes:ü Framing and developing application blanks.ü Creating and developing valid and reliable testing techniques.ü Formulating interviewing techniques.ü Checking of references.ü Placement:ü Counseling the functional managers regarding placement.
  • 5. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 5ü Conducting follow-up study, appraising employee performance in order todetermine employee adjustment with the job.ü Correcting misplacements, if any.ü Induction and Orientation: Induction and orientation are the techniques bywhich a new employee is rehabilitated in the changed surrounding andintroduced to the practices, policies, purposes and people etc., of theorganization.II. Human Resources Development:It is the process of improving, and changing the skills, Knowledge, creative ability,aptitude, values, commitment etc., based on present and future job and organizationalrequirements. This function includes:ü Performance Appraisal: It is the systematic evaluation of individuals withrespect to their performance on the job and their potential for development. Itincludes: Developing policies, procedures and techniques.ü Training: It is the process of imparting to the employees technical andoperating skills and knowledge. It includes: 1. Identification of training needs ofthe individuals and the company. 2. Developing suitable training programmes.ü Management Development: It is the process of designing and conductingsuitable executive development programmes so as to develop the managerialand human relations skill of employees. It includes: 1. Identification of the areasin which management development is needed. 2. Conducting developmentprogrammes.ü Career Planning and Development: It is the planning of one’s career andimplementation of career plans by means of education, training, job search andacquisition of work experiences. It includes internal and external mobility.ü Internal Mobility: It includes vertical and horizontal movement of anemployee within an organization. It consists of transfer, promotion anddemotion.ü Transfer: It is the process of placing employees in the same level jobs wherethey can be utilized more effectively in consistence with their potentialities andneeds of the employees and the organization. It also deals with:1. Developing transfer policies and procedures. 2. Guiding employees and line
  • 6. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 6management on transfers.ü Promotion: It deals with upward reassignment given to an employee in theorganization to occupy higher position which commands better status and/orpay keeping in view the human resources of the employees and the jobrequirements.ü Demotion: It deals with downward reassignment to an employee in theorganization.ü Retention and Retrenchment Management: Employers prefer to retainmore talented employees while they retrench less talented employees.Employers modify existing human resource strategies and craft new strategiesin order to pay more salaries provide more benefits and create high quality ofwork life to retain the best employees. And managements pay less to the lesstalented employees and plan to retrench the misfits as well as unwantedemployees depending upon the negative business trends.ü Change and Organisation Development: Change implies the creation ofimbalances in the existent pattern or situation. Organisation development is aplanned process designed process designed to improve organizationaleffectiveness and health through modifications in individual and groupbehaviour, culture and systems of the organization using knowledge andtechnology of applied behavioural sciences.III. Compensation:It is the process of providing adequate and fair remuneration to the employees. Itincludes job evaluation, wage and salary administration, incentives, bonus, fringebenefits, social security measures etc.v Job Evaluation: It is the process of determining relative worth of jobs.• Select suitable job evaluation techniques.• Classify jobs into various categories.• Determining relative value of jobs in various categories.v Wage and Salary Administration: This is the process of developing andoperating a suitable wage and salary programme. It covers:• Conducting wage and salary survey.• Determining wage and salary rates based on various factors.
  • 7. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 7• Administering wage and salary programmes.• Evaluating its effectiveness.v Incentives: It is the process of formulating, administering and revising theschemes of financial incentives in addition to regular payment of wages andsalary.It includes:• Formulating incentive payment schemes.• Helping functional managers on the operation.• Review them periodically to evaluate effectiveness.v Bonus: It includes payment of statutory bonus according to the Payment ofBonus Act, 1965 and its latest amendments.v Fringe Benefits: These are the various benefits at the fringe of the wage.Management provides these benefits to motivate the employees and to meettheir life’s contingencies.These benefits include:ü Disablement benefit.ü Housing facilities.ü Educational facilities to employees and children.ü Canteen facilities.ü Recreational facilities.ü Conveyance facilities.ü Credit facilities.ü Legal clinics.ü Medical, maternity and welfare facilities.ü Company stores.v Social Security Measures: Managements provide social security to theiremployees in addition to the fringe benefits. These measures include:¶ Workmen’s compensation to those workers (or their dependents) whoinvolve in accidents.¶ Maternity benefits to women employees. Sickness benefits and medicalbenefits.¶ Disablement benefits/allowance.¶ Dependent benefits.¶ Retirement benefits like provident fund, pension, gratuity etc.
  • 8. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 8IV. Human Relations: Practicing various human resources policies and programmeslike employment, development and compensation and interaction among employeescreate a sense of relationship between the individual worker and management, amongworkers and trade unions and the management. It is the process of interaction amonghuman beings. Human relations is an area of management in integrating people intowork situations in a way that motivates them to work together productively, co-operatively and with economic, psychological and social satisfaction. It includes:¶ Understanding and applying the models of perception, personality,learning, intra and inter-personal relations, intra and inter-group relations.¶ Motivating the employees.¶ Boosting employee morale.¶ Developing the communication skills.¶ Developing the leadership skills.¶ Redressing employee grievances properly and in time b means of a wellformulated grievance procedure.¶ Handling disciplinary cases by means of an established disciplinaryprocedure.¶ Counseling the employees in solving their personal, family and workproblems and releasing their stress, strain and tensions.¶ Providing a comfortable work environment by reducing fatigue, monotonyboredom and industrial accidents.¶ Improving quality of work life of employees through participation andother means.V. Industrial Relations: The term ‘industrial relations’ refers to the study ofrelations among employees, employers, government and trade unions. Industrialrelations include:ü Indian labour marketü Trade unionismü Collective bargainingü Industrial conflictsü Workers’ participation in management andü Quality circles.VI. Recent Trends in HRM: Human Resources Management has beenadvancing at a fast rate. The recent trends in HRM include:¶ Quality of work life¶ Total quality in human resources¶ HR accounting, audit and research and
  • 9. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 9¶ Recent techniques of HRM.SEOPE OF HUMAN RESOURCES MANAGEMENTThe scope of human resources management in the modern days is vast. In fact, thescope of HRM was limited to employment and maintenance of and payment of wage andsalary. The scope gradually enlarged to providing welfare facilities, motivation,performance appraisal, human resources management, maintenance of humanrelations, strategic human resources and the like. The scope has been continuouslyenlarging.The scope of Human Resources Management includes:ÿ Objectives of HRMÿ Organisation of HRMÿ Strategic HRMÿ Employmentÿ Developmentÿ Wage and salary administration/compensationÿ Maintenanceÿ Motivationÿ Industrial relationsÿ Participative management andÿ Recent developments in HRM.IMPORTANCE OF HUMAN RESOURCES MANAGEMENTHuman resources play a crucial role in the development process of modern economics.Arthur Lewis observed, “there are great differences in development countries whichseem to have roughly equal resources, so it is necessary to enquire into the difference inhuman behaviour.” It is often felt that though the exploitation of natural resources,availability of physical and financial resources and international aid play prominentroles in the growth of modern economies, none of these factors is more significant thanefficient and committed manpower. It is in fact said that all development comes fromthe human mind. Human Resources in the Nation’s Well-beingA nation with abundance of physical resources will not benefit itself unless humanresources make use of them. In fact, human resources with right attitude are solelyresponsible for making use of national resources and for the transformation oftraditional economies into the modern industrial and knowledge economies. Man Vis-à-
  • 10. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 10vis Machine Most of the problems in organizational sectional sections are human andsocial rather than physical, technical or economic. No industry can be rendered efficient,so long as the basic fact remains unrecognized that it is principally human. It is not amass of machines and technical processes but a body of men.HRM and General Management: Management of an organisational in moderneconomies is not only complex and sophisticated but it is also vital influencing theeconomic growth of a country. One of the fundamental tasks of management is tomanage human resources in the service of the economic objectives of the enterprise.Successful management depends not solely, but significantly upon the ability to predictand control human behaviour.Role of HRM: Human Resources Management plays the most crucial role in themanagement of an organization. Human resources play crucial role in the conversionprocess of inputs. Product design, quality maintenance, rendering services etc., dependupon the efficiency of human resources. Similarly, human resources plays critical role inmarketing the products and services. Human resource also plays significant role inmanaging finances and managing information systems.Objectives of HRM: Objectives are pre-determined goals to which individual or groupactivity in an organization is directed. Objectives of HRM are influenced by socialobjectives, organizational objectives, functional objectives and individual objectives.Institutions are instituted to attain certain specific objectives. The objectives of theeconomic institutions are mostly to earn profits, and that educational institutions aremostly to impart education and/or conduct research so on and so forth. However, thefundamental objective of any organization is survival. Organizations are not justsatisfied with this goal. Further, the goal of most of the organisations is growth and/orprofits.The objectives of HRM may be as follows:µ To create and utilize able and motivated workforce, to accomplish the basicorganizational goals.µ To establish and maintain sound organizational structure and desirable workingrelationships among all the members of the organization.µ To secure the integration of individual and groups within the organization by co-ordination of the individual and group goals with those of the organization.µ To create facilities and opportunities for individual or group development so as tomatch it with the growth of the organization.µ To attain an effective utilization of human resources in the achievement oforganizational goals.
  • 11. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 11µ To identify and satisfy individual and group needs by providing adequate andequitable wages, incentives , employee benefits and social security and measuresfor challenging work, prestige, recognition, security, status etc.HRM Objectives at Wiproü To respect the individual, as people are the greatest assets.ü To govern individual and company relationships with the higheststandard of conduct and integrity.ü To be close to the customer through employees.ü To achieve and maintain leadership in people management.HRM Policies, Procedures and Programmes:After the establishment of objectives of HRM, human resources policies are to beformulated Policies are general statements that guide thinking and action in decision-making.Definition of HRM Policy: A Policy is a plan of action. Brewster and Richbell definedHRM policies as, “set of proposals and actions that act as a reference point for managersin their dealings with employees”. “HR polices constitute guides to action. They furnishthe general standards or bases on which decisions are reached. Their genesis lies in anorganisation”s values, philosophy, concepts and principles”. HR policies guide thecourse of action intended to accomplish personnel objectives.What is HRM Procedure?Policies are general instructions whereas procedures are specific applications. Aprocedure is a well thought out course of action. It prescribes the specific manner inwhich a piece of work is to be done. Procedures are called “action guidelines.” They aregenerally derived from policies. Where policies define a broad field, procedures show asequence of activities within that area. The emphasis is on chronological, step-by-stepsequence of required actions. For instance, a student is required to complete severalitemized steps in order to register himself to complete several itemized steps for coursesin a university. The basic purpose of a procedure is to spell out clearly the way one is togo about doing something.Role of HR Manager:Human Resources Manager plays a vital role in the modern organization. He playsvarious strategic roles at different levels in the organization. Te roles of the HR Managerinclude roles of conscience, of a counselor, a mediator, a company spokesman, aproblem solver and a change agent.
  • 12. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 12µ The Conscience Role: The conscience role is that of a humanitarian whoreminds the management of its morals and obligations to its employees.µ The Counsellor: Employees who are dissatisfied with the present job approachthe HR manager for counseling. In addition, employees facing various problemslike marital, health, children education/marriage, mental, physical and careeralso approach the HR managers. The HR Manager counsels and consults theemployees and offers suggestions to solve/overcome the problems.µ The Mediator: As a mediator, the HR manager plays the role of a peace-maker.He settles the disputes between employees and the management. He acts as aliaison and communication link between bothµ The Spokesman: He is a frequent spokesman for of representative of thecompany.µ The Problem-solver: He acts as a problem solver with respect to the issuesthat involve human resources management an overall long range organizationalplanning.µ The Change Agent: He acts as a change agent and introduces changes invarious existing programmes.JOB DESIGNJob design is defined as the process of deciding on the content of a job in terms of dutiesand responsibilities of the jobholders; on the methods to be used in carrying out the job,in terms of techniques, systems and procedures and on the relationships that shouldexist between the job holder and his superiors, subordinates and colleagues. Factoraffecting job design include organizational factors, environmental factors andbehavioural factors. Two important goals of job design:µ To meet the organizational requirements such as higher productivity, operationalefficiency, quality of product/service etc., andµ To satisfy the needs of the individual employees like interests, challenges,achievement or accomplishment etc. Finally, the goal of the job design is tointegrate the needs of the individual with the organizational requirements.Approaches to job Design: There are three important approaches to job design viz.,¶ (i) engineering approach¶ (ii) human approach and¶ (iii) job characteristics approach.i. Engineering Approach: This approach which studies the workscientifically is based on scientific management principles. These principlesseem to be quite rational and appealing as they point towards increased
  • 13. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 13organizational performance.ii. Human Approach: Human relations approach to job design recognizes theneed to design the jobs which are interesting and rewarding.iii. Job Characteristics Approach: This approach assumes that employeeswill work hard when they are rewarded for the work they do and when thework gives them satisfaction. Therefore, motivation, satisfaction andperformance should be integrated in the job design. Jobs with skill variety,task identity, task significance, autonomy and feedback are called core jobdimensions. Core job dimensions will motivate the employees and result injob satisfaction and high performance.Job Rotation:Job rotation refers to the movement of an employee from one job to another. Jobsthemselves are not actually changed, only the employees are rotated among variousjobs. An employee who works on a routine/respective job moves to and works onanother job for some hours/days/months and backs up to the first job. This measurerelieves the employee from boredom and monotony, improves employee’s skillsregarding various jobs, prepares the competent employees and provides competitiveadvantage to the company These measures also improves worker’s self-image andprovides personal growth. However, frequent job rotations are not advisable in viewof their negative impact on the orgsnisation and the employee.Job Enlargement:Job enlargement means adding more and different tasks to a specialized job toprovide greater variety. This process is called horizontal job loading or horizontal jobenlargement. Job enlargement is a horizontal slice of the organization. It tacklesdissatisfaction and reduces monotony by increasing the variety and scope of tasks.This technique leads to specialization, it improves worker satisfaction, quality ofproduction and overall efficiency of the organization.Job Enrichment:Job enrichment loads the job vertically. Job enrichment means adding duties andresponsibilities that will provide for skill variety, task identity, task significance,autonomy and feedback on job performance. It tries to deal with dissatisfaction byincreasing job depth as work activities from a vertical slice of the organizational unitare combined in one job. As work becomes more challenging and workerresponsibility increases, motivation and enthusiasm also increase. Dale S. Beach hassuggested specific action steps for designing enriched jobs. They are:
  • 14. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 14ü Creation of natural or logical work units,ü Combining several duties, requiring various skills into each job,ü The employee should have direct contact and knowledge about the people forwhom his product is meant,ü Vertical job loading is to incorporate some planning and controlling duties intothe job andü Feedback information should be provided to employees to correct and improvetheir performance.JOB ANALYSISProcurement is the first operative function of personnel management,which can be sub-divided into various sub-functions like human resourcesplanning, recruitment and selection. Management should determine the kind ofpersonnel required for a job and the number of persons to be employed. Theorganization should also find out the right man for the right job in the right time.The knowledge of the job is essential to perform these functions. In addition,establishment of the scientific standard in advance is comparing the applicantswith the job and to select the suitable personnel. This standard stipulates theminimum acceptable qualifications, skills and qualities required for adequate jobperformance. Stipulating the standard requires the knowledge regarding jobdesign, study of the job duties and responsibilities, requirements of the job,human abilities and qualities etc. job analyst is needed to know all thesefunctions and to perform various functions of HRM.¶ Job Terminology: Description of technical terminology is highly necessary inorder to facilitate the study of a job analysis. So, it is desirable to define the termsrelated to job analysis like task, position, job, occupation, job analysis, jobdescription, job specification and job classification.¶ Task: A task is an action or related group of action designed to produce a definiteoutcome or result.¶ Position: A position is a group of similar tasks and responsibilities assigned toone individual. The term is used in this narrow technical sense to facilitate moreprecise discussion of the job analysis technique.¶ Job: A job is “a group of positions that are similar as to the kind and level ofwork.” In some instances, only one position may be involved, simply because noother similar position exists. For example, in the small firm the position ofpersonnel manager also constitutes a job since there is only one personnel
  • 15. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 15manager position in the organization. Further, there may be six employees, “all ofwhom are classified under the same title, yet each may perform slightly differentwork.” For example, there may be five or six cashiers in a large commercial balkbranch who may do different work.Occupation: An occupation “is a group of jobs that are similar as to the kind ofwork land are found throughout an industry or the entire country.” Anoccupation is la category of work found in many firms.¶ Job Analysis: The U.S. Department of Labour defined job analysis as “theprocess of determining, by observation and study and reporting pertinentinformation relating to the nature of a specific job. It is the determination of thetasks which comprise the job and of the skills, knowledge, abilities andresponsibilities required of the worker of a successful performance and whichdifferentiate one job from all others.”The aspects of job analysis include job description and jobspecification.¶ Job Description: A job description is “an organized, factual statement of theduties and responsibilities of a specific job.” In brief, it should tell what is to bedone, how it is done and why? It is a standard of function, in that it defines theappropriate and authorized content of a job.¶ Job Specification: A job specification is “a statement of the minimumacceptable human qualities necessary to perform a job properly.” In contrast tothe job description, it is a standard of personnel and designates the qualitiesrequired for acceptable performance.¶ Job Classification: A job classification is “a grouping of jobs on some specifiedbasis such as the kind of work or pay.” For example, a clerk, a teacher, anengineer, a chemist etc.Process of job AnalysisJob can be analysed through a process, which consists of seven basic steps. These stepsconsist of strategies, a collection of background information, selection of backgroundinformation, selection of job to be analysed, collection of job analysis data, developing ajob description, job specification and employee specification.¯ Strategies: The strategies of the company are the basis for any organizationalactivity including job analysis. If the strategy implementation needs innovativeskills and autonomy, they should be included in the job analysis.
  • 16. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 16According to William P. Anthony the companies have to make four strategicchoices viz.ü The extent of employee involvement in job analysisü The level of details of job analysisü Timing and frequency of analysis andü Past-oriented vs. future-oriented job analysis.¯ Collection of Background Information: Background information consistsof organization charts class specifications and existing job descriptions.Organization charts show the relation of the job with other jobs in the overallorganizations. Class-specifications describe the general requirements of the classof job to which this particular job belongs. The existing job description providesa good starting point for job analysis.¯ Selection of Representative Position to be analysed: It would be toodifficult and too time consuming to analyse all the jobs. So, the job analyst has toselect some of the representative positions in order to analyse them.iv. Collection of job Analysis Data: This step involves actually analyzing a job bycollecting data on features of the job, required employee behaviour and humanrequirements.¯ Developing a job Description: This step involves describing the contents ofthe job in terms of functions, duties, responsibilities, operations etc. Theincumbent of the job is expected to discharge the duties and responsibilities andperform the functions and operations listed in job description.¯ Developing a job Specification: This step involves conversion of the jobdescription statements into a job specification. Job specification or jobrequirements describe the personal qualities, traits, skills, knowledge andbackground necessary for getting the job done.¯ Developing Employee Specification: This final step involves conversion ofspecifications of human qualities under job specification into an employeespecification. Employee specification describes physical qualification,educational qualifications, experience etc., which specify that the candidate withthese qualities possesses the minimum human qualities listed in the jobspecification.Job Description:Job description is an important document which is basically descriptive in nature andcontains a statement of job analysis. It serves to identify a job for consideration by other
  • 17. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 17job analysts. It tells us what should be done, why it should be done, and where it shouldbe performed.Characteristics of Good job Description: Earnest Dale developed the followinghints for writing the job description:µ The job description should indicate the scope and nature of the work including allimportant relationships.µ (ii) The job description should be clear regarding the work of the position, dutiesetc.µ (iii) More specific words should be selected to showü (a) the kind of work,ü (b) the degree of complexity,ü (c) the degree of skill required,ü (d) the extent t which problems are standardized,ü (e) the extent of worker’s responsibility for each phase of the work andü (f) the degree and type of accountability.Action words such as analyse, gather, plan, confirm deliver, maintain, supervise andrecommend should be used.µ (iv) Supervisory responsibility should be shown to the incumbents.Brief and accurate statements should be used in order to accomplish the purpose.µ (v) Utility of the description in meeting the basic requirements should be checkedfrom the extent of understanding the job by reading the job description by a newemployeeThe Content of Job DescriptionThe job description normally contains the information on the following lines:¯ Job title¯ Organizational location of the job¯ Supervision given and received¯ Materials, tools, machinery and equipment worked with¯ Designation of the immediate superiors and subordinates¯ Salary levels: Pay , D.A., other allowances, bonus, incentive wage, method ofpayment, hours of work, shift and break¯ Complete list of duties to e performed separated according to daily, weekly,monthly and casual, estimated time to be spent on each duty¯ Definition of unusual terms¯ Conditions of work: location, time, speed of work, accuracy, health hazardsand accident hazards¯ Training and development facilities and¯ Promotional chances and channels.JOB SPECIFICATION
  • 18. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 18It is a written statement of qualifications, traits, physical and mental characteristics thatan individual must possess to perform the job duties and discharge responsibilitieseffectively.Job Specification Information:The first step in the programme of job specification is to prepare a list of all the jobs inthe company and where they are located. The second step is to secure and write up theinformation about each of the jobs in a company. Usually, this information includes:ÿ i. physical specifications,ÿ ii. mental specifications,ÿ iii. emotional and social specifications andÿ iv. behavioural specifications.¶ Physical specifications: Physical specifications include the physicalqualifications or physical capacities which vary from job to job. Physicalqualifications or capacities include physical features like height, weight, chest,vision, hearing, ability to lift weight, ability to carry weight, health, age, capacityto use or operate machines, tools equipment etc.¶ ii. Mental specifications: Mental specifications include ability to perform,arithmetical calculations to interpret data, information blueprints, to readelectrical circuits, ability to plan, reading abilities, scientific abilities, judgment,ability to concentrate, ability to handle variable factors, general intelligence,memory etc.¶ iii. Emotional and social specifications: Emotional and social specificationsare more important for the post of managers, supervisors, foremen etc. Theseinclude emotional stability, flexibility, social adaptability in human relationship,personal appearance including dress, posture, poise, features and voice requiredby the job.¶ iv. Behavioural specifications: Behavioural specifications play an importantrole in selecting the candidates for higher level jobs in the organizationalhierarchy. This specification seeks to describe the acts of managers rather thanthe traits that cause the acts. These specifications include judgments, research,creativity, teaching ability, maturity (capable of accepting responsibility) trial ofconciliation, self-reliance (self-starter sticks to own decisions), dominance (givingorders in a personal way) etc.Meaning & Objectives of HR Planning:
  • 19. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 19In simple terms, human resource planning means deciding the number and type of thehuman resources required for each job, unit and the total company for a particularfuture date in order to carry our organizational activities. E.W. Vetter viewed humanresources planning as “a process by which an organization should move from its currentmanpower position to its desired manpower position. Through planning management,strive to have the right number and right kind of people at the right place at the righttime, doing things which result in both the organization and the individual receivingmaximum long-run benefit.”Objectives of Human Resources Planning: The important objectives of manpowerplanning in an organization areØ (i)to recruit and retain the human resources of required quantity and quality.Ø (ii) to foresee the employee turnover and make the arrangements for minimizingturnover and filling up of consequent vacancies.Ø (iii) to meet the needs of the programmes of expansion, diversification etc.:Ø (iv) to foresee the impact of technology on work, existing employees and futurehuman resource requirements.Ø (v) to improve the standards, skill, knowledge, ability, discipline etc.Ø (vi) to assess the surplus of shortage of human resources and take measuresaccordingly;Ø (vii) to maintain congenial industrial relations by maintaining optimum level andstructure of human resources;Ø (viii) to minimize imbalances caused due to non-availability of human resourcesof the right kind, right number in right time and right place;Ø (ix) to make the best use of its human resources andØ (x) to estimate the cost of human resources.Benefits of HR Planning:¶ Human Resources Planning (HRP) anticipates not only the required kind andnumber of employees but also determines the action plan for all the functions ofpersonnel management. The major benefits of human resources planning are:¶ It checks the corporate plan of the organization.¶ It offsets uncertainty and change. But the HRP offsets uncertainties and changesto the maximum extent possible and enables the organization to have right menat the right time and in the right place.¶ It provides scope for advancement and development of employees training,development etc.Factors Affecting HR Planning:
  • 20. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 20Several factors affect HRP. These factors can be classified into external factors andinternal factors.External Factors: External Factors include:Ø (i) Government Policies: Policies of the government like labour policy, industrialrelations policy, policy towards reserving certain jobs for different communitiesand sons-of the-soil etc.,Ø (ii) Level of Economic Development: Level of economic development determinesthe level of HRD in the country and thereby the supply of human resources inthe future in the country.Ø (iii) Business Environment: External business environmental factors influencethe volume and mix of production and thereby the future demand for humanresources.Ø (iv) Information Technology: Information technology bought amazing shifts inthe way how do businesses operate? These shifts include business processreengineering, enterprise resources planning and supply drain management.Ø (v) Level of Technology: Level of technology determines the kind of humanresources required.Ø (vi) International Factors: International factors like the demand for and supplyof human resources in various countries.Internal Factors : Internal Factors affecting HRP include:ü (i) Company strategies: Company’s polices and strategies relating to expansion,diversification, alliances etc. determine the human resources demand in terms ofquality and quality.ü (ii) Human resources policies: Human resources policies of the companyregarding quality of human resources, compensation level, quality of work lifeetc. influence human resources plan.ü (iii) Job Analysis: Fundamentally, human resources plan is based on job analysis,job description and job specification. Thus, the job analysis determines the kindof employees required.ü (iv) Time horizons: Companies with a stable competitive environment can planfor the long run, whereas firms with and unstable competitive environment canplan for only short-term range. Exhibit 4.2 presents the degree of uncertainty andlength of the planning period.ü (v) Type and quality of information: Any planning process needs qualitative andaccurate information. This is more s with human resources plan. Exhibit 4.3presents HRP information.
  • 21. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 21ü (vi) Company’s production/operations policy: Company’s policy regarding howmuch to produce and how much to buy from outside to prepare a final productinfluences the number and kind of people required.ü (vii) Trade unions: Influence of trade unions regarding the number of workinghours per week, recruitment sources etc., and affect HRP.The Human Resource Information System (HRIS)The Human Resource Information System (HRIS) is a software or online solution forthe data entry, data tracking, and data information needs of the Human Resources,payroll, management, and accounting functions within a business. Normally packagedas a data base, hundreds of companies sell some form of HRIS and every HRIS hasdifferent capabilities. Pick your HRIS carefully based on the capabilities you need inyour company.The Human Resource Information Systems (HRIS) provide:þ Management of all employee information.þ Reporting and analysis of employee information.þ Company-related documents such as employee handbooks, emergencyevacuation procedures, and safety guidelines.þ Benefits administration including enrollment, status changes, and personalinformation updating.þ Complete integration with payroll and other company financial software andaccounting systems.þ Applicant and resume management.The HRIS that most effectively serves companies tracks:þ attendance,þ pay raises and history,þ pay grades and positions held,þ performance development plans,þ training received,þ disciplinary action received,þ personal employee information, and occasionally,þ management and key employee succession plans,þ high potential employee identification, andþ applicant tracking, interviewing, and selection.An effective HRIS provides information on just about anything the company needs totrack and analyze about employees, former employees, and applicants. Your companywill need to select a Human Resources Information System and customize it to meetyour needs. With an appropriate HRIS, Human Resources staff enables employees to do
  • 22. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 22their own benefits updates and address changes, thus freeing HR staff for more strategicfunctions. Additionally, data necessary for employee management, knowledgedevelopment, career growth and development, and equal treatment is facilitated.Finally, managers can access the information they need to legally, ethically, andeffectively support the success of their reporting employees.Strategic HR Planning:Strategic HR planning is an important component of strategic HR management. It linksHR management directly to the strategic plan of your organization. Most mid- to largesized organizations have a strategic plan that guides it in successfully meeting itsmission. Organizations routinely complete financial plans to ensure they achieveorganizational goals and while workforce plans are not as common, they are just asimportant.Strategic HR management is defined as: Integrating human resource managementstrategies and systems to achieve the overall mission, strategies, and success of the firmwhile meeting the needs of employees and other stakeholders.The overall purpose of strategic HR planning is to:ü Ensure adequate human resources to meet the strategic goals and operationalplans of your organizationü the right people with the right skills at the right timeKeep up with social, economic, legislative and technological trends that impacton human resources in your area and in the sectorRemain flexible so that your organization can manage change if the future isdifferent than anticipated.ü Strategic HR planning predicts the future HR management needs of theorganization after analyzing the organization’s current human resources, theexternal labour market and the future HR environment that the organization willbe operating in.The strategic HR planning process: The strategic HR planning process has foursteps:þ Assessing the current HR capacityþ Forecasting HR requirementsþ Gap analysisþ Developing HR strategies to support organizational strategiesþ Assessing current HR capacityBased on the organization’s strategic plan, the first step in the strategic HR planningprocess is to assess the current HR capacity of the organization. The knowledge, skills
  • 23. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 23and abilities of your current staff need to be identified. This can be done by developing askills inventory for each employee.Forecasting HR requirements: The next step is to forecast HR needs for the futurebased on the strategic goals of the organization. Realistic forecasting of humanresources involves estimating both demand and supply.Gap analysis: The next step is to determine the gap between where your organizationwants to be in the future and where you are now. The gap analysis includes identifyingthe number of staff and the skills and abilities required in the future in comparison tothe current situationDeveloping HR strategies to support organizational strategies: There are fiveHR strategies for meeting your organization’s needs in the future:¯ Restructuring strategies¯ Training and development strategies¯ Recruitment strategies¯ Outsourcing strategies¯ Collaboration strategiesRestructuring strategies: This strategy includes:ü Reducing staff either by termination or attritionü Regrouping tasks to create well designed jobsü Reorganizing work units to be more efficientTraining and development strategies: This strategy includes:ü Providing staff with training to take on new rolesü Providing current staff with development opportunities to prepare them forfuture jobs in your organizationRecruitment strategies: This strategy includes:ü Recruiting new staff with the skill and abilities that your organization will need inthe futureü Considering all the available options for strategically promoting job openings andencouraging suitable candidates to apply.Outsourcing strategies: This strategy includes:
  • 24. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 24ü Using external individuals or organizations to complete some tasksü Many organizations look outside their own staff pool and contract for certainskills.ü This is particularly helpful for accomplishing specific, specialized tasks that don’trequire ongoing full-time work.Collaboration strategies: Finally, the strategic HR planning process may lead toindirect strategies that go beyond your organization. By collaborating with otherorganizations you may have better success at dealing with a shortage of certain skills.
  • 25. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 25II - UNITRECRUITMENT & SELECTIONIntroduction to Recruitment:Once the required number and the kind of human resources are determined, themanagement has to find the places where required human resources are/will beavailable and also work out strategies for attracting them towards the organizationbefore selecting suitable candidates for jobs. This process is generally known asrecruitment. Some people use the term ‘recruitment’ for employment. These two are notone and the same. Recruitment is only one of the steps in the entire employmentprocess. Some others use the term recruitment for selection. These two terms aredifferent. Technically speaking, the function of recruitment precedes the selectionfunction and it includes only finding, developing the sources of prospective employeesand attracting them to apply for jobs in an organization, whereas the selection is theprocess of finding out the most suitable candidate to the job out of the candidatesattracted(i.e., recruited).Recruitment Definition:Recruitment is defined as “a process to discover the sources of manpower to meet therequirements of the staffing schedule and to employ effective measures for attractingthat manpower in adequate numbers to facilitate effective selection of an efficientworkforce.” Edwin B.Flippo defined recruitment as “the process of searching forprospective employees and stimulating them to apply for jobs in the organization.”These definitions can be analyzed by discussing the processes of recruitment throughsystems approach.Objectives of Recruitment: The objectives of recruitment are:i. To attract people with multi-dimensional skills and experiences that suit thepresent and future organizational strategies,ii. To induct outsiders 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 thecompany,v. To search or head hunt/head pouch people whose skills fit the company’svalues,vi. To devise methodologies for assessing psychological traits,
  • 26. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 26vii. To seek out non-conventional development grounds of talent,viii. To search for talent globally and not just within the company,ix. To design entry pay that competes on quality but not on quantum,x. To anticipate and find people for positions that does not exist yet.Employee Recruitment Methods: Recruitment can be in two different ways¯ Internal recruitment is when the business looks to fill the vacancy from withinits existing workforce.¯ External recruitment is when the business looks to fill the vacancy from anysuitable applicant outside the business.Internal Recruitment Sources:They include those who are employed in the organisation or those who were in the pastemploy (but quit voluntarily or due to retrenchment) and would return if theorganisation likes to re-employ. The advantage in looking for internal resources is thatthey provide opportunities for better deployment and utilisation of existing humanresources through planned placements and transfers. It will also motivate peoplethrough planned promotions and career development when vacancies exist in highergrades. The law provides preferences to retrenched employees when vacancies arise infuture.Internal recruitment methods are not only cost efficient, they also support employeesatisfaction and moral. Before looking outside of the company for talent, take the time tolook at the current employees. Nothing causes more dissatisfaction than havingsomeone new take the position that an employee has been working to get promoted to.Promoting within requires less training and transition. Here are two ways to accomplishthis:Job postings – post open positions for employees to apply for before external hires areconsidered.Skills inventory – have HR keep a record of employee skills. Review the inventory toidentify any employees that might qualify for the job. Invite them to apply.Internal Recruitment – Advantages1.Cheaper and quicker to recruit2. People already familiar with the business and how it operates3. Provides opportunities for promotion with in the business – can be motivating4. Business already knows the strengths and weaknesses of candidatesInternal Recruitment - Disadvantages :1.Limits the number of potential applicants2.No new ideas can be introduced from outside the business
  • 27. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 273.May cause resentment amongst candidates not appointed4.Creates another vacancy which needs to be filledExternal RecruitmentThe External Recruitment is the source of the fresh blood for the organization. Asa very critical HR Process, the external recruitment process has to be set up verycarefully. The external recruitment is a process, which is very sensitive to changes on theexternal market and the managers are very sensitive about that as well.The most popular ways of recruiting externally are:Job centres – These are paid for by the government and are responsible for helpingthe unemployed find jobs or get training. They also provide a service for businessesneeding to advertise a vacancy and are generally free to use.Job advertisements – Advertisements are the most common form of externalrecruitment. They can be found in many places (local and national newspapers, noticeboards, recruitment fairs) and should include some important information relating tothe job (job title, pay package, location, job description, how to apply-either by CV orapplication form). Where a business chooses to advertise will depend on the cost ofadvertising and the coverage needed (i.e. how far away people will consider applying forthe jobRecruitment agency – Provides employers with details of suitable candidates for avacancy and can sometimes be referred to as ‘head-hunters’. They work for a fee andoften specialise in particular employment areas e.g. nursing, financial services, teacherrecruitmentPersonal recommendation – Often referred to as ‘word of mouth’ and can be arecommendation from a colleague at work. A full assessment of the candidate is stillneeded however but potentially it saves on advertising cost.Unsolicited applicants – most business will have unsolicited resumes. Make surethese resumes are kept and filed. Review these before beginning to advertise. The rightcandidate might very well be in that file.Events – job fairs, open houses. These are costly to run but can produce excellentresults. The number of positions available can best determine if it is worth theinvestment.
  • 28. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 28Campus Placements – co-op programs and job placement programs are a great wayto bring in new employees. Contact local colleges or universities to see if there is anopportunity to work together.Modern Sources of Recruitment: A number of modern recruitment sources arebeing used by the corporate sector in addition to traditional sources.ÿ Employee Referrals: Present employees are well aware of the qualifications,attitudes, experience and emotions of their friends and relatives. They are alsoaware of the job requirements and organizational culture of their company. Assuch, they can make preliminary judgment regarding the match between the joband their friends or relatives. Hence, the HR managers of various companiesdepend on the present employees for reference of the candidates for various jobs.This source reduces the cost and time required for recruitment. Further, thissource enhances the effectiveness of recruitment. HR managers offer variousincentives/rewards including cash incentives to the current employees forreferring the best candidates.Modern external sources include: Walk in and consult in, head-hunting, body-shopping, mergers and acquisitions, tele-recruitment and outsourcing.Ï Walk-in: The busy organizations and the rapid changing companies do not findtime to perform various functions of recruitment. Therefore, they advise thepotential candidates to attend for an interview directly and without a priorapplication on a specified date, time and at a specified place. The suitablecandidates from among the interviewees will be selected for appointment afterscreening the candidates through tests and interviews.Ï (ii) Consult-in: The busy and dynamic companies encourage the potential jobseekers to approach them personally and consult them regarding the jobs. Thecompanies select the suitable candidates from among such candidates throughthe selection process.Ï (iii) Head-hunting: The companies request the professional organizations tosearch for the best candidates particularly for the senior executive positions. Theprofessional organizations search for the most suitable candidates and advise thecompany regarding the filling up of the positions. Head-hunters are also called‘search consultants’.Ï (iv) Body shopping: Professional organizations and the hi-tech traininginstitutes develop the pool of human resources for the possible employment. Theprospective employers contact these organizations to recruit the candidates.
  • 29. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 29Otherwise, the organizations themselves approach the prospective employers toplace their human resources. These professional and training institutions arecalled ‘body shoppers’ and these shopping is also known as employee leasingactivity. The leasing firms employ the people and lease them for the use byvarious needy companies for payment of a commission.Ï (v) Mergers & Acquisitions: Business alliances like acquisitions, mergers,and take-overs help in getting human resources. In addition, the companies doalso have alliances in sharing their human resources on ad-hoc basis.It does mean that the company with surplus human resources offers the servicesof their employees to other needy organizations.Ï (vi) E-Recruitment: The technological revolution in telecommunicationshelped the organizations to use internet as a source of recruitment. Organizationsadvertise the job vacancies through the World Wide Web (www). The job seekerssend their applications through e-mail using the Internet. Alternatively, jobseekers place their CVs in the world wide web/internet, which can be drawn bythe prospective employers depending upon their requirements.External Recruitment Sources: Organisations may look for people outside it. Entrylevel jobs are usually filled by new entrants from outside. Also in the followingcircumstances organisations may resort to outside sources:Ï a. when suitably qualified people are not available.Ï b. when the organisation feels it necessary to impart new blood for fresh ideas.Ï c. when it is diversifying into new avenues andÏ d. when it is merging with another organisation.External Recruitment – Advantages¯ Outside people bring in new ideas¯ Larger pool of workers from which to find the best candidate¯ People have a wider range of experienceExternal Recruitment - Disadvantages :Longer processMore expensive process due to advertisements and interviews requiredSelection process may not be effective enough to reveal the best candidate
  • 30. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 30Recruitment Strategies: The recruitment strategies formulated by the companiesinclude:In-sourcing or Outsourcing: Companies recruit the candidates, employ them, trainand develop them and utilize the human resources of these candidates. This strategy iscalled ‘in-sourcing’. Companies formulate and implement this strategy when thecompany’s growth is stable. Some organizations employ and develop the candidateswith a view to provide the human resources to other companies which concentrate onmanufacturing, servicing and such other activities. Some manufacturing and servicecompanies depend for their human resource requirements on such externalorganizations whose core business is to provide human resources. This strategy is called‘outsourcing’. Most of the IT companies follow this strategy. Even manufacturingcompanies also depend on outsourcing for the running the non-core business likecanteens, hospitals, office maintenance, security, house-keeping, plant maintenance etc.outsourcing strategy is more suitable for both the fast growing and diversifyingcompanies.Vast and Fast Source: The fast developing IT industry and high technology orientedindustry invariably require vast human resources within the short span of time. The beststrategy to get vast human resources immediately is through internet.Recruitment Policy: Recruitment policy of any organization is derived from the HRpolicy of the same organization. In other words, the former is a part of the latter.However, recruitment policy by itself should take into consideration the government’sreservation policy, policy Regarding sons of soil etc., HR policies of other organizationsregarding merit, internal sources, social responsibility in absorbing minority sections,women etc. recruitment policy should commit itself to the organization’s HR policy likeenriching the organization’s human resources or serving the community by absorbingthe weaker sections and disadvantaged people of the society, motivating the employeesthrough internal promotions, improving the employee’s loyalty to the organization byabsorbing the retrenched or laid-of employees or casual/temporary employees ordependents of present/former employees etc.Limitations for Recruitment – Challenges:Child Labour (Prohibition and Regulation ) Act, 1986: This Act replacesthe Employment of Children Act, 138, and seeks to prohibit the engagement ofchildren below 14 years of age in certain employment and to regulate theconditions of work of children in certain other employment. Penalties forcontravening the provisions are fine and imprisonment.2. The Employment Exchanges (Compulsory Notification of Vacancies) Act,1959: The Act requires all employers to notify vacancies (with certain
  • 31. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 31exemptions) occurring in their establishments to the prescribed employmentexchanges before they are filled3. The Apprentices Act, 1961: The Act seeks to provide for the regulation andcontrol of training apprentices and for matters connected therewith. The Actprovides for a machinery to lay down syllabi and prescribe period of training,reciprocal obligations for apprentices and employers etc. The responsibility forengagement of apprentices lies solely with the employer. An apprentice is not aworkman.4. The Contract Labour (Regulation and Abolition) Act, 1970: This Actseeks to regulate the employment of contract labour in certain establishmentsand to provide for the abolition in certain circumstances. The Act applies to everyestablishment / contractor employing 20 or more persons.5. Bonded Labour System (Abolition) Act, 1976: This Act seeks to providefor the abolition of bonded labour system with a view to preventing the economicand physical exploitation of the weaker sections of society.6. The Inter-state Migrant Workmen Act, 1979: This Act safeguards theinterests of the workmen who are recruited by contractors from one state forservice in an establishment situated in another state and to guard against theexploitation of such workmen by the contractors.7. The Factories Act, 1948, the Mines Act, 1952, etc. : Certain legislation,like the Factories Act and the Mines Act prohibit employment of women (in nightwork, underground work etc.) and children (below 14 years of age) in certaintypes of jobs.8. Reservations for Special Groups: In pursuance of the constitutionalprovisions, statutory reservations and relaxed norms have been provided ineducation and employment to candidates belonging to Scheduled Castes andScheduled Tribes in central and state services including departmentalundertakings, government corporations, local bodies and other quasi –government organisations. Most state governments have issued policy directivesextending the reservations to notified backward communities also.9. Sons -of -the-Soil: The question of preference to local population in thematter of employment has become more complex toady than ever before. TheGovt. of India has recognised the main elements of the arguments on behalf ofthe sons of the soil and laid down certain principles in the matter of recruitmentto its public sector projects, whose implementation, however, is left to theundertakings themselves.10. Displaced Persons: Whenever major projects are set up, large tracts ofland are acquired for the purpose, displacing several hundred households in eachcase. Payment of compensation for land was at one time considered a sufficientdischarge of obligation towards persons who are dispossessed of land. This alonedid not solve the question of earning livelihood.
  • 32. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 32Realistic Job Preview:A Realistic Job Preview is an approach that enables the communication of aspects of ajob to prospective applicants before the applicant accepts the offer of a position.For a RJP to be effective, it is critical to allow employees to obtain a balanced view of thepositive and negative aspects of the position. Discrepancies between the applicant of theposition and the actual operational requirements of the job role may lead to lowercommitment levels and increased turnover. A RJP works by providing applicants withinformation that clarifies their expectations and allows them to have a more realisticperspective of the role. By providing a well designed and consistent RJP process to allpotential employees, the organization can reduce turnover and increase commitment byallowing the employer to match job requirements with the applicant’s qualities and theapplicant to match their personal needs with the position requirements and theorganizational culture.Research on the effects of utilizing a RJP has demostrated cost savings due to increasedperformance and job survival; decreased levels in turnover by better meeting employeeexpectations, improving their ability to cope, providing a perception of honesty for theorganization and allowing them to self-select themselves for the position. In addition,there is also increased post-employment job satisfaction by giving them preparation tocope with the demands of the position and making them feel that the employer has beenhonest in their recruitment process.Using Realistic Job Previews for recruitmentBy providing applicants with an insight into the job vacancy – both the attractive andless attractive aspects of the role – many candidates decide for themselves that the job isnot for them. The Realistic Job Previews (RJP) helps the applicant to really thinkthrough whether the new role is for them – whether they will fit into the organisationand enjoy the role.The Realistic Job Preview should be used to: Help unsuitable applicants withdrawthemselves before the formal recruitment process takes place. Ensure such ‘self-elimination’ is seen in a positive, brand aligned and advisory way. These applicants mayalso be customers and it is important to treat them with dignity.The benefits of Realistic Job PreviewRealistic Job Previews can help with volume recruitment by removing around 15% ofapplicants through clarifying and clearly stating the job requirements, therebyincreasing the quality of applications received. It also reduces resignation rate of
  • 33. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 33recruits and ensures candidates finally selected are likely to align well with the valuesand culture of the organization.Selection:Selection is a process of measurement, decision making and evaluation. The goal of aselection system is to bring in to the organisation individuals who will perform well onthe job. To have an accurate and fair selection system, an organisation must use reliableand valid measures of job applicant characteristics. In addition, a good selection systemmust include a means of combining information about applicant characteristics in arational way and producing correct hire and no-hire decisions. A good personnelselection system should add to the overall effectiveness of the organisation.Organisations vary in the complexity of their selection system. Some merely skimapplications blanks and conduct brief, informal interviews, whereas others take toresting, repeated interviewing, background checks and so on. Although the latter systemis more costly per applicant, many benefits are realised from careful, thorough selection.An organisation needs to have members who are both skilled and motivated to performtheir roles. Either such members can be identified by careful selection or attempts canbe made to develop them after hire by extensive training. Thus cursory selection maygreatly increase training and monitoring costs, whereas spending more on the selectionprocess will reduce these post-hire expenses.Selection procedure:Selection procedure employs several methods of collecting information about thecandidate’s qualifications, experience, physical and mental ability, nature andbehaviour, knowledge, aptitude and the like for judging whether a given applicant issuitable or not for the job. Therefore, the selection procedure is not a single act but isessentially a series of methods or stages by which different types of information can besecured through various selection techniques. At each step, facts may come to lightwhich are useful for comparison with the job requirement and employee specifications.Steps in Scientific Selection Process(i) Job Analysis, (ii) Recruitment. (iii) Application Form, (iv) Written Examination, (v)Preliminary Interview (iv) Business Games (vii) Tests. (viii) Final Interview. (ix) MedicalExamination (x) Reference Checks. (xi) Line Manager’s Decision. (xii) Job offer (xiii)Employment.Job Analysis: Job analysis is the basis of selecting the right candidate. Everyorganization should finalize the job analysis, job description, job specification andemployee specifications before proceeding to the next stop of selection.
  • 34. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 34Human Resource Plan: Every company plans for the required number of and kind ofemployees for a future date. This is the basis for recruitment function.Recruitment: Recruitment refers to the process of searching for prospective employeesand stimulating then to apply for jobs in an organization. It is the basis for theremaining techniques of the selection and the latter varies depending upon the former.It develops the applicants’ pool.Development of Bases for Selection: The Company has to select the appropriatecandidates from the applicants’ pool. The company develops or borrows the appropriatebases/techniques for screening the candidates in order to select the appropriatecandidates for the jobs.Application Form: Application Form is also known as application blank. Thetechnique of application bank is traditional and widely accepted for securinginformation from the prospective candidates. It can also be used as a device to screenthe candidates at the preliminary level. Many companies formulate their own style ofapplication forms depending upon the requirement of information based on the size ofthe company, nature of business activities, type and level of the job etc. Information isgenerally required on the following items in the application forms: Personal backgroundinformation, Educational attainments, Work experiences, Salary , Personal details andReferences.Written Examination: The organizations have to conduct written examination forthe qualified candidates after they are screened on the basis of the application blanks soas to measure the candidate’s ability in arithmetical calculations, to know thecandidates’ attitude towards the job, to measure the candidates’ aptitude, reasoning,knowledge in various disciplines, general knowledge and English language.Preliminary Interview: The preliminary interview is to solicit necessary informationfrom the prospective applicants and to assess the applicant’s suitability to the job. Thismay be conducted by an assistant in the personnel department. The information thusprovided by the candidate may be related to the job or personal specifications regardingeducation, experience, salary expected, aptitude towards the job, age, physicalappearance and other physical requirements etc. Thus, preliminary interview is usefulas a process of eliminating the undesirable and unsuitable candidates. If a candidatesatisfied the job requirements regarding most of the areas, he may be selected forfurther process. Preliminary interviews are short and known as stand-up interviews orsizing-up of the applicants or screening interviews. However, certain required amount ofcare is to be taken to ensure that the desirable workers are not eliminated. Thisinterview is also useful to provide the basic information about the company to thecandidate.
  • 35. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 35Business Games: Business games are widely used as a selection technique forselecting management trainees, executive trainees and managerial personnel at junior,middle and top management positions. Business games help to evaluate the applicantsin the areas of decision-making identifying the potentialities, handling the situations,problem-solving skills, human relations skills etc. Participants are placed in ahypothetical work situation and are required to play the role situations in the game. Thehypothesis is that the most successful candidate in the game will be the most successfulone on the job.Group Discussion: The technique of group discussion is used in order to securefurther information regarding the suitability of the candidate for the job. Groupdiscussion is a method where groups of the successful applicants are brought around aconference table and are asked to discuss either a case study or a subject-matter. Thecandidates in the group are required to analyses, discuss, find alternative solutions andselect the sound solution. A selection panel then observes the candidates in the areas ofinitiating the discussion, explaining the problem, soliciting unrevealing informationbased on the given information and using common sense, keenly observing thediscussion of others, clarifying controversial issues, influencing others, speakingeffectively, concealing and mediating arguments among the participants andsummarizing or concluding apply. The selection panel, based on its observation, judgesthe candidates’ skill and ability and ranks them according to their merit. In some cases,the selection panel may also ask the candidates to write the summary of the groupdiscussion in order to know the candidates’ writing ability as well.Test: Psychological tests play a vital role in employee selection. A psychological test isessentially an objective and standardized measure of sample of behavior from whichinferences about future behavior and performance of the candidate can be drawn.Objectivity of tests refers to the validity and reliability of the instruments in measuringthe ability of the individuals. Objectivity provides equal opportunity to all the jobseekers without any discrimination against sex, caste etc. standardization of test refersto uniformity of the total behavior of the prospective employee on the job.Types of Test: Tests are classified into six types. They are Aptitude tests, Achievementtests , Situational tests, Interest tests, Personality tests and Multidimensional testing.Aptitude tests: These tests measure whether an individual has the capacity or latentability to learn a given job if given adequate training. Aptitudes can be divided intogeneral and mental ability or intelligence and specific aptitudes such as mechanical,clerical, manipulative capacity etc.Emotional Quotient (EQ): Most of the organizations realized that emotionalinvolvement and commitment of the employees determine their contribution to the
  • 36. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 36company rather than their intelligence quotient. As such, emotional quotient (EQ) isused as important criteria in the employee selection process.Achievement Tests: These tests are conducted when applicants claim to knowsomething as these tests are concerned with what one has accomplished. These tests aremore useful to measure the value of a specific achievement when an organization wishesto employ experienced candidates. These tests are classified into: (a) Job knowledgetest: and (b) Work sample test.Situational test: This test evaluates a candidate in a similar real life situation. In thistest, the candidate is asked either to cope with the situation or solve critical situations ofthe job.Interest tests: These tests are inventories of the likes and dislikes of candidates inrelation to work, job, occupations, hobbies and recreational activities. The purpose ofthis test is to find out whether a candidate is interested or disinterested in the job forwhich he is a candidate and to find out in which area of the job range/occupation thecandidate is interested. The assumption of this test is that there is a high correlationbetween the interest of a candidate in a job and job success. Interest inventories are lessfaked and they may not fluctuate after the age of 30.Personality Tests: These tests prove deeply to discover clues to an individual’s valuesystem, his emotional reactions and maturity and characteristic mood. They areexpressed in such traits like self-confidence, tact, emotional control, optimism,decisiveness, sociability, conformity, objectivity, patience, fear, distrust, initiative,judgment dominance of submission, impulsiveness, sympathy, integrity, stability andself-confidence.Cognitive Ability Tests: These tests measure mathematical and verbal abilities.Popularly known tests of this category include Graduate Record Examination (GRE) andScholastic Aptitude Test (SAT).Wechsler Adult Intelligence Scale: this is a comprehensive test including generalinformation, arithmetic, similarities, vocabulary, picture completion, picturearrangement, object assembly and similar items.Wonderlic Personnel Test: This test includes perceptual, verbal and arithmetic.Polygraph Tests: The polygraph is an instrument that records changes in breathing,blood pressure, pulse and skin response associated with sweating of palms and plotsthese reactions on paper.
  • 37. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 37Multi-dimensional Testing: However, the need for multi-skills is being felt by mostof the companies’ consequent upon globalization, competitiveness and the consequentcustomer-centred strategies. Organization have to develop multi-dimensional testing inorder to find out whether the candidates possess a variety of skills or not, candidate’sability to integrate the multi-skills and potentiality to apply them based on situationaland functional requirement.Employment Interview: Final interview is usually followed by testing. This is themost essential step in the process of selection. In this step, the interviewer matches theinformation obtained about the candidate thorough various means to the jobrequirements and to the information obtained through his own observation during theinterview.Various Types of interviews: 1.Priliminary Interview 2.Core Interview 3.Decision-Making InterviewPriliminary Interview: Informal Interview & Unstructured InterviewÏ Informal Interview: This is the interview which can be conducted at any placeby any person to secure the basic and non-job related information. theinteraction between the candidate and the personnel manager when the formermeets the latter to enquire about the vacancies or additional particulars inconnection with the employment advertisement is an example of informalinterview.Ï Unstructured Interview: In this interview, the candidate in given the freedomto tell about himself by revealing his knowledge on various items/areas, hisbackground , expectations, interest etc. Similarly, the interviewer also providesinformation on various items required by the candidate.Core Interview: It is normally the interaction between the candidate and the lineexecutive or experts on various areas of no knowledge, skill, talent etc. this interviewmay take various forms like: Background Information Interview, Job and ProbingInterview, Stress Interview, Stress Interview, Group Discussion Interview, Formal andStructured Interview, Panel Interview & Depth Interview.Background Information Interview: This interview is intended to collectthe information which is not available in the application blank and to check thatinformation provided in the application blank regarding education, place ofdomicile, family, health, interests, hobbies, likes, dislikes and extracurricularactivities of the applicant.
  • 38. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 38Job and Probing Interview: This interview aims at testing the candidate’s jobknowledge about duties, activities, methods of doing the job, critical/problematicareas, methods of handling those areas etc.Stress Interview: This Interview aims at testing the candidate’s job behaviourand level of withstanding during the period of stress and strain. The interviewertests the candidate by putting him under stress and strain by interrupting theapplicant from answering, criticising his opinions, asking questions pertaining tounrelated areas, keeping silent for unduly long periods after he has finishedspeaking etc. stress during the middle portion of the interview gives effectiveresults. Stress interview must be handled with utmost care and skill. This typeinterview is often invalid, as the interviewee’s need for a job and his previousexperience in such type of interviews may inhibit his actual behaviour under suchsituations.Group Discussion Interview: There are two methods of conducting groupdiscussion interviews, viz. group interview method and discussion interviewmethod. All the candidates are brought into one room, i.e., the interview roomand are interviewed one by one under group interview. This method helps a busyexecutive to save valuable time and gives a fair account of the objectivity of theinterview to the candidates. Under the discussion interview method, one topic isgiven for discussion to the candidates who assemble in one room and they areasked to discuss the topic in detail. This type of interview helps the interviewer inappraising certain skills of the candidates like initiative, interpersonal skills,dynamism, presentation, leading, comprehension, collaboration etc. Interviewersare at ease in this category of interview because of its informality and flexibility.But it may fail to cover some significant portions of the candidates’ backgroundand skills.Formal and Structured Interview: In this type of interview, all theformalities, procedures like fixing the value, time, panel of interviewers, openingand closing, intimating the candidates officially etc. are strictly followedarranging and conducting the interview. The course of the interview ispreplanned and structured, in advance, depending on job requirements, thequestions for discussion are structured and experts are allotted different areasand questions to be asked. There will be very little room for the interviewers todeviate from the questions prepared in advance in a sequence.Panel Interview: A panel of experts interviews each candidate, judges hisperformance individually and prepares consolidated judgment. This type of
  • 39. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 39interview is known as panel interview. Interviews for middle level and seniorlevel managers are normally conducted by the panel of experts.Depth Interview: In this interview, the candidate would be examinedextensively in core areas of job skills and knowledge. Experts test the candidate’sknowledge in depth. Depth interviews are conducted for specialist jobs.Information technology brought significant developments in the selection processof employees. The vital development is on-line interview.Decision-Making Interview:After the candidates are examined by the experts including the line managers of theorganization in the core areas of the job, the head of the department/section concernedinterviews the candidates once again, mostly through informal discussion. Theinterviewer examines the interest of the candidate in the job, organization,reaction/adaptability to the working conditions, career planning, promotionalopportunities, work adjustment and allotment etc. the Personnel Manager alsointerviews the candidates with a view to find out his reaction/acceptance regardingsalary, allowances, benefits, promotions, opportunities etc.The head of the department and the personnel manager exchange the views and thenthey jointly inform their decision to the chairman of the interview board, who finallymakes the decision about the candidates’ performance and their ranks in the interview.Most of the organizations have realized recently that employees’ positive attitudematters much rather than employees’ skills and knowledge. Employees with positiveattitude contribute much to the organization. Hence the interviewers look for thecandidates with the right attitude while making final decision.Medical examination: – Applicants who have crossed the above stages are sent for aphysical examination either to the company’s physician or to a medical officer approvedfor the purpose.Reference checks: – The applicant is asked to mention in his application form thenames and addresses of two or three persons who know him well.Final approval: – The shortlisted candidates by the department are finally approvedby the executives of the concerned department. Employment is offered in the form ofappointment letter mentioning the post, the rank, the grade, the date by which thecandidate should join and other terms and conditions in brief.HR Interview
  • 40. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 40The goal of an HR interview is to determine the potential job performance of anapplicant based on the answers that they give to questions. The HR interview isexcellent for jobs that will require applicants to have communication skills. It will alsoallow the company to obtain important information that is related to the client. Duringthe HR interview, the applicant will be able to demonstrate how much they know abouta particular task.The HR interview is designed to make sure the best candidates are selected. Theinterview will also allow the human resources department to determine if theapplicant can work well with the other employees. However, there are a numberof disadvantages to the HR interview process. The evaluations that are made bythe HR department will often be subjective. The decision on whether or not theywill hire the applicant is generally made during the first few minutes of theconversation. The rest of the interview is used by the HR department todetermine if the decision is valid.Ï There are a number of ways that can be used to make the HR interview moresuccessful. The use of stereotypes should be reduced as much as possible. Sex andrace should not play a role in the selection process of the company. Studies haveshown that interviewers who do not have an advanced knowledge of the job aremuch more likely to use stereotypes than those who do understand the jobrequirements.ÿ The questions that are asked during the interview should always be related to thejob. When applicants are asked questions which are not related to the job, thiscan damage the credibility of the company. To solve these problems, it isimportant for a company to make sure they train their employees, especiallythose who will be interviewing applicants. The interviewer must haveinterpersonal skills. They should not make quick decisions about those theyinterview, and they should never use stereotypes. The emphasis should never beplaced on any one characteristic, especially if the job requires the applicant to beskilled in multiple areas.¯ Reliability of the Interview: In the interview context, reliability is consensus,or agreement, between two interviewers on their assessment of the samecandidates. This is called Interrater Reliability. Research shows that it is ratherweak.¯ Similarity Error: Interviewers are positively predisposed to candidates whoare similar to them (in hobbies, interests, personal background). They arenegatively disposed to candidates who are unlike them.¯ Contrast Error: When several candidates are interviewed in succession, raterstend to compare each candidate with the preceding candidates instead of an
  • 41. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 41absolute standard. Thus an average candidate can be rated as higher than averageif he or she comes after one or two poor candidates and lower than average if heor she follows an excellent candidate.¯ First Impression Error: Some interviewers tend to form a first impression ofcandidates rather quickly, based on a review of the application blank or on thefirst few moments of the interview. Thus, this impression is based on relativelylittle information about the candidate. Nevertheless the initial judgment isresistant t change as more information or contradictory information is acquired.In addition, the interviewer may choose subsequent questions based on the firstimpression, in an attempt to confirm the positive or negative impression.¯ Traits Rated and Halo Error: Halo error occurs when either the interviewer’soverall impression or strong impression of a single dimension spreads toinfluence his or her rating of other characteristics. For instance, if a candidateimpresses the interviewer as being very enthusiastic, the interviewer might tendto rate he candidate high on other characteristics, such as job knowledge, loyaltyand dependability.Placement: Placement refers to assigning rank and responsibility to an individual,identifying him with a particular job. If the person adjusts to the job and continues toperform per expectations, it means that the candidate is properly placed. However, if thecandidate is seen to have problems in adjusting himself to the job, the supervisor mustfind out whether the person is properly placed as per the latter’s aptitude and potential.Usually, placement problems arise out of wrong selection or improper placement orboth. Therefore, organizations need to constantly review cases of employeesexpectations / potential and employee related problems such as turnover, absenteeism,accidents etc., and assess how far they are related to inappropriate placement decisionsand remedy the situation without delay.Induction: Induction refers to the introduction of a person to the job and theorganization. The purpose is to make the employee feel at home and develop a sense ofpride in the organization and commitment to the job. The induction process is alsoenvisaged to indoctrinate, orient, acclimatize, and acculturate the person to the job andthe organization. The basic thrust of Induction training during the first one or few weeksafter a person joins service in the organization is to:þ introduce the person to the people with whom he worksþ make him aware of the general company policies that apply to him as also theþ specific work situation and requirements,þ answer any questions and clarify any doubts that the person may have about thejob and the organization ……andþ provide on-the-job instructions, check back periodically howthe person is doing and offer help, if required.
  • 42. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 42III – UNITTRAINING & DEVELOPMENTAND PERFORMANCE APPRAISALIntroduction: Organization and individual should develop and progresssimultaneously for their survival and attainment of mutual goals. So, every modernmanagement has to develop the organization through human resources development.Employee training is the most important sub-system of human resources development.Training is a specialized function and is one of the fundamental operative functions forhuman resources management.Meaning: After an employee is selected, placed and introduced in an organizationhe/she must be provided with training facilities in order to adjust him to the job.Training is the act of increasing the knowledge and skill of an employee for doing aparticular job. Training is a short-term educational process and utilizing a systematicand organized procedure by which employees learn technical knowledge and skills for adefinite purpose. Dale S. Beach defines the training as”….. the organized procedure bywhich people learn knowledge and skill for a definite purpose”. In other words, trainingimproves changes and moulds the employee’s knowledge, skill, behavior and aptitudeand attitude towards the requirements of the job and the organization. Training refers tothe teaching and learning activities carried on for the primary purpose of helpingmembers of an organization to acquire and apply the knowledge, skills, abilities andattitudes needed by a particular job and organization.Thus, training bridges thedifferences between job requirements and employee’s present specifications.Training and Development: Employee training is distinct from managementdevelopment or executive development. While the former refers to training given toemployees in the areas of operations, technical and allied areas, the latter refers todeveloping an employee in the areas of principles and techniques of management,administration, organization and allied areas.Importance of Training and Development: Optimum Utilization of HumanResources – Training and Development helps in optimizing the utilization of humanresource that further helps the employee to achieve the organizational goals as well astheir individual goals.Development of Human Resources – Training and Development helps to providean opportunity and broad structure for the development of human resources’ technical
  • 43. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 43and behavioral skills in an organization. It also helps the employees in attainingpersonal growth.Development of skills of employees – Training and Development helps inincreasing the job knowledge and skills of employees at each level. It helps to expand thehorizons of human intellect and an overall personality of the employees.Productivity – Training and Development helps in increasing the productivity of theemployees that helps the organization further to achieve its long-term goal.Team spirit – Training and Development helps in inculcating the sense of team work,team spirit, and inter-team collaborations. It helps in inculcating the zeal to learn withinthe employees.Organization Culture – Training and Development helps to develop and improve theorganizational health culture and effectiveness. It helps in creating the learning culturewithin the organization.Organization Climate – Training and Development helps building the positiveperception and feeling about the organization. The employees get these feelings fromleaders, subordinates, and peers.Quality – Training and Development helps in improving upon the quality of work andwork-life.Healthy work environment – Training and Development helps in creating thehealthy working environment. It helps to build good employee, relationship so thatindividual goals aligns with organizational goal.Health and Safety – Training and Development helps in improving the health andsafety of the organization thus preventing obsolescence.Morale – Training and Development helps in improving the morale of the work force.Image – Training and Development helps in creating a better corporate image.Profitability – Training and Development leads to improved profitability and morepositive attitudes towards profit orientation.þ Training and Development aids in organizational development i.e. Organizationgets more effective decision making and problem solving. It helps inunderstanding and carrying out organisational policies
  • 44. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 44þ Training and Development helps in developing leadership skills, motivation,loyalty, better attitudes, and other aspects that successful workers and managersusually display.Training Objectives: Generally, line managers ask the personnel manager toformulate the training policies. The personnel manager formulates the followingtraining objectives in keeping with the company’s goals and objectives.ü (i) To prepare the employee, both new and old to meet the present as well as thechanging requirements of the job and the organization.ü (ii) To prevent obsolescence.ü (iii) To impart the new entrants the basic knowledge and skills they need for anintelligent performance of a definite job.ü (iv) To prepare employees for higher level tasks.ü (v) To assist employees to function more effectively in their present positions byexposing them to the latest concepts, information and techniques and developingthe skills they will need in their particular fields.ü (vi) To build up a second line of competent officers and prepare them to occupymore responsible positions.ü (vii) To broaden the minds of senior managers by providing them withopportunities for an interchange of experiences within and outside with a view tocorrecting the narrowness of outlook that may arise from over-specialization.ü (viii) To develop the potentialities of people for the next level job.ü (ix) To ensure smooth and efficient working of a department.ü (x) To ensure economical output of required quality.ü (xi) To promote individual and collective morale, a sense of responsibility, co-operative attitudes and good relationships.Training Methods: As a result of research in the field of training, a number ofprograms are available. Some of these are new methods, while others are improvementsover the traditional methods. The training programs commonly used to train operativeand supervisory personnel are discussed below. These programs are classified into on-the-job off-the-job training programs.On-the Job Training Methods: This type of training, also known as job instructiontraining, is the most commonly used method. Under this method, the individual isplaced on a regular job and taught the skills necessary to perform that job. The traineelearns under the supervision and guidance of a qualified worker or instructor. On-the-job training has the advantage of giving first hand knowledge and experience under theactual working conditions. While the trainee learns how to perform a job, he is also aregular worker rendering the services for which he is placed on rendering services in the
  • 45. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 45most effective manner rather than learning how to perform the job. On-the-job trainingmethods include job rotation, coaching, job instruction or training through step-by-stepand committee assignment.Job Rotation: This type of training involves the movement of the trainee from one jobto another. The trainee receives job knowledge and gains experience from his supervisoror trainer in each of the different job assignments. Though this method of training iscommon in training managers for general management positions, trainees can also berotated from job to job in work-shop jobs. This method gives an opportunity to thetrainee to understand the problems of employees on other jobs and respect them.Coaching: The trainee is placed under a particular supervisor who functions as a coachin training the individual. The supervisor provides feedback to the trainee on hisperformance and offers him some suggestions of his burden. A limitation of this methodof training is that the trainee may not have the freedom or opportunity to express hisown ideas.Job Instruction: This method is also known as training through step by step. Underthis method, the trainer explains to the trainee the way of doing the jobs, job knowledgeand skills and allows him to do the job. The trainer appraises the performance of thetrainee, provides feedback information and corrects the trainee.Committee Assignments: Under the committee assignment, a group of trainees aregiven and asked to solve an actual organizational problem. The trainees solve theproblem joint6ly. It develops team work.Internship: Internship is one of the on-the-job training methods. Individuals enteringindustry in skilled trade4slike machinist, elect6ician and laboratory technician areprovided with thorough instruction though theoretical and practical aspects. Forexample, TISCO, TELCO, and BHEL select the candidates from polytechnicsengineering colleges and management institutions and provide apprenticeship training.Apprenticeship training programs are jointly sponsored by colleges, universities andindustrial organizations to provide the opportunity to the students to gain real-lifeexperience as well as employment. Exhibit presents the benefits of apprenticeshiptraining.MAKE INTERNSHIPS BENEFICIAL: Most of the Universities and Collegesencourage students for internship as part of the curriculum, as it is beneficial to allconcerned.Benefits to Students:
  • 46. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 46þ Practical knowledge and exposureþ Higher initial salariesþ Faster promotionsþ Quick job orientationBenefits of Universities:þ Touch with market placeþ Improvement in recruitment chancesþ Improvement in attraction of quality studentsBenefits to Potential Employers:þ Competent assistanceþ Opportunity to evaluate potential employeesþ No obligation to continue relationship at the end of internshipþ Reduce recruitment expenses.Off-the-Job Methods: Under this method of training, the trainee is separated fromthe job situation and his attention is focused upon learning the material related to hisfuture job performance. Since the trainee is not distracted by job requirements, he canplace his entire concentration on learning the job rather than spending his time inperforming it. There is an opportunity for freedom of expression for the trainees.Companies have started using multimedia technology and information technologies intraining off-the-job training methods are as follows:Vestibule Training: In this method, actual work conditions are simulated in aclass room, material, files and equipment which are used in actual jobperformance are also used in training. This type of training is commonly used fortraining personnel for clerical and semi-skilled jobs. The duration of this trainingranges from days to a few weeks. Theory can be related to practice in this method.Role Playing: It is defined as a method of human interaction that involvesrealistic behavior in imaginary situations. This method of training involvesaction, doing and practice. The participants play the role of certain characterssuch as the production manager, mechanical engineer, superintendents,maintenance engineers, quality control inspectors, foremen, workers and the like.This method is mostly used for developing inter-personal interactions andrelations.Lecture Method: The lecture is a traditional and direct method of instruction.The instructor organizes the material and gives it to a group of trainees in theform of a talk. To be effective, the lecture must motivate and create interestamong the trainees. An advantage of the lecture methods that it is direct and can
  • 47. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 47be used for a large group of trainees. Thus, costs and time involved are reduced.The major limitation of the lecture method is that it does not provide for transferof training effectively.Conference or Discussion: It is a method in training the clerical professionaland supervisory personnel. This method involves group of people who pose ideas,examine and share facts, ideas and data, test assumptions and draw conclusions,all of which contribute to the improvement of job performance. Discussion hasthe distinct advantage over the lecture method, in that the discussion involvestwo-way communication and hence feedback is provided. The participants feelfree to speak in small groups. The success of this method depends on theleadership qualities of the person who leads the group.Programmed Instruction: In recent years, this method has become popular.The subject-matter to be learned is presented in a series of carefully plannedsequential units. These units are arranged from simple to more complex level ofinstruction. The trainee goes through theses units by answering questions orfilling the blanks. This method is expensive and time consuming.The Training Procedure: The training procedure discussed below isessentially an adoption of the job instruction training course, which has beenproved to have a great value. The important steps in the training procedure arediscussed below:Preparing the Instructor: The instructor must know both the job to be taughtand how to teach it. The job must be divided into logical parts so that each can betaught at a proper time without the trainee losing plan. For each part, one shouldhave in mind the desired technique of instruction, that is, whether a particularpoint is best taught by illustration, demonstration or explanation.A serious and committed instructor must:• Know the job or subject he is attempting to teach.• Have the aptitude and ability to teach.• Have willingness towards the profession.• Have a pleasing personality and capacity for leadership.• Have the kno2wledge of teaching principles and methods.• Be a permanent student, in the sense that he should equip himself with the latestconcepts and knowledge.Preparing the Trainee: As in interviewing, the first step in training is to attempt toplace the trainee at east. Most people are some what nervous when approaching an
  • 48. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 48unfamiliar task. Though the instructor may have executed this training procedure, manytimes he or she never forgets its newness to the trainee. The quality of empathy is amark of the good instructor.Getting Ready to Teach: This stage of the program is class hour teaching involvingthe following activities:• Planning the program.• Preparing the instructor’s outline.• Do not try to cover too much material.• Keep the session moving along logically.• Discuss each item in depth.• Repeat, but in different words.• Take the material from standardized texts when it is available.• When the standardized text is not available, develop the program and course contentbased on group approach. Group consists of employer, skilled employees, supervisors,trade union leaders and others familiar with job requirements. Group preparesteaching material.• Teach about the standard for the trainee like quality, quantity, waste or scrap, abilityto work without supervision, knowledge or procedure, safety rules, human relationsetc.• Remember your standard, before you teach.Ï Presenting the Operation: There are various alternative ways of presentingthe operation, viz. explanation, demonstration etc. an instructor mostly usesthese methods of explanation. In addition, one may illustrate various pointsthrough the use of pictures, charts, diagrams and other training aids.Ï Try Out the Trainee’s Performance: As a continuation of the presentationsequence given above, the trainee should be asked to start the job or operativeprocedure. Some instructors prefer that the trainee explains each step beforedoing it, particularly if the operation involves any danger. The trainee, throughrepetitive practice, will acquire more skill.Ï Follow-up: The final step in most training procedures is that of follow-up.When people are involved in any problem or procedure, it is unwise to assumethat things are always constant. Follow-up cab be adopted to a variablereinforcement schedule as suggested in the discussion of learning principles.Every training program should have follow-up otherwise the training programs inthe future cannot be improved.
  • 49. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 49EVALUATION OF TRAINING PROGRAMMEThe specification of values forms a basis for evaluation. The basis of evaluation and themode of collection of information necessary for evaluation should be determined at theplanning stage. The process of training evaluation has been defined as “any attempt toobtain information on the effects of training permance and to assess the value oftraining in the light of that information”. Evaluation leads to controlling and correctingthe training program. Hamblin suggested five level at which evaluation of training cantake place, viz, reactions, learning, job behavior, organization and ultimate value.¶ Positive Attitudes Make an Organisation¶ Determine training needs through job description, performance appraisal formsand potential appraisal discussions.¶ Prepare a training calendar in discussion with managers.¶ Training programs should be well defined specific objectives.¶ Nominate the employees for training based on a need for training.¶ Trainers should be qualified and experienced, and preferably internal.Ï Reactions: Training program is evaluated on the basis of the trainee’s reactionsto the usefulness of coverage of the matter, depth of the course content, methodof presentation, teaching methods etc.Ï Learning: Training program, trainer’s ability and trainee ability are evaluatedon the basis of quantity of content learned and time in which it is learned and thelearner’s ability to use or apply the content he learned.Ï Job Behavior: This evaluation includes the manner and extent to which thetrainee has applied his learning to his job.Ï Organisation: This evaluation measures the use of training, learning andchange in the job behavior of the department/organization in the form ofincreased productivity, quality, morale, sales turnover and the like.Ï Ultimate Value: It is the measurement of the ultimate result of thecontributions of the training program to the Company goals like survival, growth,profitability etc., and to the individual goals like development of personality andsocial goals like maximizing social benefit.MANAGEMENT DEVELOPMENT INTRODUCTIONWhat is Management Development?
  • 50. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 50Management development is a systematic process of growth and development by whichthe managers develop their abilities to manage. So, it is the result of not onlyparticipation in formal courses of instruction but also of actual job experience. It isconcerned with improving the performance of the managers by giving themopportunities for growth and development, which in turn depends on organizationstructure of the company.Role of the Organisation: “The role of the company in management development isto establish the program and the development opportunities for its present andpotential managers”. “Executive development is eventually something that the executivehas to attain himself. But he will do this much better if he is given encouragement,guidance and opportunity by his company”.Objectives of Management Development: The management developmentprograms are organized with a view to achieving specific objectives. They are:¯ (i)To overhaul the management machinery.¯ (ii) To improve the performance of the managers.¯ (iii) To give the specialists on overall view of the functions of an organization andequip them to coordinate each other’s efforts effectively.¯ (iv) To identify persons with the required potential and prepare them for seniorpositions.¯ (v) To increase morale of the members of the management group.¯ (vi) To increase versatility of the management group.¯ (vii) To keep the executives abreast with the changes and developments in theirrespective fields.¯ (viii) To create the management succession that can take over in case ofcontingencies.¯ (ix) To improve thought process and analytical ability.¯ (x) To broaden the outlook of the executive regarding h is role position andresponsibilities.¯ (xi) To understand the conceptual issues relating to economic, social andtechnical areas.¯ (xii) To understand the problems of human relations and improve humanrelations skills and¯ (xiii) To stimulate creative thinking.Evaluation of Management Development Programs: Management developmentprograms should be evaluated in order to find out whether the objectives of the
  • 51. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 51programs are achieved or not. The development programs would be effective, if theycontribute to the organizational group and individual goals. Management shoulddelegate the responsibility of evaluation to a senior manager in the HRD department.The evaluation specialist should be clear of the objectives and goals against which theevaluation is conducted. Evaluation should be a continuous process and specific. Theevaluation specialist should inform the trainees well in advance the content, objectives,areas and the method of evaluation. Evaluation must be objective oriented. Evaluationmust be realistic in terms of direction, standards etc., The areas of evaluation includedifferent managerial skills, knowledge, technical skills and knowledge and conceptualskills and knowledge. The areas should be specific for each MDP based on the contentprovided. Further, the evaluation can also be conducted regarding the trainingmethodology, input/output/content, infrastructure and physical facilities, teaching aidsetc.,Evaluation should not only immediately be after the completion of the programs butalso in specific intervals in the long-run in order to find out the impact of the MDP onthe job behavior and efficiency of the trainee. Further, their evaluation may alsomeasure the improvement in decision-making skill, interpersonal relation, strategymaking and implementation skills, role modeling skills etc., these areas depend uponthe content of each MDP. The evaluation results should be provided to the trainees,their superiors, subordinates and HRD department of the organization. These resultscan be used for further improvement of the future programs in the company.Methods of Management Development: There are mainly two types of methods bywhich managers can acquire the knowledge, skills and attitudes and make themselvescompetent managers. One is through formal training and the other is through on-the-job experiences. On-the-job training is of utmost importance as the real learning takesplace only when the learner uses what he has learnt. The saying ”an ounce of practice isworth tons of theory” is true, whoever said it. But it should also be remembered thatclass-room training or pedagogical techniques have also get their own importance inlearning new knowledge, learning new techniques and broader concepts.Performance AppraisalPerformance appraisal is the process of obtaining, analyzing and recording informationabout the relative worth of an employee. The focus of the performance appraisal ismeasuring and improving the actual performance of the employee and also the futurepotential of the employee. Its aim is to measure what an employee does. According toFlippo, a prominent personality in the field of Human resources, “performanceappraisal is the systematic, periodic and an impartial rating of an employee’s excellence
  • 52. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 52in the matters pertaining to his present job and his potential for a better job.”Performance appraisal is a systematic way of reviewing and assessing the performanceof an employee during a given period of time and planning for his future.It is a powerful tool to calibrate, refine and reward the performance of the employee. Ithelps to analyze his achievements and evaluate his contribution towards theachievements of the overall organizational goals. By focusing the attention onperformance, performance appraisal goes to the heart of personnel management andreflects the management’s interest in the progress of the employees.Objectives Of Performance appraisal:●To review the performance of the employees over a given period of time.●To judge the gap between the actual and the desired performance.●To help the management in exercising organizational control.●Helps to strengthen the relationship and communication between superior –subordinates and management – employees.●To diagnose the strengths and weaknesses of the individuals so as to identifythe training and development needs of the future.●To provide feedback to the employees regarding their past performance.●Provide information to assist in the other personal decisions in theorganization.●Provide clarity of the expectations and responsibilities of the functions to beperformed by the employees.●To judge the effectiveness of the other human resource functions of theorganization such as recruitment, selection, training and development.●To reduce the grievances of the employees.Traditional Methods of Performance Appraisal| Essay Appraisal Method: This traditional form of appraisal, also known as“Free Form method” involves a description of the performance of an employee byhis superior. The description is an evaluation of the performance of anyindividual based on the facts and often includes examples and evidences tosupport the information. A major drawback of the method is the inseparability ofthe bias of the evaluator.| Straight Ranking Method: This is one of the oldest and simplest techniques ofperformance appraisal. In this method, the appraiser ranks the employees fromthe best to the poorest on the basis of their overall performance. It is quite usefulfor a comparative evaluation.
  • 53. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 53| Paired Comparison: A better technique of comparison than the straightranking method, this method compares each employee with all others in thegroup, one at a time. After all the comparisons on the basis of the overallcomparisons, the employees are given the final rankings.| Critical Incidents Methods: In this method of Performance appraisal, theevaluator rates the employee on the basis of critical events and how the employeebehaved during those incidents. It includes both negative and positive points.The drawback of this method is that the supervisor has to note down the criticalincidents and the employee behaviour as and when they occur.| Field Review: In this method, a senior member of the HR department or atraining officer discusses and interviews the supervisors to evaluate and rate theirrespective subordinates. A major drawback of this method is that it is a very timeconsuming method. But this method helps to reduce the superiors’ personal bias.| Checklist Method: The rater is given a checklist of the descriptions of thebehaviour of the employees on job. The checklist contains a list of statements onthe basis of which the rater describes the on the job performance of theemployees.| Graphic Rating Scale: In this method, an employee’s quality and quantity ofwork is assessed in a graphic scale indicating different degrees of a particulartrait. The factors taken into consideration include both the personalcharacteristics and characteristics related to the on the job performance of theemployees. For example a trait like Job Knowledge may be judged on the range ofaverage, above average, outstanding or unsatisfactory.| Forced Distribution: To eliminate the element of bias from the rater’s ratings,the evaluator is asked to distribute the employees in some fixed categories ofratings like on a normal distribution curve. The rater chooses the appropriate fitfor the categories on his own discretion.Modern Methods of Performance AppraisalAssessment Centers: An assessment centre typically involves the use of methods likesocial/informal events, tests and exercises, assignments being given to a group ofemployees to assess their competencies to take higher responsibilities in the future.Generally, employees are given an assignment similar to the job they would be expectedto perform if promoted. The trained evaluators observe and evaluate employees as theyperform the assigned jobs and are evaluated on job related characteristics. The major
  • 54. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 54competencies that are judged in assessment centres are interpersonal skills, intellectualcapability, planning and organizing capabilities, motivation, career orientation etc.assessment centres are also an effective way to determine the training and developmentneeds of the targeted employees.Behaviorally Anchored Rating Scales: Behaviorally Anchored Rating Scales(BARS) is a relatively new technique which combines the graphic rating scale andcritical incidents method. It consists of predetermined critical areas of job performanceor sets of behavioral statements describing important job performance qualities as goodor bad (for eg. the qualities like inter personal relationships, adaptability and reliability,job knowledge etc). These statements are developed from critical incidents. In thismethod, an employee’s actual job behaviour is judged against the desired behaviour byrecording and comparing the behaviour with BARS. Developing and practicing BARSrequires expert knowledge.Human Resource Accounting Method: Human resources are valuable assets forevery organization. Human resource accounting method tries to find the relative worthof these assets in the terms of money. In this method the Performance appraisal of theemployees is judged in terms of cost and contribution of the employees. The cost ofemployees include all the expenses incurred on them like their compensation,recruitment and selection costs, induction and training costs etc whereas theircontribution includes the total value added (in monetary terms). The difference betweenthe cost and the contribution will be the performance of the employees. Ideally, thecontribution of the employees should be greater than the cost incurred on them.360-Degree-Performance-Appraisal Method: 360 degree feedback, also knownas ‘multi-rater feedback’, is the most comprehensive appraisal where the feedback aboutthe employees’ performance comes from all the sources that come in contact with theemployee on his job. 360 degree respondents for an employee can be his/her peers,managers (i.e. superior), subordinates, team members, customers, suppliers/ vendors –anyone who comes into contact with the employee and can provide valuable insights andinformation or feedback regarding the “on-the-job” performance of the employee.360 degree appraisal has four integral components:1. Self appraisal2. Superior’s appraisal3. Subordinate’s appraisal4. Peer appraisal.Self appraisal gives a chance to the employee to look at his/her strengths andweaknesses, his achievements, and judge his own performance. Superior’s appraisalforms the traditional part of the 360 degree performance appraisal where the
  • 55. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 55employees’ responsibilities and actual performance is rated by the superior.Subordinates appraisal gives a chance to judge the employee on the parameters likecommunication and motivating abilities, superior’s ability to delegate the work,leadership qualities etc. Also known as internal customers, the correct feedback given bypeers can help to find employees’ abilities to work in a team, co-operation andsensitivity towards others.360 degree performance appraisal is also a powerful developmental tool because whenconducted at regular intervals it helps to keep a track of the changes others’ perceptionsabout the employees. A 360 degree appraisal is generally found more suitable for themanagers as it helps to assess their leadership and managing styles. This technique isbeing effectively used across the globe for performance appraisals. Some of theorganizations following it are Wipro, Infosys, and Reliance Industries etc.PROCESS OF PERFORMANCE APPRAISALEstablishing Performance Standards: The first step in the process of performanceappraisal is the setting up of the standards which will be used to as the base to comparethe actual performance of the employees. This step requires setting the criteria to judgethe performance of the employees as successful or unsuccessful and the degrees of theircontribution to the organizational goals and objectives. The standards set should beclear, easily understandable and in measurable terms. In case the performance of theemployee cannot be measured, great care should be taken to describe the standards.Communicating the Standards: Once set, it is the responsibility of the managementto communicate the standards to all the employees of the organization. The employeesshould be informed and the standards should be clearly explained. This will help themto understand their roles and to know what exactly is expected from them. Thestandards should also be communicated to the appraisers or the evaluators and ifrequired, the standards can also be modified at this stage itself according to the relevantfeedback from the employees or the evaluators.Measuring the Actual Performance: The most difficult part of the Performanceappraisal process is measuring the actual performance of the employees that is the workdone by the employees during the specified period of time. It is a continuous processwhich involves monitoring the performance throughout the year. This stage requires thecareful selection of the appropriate techniques of measurement, taking care thatpersonal bias does not affect the outcome of the process and providing assistance ratherthan interfering in an employees work.
  • 56. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 56Comparing the Actual with the Desired Performance: The actual performanceis compared with the desired or the standard performance. The comparison tells thedeviations in the performance of the employees from the standards set. The result canshow the actual performance being more than the desired performance or, the actualperformance being less than the desired performance depicting a negative deviation inthe organizational performance. It includes recalling, evaluating and analysis of datarelated to the employees’ performance.Discussing Results: The result of the appraisal is communicated and discussed withthe employees on one-to-one basis. The focus of this discussion is on communicationand listening. The results, the problems and the possible solutions are discussed withthe aim of problem solving and reaching consensus. The feedback should be given with apositive attitude as this can have an effect on the employees’ future performance. Thepurpose of the meeting should be to solve the problems faced and motivate theemployees to perform better.Decision Making: The last step of the process is to take decisions which can be takeneither to improve the performance of the employees, take the required correctiveactions, or the related HR decisions like rewards, promotions, demotions, transfers etc.Purpose Of Performance Appraisal: Performance Appraisal is being practiced in90% of the organisations worldwide. Self-appraisal and potential appraisal also form apart of the performance appraisal processes. Performance Appraisal is aimed at:þ To review the performance of the employees over a given period of time.þ To judge the gap between the actual and the desired performance.þ To help the management in exercising organizational control.þ To diagnose the training and development needs of the future.þ Provide information to assist in the HR decisions like promotions, transfers etc.þ Provide clarity of the expectations and responsibilities of the functions to beperformed by the employees.þ To judge the effectiveness of the other human resource functions of theorganization such as recruitment, selection, training and development.þ To reduce the grievances of the employees.þ Helps to strengthen the relationship and communication between superior –subordinates and management – employees.The most significant reasons of using Performance appraisal are:þ Making payroll and compensation decisions – 80%þ Training and development needs – 71%
  • 57. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 57þ Identifying the gaps in desired and actual performance and its cause – 76%þ Deciding future goals and course of action – 42%þ Promotions, demotions and transfers – 49%þ Other purposes – 6% (including job analysis and providing superior support,assistance and counseling)Performance Appraisals as Career Development: Performance appraisal is apart of career development. The latest mantra being followed by organizations acrossthe world being – “get paid according to what you contribute” – the focus of theorganizations is turning to performance management and specifically to individualperformance. Performance appraisal helps to rate the performance of the employees andevaluate their contribution towards the organizational goals. Performance appraisal asCareer Development leads to the recognition of the work done by the employees, many atimes by the means of rewards and appreciation etc. It plays the role of the link betweenthe organization and the employees’ personal career goals.| Potential appraisal, a part of Performance appraisal, helps to identify the hiddentalents and potential of the individuals. Identifying these potential talents canhelp in preparing the individuals for higher responsibilities and positions in thefuture. The performance appraisal process in itself is developmental in nature.| Performance appraisal is also closely linked to other HR processes like helps toidentify the training and development needs, promotions, demotions, changes inthe compensation etc. A feedback communicated in a positive manner goes a longway to motivate the employees and helps to identify individual careerdevelopmental plans. Based on the evaluation, employees can develop theircareer goals, achieve new levels of competencies and chart their careerprogression. Performance appraisal encourages employees to reinforce theirstrengths and overcome their weaknesses.Performance Appraisal Feedback: Performance appraisal process is incompletewithout the feedback given to the employee about his appraisal and his performance.But the way of giving as well as receiving the feedback differs from person to person andtheir way of handling and their outlook towards the issue. Therefore, On the part of theperson receiving the feedback, the following points are important to be taken care of:r The employee should have a positive attitude towards the feedback processr He should listen to the suggestions of the appraiser calmly and try to incorporatethem in his plans.r He should not hesitate to ask for the help of his superiors.r Should have a co-operative attitude during the feedback meeting.
  • 58. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 58r Should take the feedback objectively.r Should not judge the appraiser as a person on the basis of the feedback.On the part of the appraiser or the manager / person giving the feedback, the followingpoints are to be taken care of:r The appraiser should make the receiver feel comfortable during the feedbackmeeting.r The appraiser should make it a two – way conversation i.e. let the employeespeak.r Listen to the employee and note his points, suggestions, problems etc.r The appraiser should not adopt a confrontational approach towards the meeting.The goal is not to criticize the employee.r Provide a constructive feedback to the employee i.e. in a way which will motivatehim to perform better.r Have a positive attitude towards the processr Be fair and objectiver Prepare yourself for what to say and how to say.r Make the appraisal feedback meeting useful and productive for the organizationand the employee.
  • 59. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 59IV - UNITCOMPENSATIONSALARY & WAGE ADMINISTRATIONCompensation administration is essentially the application of a systematic approach tothe problem of ensuring that employees are paid in a logical, equitable and fair manner.Wage: Wage and salary are often discussed in loose sense, as they are usedinterchangeably. But Indian Labour Organisation (ILO) defined the term wage as “theremuneration paid by the employer for the services of hourly, daily, weekly andfortnightly employees. “It also means that remuneration paid to production andmaintenance or blue collar employees.Salary: The term salary is defined as the remuneration paid to the clerical andmanagerial personnel employed on monthly or annual basis.This distinction betweenwage and salary does not seem to be valid in these days of human resources approachwhere all employees are treated as human resources and are viewed at par. Hence, thesetwo terms can be used interchangeably. As such, the term wage and/or salary can bedefined as the direct remuneration paid to an employee compensating his services to anorganization. Salary is also known as basic pay.Earnings: Earnings are the total amount of remuneration received by an employeeduring a given period. These include salary (pay), dearness allowance; house rentallowance, city compensatory allowance, other allowances, overtime payments etc.Nominal wage: It is the wage paid or received in monetary terms. It is also known asmoney wage.Real wage: Real wage is the amount of wage arrived after discounting nominal wage bythe living cost. It represents the purchasing power of money wage.Take Home Salary: It is the amount of salary left to the employee after makingauthorized deductions like contribution to the provident fund, life insurance premium,income tax and other charges.Minimum wage: It is the amount of remuneration which could meet the “normalneeds of the average employee regarded as a human being living in a civilized society.” Itis defined as the amount or remuneration “which may be sufficient to enable a worker tolive in reasonable comfort, having regard to all obligations to which an average workerwould ordinarily be subjected to”.
  • 60. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 60Statutoty Minimum Wage: It is the amount of remuneration fixed according to theprovisions of the minimum wages Act, 1948.Objective of Wage and Salary Administration: The objective of wage and salaryadministration is numerous and sometimes conflict with each other. The importantamong them are:Ï To acquire qualified competent personnel: Candidates decide upon theircareer in a particular organization mostly on the basis of the amount ofremuneration the organization offers. Qualified and competent people join thebest-paid organizations. As such, the organizations should aim at payment ofsalaries at that level, where they can attract competent and qualified people.Ï To retain the present employees: If the salary level does not comparefavorable with that of other similar organizations, employees quit the present oneand join other organizations. The organization must keep the wage levels at thecompetitive level, in order to prevent such quits.Ï To secure internal and external equity: Internal equity does meanpayment of similar wages for similar jobs within the organization. External equityimplies payment of similar wages to similar jobs in comparable organizations.Ï To ensure desired behaviour: Good rewards reinforce desired bahaviourlike performance, loyalty, accepting new responsibilities and changes etc.Ï To keep labour and administrative costs in line with the ability of theorganization to pay.Ï To protect in public as progressive employers and to comply with the wagelegislations.Ï To pay according to the content and difficulty of the job and in tune with theeffort and merit of the employees.Ï To facilitate pay roll administration of budgeting and wage and salary control.Ï To simplify collective bargaining procedures and negotiations.Ï To promote organization feasibility.
  • 61. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 61FACTORS AFFECTING WAGE/SALARY LEVELSGenerally, a large number of factors influence the salary levels in an organization.Significant among them are:þ (i) Remuneration in Comparable Industries;þ (ii) Firm’s Ability to Pay;þ (iii) Cost of Living;þ (iv) Productivity;þ (v) Union Pressure and Strategies; andþ (vi) Government Legislations.(i) Remuneration in Comparable Industries: Prevailing rates of remuneration incomparable industries constituted an important factor in determining salary levels. Theorganization, in the long-run, must pay at least equal to the going rate for similar jobs insimilar organization. Further, the salary rates for the similar jobs in the firms located inthe same geographical region also influence the wage rate in the organization. Theorganization has to pay the wages equal to that paid for similar jobs in comparableindustries in order to secure and retain the competent employees, to follow the directiveof Courts of Law, to meet the trade union’s demands, to satisfy the employee’s need forsame social status as that of same categories of employees in comparable organizations.Comparable industries constitute the organizations engaged in the same or similaractivities, of the same size in the similar type or management, i.e., public sector or underthe management of same owners, organizations located in the same geographical regionetc.,(ii) Firm’s Ability to Pay: One of the principal considerations that weigh with themanagement in fixing the salary levels is its ability to pay. But in the short-run, theinfluence of ability to pay may be practically nil. However, in the long-run, it is quite aninfluential factor. In addition, total cost of employees (salaries, allowances, cost of fringebenefits etc.) should be taken into consideration in determining the ability to pay. TradeUnions demand higher wages when the company’s financial position is sound. But theymay not accept wage reduction, when the company’s financial position is in doldrums.Hence, the management has to take decisions judiciously. Further, certain incentives arelinked to the profitability. Thus, whatever the influence of other factors may be, theorganization cannot pay more than its ability to pay in the long-run.(iii) Relating to Price-index: The cost of living is another important factor thatinfluences the quantum of salary. The employees expect that their purchasing power bemaintained at least at the same level, if not increased by adjusting wages to changes incost of living. In fact, in recent years, in advanced countries, “ a number f labouragreements have ‘escalator’ clauses, providing for automatic wage and salary increase as
  • 62. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 62cost of living index raises. “Dearness allowance is an allowance granted to the employeeswith a view to combating onslaughts of soaring prices.(iv) Productivity: An interesting development in wage determination has beenproductivity standard. This is based on the fact that productivity increase is also theresult of employee satisfaction and contribution to the organization. But wageproductivity linkage does not appear to be so easy since many problems crop up inrespect of the concept and measurement of productivity. But, although the wages arenot linked directly to the productivity in an organization, changes in productivity havetheir impact on remuneration. This criteria received consideration of wage boards. “notonly because it constituted a factor in the fixation of ‘fair wage’ but also because it wasdirectly related to such questions as desirability of extending the system of payment byresult”.(v) Union Pressure and Strategies: the wages are also often influenced by thestrength of Unions, their bargaining capacity and their strategies. Arthur M. Rossconcluded that “read hourly earnings have advanced more sharply in highly organizedindustries than in less unionized industries. “Unions pressurize management throughtheir collective bargaining strategies political tactics and by organizing strikes etc. tradeunions influence maybe on the grounds of wages in comparable industries, firm’sfinancial position, raised particularly in those industries where the wage level is belowthat of other comparable industries”.(vi) Government Legislations: Government legislations influence wagedetermination. The two important legislations which affect wage fixation are: thePayment of Wages Act, 1936 and the Minimum Wages Act, 1948. The importantprovisions of the Payment of Wages Act, 1936 are: ensuring proper payment of wages adavoiding all malpractices like non-payment, underpayment, delayed and irregularpayment, payment in king and under-measurement of work. The Act covers allemployees drawing the wage up to Rs. 1,000 per month. The Act stipulates that theorganizations with less than hundred workers should pay the wage by the seventh andthe organizations with more than 100 employees should pay by the tenth of nest month.Compensation: An Overviewv Compensation – Total of all rewards provided employees in return for servicesv Direct financial compensation – Pay received in the form of wages, salaries,bonuses, and commissionsv Indirect financial compensation – All financial rewards not included in directcompensationv Nonfinancial compensation – Satisfaction a person receives from job itself orfrom work environment
  • 63. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 63Equity in Financial Compensationv Equity – Fair pay treatment for employeesv External equity – Comparable salary for work performed by workers ofsimilar jobs in other firms.v Internal equity – pay according to relative value of other jobs within sameorganizationv Employee equity – Individuals performing similar jobs for same firm are paidaccording to factors unique to employee, such as performance level orseniorityv Team equity – More productive teams are rewarded more than lessproductive groupsCompensation PoliciesÏ Pay leaders – pay higher wages and salariesÏ Market rate, or going rate – pay what most employers pay for same jobÏ Pay followers – pay below market rate because poor financial condition orbelieve they do not require highly capable employeesJob Evaluation¯ Firm determines the relative value of one job in relation to another¯ Ranking¯ Classification¯ Factor comparison¯ PointRanking Methodÿ Simplest methodÿ Raters examine description of each jobÿ Jobs arranged in order according to valueFactor Comparison Method¶ Mental requirements¶ Skills¶ Physical requirements¶ Responsibilities¶ Working conditionsJob Pricing¯ Placing a dollar value on worth of a job¯ Pay grades – Grouping of similar jobs to simplify pricing jobs
  • 64. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 64¯ Wage curve – Fitting of plotted points to create a smooth progression betweenpay grades¯ Pay ranges – Minimum and maximum pay rate with enough variance betweenthe two to allow for a significant pay differenceEmployee –Determinant of Financial Compensation¥ Performance-based Pay¥ Skilled-based Pay¥ Competency-based Pay¥ Seniority¥ Experience¥ Membership in the organization¥ Potential¥ Political Influence¥ LuckPerformance-Based Pay¤ Merit pay – Pay increase given to employees based on their level ofperformance as indicated in the appraisal¤ Variable pay – Compensation based on performance (bonus)¤ Piecework – Employees paid for each unit they produceSkill-Based Pay± Compensates on basis of job-related skills and knowledge± Employees and departments benefit when employees obtain additionalskills± Appropriate where work tends to be routine and less varied± Must provide adequate training opportunities or system becomes ademotivator Seniority± Length of time an employee has been associated with the company,division, department, or job± Labor unions tend to favor seniorityOrganizational Memberships° Some components of individual financial compensation are given toemployees regardless of particular job they perform or their level ofproductivity° Intended to maintain a high degree of stability in the workforce and torecognize loyalty
  • 65. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 65Compensation for Special GroupsÉ Team-based PayÉ Company-wide PlansÉ Compensation for ProfessionalÉ Compensation for Sales EmployeesÉ Compensation for Contingency WorkersCompany-Wide PayÉ Profit sharing – distribution of predetermined percentage of firm’s profitsto employeesÉ Gain sharing – incentive payment based upon improved companyperformanceÉ Scanlon plan – reward to employees for savings in labor costs resultingfrom employees’ suggestionsTypes of Executive CompensationÉ Base salaryÉ Short-term (annual) incentives or bonusesÉ Long-term incentives and capital appreciation plansÉ Stock option plansÉ Indexed stock option plansÉ Executive benefits (Perks)É Golden parachutesCompensation Management PurposeCompensation is a key factor in attracting and keeping the best employees andensuring that your organization has the competitive edge in an increasinglycompetitive world. The Compensation Management component enables you todifferentiate between your remuneration strategies and those of your competitorswhile still allowing flexibility, control and cost effectiveness.It provides a toolset for strategic remuneration planning that reflects yourorganization culture and pay strategies, and it empowers line managers within aframework of flexible budget control. Compensation Management allows you tocontrol bottom-line expenditures and offer competitive and motivatingremuneration, be it fixed pay, variable pay, stock options, merit increases, orpromotion – in other words, total compensation. In brief, you can use thiscomponent to perform:
  • 66. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 66ü Create centralized and decentralized budgetsü Plan and administer compensation adjustments at the manager levelü Plan and administer compensation adjustments within budgetü Performing Job Pricingü Define pay grades and salary structures to identify the internal value ofjobs and positions in your organizationü Administer long-term incentivesBUILDING COMPENSATION PLANSDuring the process of establishing compensation plans, companies take intoconsideration different employee types, such as a software engineer or a salesrepresentative, and establish the primary salary ranges based on the different gradesavailable for each position (e.g., Software Engineer I, Software Engineer II). Eachposition can be assigned an associated salary or compensation range, which can befurther affected by other factors such as seniority, location, and market salary surveys.Which factors are included and how much weight each factor has are easily configuredduring the plan definition phase.Compensation Planning includes all aspects of employee compensation, includingbonuses and long-term incentives such as stock options. Compensation plan definitionis extremely flexible. For instance, a plan can be applied to all employees or groups ofemployees, different policies in a single plan may apply to all employees or a group ofemployees, or an organization may cover all of its employees within one plan or withinmultiple plans. Plans can be tested against the organization’s budget using simulationsto ensure that policies are practically applied.MANAGERIAL COMPENSATIONThere is a feeling among the trade union circles that executives get a very high salaryincluding perks. Hence, they view that the level of executive compensation should becontained in view of the objectives of the socialistic pattern of society. However, theexisting provisions of managerial compensation would provide a clear picture. Section198 of the Companies Act, 1956 says that the total managerial remuneration payable bya public limited company to its directors, secretaries and treasures and managers in afinancial year shall not exceed 11% of the net profits of the company. Section 198(4) ofthe Companies Act provides that in the absence or inadequacy profits, a maximum ofRs.50,000 may be paid to Managing Director and all directors. In exceptional cases, theGovernment may permit payment of higher salary. Section 309(4) of the Act stipulatesCertain ceilings on the remuneration payable.
  • 67. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 67The Government issued guidelines in November, 1978. According to these guidelines,the overall salary was restricted to Rs. 72,000 per annum and perks were restricted toRs.60,000 per annum. Managers and organizations were highly critical about theseguidelines. They felt that they discourage initiative and hamper the skill of managers.Peter F. Durucker . who was in India during November and December, 1978, thoughtthat such ceiling should cause migration of talent from India. He suggested that Indianmanagers should not accept lower salaries and they should demand tax-free as is thecustom in Sweden. Ratio between the lowest and highest salary of managers in Swedenis 1:5 But the tax free benefits are enormously granted to the executives.In view of the criticism, the Government announced some liberalization to theguidelines. Overall ceiling is as it was at Rs. 60,000 but it is increased to Rs. 62,700 incase of Mumbai. Rates of house rent allowance to salary are raised to 45% in case ofMumbai, 40% in case of Delhi, 35% in case of Kolkata and 30% in case of other places.An allowance of 10% is allowed for cooking gas, electricity, gas etc. Expenditure ofpensionary benefits is increased upto 25% of the salary. Medical expenses allowanceequal to three months salary is allowed. However, the Gujarat High Court in May, 1980and the Delhi High Court in August, 1980, struck down the guidelines of November 1978as violative of Section 637-A of the Companies Act, 1956.The Government in U.K. accepted fair remuneration for executives in the public sectorwith a view to attracting whereas the Government in India reduced the managerialcompensation in the private sector with a view to equalizing them with those of thepublic sector. Thus, the Government wishes to control its burden at the cost of talentand skill.Influences on Compensation: Factors Determining Pay Rates 1. Job needs 2. Abilityto pay 3. Cost of living 4. Prevailing rates 5. Unions 6. Productivity 7. State regulation8. Demand and surplus of workforceJob Evaluation: Job evaluation is a practical technique, designed to enable trainedand experienced staff to judge the size of one job relative to others. It does not directlydetermine pay levels, but will establish the basis for an internal ranking of jobs.The two most common methods of job evaluation that have been used are first, wholejob ranking, where jobs are taken as a whole and ranked against each other. The secondmethod is one of awarding points for various aspects of the job. In the points systemvarious aspects or parts of the job such as education and experience required to performthe job are assessed and a points value awarded – the higher the educationalrequirements of the job the higher the points scored. The most well known pointsscheme was introduced by Hay management consultants in 1951. This scheme evaluates
  • 68. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 68job responsibilities in the light of three major factors – know how, problem solving andaccountability.Job Evaluation Methods:There are three basic methods of job evaluation: (1) ranking, (2) classification, (3) factorcomparison. While many variations of these methods exist in practice, the three basicapproaches are described here.Ranking Method: Perhaps the simplest method of job evaluation is the rankingmethod. According to this method, jobs are arranged from highest to lowest, in order oftheir value or merit to the organization. Jobs also can be arranged according to therelative difficulty in performing them. The jobs are examined as a whole rather than onthe basis of important factors in the job; and the job at the top of the list has the highestvalue and obviously the job at the bottom of the list will have the lowest value. Jobs areusually ranked in each department and then the department rankings are combined todevelop an organizational ranking. The following table is a hypothetical illustration ofranking of jobs.Array of Jobs according to the Ranking MethodRank Monthly salaries1. Accountant Rs 3,0002. Accounts clerk Rs 1,8003. Purchase assistant Rs 1,7004. Machine-operator Rs 1,4005. Typist Rs 9006. Office boy Rs 600The variation in payment of salaries depends on the variation of the nature of the jobperformed by the employees. The ranking method is simple to understand and practiceand it is best suited for a small organization. Its simplicity, however, works to itsdisadvantage in big organizations because rankings are difficult to develop in a large,complex organization. Moreover, this kind of ranking is highly subjective in nature andmay offend many employees. Therefore, a more scientific and fruitful way of jobevaluation is called for.Job Classification MethodAccording to this method, a predetermined number of job groups or job classes areestablished and jobs are assigned to these classifications. This method places groups ofjobs into job classes or job grades. Separate classes may include office, clerical,
  • 69. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 69managerial, personnel, etc. Following is a brief description of such a classification in anoffice.ü Class I – Executives: Further classification under this category may be Officemanager, Deputy office manager, Office superintendent, Departmentalsupervisor, etc.ü (b) Class II – Skilled workers: Under this category may come the Purchasingassistant, Cashier, Receipts clerk, etc.ü (c) Class III – Semiskilled workers: Under this category may come Steno typists,Machine-operators, Switchboard operators, etc.ü (d) Class IV – Semiskilled workers: This category comprises Daftaris, File clerks,Office boys, etc.The job classification method is less subjective when compared to the earlier rankingmethod. The system is very easy to understand and acceptable to almost all employeeswithout hesitation. One strong point in favor of the method is that it takes into accountall the factors that a job comprises. This system can be effectively used for a variety ofjobs.The weaknesses of the job classification method are:° Even when the requirements of different jobs differ, they may be combined into asingle category, depending on the status a job carries.° It is difficult to write all-inclusive descriptions of a grade.The method oversimplifies sharp differences between different jobs and differentgrades.° When individual job descriptions and grade descriptions do not match well, theevaluators have the tendency to classify the job using their subjective judgments.Factor Comparison Method:A more systematic and scientific method of job evaluation is the factor comparisonmethod. Though it is the most complex method of all, it is consistent and appreciable.Under this method, instead of ranking complete jobs, each job is ranked according to aseries of factors. These factors include mental effort, physical effort, skill needed,supervisory responsibility, working conditions and other relevant factors (for instance,know-how, problem solving abilities, accountability, etc.). Pay will be assigned in thismethod by comparing the weights of the factors required for each job, i.e., the presentwages paid for key jobs may be divided among the factors weighed by importance (themost important factor, for instance, mental effort, receives the highest weight). In otherwords, wages are assigned to the job in comparison to its ranking on each job factor.The steps involved in factor comparison method may be briefly stated thus:Select key jobs, representing wage/salary levels across the organization. The selected
  • 70. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 70jobs must represent as many departments as possible.Find the factors in terms of which the jobs are evaluated (such as skill, mental effort,responsibility, physical effort, working conditions, etc.).Rank the selected jobs under each factor (by each and every member of the jobevaluation committee) independently. Assign money value to each factor and determinethe wage rates for each key job. The wage rate for a job is apportioned along theidentified factors. All other jobs are compared with the list of key jobs and wage ratesare determined.Merits of Factor Comparison Method:Ï Analytical and objective.Ï Reliable and valid as each job is compared with all other jobs in terms of keyfactors.Ï Money values are assigned in a fair way based on an agreed rank order fixed bythe job evaluation committee.Ï Flexible as there is no upper limitation on the rating of a factor.Demerits of Factor Comparison Method :¥ Difficult to understand, explain and operate.¥ Its use of the same criteria to assess all jobs is questionable as jobs differ acrossand within organizations.¥ Time consuming and costly.Point method: This method is widely used currently. Here, jobs are expressed interms of key factors. Points are assigned to each factor after prioritizing each factor inthe order of importance. The points are summed up to determine the wage rate for thejob. Jobs with similar point totals are placed in similar pay grades. The procedureinvolved may be explained thus:¥ Select key jobs. Identify the factors common to all the identified jobs such as skill,effort, responsibility, etc.¥ (b) Divide each major factor into a number of sub factors. Each sub factor isdefined and expressed clearly in the order of importance, preferably along a scale.The most frequent factors employed in point systems are:± Skill (key factor): Education and training required, Breadth/depth of experiencerequired, Social skills required, Problem-solving skills, Degree of discretion/useof judgment, Creative thinking;
  • 71. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 71± II. Responsibility/Accountability: Breadth of responsibility, Specializedresponsibility, Complexity of the work, Degree of freedom to act, Number andnature of subordinate staff, Extent of accountability for equipment/plant, Extentof accountability for product/materials;± III. Effort: Mental demands of a job, Physical demands of a job, Degree ofpotential stress.Merits of the Point Method: The point method is a superior and widely used methodof evaluating jobs. It forces raters to look into all keys factors and sub-factors of a job.Point values are assigned to all factors in a systematic way, eliminating bias at everystage. It is reliable because raters using similar criteria would get more or less similaranswers. “The methodology underlying the approach contributes to a minimum ofrating error” (Robbins, p.361). It accounts for differences in wage rates for various jobson the strength of job factors. Jobs may change over time, but the rating scalesestablished under the point method remain unaffected.Demerits of the Point Method: On the negative side, the point method is complex.Preparing a manual for various jobs, fixing values for key and sub-factors, establishingwage rates for different grades, etc., is a time consuming process. According to Decenzoand Robbins, “the key criteria must be carefully and clearly identified, degrees of factorshave to be agreed upon in terms that mean the same to all rates, the weight of eachcriterion has to be established and point values must be assigned to degrees”. This maybe too taxing, especially while evaluating managerial jobs where the nature of work(varied, complex, novel) is such that it cannot be expressed in quantifiable numbers.Compensation StrategyCompensation Strategy is one of the most important strategies in the HRM Function asit influences the costs of the organization and potential bad decision can lead to veryserious damages to the organization. The compensation and benefits strategy is derivedfrom the overall HRM Strategy and it has to be fully aligned. When the HRM Strategysets the main objectives for the HRM Function, the compensation and benefits strategyhas to follow. When the overall HRM Strategy states the low cost of services andemployees, the compensation and benefits strategy cannot target the highest salaries atall levels.The compensation and benefits strategy sets the general rules for the compensation andbenefits area in the organization and the owners and leaders of the area. In someorganizations, the compensation and benefits department is just a support departmentfor the line management. In other organizations the compensation and benefitsmanager is a very powerful employee in the organization with the right “veto”.
  • 72. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 72The compensation and benefits strategy sets the position of the organization on the jobmarket and defines the items in the total cash in the organization and their role. Therole of different components of the compensation is very important as the role of thecompensation components can differ. For example, the role of bonuses can be primarilyin performance reward or the retention of the employees and the organization has todecide.The compensation and benefits strategy has to reflect the reality in the industry and thesurrounding job market. The compensation strategy can set the wish to pay the lowestpossible salaries, but the HRM Function and the organization have to respect the realityon the job market.The compensation strategy needs a strong support from the top management as it setsstrong limits to the daily operation of the line management and they usually do not fullyagree with all the aspects included in the compensation and benefits strategy.International Compensation:Developing international compensation policies requires that it be consistent withoverall corporate strategy, structure of a global corporation. The policy must becompetitive and take into account incentives for Foreign Service, tax equalization andreimbursement of expenses. Other factors that determine whether or not thecompensation package will be acceptable to the potential expatriate are social security,health and medical benefits, and cost of living factors in the foreign location. The maincomponents of an international compensation plan are base salary, Foreign Serviceinducement, allowances and benefits. The base salary in domestic terms is the cashcompensation, bonus and benefits are in addition to this amount. For an expatriate thebase salary is a primary component of the compensation package, of which ForeignService inducement, cost of living allowance and other costs may be a percentage of thisamount.Foreign Service inducement can vary from country to country. U.S. Department of Statehas published hardship post differential guidelines to determine level of payment. Whilethe hardship guidelines may dictate a high differential cost the Cost of Living Allowance(COLA) may tend to pull this figure down. It is difficult to determine the actual cost ofliving in a particular country. One method to determine cost of living is according toPhilippe Lasserre, Purchasing Power Parity (PPP) which is for example, a cup of coffeethat cost $5.00 in New York City may cost €6.00 in France due to spot exchange ratesthese would be identical in cost however, the housing in Paris may be more than in NewYork City. To determination this can be quite extensive, housing costs must beconsidered, as must the cost of entertainment and food. Another cost that should beconsidered is education costs for children. The spouse may also decide to attend school
  • 73. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 73at the foreign location to fill in any gap in the employment record she may beencountering due to her husbands foreign posting. Care should be exercised in theselection of schools both for the children and the spouse as the accreditation of theforeign school may not be acceptable in the home country. Most international schools inEurope have an acceptable accreditation in the United States.It is also not possible to defer these payments because this creates an excesscontribution and becomes a taxable event, for more information on 401k accountsplease see the Internal Revenue Service web site listed in the bibliography. Anotherissue is the health and medical benefits and continuation of these benefits uponrepatriation into the expatriate’s home country. Socialized medicine in many of theWestern European countries has made this a non-issue while the expatriate is onassignment in these countries, or if an expatriate is returning to Europe after anassignment in another country. An assignment to the United States for example, theexpatriate and his family would require medical insurance. There are several methodsfor determining the international compensation plan. The first is the going rateapproach which in effect, excluding allowances and benefits discussed above, wouldmake compensation similar to the host country nationals. This method of compensationcould make things difficult for the expatriate when returning to is home country. If thegoing rate is considerably higher in the host country, the may be some adjustment uponhis return home in there will be a perceived pay cut. The preferred method ofcompensation is the balance sheet method as defined by C. Reynolds as, “foreignassignees should not suffer a material loss due to their transfer, and this is accomplishedvia the balance sheet method of international compensation.” Taxation is also a concernto expatriate personnel. Some form of tax equalization should be provided to theexpatriate employee. While on assignment for Ericsson the tax equalization wasprovided by withholding taxes for the parent country and paying the taxes in the hostcountry. Centillium provided no such relief however, due to an existent tax treatbetween the United Kingdom and the United States my tax burden was not doubled. Forfurther information on taxes and treaties it may benefit employers and employee todiscuss their individual situations with a global accounting firm such as Ernst & Young.
  • 74. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 74V - UNITINTEGRATION - QUALITY OF WORK LIFEIntroduction: There has been much concern today about decent wages, convenientworking hours, conducive working conditions etc. Their term “Quality of work life” hasappeared in research journals and the press in USA only in 1970s. There is no generallyacceptable definition about this term. However, some attempts were made to describethe term quality of work life (QWL). It refers to the favourableness or unfavourablenessof a job environment for people. QWL means different things to different people. J.Richard and J. Loy define QWL as “the degree to which members of a work organizationare able to satisfy important personnel needs through their experience in theorganization.”Quality of work life improvements are defined as any activity which takes place at everylevel of an organization, which seeks greater organizational effectiveness through theenhancement of human dignity and growth … a process through which the stockholdersin the organization management, unions and employees — learn how to work togetherbetter to determine for themselves what actions, changes and improvements aredesirable and workable in order to achieve the twin and simultaneous goals of animproved quality of life at work for all members of the organization and greatereffectiveness for both the company and the unions.Richard E. Walton explains quality of work life in terms of eight broad conditions ofemployment that constitute desirable quality of work life. He proposed the same criteriafor measuring QWL. Those criteria include:Ï Adequate and Fair Compensation: There are different opinions about adequatecompensation. The committee on Fair Wages defined fair wage as” . . . the wagewhich is above the minimum wage, but below the living wage.”Ï (ii) Safe and Healthy Working Conditions: Most of the organizations provide safeand healthy working conditions due to humanitarian requirements and/or legalrequirements. In fact , these conditions are a matter or enlightened self interest.Ï (iii) Opportunity to Use and Develop Human Capacities: Contrary to thetraditional assumptions, QWL is improved… “to the extent that the worker canexercise more control over his or her work, and the degree to which the jobembraces and entire meaningful task” … but not a part of it. Further, QWLprovides for opportunities like autonomy in work and participation in planning inorder to use human capabilities.
  • 75. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 75Ï (iv) Opportunity for Career Growth: Opportunities for promotions are limited incase of all categories of employees either due to educational barriers or due tolimited openings at the higher level. QWL provides future opportunity forcontinued growth and security by expanding one’s capabilities, knowledge andqualifications.Ï (v) Social Integration in the Work Force: Social integration in the work force canbe established by creating freedom from prejudice, supporting primary workgroups, a sense of community and inter-personnel openness, legalitarianism andupward mobility.Ï (vi) Constitutionalism in the Work Organization: QWL provides constitutionalprotection to the employees only to the level of desirability as it hampers workers.It happens because the management’s action is challenged in every action andbureaucratic procedures need to be followed lat that level. Constitutionalprotection is provided to employees on such matters as privacy, free speech,equity and due process.Ï (vii) Work and Quality of Life: QWL provides for the balanced relationshipamong work, non-work and family aspects of life. In other words family life andsocial life should not be strained by working hours including overtime work, workduring inconvenient hours, business travel, transfers, vacations etc.Ï (viii) Social Relevance of Work: QWL is concerned about the establishment ofsocial relevance to work in a socially beneficial manner. The workers’ self esteemwould be high if his work is useful to the society and the vice versa is also true.Quality Circles:Quality circles which have been popularized by Japanese firms are being used all overthe world because of the benefits that accrue to the firm. A quality circle involvesparticipation from a small group of employees doing the same type of work. They meetregularly to identify, analyze and solve the problems that arise during the course of theirwork and their association with the organization.The basic objectives of quality circles are to develop and utilize human resourceseffectively, to develop quality products, improve the quality of work life and sharpen andutilize an individual’s creative abilities. There are different steps involved in thedevelopment of quality circles from getting started to problem-solving. Communicatingthe importance of quality circles to the employees is of prime importance.The next step is the composition of a quality circle. Then the stage of initial problemsolving through which employee suggestions are presented, follows. The suggestions arethen evaluated and the best one, chosen by consensus, is implemented. Varioustechniques like brainstorming sessions, fish bone diagram and sampling and charting
  • 76. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 76methods, are used in quality circles. Problems arise in the implementation of qualitycircles because of lack of understanding regarding the concepts, low education levelsand training, delays in execution and operational problems. Most of these problems canbe resolved through effective training of employees and management support.Industrial Relations: The concept of industrial relations means the relationshipbetween employees and the management in the day-to-day working of the industry. Butthe concept has a wide meaning. When taken in the wider sense, industrial relations is a“set of functional interdependence involving historical, economic, social, psychological,demographic, technological, occupational, political and legal variables.” According toDale Yoder, industrial relations is a “whole field of relationship that exists because of thenecessary collaboration of men and women in the employment process of an industry.”According to the international Labour Organisaton (ILO), “Industrial Relations dealwith either the relationship between the state and employers’ and workers’organizations or the relation between the occupational organizations themselves.”The concept of industrial relations has been extended to denote the relations of the jointconsultations between employers and people at their organizations. The subject therefore includes individual relations of the joint consultations between employers andpeople at their work place, collective relations between em0ployers and theirorganizations and trade unions and the part played by the State in regulating theserelations.Characteristics of Industrial Relations: Characteristics of industrial rationsinclude:¤ i. Industrial relations are the outcome of employment relationship in anindustrial enterprise.¤ ii. Industrial relations develop the skills and methods of adjusting to and co-operating with each other.¤ iii. Industrial relations system creates complex rules and regulations to maintainharmonious relations.¤ iv. The Government involves to shape the industrial relations through laws, rules,agreements, awards etc.¤ v. The important factors of industrial relations are: employees and theirorganizations, employer and their associations and the Government.Factors of Industrial Relations: Industrial relations are influenced by variousfactors, viz., institutional factors, economic factors and technological factors.1. Institutional factors: These factors include government policy, labour legislations,voluntary courts, collective agreement, employee courts, employers’ federations, social
  • 77. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 77institutions like community, caste, joint family, creed, system of beliefs, attitudes ofworks, system of power status etc.2. Economic factors: These factors include economic organization, like capitalist,communist mixed etc,. The structure of labour force, demand for and supply of labourforce etc.3. Technological factors: These factors include mechanization, automation,rationalization, computation etc.,4. Social and cultural factors: These factors include population, customs andtraditions of people, ethnic groups, cultures of various groups of people etc.5. Political factors: These factors include political system in the country, politicalparties and their ideologies, their growth, mode of achievement of their policies,involvement in trade unions etc.6. Government factors: These factors include governmental policies like industrialpolicy, economic policy, labour policy, export policy etc.Objectives of Industrial Relations:The primary objective of industrial relations is to maintain congenial relations betweenemployees and the employer. And the other objectives are:þ i. To promote and develop congenial labour management relations;þ ii. To enhance the economic status of the worker by improving wages, benefitsand by helping the worker in evolving sound budget;þ iii. To regulate the production by minimizing industrial conflicts through statecontrol;þ iv. To socialize industries by making the government as an employer;þ v. To provide and opportunity to the workers to have a say in the managementand decision-making;þ vi. To improve worker’s strength with a view to solve their problems throughmutual negotiations and consultation with the management;þ vii. To encourage and develop trade unions in order to improve the workers’strength;þ viii. To avoid industrial conflict and their consequences andþ ix. To extend and maintain industrial democracy.DEFINITION OF A DISPUTE/CONFLICTAccording to the Industrial Disputes Act, 1947, Section 2 (k), “Industrial dispute meansany dispute of difference between employers and employers, or between employers and
  • 78. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 78workmen or between workmen and workmen, which is connected with the employmentor non-employment or terms of employment or non-employment or with the conditionsof labour of any person.”CAUSES OF INDUSTRIAL DISPUTES/CONFLICTSIt not easy to identify a single factor as a cause of industrial conflicts as multifariouscauses blended together result in industrial disputes. Deep seated and more basic causesof disputes can be identified through in-depth probe, though surface manifestationsappear to be responsible for conflicts. The relative importance of these causes, whenmore than one present, is often very difficult to gauge.According to Mukherjee, “the development of capitalistic enterprise, which means thecontrol of the tools of production by the small entrepreneur class has brought to the forethe acute problem of friction between management and labour throughout the world.”Causes of industrial conflicts may be grouped into four categories, viz.:1) Industrial factors;2) Management’s attitude towards workers;3) Government machinery and4) Other causes.TYPES OF INDUSTRIAL CONFLICTS: Industrial conflicts are basically two types,viz. Strikes and Lock-outs.Strikes: Strikes are the result of more fundamental maladjustments, injustices andeconomic disturbances. According to Peterson, “strike is a temporary cessation of workby a group of employees in order to express grievances or to enforce a demandconcerning changes in work conditions.Under Section 2(q) of the Industrial DisputesAct, 1947, strike is “a cessation of work by a body of persons employed in any industry,acting in combination or a concerted refusal under a common understanding, of anumber of persons who are or have bee so employed to continue to work or to acceptemployment.”However, prohibiting an individual employee, termination of employment ofretrenchment, termination of service of more than one person are not lock-outs.Strikes are divided into primary strikes and secondary strikes. Primary strikes aregenerally against the employer with whom the dispute exist. They take the form of stayaway strike, sit-in, sit-down, pen-down, tools-down, or mouth-shut strikes, go slow,work-to-rule, token or protest strike, lightening or wildcat strike, picketing or boycott.þ Primary Strikes:
  • 79. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 79Stay away strike: In this strike, workmen stay away from the work place. Theyorganize rallies, demonstrations etc.Stay-in strike or sit-down shut strike: In this strike, workmen come to the place,they stay at the work place but they don’t work.Tools-down, pen-down or mouth-shut strike: In this strike, the strikers lay downtheir tools in case of factory workers, lay down their pens in case of office workers andshut their mouth in case of teachers.Token or protest strike: It is a very short duration and in the nature of signal for thedanger ahead. In this strike, the workers do not work for an hour or a day.Lightening or wildcat strike: In this strike, the strikers strike the work without anyprior notice or with a shortest notice.Go slow: In this strike, the workers intentionally reduce the speed of work.Work to rule/work to designation: In this strike, the strikers undertake the workaccording to rules of job description.Picketing: It is an act of posting pickets and implies machinery or patrolling of theworkmen in front of the premises of the employer.Boycott: It alms at disrupting the normal functioning of the enterprise.Gherao: It is a physical blockade of a target either by encirclement, intended to blockthe regress and ingress for a limited period or up to the period of settlement of disputes.Hunger strike: This type of strike is resorted to either by the leaders of the union or bysome workers all at a time or in small batches for a limited period or up to the period ofsettlement of disputes.Secondary strike: Secondary strikes are against a third party. These strikes aresympathetic strikes.Other strikes: These strikes are in the form of general, political strikes and bandhs.SETTLEMENT OF CONFLICTS: The methods of the settlement of conflicts generallyinclude those mentioned in the figure below: They are dealt in detail in the followingparagraphs:
  • 80. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 80Investigation: This is conducted by a board or court appointed by the government. Itmay be voluntary or compulsory. If the investigation is conducted on an application byeither or both the parties to the dispute, it is voluntary. If the Government appoints aCourt of inquiry to investigate into a dispute without the consent of the parties, it iscompulsory. Investigations do not aim at bringing about the settlement of disputesdirectly, but by analyzing the facts, they aim at bringing about an amicable solution.When the investigation is comp0ulsory, the strikes and lock-outs are required to bestopped and employment. The result of investigation has no serious effect on thedisputes because the general public is least bothered to make note of the disputes.Mediation: another attempt to settle disputes is mediation. In this method, an outsiderassists the parties in their negotiations. It takes place with the consent of both theparties. The mediator performs the messenger’s job for both the parties and he neitherimposes his will nor his judgement upon them. The main aim of mediation is thesettlement of disputes by bringing about a voluntary agreement. There may be threekinds of mediation:Ï (i)The Eminent Outside;Ï (ii) Non-Government Board; andÏ (iii) Semi-Governmental Board.If mediation is conducted skillfully and sympathetically along proper lines, it can bringabout the adjustment of differences tat might otherwise contribute to stoppage of work.Conciliation: the main objective of a conciliation and arbitration is to reunite andarbitration is to reunite the two conflicting groups in the industry in order to avoidinterruption of production, distrust etc. Conciliation is a process by whichrepresentatives of both workers and employers are brought together before third partywith a view to persuading them to arrive at some sort of settlement. It is an extension ofcollective bargaining with third party assistance. It is the practice by which the servicesof a neutral third party are used in a dispute as a means of helping the disputing partiesto reduce the extent of their differences and to arrive at an amicable settlement oragreed solution. It is a process of rational and orderly discussions of differences betweenthe parties to a dispute under the guidance of a conciliator. Conciliation machineryconsists of a conciliation officer and board of conciliations. The conciliator induces theparties to a course of action. He plays the role of an innovator, protector, discussionleader, stimulator, advisor, face saver. He acts as a safety valve and a communicationlink. The task of conciliation is to offer advice and make suggestions to the parties to thedispute on controversial issues.
  • 81. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 81Voluntary Arbitration: If the two parties to the dispute fail to come to an agreement,either by themselves or with the help of a mediator or conciliator, who agrees to submitthe dispute to an impartial authority, whose decision, they are ready to accept. Theessential elements in voluntary arbitration are:þ the voluntary submission of dispute to an arbitrator;þ the subsequent attendance of witness and investigations andþ the enforcement of an award may not be necessary.Compulsory Arbitration/Adjudication: Where trade unions are weak, the methodof Compulsory Arbitration is used. Compulsory Arbitration is utilized generally whenthe parties fail to arrive at a settlement through the voluntary methods.In India, Compulsory Arbitration is enforced because collective bargaining was not usedfor regulating wages and other conditions of employment.GRIEVANCE PROCEDURE – Meaning/Definitions:The concept ‘grievance’ has been defined in several ways by different authorities. Someof the definitions are as follows: Beach defines grievance as “any dissatisfaction forfeeling of injustice in connection with one’s employment situation that is brought to thenotice of the management”, whereas Flippo indicates the grievance as “a type ofdiscontent which must always be expressed. A grievance is usually more formal incharacter than a complaint. It can be valid or ridiculous, and must grow out ofsomething connected with company operations or policy. It must involve aninterpretation or application of the provisions of the labour contract.” Jucius definesgrievance as” …any discontent or dissatisfaction, whether exposed or not, whether validor not, arising out of anything connected with the company which an employee thinks,believes or even feels to be unfair, unjust or inequitable.Causes of Grievances: The causes of employee grievances include:• Demands for individual wage adjustments;• Complaints about the incentive system;• Complaints about the job classifications;• Complaints against a particular foreman;• Complaints concerning disciplinary measures and procedures;• Objections to the general methods of supervision;• Loose calculation and interpretation of seniority rules and unsatisfactoryinterpretation of agreements;• Promotions;• Disciplinary discharge or lay-off;
  • 82. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 82• Transfer for another department or another shift;• Inadequacy of safety and health services/devices;• Non-availability of materials in time;• Violation of contracts relating to collective bargaining;• Improper job assignment;• Undesirable or unsatisfactory conditions of work;• Victimization and• Fines.Grievance Procedure: The model Grievance Procedure suggested by the NationalCommission on Labour has provided for the successive time bound steps each leading tothe next in case of lack of satisfaction. At the outset, an aggrieved worker shall approachthe foreman, inform his grievance orally and seek the redressal of his grievance. If it isnot redressed to his satisfaction, he approaches the supervisor who has to give adecision to the complaint of the worker within 48 hours. If the decision (answer) is notacceptable to the worker or if the superior does not give an answer, the worker can go tothe next step. At the third stage, the worker can, either in person or accompanied by hisdepartmental representative, approach the head of the department who has to give ananswer before the expiry of three days. If the department head fails to do so or if thedecision given by him is not acceptable to the worker, then the worker can resort to theGrievance Committee which comprises of the representatives of employers andemployees. This Committee shall communicate its recommendations to the managerwithin seven days of the grievance reaching it. If there are unanimous decisions, theseshall be implemented by the management. In case unanimous decisions have not beenarrived at, the views of the members of the Committee shall be recorded and all therelevant records shall be placed before the manager for decision. The manager shallcommunicate his decision within three days. The worker has got a right to appealagainst the manager’s decision. These appeals shall be decided within a week. If theaggrieved desires, he can take along with him a union official for discussion with theauthority. In case a decision has not been arrived at, at this stage, the union andmanagement may refer the grievance to voluntary arbitration within a week of receipt ofthe management’s decision by the worker.GUIDELINES FOR GRIEVANCE HANDLING:The primary purposes of a grievance procedure are to:(1) channel conflict into an institutionalized mechanism for peaceful resolution;(2) facilitate communication between labor and management regarding problems thatarise in a collective bargaining relationship;(3) enable employees to complain with dignity knowing that there is a system of appealsleading to an impartial decision-maker; and(4) enforce compliance with the terms and conditions negotiated by the parties.
  • 83. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 83Handling Employee Grievance:The following checklist is provided as guidance when an employee comes to you with acomplaint:●Make sure that meetings with employees to handle complaints are held in accordancewith any contract provisions that regulate the time and/or location for such meetings.Develop good listening and note taking skills.●Be prepared to spend the time to get the evidence and testimony to support your caseand to refute management’s case. Treat all employees fairly and consistently.●Do not make judgments about the case to the employee or anyone else until you get thefacts. Keep good records of all transactions, oral and written, that occur from the time acomplaint is brought to you until the case is resolved in the grievance procedure or inarbitration.INTERVIEW:●Let the employee tell his/her story without interruption. Take notes. Review theemployee’s description of the case with him/her to make sure you have all the facts.Make sure you get the answers to the questions who, what, when, where, why and how.●Ask the employee for the names, addresses and telephone numbers of any witnesses.Then ask the employee to tell you what he/she thinks each witness knows about thecase. Record this information. Try to clarify any uncertainties about what a witness issupposed to know.●Ask the employee to give you all of the evidence he/she has concerning the case. Makecopies so that no information is lost. Before the employee leaves, check one more time tomake sure you have all the facts, names of witnesses and evidence.REVIEW:●Refer to the grievance procedure in the contract to make sure the issue the employeehas raised is defined as a proper subject of a grievance. If you are uncertain, ask for help.If the issue is not a proper subject of a grievance, the best thing to do is to tell theemployee and explain how this affects his/her case.●Check to make sure that the procedural requirements set forth in the grievanceprocedure have been complied with. If there is more than one witness who knows abouta given event, note which ones would be best able to present clear testimony under thepressure of examination and cross-examination at an arbitration hearing.●Verify name, address, telephone, work shift and location.
  • 84. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 84ANALYSIS:After you have thoroughly reviewed all of these matters, you may find that a complaintis not grievable/arbitrable or that the case lacks merit. One way to proceed is to explainyour findings to the employee and ask if there is any additional information he/she hasthat might have a bearing on the case. If not, you should be guided by local orinternational union policy and perhaps by counsel, in determining how to handle thissituation.FILING:Be sure to properly and timely complete the grievance form. This includes such items as:names; dates; signatures; clear and accurate statement of the complaint; contractclauses alleged to have been violated; and remedy requested. This is a checklist, not amagic wand. It highlights key points to consider in handling employee complaints. Thistask is time consuming and requires the application of a number of skills. There are noreal short cuts. If you take them, an employer will usually find them at some stage in thegrievance procedure or in arbitration. The result may be very damaging involving notonly loss of a case that might have been won, but also expenditures of time, otherresources and credibility that a union can ill afford.EMPLOYEE COUNSELINGEmployees face a variety of uncertainties, issues and problems both at the work and thefamily. In fact, the problems are multi-faceted involving economic, social, physical,psychological and religious considerations. Counseling is one of the efficientinterventions to find out work and family related employee problems that affect thework negatively. Counseling is the process of helping other persons to find and act upona solution to their problems, anxieties, uncertainties and issues, the person conductingcounseling is called counselor and the person being counseled is called counselee orclient.Concept of counseling: A counselor is mostly concerned with client rather than theproblem. The counselor helps the counselee to identify his/her own problem anddevelop is/her own solution rather than imposing his/her solution. Counselor helpscounselee in reaching a solution. This style involves more listening than talking.Counselor uses questions and exploring techniques and enable the client to find outhis/her own problem. The counselor further helps the client to learn the problemsolving techniques, processes and methods that helps them to solve their problems ontheir own in the future. The counselor recognizes the emotions, feelings, psychologicalissues involved in the process.Counseling can assist the employee to resolve difficulties in a supportive andprofessional setting. Whether a crisis or something that has been worrying the employee
  • 85. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 85for sometime, counseling can assist the employee to understand the problem, its impactand to develop strategies to cope with it. As employees from time to time, we canexperience difficulties either in our work or personal life. At these times, workperformance and productivity can be affected. Counseling can result in quicker and lessstressful resolution of the problems with less disruption to the workplace.Counseling isconfidential and private. Generally, no information can be released without employee’swritten authority.Counseling is provided for work and personal issues such as: Stress , Change,Conflict, Career planning, Communication, Trauma, Depression, Relationship issues,Family problems, Gambling, Grief and bereavement, Anxiety, Drug and alcohol problem& Work satisfactionProcess of Counselling: Counseling is the process of helping other persons to solvetheir problems. The person conducting the counseling is known as the counselor and theone being counseled is referred to as the counselee or client.There are four basic styles of counseling, viz., telling, manipulating, counseling andadvising. The counseling process includes various steps viz., identifying the needs forcounseling, communicating effectively, managing the counseling interview, controllingemotions, and follow-up.Identifying the needs for counseling: The manager of the department concernedidentifies the counseling needs of the employees. The couselling needs may be obvious,based on permanent lateness, irregular attendance, absenteeism, poor quality of work,breakages at the work etc. In addition, the manager can identify the possible andprospective problems. Counseling needs or employee problems may be classified aspersonality problems, work and organizational related problems and external problemsand external problems. Personality problems are related to the image people have ofthemselves and others.Communicating effectively: Counselling is mostly done through communication. Inother words, communication plays vital role in counselling. Counselor communicateswith the counselee by practicing a three step-process, which can be repeated in thecounseling interview process. These steps are questioning, listening and responding.The counselor should use oral, written, verbal and non-verbal communication. Thecounsellor’s posture and the counsellee’s posture matter much in the counselingprocess.Managing the counselling interview: The cousnellor and the counselee should beprepared physically, socially and psychologically before counselling interview. Themanager of the employee might have developed good and comfortable relationship with
  • 86. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 86the staff. Therefore, the suggestions of the manager should be considered by thecounselor, if the manager is not acting as a counselor. The steps in the interview processinclude:1. setting up the interview2. creating the right interview opportunity3. starting the interview4. encouraging the people to talk5. reaching the core problem6. discovering when to ask and what to ask7. exploring the feeling problem8. develop and provide the solution.Controlling emotions: counselling mostly involves understanding the feelings of thecounselee. The counselor has to gain the confidence and trust of the counselee.Counselling will result in change in the behaviour of the counselee, which causes pain.The counselee can express his feelings freely when the interview environment is free andharmonious. In addition, the counselor should also control his/her emotions andfeelings so that the counselee can express his/her feelings and emotions.Follow-up: The counselor after offering his/her advice provides the methods and step-by-step procedure to the counselee to practise the advice. The counselor has to getfeedback from the counselee and ascertain whether the counselee is improving or not. Ifnot, he /she has to modify the advice and follow-up further. Thus, the counselee shouldensure the permanent solution to the problem and improvement in the counselee.DEFINITION OF COLLECTIVE BARGAININGThe phrase ‘Collective Bargaining’ is coined by Sydney and Beatrice Webb. According tothem, collective bargaining is a method by which trade unions protect and improve theconditions of their members’ working lives. According to the Encyclopedia of SocialSciences, “collective bargaining is a process of discussion and negotiation between twoparties, one or both of whom is a group of persons acting in consent. The resultingbargain is an understanding as to the terms and conditions under which a continuingservice is to be performed. More specifically, collective bargaining is a procedure bywhich employers and a group of employees agree upon the conditions of work.”Functions of Collective Bargaining: Collective bargaining plays an important rolein preventing industrial disputes, setting disputes and maintaining industrial peace byperforming the following functions:
  • 87. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 87●Increase the economic strength of employees and management.●Establish uniform conditions of employment.●Secure a prompt and fair redressal of grievances.●Lay down fair rates of wages and other norms of working conditions.●Achieve an efficient functioning of the organization.●Promote the stability and prosperity of the company.●It provides a method of the regulation of the conditions of employment of those whoare directly concerned about them.● It provides a solution to the problem of sickness in the industry and ensures ole- agepension benefits and other fringe benefits.●It creates new and varied procedures for the solution of the problems as and when theyarise-problems which vex industrial relations; and its form can be adjusted to meet newsituations. Since basic standards are laid down, the employee is assured that he will berequired to work under the stipulated conditions incorporated in the agreement and theemployer is protected from unfair competition by those who are engaged in a similarindustry.●It provides a flexible means for the adjustment of wages and employment conditions toeconomic and technological changes in the industry, as a result of which the changes forconflicts are reduced.●As a vehicle of industrial peace, collective bargaining is the most important andsignificant aspect of labour management relations, and extends the democratic principlefrom the political to the industrial field.●It builds up a system of industrial jurisprudence by introducing civil rights in theindustry. In other words, it ensures that the management is conducted by rules ratherthan by arbitrary decisions.Collective Bargaining Process: There are two stages in collective bargaining, viz., (i)the negotiation stage and (ii) the stage of contract1. Negotiationa) identification of problem: The nature of the problem influences the whole process-whether the problem is very important that is to be discussed immediately or it can bepostponed for some other convenient time, whether the problem is problem is minorthat it can be solved with the other party’s acceptance on its presentation and does notneed to involve the long process of collective bargaining process etc.b) preparing for negotiations: When it becomes necessary to solve the problemthrough collective bargaining process, both the parties prepare themselves fornegotiations.
  • 88. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 88c) Negotiations of agreement; Usually, there will be a chief negotiator who is fromthe management side. He directs and presides over the process. The chief negotiatorpresents the problem, its intensity and nature and the views of both the parties. When asolution is reached at, it is pt on the paper, taking concerned legislations intoconsideration. Both the parties concerned, sign the agreement which, in turn, becomes abinding contract for both the parties.2. Contract Administration: Implementation of the contract is as important asmaking a contract. Management usually distributes the printed contract, its terms andconditions throughout the organization. The union takes steps to see that all the workersunderstand the contract and implement it. From time-to-time depending on changingcircumstances, both the parties can make mutually acceptable amendments.Causes for the Limited Success of Collective Bargaining in India: Though it is arguedthat collective bargaining has grown in India due to statutory provisions, voluntarymeasures, Industrial Truce Resolution of 1962 and the amendments to the IndustrialDisputes Act, 1947, its success is limited. The causes for its limited success are:1. Problems with unions: Collective bargaining process mainly depends on thestrength of unions. But still there are not many strong unions in India. Unions aremarked with multiplicity, inter and intra-union rivalry, weak financial position and non-recognition. Weak trade unions cannot initiate strong arguments during negotiations.There is usually no unanimous decision among workers to be presented at thenegotiating table.2. Problems from Government: The Government has not been making any strongeffects for the development of Collective Bargaining. The Government has imposedmany restrictions regarding strikes and lock-ours, which is an obstacle for thedevelopment of collective bargaining process.3. Legal Problems: Now adjudication is easily accessible. As such now collectivebargaining process is losing its importance.Maintenance of HR: Organisation provide a variety of fringe benefits. Dale Yoder andPaul D. Standohar classified the fringe benefits under four heads as given hereunder:For employment security: Benefits under this head include unemployment insurance,technological adjustment pay, leave travel pay, over for maternity, leave for grievances,holidays, cost of living bonus, call-back pay, lay-off pay, retiring rooms, jobs to thesons/daughters of the employees and the like.
  • 89. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 89For health protection: Benefits under this head include accident insurance, disabilityinsurance, health insurance, hospitalization, life insurance, medical care, sick benefits,sick leave, etc.For old age and retirement: Benefits under this category include: deferred incomeplans, pension, gratuity, provident fund, old age assistance, old age counseling, medicalbenefits for retired employee traveling concession to retired employees, jobs to sons/daughters of the deceased employee and the like.For personnel identification, participation and stimulation: This categorycovers the following benefits: anniversary awards, attendance bonus, canteen, co-operative credit societies, educational facilities, beauty parlour services,housing, incometax aid, counseling, quality bonus, recreational programmes, stress counseling, safetymeasures etc.Employee Security: Physical and job security to the employee should also beprovided with a view to promoting security to the employee and his family members.The benefits of confirmation of the employee on the job create a sense of job security .further, a minimum and continuous wage or salary gives a sense of security to the life.The Payment of Wages Act, 1936, The Minimum Wages Act, 1948, and the Payment ofBouns Act, 1965, provide income security to the employees.Safety and Health: Employee’s safety and health should be taken care of in order toprotect the employee against accidents, unhealthy working conditions and to protectworker’s capacity. In India, the Factories Act, 1948, stipulated certain requirementsregarding working conditions with a view to provide a safe working environment. Theseprovisions relate to cleanliness, disposal of waste and effluents, ventilation andtemperature, dust and fume, artificial humidification, over-crowding, lighting drinkingwater, public utility and spittoons. Provisions relating to safety measures includefencing of machinery, work on or near machinery in motion, employment of youngpersons on dangerous machines, striking gear and devices for cutting off power, self-acting machines, easing of new machinery, probation of employment of women andchildren near cotton openers, hoists and lifts, lifting machines, chains, ropes and liftingtackles, revolving machinery, pressure plant, floors, excessive weights, protection ofeyes, precautions against dangerous fumes, explosive or inflammable dust, gas etc.Precautions in case of fire, power to require specifications of defective parts of test oftest of stability, safety of buildings and machinery etc.Welfare and Recreational Facilities: Welfare and recreational recreation include:(a) Canteens: (b) Consumer societies: (c) Credit societies: (d) Housing; (e) Legal aid: (f)
  • 90. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 90Employee counseling: (g) Welfare organizations; (h) Holiday homes; (i) Educationalfacilities; (j) Transportation: (k) Miscellaneous.Old Age and Retirement Benefits: Industrial life generally breaks the familysystem. The saving capacity of the employee is very low due to lower wages, high livingcost and increasing aspirations of the employees and his family members. As such,employers provide some benefits to the employees after retirement and during old age,with a view to create a feeling of security about the old age. These benefits are called oldage and retirement benefits, these benefits include: (a) Provident Fund; (b) Pension; (c)Deposit linked insurance; (d) Gratuity and (e) Medical benefit.Corporate social responsibility:Corporate social responsibility is becoming an increasingly important priority for manyCEOs across the world, and HR has a vital part to play, writes Robin Kramar Corporatesocial responsibility (CSR) and sustainable development is gaining increasingprominence in the global business culture, as many businesses attempt to accommodatethe CSR agenda. The concept of corporate sustainable development is still the subject ofcontroversy and therefore the indicators used to measure CSR continue to be the topicof debate. However, no matter what indicators are used, the notion of responsibilityincludes responsibility for people in the collective sense (such as communities) and alsofor individuals.The criteria used to measure workplace practices relate specifically to HR practices. Thecriteria include: employee involvement; fair and reasonable rewards and conditions; apositive commitment to diversity and work-life balance; industrial relationsarrangements based on mutual respect; occupational health and safety arrangements;executive remuneration that is fair and reflect the concerns of internal stakeholders;independently verifiable performance measurement and evaluation systems andtraining and development policies. These criteria indicate that an organisation that isseen as socially responsible creates a culture that is perceived as open, fair and attractiveto potential and existing employees.Research demonstrates CSR initiatives have a positive impact on employee morale,motivation, commitment, loyalty, training, recruitment and turnover. Benefits in theseareas have been found to improve the bottom line of companies. Three surveys acrossEurope, the USA and a survey involving 25 countries found employees felt greaterloyalty, satisfaction and motivation when their companies were socially responsible.A recent survey of 257 CEOs by Korn/Ferry shows that 65 per cent of CEOs are takingresponsibility for managing company reputation. Almost three-quarters of the CEOsregarded recruitment and retention as the main business objective of corporate
  • 91. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 91reputation and almost the same percentage identified the hiring and retaining of keyand talented people as one of the three top objectives of corporate and socialresponsibility initiatives. These HR concerns were regarded as more important thanmore commercial and business outcomes.Therefore, corporate initiatives can contribute to the branding of organisations in thelabour market. These initiatives can make the organisation attractive to employees withsimilar values and so assist the organisation to become an employer of choice for thesepotential employees. And, if it lives out the values and initiatives on a daily basis it willassist the retention of desirable employees.Global HRM :Global HRM refers to Human Resource Management practices that deal with managinga diversity of workforce from all around the world.The following challenges are being faced by HR managers in terms of globalization:- Managing diversity of workforce.- Managing pressures for more labor rights in third world countries.- Managing Outsourcing of employees.- More part-time and temporary work- Managing productivity and Quality- Downsizing the workforce- Coping with flexible working hoursThe globalization of Business has had a significant impact on human resourcemanagement. Even though there has been large scale regional integrations, such as theEuropean Union, human resource manage across borders is very different and can bequite difficult for a Human Resource Professional un-accustom to cross bordermanagement. The purpose of this course is gain insights into employee relations from acultural and international perspective. One would tend to think that Human Resourcemanagement in one country would be much like it is in another country. There aresimilarities in the human resource function from one country to another however; dueto cultural differences the human resource function can also be quite different. We mustfirst define the Field of Human Resource Management. According to Peter Dowling inInternational Human Resource Management, “Human resource management is thoseactivities undertaken by an organization to utilize its human resources effectively.”
  • 92. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 92These activities include but are not limited to, human resource planning, staffing,performance management, training and education, compensation and benefits, andlabor relations. We must consider what, if any, changes to the above definition occurwhen a company goes international or global. When the human resource activities arespread across different countries therefore, different types of employees must beconsidered. Employees from the parent company or Parent Company Nationals (PCNs),this is the expatriate manager or technical professional assigned to a different country.The next type of employee is the Host Country National (HCNs), this is an employee ofthe company form the country which hosts the subsidiary. The last type of employee is aThird Country National (TCNs), these employees are from a country that is neither thehost nor the parent country. This expatriate also may be from another subsidiary ownedby the parent company.These multi-country nationals lead to issues generally not associated with HumanResource Management (HRM), such as international taxation, international relocation,administrative services for expatriates, and government relations. For example D.L.Pinney discusses tax reimbursement for expatriates because expatriates are subject tointernational tax and often have domestic tax liabilities; it is therefore incumbent on acompany to provide tax equalization. If there is no tax equalization much of theincentive and motivation for the overseas assignments would be lost.