1. Table of Contents
Human Resources – Introduction.........................................................................................................3
Managerial Functions......................................................................................................................3
Operative Functions.........................................................................................................................3
Human Resource Management.............................................................................................................4
Objectives Of HRM.........................................................................................................................5
HRM Policy.....................................................................................................................................5
Organization.........................................................................................................................................5
Steps in designing organization structure........................................................................................5
Roles Of HR Manager.....................................................................................................................6
Qualities of a line manager..............................................................................................................6
Job Analysis..........................................................................................................................................6
Job Description includes..................................................................................................................6
Job Specification includes ..............................................................................................................7
Process of job analysis:....................................................................................................................7
Uses of Job description & specification .........................................................................................7
Potential Problems with Job Analysis .............................................................................................7
Job Design............................................................................................................................................7
Factors affecting Job Design............................................................................................................8
Techniques of Job Design................................................................................................................9
HR Planning.........................................................................................................................................9
Meaning of HR planning: ...............................................................................................................9
Objectives of HR Planning............................................................................................................10
Benefits of HR Planing..................................................................................................................10
Factors effecting HR Plan..............................................................................................................10
Process of HRP .............................................................................................................................11
Problems in HRP............................................................................................................................11
Recruitment.........................................................................................................................................11
Objectives......................................................................................................................................11
Factors effecting recruitment.........................................................................................................11
Recruitment Policy........................................................................................................................12
Recruitment Process......................................................................................................................12
Evaluation of Recruitment Process................................................................................................12
Evaluation of Recruitment Method................................................................................................12
Selection.............................................................................................................................................13
Selection Test.................................................................................................................................13
Advantages of Centralized Selections...........................................................................................13
Selection Process Involves.............................................................................................................13
Do's ...............................................................................................................................................13
Dont's ............................................................................................................................................14
Contract of Employment: Should include following ....................................................................14
Common interview problems – Interviewers.................................................................................14
Barriers of effective selection .......................................................................................................14
Training...............................................................................................................................................15
Need for Training...........................................................................................................................15
Objectives of Training...................................................................................................................15
Training Methods...........................................................................................................................15
Training Procedure.........................................................................................................................15
Evaluation......................................................................................................................................16
Performance Appraisal.......................................................................................................................16
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2. Objectives Of PA...........................................................................................................................16
Appraisal Program ........................................................................................................................16
Appraisal Contents ........................................................................................................................16
Problems Of PA.............................................................................................................................17
How to minimize PA Problems......................................................................................................17
Methods of PA ...............................................................................................................................18
Uses/advantages of PA...................................................................................................................18
Job Evaluation....................................................................................................................................18
Objectives......................................................................................................................................18
Principal of Job Evaluation............................................................................................................19
Job Evaluation Procedure..............................................................................................................19
Job Evaluation Methods/Techniques.............................................................................................19
Advantages.....................................................................................................................................19
Remuneration.....................................................................................................................................19
Components...................................................................................................................................19
Objectives......................................................................................................................................20
Theories of Remuneration.............................................................................................................20
Factors Affecting Salary................................................................................................................20
Remuneration plan Morning..........................................................................................................20
Social Security....................................................................................................................................21
Social security legislations in India ..............................................................................................21
Need for extended social security programs..................................................................................21
Objectives......................................................................................................................................21
Types of Social security programs ................................................................................................22
Classification of Fringe Benefits...................................................................................................22
Non-monetary benefits .................................................................................................................23
Promotion...........................................................................................................................................23
Purpose of Promotion....................................................................................................................23
Principles of Promotion ................................................................................................................23
Types of promotion........................................................................................................................24
Transfer...............................................................................................................................................24
Reason for transfer.........................................................................................................................24
Principles of transfer......................................................................................................................25
Types of Transfers..........................................................................................................................25
Transfers........................................................................................................................................25
Separation...........................................................................................................................................25
Lay-off...........................................................................................................................................25
Dismissal........................................................................................................................................25
Retrenchment.................................................................................................................................26
VRS................................................................................................................................................26
Industrial Accident..............................................................................................................................26
Causes of accidents........................................................................................................................26
Grievance............................................................................................................................................27
Need for grievance procedure........................................................................................................27
Causes of Grievances.....................................................................................................................27
Prerequisites of Grievance.............................................................................................................27
Discipline............................................................................................................................................27
Meaning.........................................................................................................................................27
Objectives......................................................................................................................................28
The Red Hot Stove Rule................................................................................................................28
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3. Domestic Enquiry..........................................................................................................................28
Disciplinary Procedure..................................................................................................................28
Types Of Punishment.....................................................................................................................29
HR Audit.............................................................................................................................................29
Objectives......................................................................................................................................29
Benefits..........................................................................................................................................29
Scope Of HR Audit........................................................................................................................29
Topics Left Indiscipline
Orientation & Placement
Challenges of Human Resource Management
Employee Safety
Human Resources – Introduction
Managerial Functions
it influences the operative functions
Involves
• Planning
• Organizing
• Directing
• Controlling
Operative Functions
It involves securing & employing the people necessary to achieve the kind & level of
human resources necessary to achieve organization objectives. It includes
• Job Analysis
• Process of study & collection of information relating to operations &
responsibilities of a specific job. It involves
• Collecting & recording job information
• Preparing job description based on the information
• Determine the skills, abilities & knowledge required on the job
• Updating the information from time – time
• HR Planning
• Process by which organization ensures that it will have the right kind & right
number of employees, at the right time, at the right place capable of effectively &
efficiently completing tasks that will help the organization achieve its objectives
• Recruitment
• Process of searching for perceptive employees & stimulating them to apply for
jobs
• Identification of internal sources of applicants & developing them
• Creation & identification of external sources
• Stimulating candidates to apply for jobs in the organization
• Seeking balance between internal & external
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4. • Selection
• Process of selecting individuals from a pool of job applicants who have required
qualifications & competence to fill the vacancies. It involves
• Framing & developing application blanks
• Creating & validating reliable testing & interview techniques
• Checking & verifying academic records, references & employment record
• Letter of approval/rejection
• Employing the candidate who reports on duty
• Placement
• Process of assigning the selected candidate with the most suitable job
• Induction & orientation
• Techniques by which employees are rehabilitated to the change surroundings &
introduce to to the philosophy, policies, purposes & people of the organization
Human Resource Management
Human Resource Management – Process of improving, moulding & changing skills,
creative ability, attitude, aptitude values commitment etc. based on present & future job &
organization requirements
Includes
• Performance appraisal
• Training
• Management Development
• Career planning & Development
• Internal Mobility
• Transfer
• Promotion'
• Demotion
• Change & organization development
Compensation
• Job Evaluation
• Wage & Salary Administration
• Incentives
• Bonus
• Fringe Benefits
• Social Security Measures
Human Relations is an area of management integrating people in a work situation in way
that motivates them to work productively, co-operatively with economic, psychological &
social satisfaction
Industrial Relations refers to relation among employee, employer, government & trade
unions
Includes
• Labour market
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5. • Trade unionism
• Collective bargain
• Industrial conflicts
• Worker participation in management
• Quality circles
Objectives Of HRM
• Create & utilize able & motivated workforce to achieve organization goals
• Create sound organizational structure & establish desirable working relationships
among all employees
• Secure integration with individual & group within the organization by co-ordination of
individual & groups goals with those of the organization
• Create facilities & opportunities for individual & group development so as it matches
with the growth of the organization
• Attain effective utilization of workforce for the achievement of organizational goals
• Identify & satisfy individual & group needs by providing fare & equitable wages,
incentives, benefits, job security, social security measures for challenging work,
recondition, status & prestige
HRM Policy
Policy is a plan of action. It is a set of proposals & actions which act as reference point for
manager dealing with employees. Personnel polices guides the course of action intended
in handling personnel objectives. Policies are based on the following sources
• Past experiences
• Existing practices & experience in other organization of same nature
• Attitude/philosophy of management at various levels, employees, trade unions etc.
• Knowledge & experience of line managers & personnel managers in handling
personnel issues
• Policies of the organization
Organization
Organization is set of economic & social entities in which a no of people perform various
task to attain common goal
Steps in designing organization structure
• Present & future analysis of circumstances & environmental factors. Organization
analysis is basis for organization design & process of defining aim, objectives,
activities & structure of enterprise. It includes analysis of
◦ External factors
◦ Overall aim & purpose of the organization
◦ Activities
◦ Objectives
◦ Decision to be taken on vertical & horizontal dimension
◦ Relationship
◦ Organization structure & Job structure
◦ Organization climate
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6. ◦ Management style
◦ Human Resources
• Planning & implementation.
Roles Of HR Manager
HR manager plays a vital role in the modern organization. He plays different strategic roles
at different levels of the organization. They include
• Ethical Role – Role of humanitarian reminding the managements of its morals &
obligation towards the employees
• Counsellor’s Role – Council & help employees solve their personal problem related
health, martial, family, mental, physical etc.
• Mediator's Role – Role of peacemaker in settling disputes between the
management & the employees
• Spokespersons Role – Acts as spokesperson of the organization
• Problem Solver – Solve problem relating to issues that involve HRM & overall long
range HR
• Changed Event – To introduce changes in various existing programmes
• Other role: welfare, clerical & fire-fighting roles
Qualities of a line manager
• Intelligence
• Educational Skill
• Discriminating Skill
• Experience & Training
• Professional Attitude
• Knowledge – Job, Labour Law etc.
• Tactical Skills & Good Judgement
Job Analysis
Job Analysis – It is a process of studying & collection information relating to operations &
responsibilities of a specific job. Outcome – Job Description & Job Specifications
Involves
• Collecting & recording job information
• Checking the information for accuracy
• Preparing job description based on the information
• Determine the skills, abilities & knowledge required on the job
• Updating the information from time – time
Job Description includes
• Job Title
• Location
• Job Summary
• Duties
• Machines, Tools & Equipment
• Materials & forms used
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7. • Supervision given or received
• Working conditions & hazards
Job Specification includes
• Education
• Experience
• Training
• Judgement
• Physical efforts & skills
• Responsibilities
• Communication skills
• Emotional characteristics
• Sensory demands such as sight, smell, hearing
Process of job analysis:
• Strategic Choices
• Gather information
• Process information
• Job description
• Job specification
Uses of Job description & specification
• Personnel planning
• Performance appraisal
• Hiring
• Training & development
• Job evaluation & compensation
• Health & safety
• Employee discipline
• Work scheduling
• Career planning
Potential Problems with Job Analysis
• Support from top management
• Single means & source
• No training & motivation
• Activities may be distorted
Job Design
Job Design – Process of deciding the content of the job in terms of duties &
responsibilities of the job holders, methods to be used to carry out the job in terms of
techniques, procedures & systems & the relationship that must exist between the job
holder & superior, sub ordinates & colleagues
Involves
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8. • Specification of each individual task
• Specification of method to be used to perform each individual task
• Specification of specific jobs assigned to an individual
Factors affecting Job Design
• Organization Factors
• Characteristics of task
• Job design requires assembly of task into a job. An individual may perform
one main task which may consist of several interrelated task. On the other
hand a group may perform a task or set of tasks. The internal structure of the
task consist of three main elements planning, execution & evaluation. The
responsibility of a job is measured by the amount
• Ergonomics
• It is concerned with designing & shaping the jobs to fit the physical abilities &
characteristics of an individual so as they can perform their job effectively
• It helps employers design jobs in a way that individual physical ability & jobs
demands are balanced
• Work-flow
• The flow of work in an organization is strongly influenced by the nature of
product or service. The product or service usually suggest the sequence &
balance of jobs if the work is to be done efficiently. After the sequence of job
is determined the balance between the jobs is established
• Work Practices
• Work practices are a set of ways of performing work. They may arise from
traditional or collective choice of employees. Either way HR Dept. flexibility is
limited especially when these practices are a part of union-management
relationship. Failure to consider work practices can have unfavourable
outcomes
• Environment Factors
• Employees ability & availability
• Efficiency of work must be balanced against ability & availability of people
who will do the work.
• Social & cultural expectations
• Job must be designed to meet the social & cultural expectations like hours of
work, holidays on religious occasion, vacation, reset period, management
styles, sophistication & attitude
• Behavioural Factors
• Feedback
• Individual must receive meaningful feedback about their performance
preferably by evaluating themselves & defining the feedback
• Autonomy
• Autonomy is being responsible for what one does. It is the freedom to control
responses to the environment. Job that give workers the authority to take
their own decisions will provide added a sense of recondition & self esteem.
Absence of autonomy can cause lack of interest or poor performance
• Use of abilities
• The job must be perceived by individual as requiring them to use their
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9. abilities they in order to perform the job efficiently
• Variety
• Lack of variety can boredom which may lead to fatigue & mistakes. By
injecting variety to the job, the personnel specialist can reduce errors caused
by fatigue
Techniques of Job Design
• Work Simplification
• The job is more simplified or specified. The job is broken down them into small
sub-parts & each task is assigned to an individual. The process involves
mechanical pacing of work, repetitive work-process, working on only one task
predetermining tools & techniques, restricted interactions with workers, few skill
requirements. It is done when job designers feel that job is not specialized
enough. The method is defective in the sense that over specialization leads to
boredom, mistakes & other problems.
• Job Rotation
• It refers to employees movement from one job or another. It reduces boredom &
monotony, it improves employees skills regarding various job & prepares
competent employees & provides personal growth. Frequent job rotation is not
as advisable as it may be a negative effect on employees effectiveness &
enthusiasm
• Job Enlargement
• It involves adding more & different task to a specialized job to provide greater
variety. It tackles dissatisfaction & reduces monotony by increasing variety &
scope to a task. It leads to specialization & worker satisfaction, quality of
production & improvement in overall efficiency of the organization
• Job Bandwidth
• Another approach is narrow job design & broad job design. Narrow job design
deals with few task & responsibilities. Broad job design deals with with wider
variety, range of task & greater responsibilities
• Job Enrichment
• It deals with adding duties & responsibilities to a job to provide skill variety, task
identity, task significance, autonomy & feedback on performance. It tries to deal
with job dissatisfaction by adding to depth of the job
HR Planning
HRP is a process by which organization ensures that it will have the right kind & right
number of employees, at the right time, at the right place capable of effectively & efficiently
completing tasks that will help the organization achieve its objectives
Meaning of HR planning:
HR Planning may be view
• A process by which organization can move from current man power to its desired
man power
• Foreseeing the human resource requirement & the future supply of human
resources
• Making necessary adjustments between these two & organization plans
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10. • Foreseeing the possibility of developing the supply of human resources in order to
meet with the requirements by introducing necessary changes in functions of
human resource management
Objectives of HR Planning
• Recruit & retain HR of required quality & quantity at required place & time.
• Foreseeing & minimizing employee turnover & filling up of consequent vacancies.
• Meet the needs of programmes of the expansion, diversification etc.
• Foresee the impact of technology on work and HR requirement
• Improve employees skill, knowledge, standards, ability, discipline etc.
• Assess the surplus or shortage of human resources & take necessary measures
• Maintain congenial (friendly/pleasant) industrial relations
• Minimize imbalances caused due to HR fluctuations
• Make the best use of its human resources
• Estimate the cost of human resources
Benefits of HR Planing
• Checks corporate plans
• Balances uncertainties & change to maximum extent possible
• Enable organization to have required quality and quantity of HR at the right time &
right place
• Controls function, operations & contribution of HR
• Foresees changes in values, attitude & aptitude of employees
• Plans for physical facilities, working conditions & fringe benefits
• Plans for development of employees to meet organization needs
• Plans for advancement & development of employees
• Plans recruitment & selections processes
• Plans for all cost of HR
Factors effecting HR Plan
• External Factors
• Government policies for labour law, Industrial relations policy, reservation policy
• Level of development of economy & HR in the country & its future supply
• Business environment factors like mix & volume of production & demand of HR
in future
• Advancement in technologies & requirement of business
• International factors – Demand & supply of HR in other countries
• Internal Factors
• Company strategies regarding expansion, diversification etc.
• Human Resource policies regarding quality, compensation and work-life of HR
• Job analysis – kind & quality of HR requirement
• Time horizon – Company's current business environment i.e. stable or unstable
• Quality & accuracy of HR info of company
• Company production/operation policy – How much does the company produce,
procure & outsource
• Trade unions terms regarding employee's working
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11. Process of HRP
• Analysing the unit & corporate level strategies.
• Demand & Supply forecasting
• Estimating the net human resource requirements.
• In case of surplus, plan for redeployment, retrenchment, lay-off.
• In case of deficit, forecast the future supply of human resources
• Plan for Recruitment, development & internal mobility
• Modify or adjust the organizational plan if future supply will be inadequate
Problems in HRP
Though HRP is beneficial to the organization, employees & trade unions, some problems
crop up in the process of HRP.
• Resistance by Employers & Employees
◦ Employers feel that it increases the cost of manpower as trade unions demand
for more facilities & benefits including training & development.
◦ They also feel that employees will be easily available as & when required
considering the growing population & unemployment situation in India.
◦ Employees resist HRP as they feel that it increases their work load.
• Uncertainties due to absenteeism, seasonal employment, labour turnover
technological change & marketing conditions cause imperfections in HRP
• Inadequacies of Information Systems & reliable data about the economy, Industries,
labour market, trends in human resources
Recruitment
Recruitment is a process to discover the sources of manpower to meet the requirements
of staffing schedule & to employ effective measures for attracting that manpower in
adequate number to facilitate effective selection process of an efficient workforce
Objectives
• To determine the present & future requirements of the organization
• To increase the pool of job applicants at minimum cost
• Help improve effectiveness of selection process by reducing the no of over qualified
or under qualified job applicants
• Helps reduce job applicants turnover rate once recruited & selected
• Meet the organization legal & social obligations regarding workforce composition
• Begin identifying & preparing job applicants who will be appropriate candidates
• Evaluate the effectiveness of various recruitment techniques & sources of all job
applicants
Factors effecting recruitment
• External
• Supply & demand
• Unemployment Rate
• Labour Market
• Political & Social Considerations
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12. • Sons of Soil
• Image of the company
• Internal
• Recruitment Policy
• Human Resource Planning
• Size of Firm
• Cost
• Growth & Expansion
Recruitment Policy
• Derived from personnel policies
• Should consider government regarding reservation
• Should consider policies regarding merit, internal sources & social responsibilities
• Should consider personnel policies like improving HR, motivation through internal
promotion, improving loyalty by absorbing entrenched or laid off employees
• Should consider personnel policies of competing organization
• Should consider recruitment sources, needs, cost, select criteria & preferences
Recruitment Process
• Planning – for quality, type and no of HR required
• Strategy development
◦ Make (hire less skilled workers & train them) or buy (hire skilled workers & place
them immediately on job) employees
◦ Technological advancement – has help employer & job seekers get connected
easily and get better access to organization requirement
◦ Where to look – Which labour market to tap in to for HR
◦ How to look
▪ Internally – present employees, employee referral, previous job applicants
etc.
▪ Externally – campus placements, walk-in, advertisement etc.
• Screening – process to knock out visibly unqualified applicants at an early stage
• Evaluation & control – Methods used should be tested, validated for effectiveness.
Required as lot of cost is incurred in the process.
Evaluation of Recruitment Process
• Return rate of applicants send out
• No of suitable candidates
• Retention & performance of candidates
• Cost, time lapsed & quality of recruitments process
Evaluation of Recruitment Method
• No of initial inquiries which resulted in completed application forms
• No of candidates at various stages
• No of candidates recruited
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13. • No of candidates retained after a period
Selection
Selection is a process of selecting individuals from a pool of job applicants who have
required qualifications & competence to fill the vacancies
Selection Test
Ability Test – to measure ability of an individual to perform a task related to job
Aptitude Test – to measure individual potential to learn
Personality – to measure individual motivation to particular working environment
Interest Test – to check individual preferences
Graphology Test – To analyse individual handwriting
Polygraph Test – To check individual information for accuracy
Technical Test – To check individuals technical knowledge
Medical Test – To check individual medical fitness
Advantages of Centralized Selections
• Easier for applicants to send application to single Dept.
• Issues pertaining to employment can be resolved at a central location
• Helps operation managers concentrate on their work instead selection
• Hiring can be done by specialist
• Applicant is assured of greater variety of job options
• Hiring cost can be reduced
Selection Process Involves
• Preliminary interview
• Selections Test
• Employment Interview
• Reference & Background Analysis
• Selection Decision
• Physical Examination
• Job Offer
• Employment Contract
• Evaluation
Do's
• Plan the interview
• Establish an easy and informal relationship
• Encourage the candidate to talk
• Cover the ground as planned
• Probe where necessary
• Analyse career and interests to reveal strengths, weakness and patterns of
behaviour
• Maintain control over the direction and time taken for interview
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14. Dont's
• Start interview unprepared
• Plunge too quickly into demanding questions
• Ask leading questions
• Jump to conclusions on inadequate evidences
• Pay too much attention to isolated strengths or weaknesses
• Allow the candidate to gloss over important facts
• Talk too much
Contract of Employment: Should include following
• Job Title
• Duties and responsibilities
• Join date, Training period, Permanent date
• Work rules including working hours, environment
• Compensation
• Holidays and Leaves
• Termination, Notice period
• Grievances and disciplinary procedures
Common interview problems – Interviewers
• Do not have the complete/accurate job details and requirements.
• May make snap judgement early in the interview, thereby blocking further potentially
useful information.
• Permit one trait or job related attribute to influence their evaluation of the remaining
qualities of an applicant.
• Tendency to be swayed by negative information about the applicant.
• Information obtained from interviews is not integrated in a systematic manner
• Judgement are often affected by the pressure to favour a candidate
• Judgement regarding an applicant is often affected by the list of available
applicants. E.g. a good person looks better in contrast to a group of average
applicants.
• Sex, race, background etc. similar/preferential to Interviewer may lead to bad
judgements
Barriers of effective selection
• Perception: Interviewers inability to understand others accurately is probable the
most fundamental barrier.
• Fairness: Fairness requires that no individual should be discriminated against on
the basis of religion, region, race or gender.
• Validity: A test that has been validated can be differentiate between the employees
who can perform well and those who will not.
• Reliability: A reliable method is one which will produce consistent results when
repeated in similar situations.
• Pressure: Pressure from politicians, bureaucrats, relatives, friends, and peers to
favour a particular candidate
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15. Training
Training is act of improving skill & knowledge of HR at particular job
Need for Training
• To match employees specifications with job requirements & organization needs
• organization viability & transformation process
• technological advances
• organizational complexity
• Human relations
• change in job assignment
Objectives of Training
• To prepare new & current employees for current as well future requirements
• To prepare them for high level task
• To assist them by exposing them to latest technology, information & techniques &
developing their skills
• To prepare second line of competent employees & assigning them more
responsibilities
• To improve productivity & quality to ensure economic output
• To promote individual & collective moral, sense of responsibilities, co-operative
attitudes & good relationship
Training Methods
On-Job Training Method – The individual is placed on the job & is taught skills necessary
to perform the job. The individual is placed under guidance & supervision of skilled
employees
• Job rotation
• Coaching
• Job instructions
• committee assignments
Off-Job Training Method – The trainee is separated from job situation & his attention is
focused on learning material related to his future job performance
• Vestibule training
• role playing
• lectures
• conference of discussion
• programmed instructions
Training Procedure
• Prepare the instructor
• Prepare the trainee
• Get ready to teach
• Presenting the operation
• Try out the trainee performance
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16. • follow up
Evaluation
• Immediate assessment of trainees reaction about the program
• Trainees observation during the program
• Expectations of trainees before the program & view of attainment after the program
• Opinions of trainees superiors/subordinates/colleges about his performance after
the program
• Measuring trainees skill level before & after the program
• Measuring trainees behaviour, attitude on job
• Cost benefit analysis of the program
Performance Appraisal
Performance appraisal is formal, structural way of measuring & evaluating employee's
job related behaviour & outcomes to discover how & why the employee is presently
performing on the job & how can the employee perform more effectively in future so that
the employee, organization & society will benefit
Objectives Of PA
• To let employee know where they stand in terms of performance & assist them with
constructive criticisms & guidance for their development
• To maintain satisfactory level of performance
• To confirm services of probationary employees
• To provide feedback on level of achievement & behaviour
• To identify training & development needs
• To decide upon pay rise & facilitate fair & equitable wages based on performance
• To effect promotion based on competence & performance
• To prevent grievances & indisciplined activities
• To check whether HR programs like selection, training & transfer have been
effective
Appraisal Program
• Formal or Informal appraisal
• Whose performance should be appraised?
• Who are raters?
• What & when should be evaluated
• Problems encountered & how to solve them
• Methods of performance appraisal
Appraisal Contents
Quality, Quantity, Timeliness, Cost effectiveness, Need for supervision, Interpersonal
impact.
Organization should decide the content to be appraised which is usually determined on the
basis of job analysis.
The content may vary with the purpose of appraisal & the type & level of employees. It
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17. includes
• Regularity of attendance
• Self expression: written & oral
• Ability to work with others
• Leadership styles & abilities
• Initiative
• Technical skills / ability / knowledge
• Ability to grasp & learn new things
• Ability to reason
• Originality & resourcefulness
• Creativity
• Area of interest & suitability
• Judgement skills
• Integrity
• Capability for assuming responsibility
• Level of acceptance by subordinates, colleagues, superiors
• Honesty & sincerity
• Thoroughness in job & organizational knowledge
• Knowledge of systems & procedures
• Quality of suggestions offered for improvement
Problems Of PA
• Rating Biases
• Halo effect – Tendency of raters to depend excessively on the ratings of one trait
or behaviour consideration in rating all other traits or behavioural considerations.
• Error of central tendency – Follow play safe policy and avoid rating the
employees at both the extremes of the scale.
• Recency Effect – Rating people based on their recent performance
• Leniency & strictness – Tendency to be liberal by assigning higher rates
• Personal Prejudice – Rating people at lower end if the rater dislikes them
• Failure of superiors in conducting performance appraisal & post performance
appraisal interview
• Appraisal is based on subjectivity
• Less reliability & validity of appraisal techniques
• Negative rating effects interpersonal relations
• Absence of inter-rater reliability
• Influence of external & uncontrollable internal factors
• Performance appraisal in a few minutes
• Management emphasis on punishment rather than development
How to minimize PA Problems
• Conduct an open meeting with appraisers about employees performance before,
during & after performance review
• Encourage each one to comment about each others achievement & areas of
improvement
• Appraiser should tell truth & reality
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18. • Conduct counselling meeting with appraiser to to appraise them to reason for their
performance & its consequences
Methods of PA
• Past Oriented
• Rating Scales
• Check-lists
• Forced choice method
• Forced distribution method
• Critical incident method
• Behaviourally anchored scales
• Field review methods
• Performance tests & observations
• Annual confidential reports
• Essay method
• Cost accounting approach
• Comparative evaluation approach
• Future Oriented
• Management by objectives
• 360 Degree appraisal
• Psychological appraisals
• Assessment centres
Uses/advantages of PA
• Helps review &/correct earlier decisions relating to
◦ Organization & HR planning
◦ Organization effectiveness through development
◦ Fixation of salary, allowances, benefits etc.
◦ Training & development needs
◦ Career plaining & development of employees
• Helps evaluate existing systems, information system, job analysis, internal &
external environmental factors effecting performance
• Helps improve employees performance & self-development
• Helps improving inter-personal relationship through close interactions & better
understanding
Job Evaluation
Job evaluation is process of analysing & assessing the content of a job in order to place
them in acceptable rank which can be used as a basis of remuneration system
Objectives
• To gather data & information about job description, job specification & employees
specification of various jobs
• To compare duties, responsibilities & demands of a job with other jobs
• To determine the hierarchy & place of a job with in an organization
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19. • To determine rank or grade of job
• To ensure & fair equitable wage distribution on basis of relative wroth or value of job
• To avoid discrimination on basic on gender, caste, religion etc.
Principal of Job Evaluation
• Rate the job & not the employee
• Elements should be properly selected, clear defined & easily understood
• Concerned employees & supervisors should be convinced about program
• Encourage supervisors & employees to participate in the program
• Discuss with them about the rating but about assigning money values to points
• Do not create too many occupational wages
Job Evaluation Procedure
• Analyse & prepare the job description
• Select & prepare job evaluation plan
• Classify the jobs
• Install & maintain the program
Job Evaluation Methods/Techniques
• Quantitative Methods
• Points Rating Method
• Factor Comparison Method
• Non-Quantative Methods
• Ranking: Simple Ranking Method, Ranking Key Jobs
• Job Classification & Grading Method
Advantages
• It is logical & to certain extent an objective way of ranking & grading jobs
• It helps fit new created jobs
• It helps in reducing employee grievances & complaints about wage
• It satisfies principles of fair wage, wage equity uniformity in wage etc.
• It helps in redesigning the jobs by reallocating easy & difficult task among various
jobs
• It helps in minimizing wide wage differentials
Remuneration
Remuneration is compensation of an employees in return for his contribution to the
organization
Components
• Wages & Salary
• Incentives: Performance based additional payment
• Fringe Benefits: pension, gratuity fund, medical care, health insurance etc.
• Perks: company car, club membership, paid holiday
• Non-monteray benefits: recognition of merit, responsibilities, work environment
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20. Objectives
• To acquire competent qualified personnel
• To retain present employees
• To secure internal & external quality
• To ensure desired behaviour like performance, loyalty, accepting new
responsibilities
• To facilitate pay roll administration of budgeting & salary control
• To maintain labour & administrative cost in line with organizations ability to pay
• To pay according to job content & difficulty in tune with efforts & merit of employees
Theories of Remuneration
• Reinforcement & Expectancy Theory: Reinforcement theory postulates that a
behaviour which has a rewarding experience is likely to be repeated. Expectancy
theory focuses on the link between rewards & behaviour. Vroom’s expectancy
theory focuses on the link between rewards & behaviour. Motivation, according to
the theory, is the product of valence (positive or negative emotion), instrumentality &
expectancy. Remuneration differs according to the impact of these factors on the
motivational component.
• Equity Theory: Equity theory posits that an employee who perceives inequity in his
rewards seeks to restore equity. The theory emphasizes equity in pay structure of
employees’ remuneration. Employee’s perception of how they are being treated by
their organization is of prime importance. When employees perceive inequity, it can
result into lower productivity, higher absenteeism, or increase in turnover.
• Agency Theory: The Agency theory focuses on the different interests & goals of the
organization’s stakeholders (employers & employees) & the way that employee
remuneration can be used to align these interests & goals. Employees expect high
remuneration while the employers seek to minimize it. The Agency theory says that
the principal (employer) must choose a contracting scheme that helps align the
interests of the agents (employees) with the principle’s own interests. These
contracts can be either behaviour-oriented (e.g. merit pay) or outcome-oriented
(e.g. stock option, profit sharing, commission).
Factors Affecting Salary
• Ability to pay
• Cost of living
• Productivity
• Union pressure & strategies
• Government legislation & labour law
• Economy
• Business strategy
• Job evaluation & performance appraisal
• Employee
Remuneration plan Morning
Wage & salary plans are derived from the assessment of what will attract & retain the right
people, what the organization can afford & what will meet the organization strategy
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21. Plan must be based on
• Job Description
• Job Evaluation
• Job Hierarchy
• Pricing Jobs
• Pay surveys
Challenges
• Skill based pay
• Pay reviews
• Pay secrecy
• Comparable worth
• Employee participation
Social Security
Social security is primarily a social insurance program providing social protection or
protection against social recognized conditions such as old age, poverty, disability,
unemployment etc. It may refer to
• Social insurance
• Services
• Income maintenance
• Basic security referring to basic necessities
Social security legislations in India
• Workmen’s compensation act 1923: compensation for any personal injury due to
accident at workplace, for loss of earnings
• The employee’s state insurance act 1948: provide sickness benefits, disablement
benefits, dependant's benefits, medical benefits
• The employee’s provident fund & misc provisions act 1952: provident fund, deposit
liked insurance
• The maternity benefits act 1961: medical benefits, medical leave
The payment of gratuity act 1953: gratuity at retirement
Need for extended social security programs
Fringe benefits are provided for following reasons
• Employee demands
• Trade union demands
• Employer’s preference
• As a social security
• To improve human relations
Objectives
• To create & improve sound industrial relations
• To boost up employee morale
• To motivate the employees by identifying & satisfying their unsatisfied needs
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22. • To provide qualitative work environment & work life
• To provide security to the employees against social risks like old age benefits &
maternity benefits
• To protect health of the employees & to provide safety to the employees against
accidents
• To promote employee’s welfare by providing welfare activities like recreational
facilities
• To create a sense of belongingness among employees & to retain them.
• To meet requirements of various legislations relating to fringe benefits
Types of Social security programs
• Employment security: unemployment insurance, leave travel pay, overtime pay,
leave for maternity / grievances, holidays, cost of living bonus, lay-off pay, jobs to
the sons/daughters of the employees
• Health protection: Accident insurance, disability insurance, hospitalization, medical
care, sick leave.
• Old age & Retirement: deferred income plans, pension, gratuity, provident fund, old
age: assistance / counselling, medical benefits for retired employees, travelling
concession to retired employees, jobs to the sons/daughters of deceased
employees
• Personnel Identification, Participation & Stimulation: anniversary awards,
attendance bonus, canteen, cooperative credit societies, educational facilities,
housing, income tax aid, quality bonus, recreational programs, stress counselling,
safety measures
Classification of Fringe Benefits
• Payment for time not worked
◦ Hours of work
◦ Paid holidays
◦ Shift premium
◦ Holiday pay
◦ Paid vacation
• Employee security
◦ Retrenchment compensation
◦ Lay-off compensation
• Safety & Health
◦ Workmen’s compensation
◦ Health benefits: sickness benefits, maternity benefits, disablement benefits,
dependant’s benefits, medical benefits
◦ Voluntary arrangements
• Welfare & recreational facilities
◦ Canteen
◦ Consumer society
◦ Credit society
◦ Housing
◦ Legal aid
◦ Counselling
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23. ◦ Welfare organizations & welfare officers
◦ Holiday homes
◦ Educational facilities
◦ Transportation
◦ Parties & picnics
◦ Miscellaneous
• Old age & retirement benefits
◦ Provident funds
◦ Pension
◦ Deposit linked insurance
◦ Gratuity
Non-monetary benefits
• Treats, free lunch/tea/coffee, picnic, dinner with the family, birthday treats
• Desk accessories, watches, tie pins, diaries, planners, calendars, wallets, t-shirts
• Awards: trophies, citations, certificates, letter of appreciation
• Social acknowledgement: informal recognition, recognition at office get-together,
suggestions
• Office environment: work from home, flexible working hours, redecoration
• Tokens: movie tickets, vacation trips, early time-offs
• On-the-job: increased responsibility, training
Advantages: motivate, build self-esteem, loyalty, healthy work environment, no extra cost
involved, create close bonding between company & employee family
Disadvantages: de-motivate if not implemented properly, rewards may result in short
sighted & hasty decision making or may result in unhealthy competition between
employees, may intrude home life of employees, monetary rewards should be present
otherwise it is not effective
Promotion
Promotion is an improvement in position, responsibilities, pay scale of an employee within
an organization
Purpose of Promotion
• To motivate employees for higher productivity
• To attract & retain services of qualified & competent employees
• To reward employees for their efficiency & performance
• To improve the effectiveness of the employee & organization
• To build loyalty, morale & sense of belongingness
• To impress upon others that opportunities area available for them too if they perform
well
• To fill vacancies within the organization
Principles of Promotion
It is the responsibility of the HR department to lay down a clear cut & sound promotion
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24. policy & ensure its implementation. This policy should be clear on following matters
• Recruit from outside or promote internally
• The basis of promotion: merit &/or seniority
◦ Merits of Seniority
▪ Easy to administer
▪ Less scope for subjectivity/biased behaviour in fixing seniority
▪ Trade unions welcome it
▪ It is the right option, as seniority & experience go hand in hand
▪ Subordinates are willing to work under an older boss
▪ Loyalty is rewarded
◦ De-Merits of Seniority
▪ Seniority is no indication of performance
▪ No single criteria for fixing seniority
▪ Young & competent employees may feel frustrated & might leave
◦ Merits of Competence
▪ Efficiency is encouraged, recognized & rewarded
▪ Competent people are retained
▪ Productivity increased
◦ De-Merits of Competence
▪ Discontentment among senior employees
▪ Scope for favouritism
Types of promotion
• Horizontal Promotion
• Change in responsibilities, pay
• Change in designation
• Example – Jr Clerk promoted to Sr Clerk
• Vertical Promotion
• Change in responsibilities, pay, prestige
• Change in nature of job
• Example – Clerk promoted to Manager
• Dry Promotion
• Promotion in terms increase in remuneration
• Change in designation but no change is responsibilities
• Get one or two annual increments
Transfer
Transfer means change in job (accompanied by change in place of job) but no change in
responsibilities & remuneration
Reason for transfer
• Shortage of employee because of heavy demand
• Removal of incompatibilities between workers
• Correction of initial faulty placement
• Change in interest & capacity of an individual
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25. • To break monotony in job over a period of time
• Unhealthy climate for employees health
• Family related problems
Principles of transfer
A policy based on the following principles should be framed by the HR Dept.
• Frequency & minimum period between transfers. Well informed to all employees
• Authority to handle transfers. can be centralized
• Well defined criteria for transfers
• Temporary or permanent transfers
• Effect of pay & responsibilities should be evaluated
• Job description & employee analysis should be done
• Interest of the organization should be given importance
Types of Transfers
• Transfers designed to enhance training & development
• Transfers to make possible adjustment to varying volumes of work within the firm
• Transfer to remedy problems of poor placement
Transfers
• Production – Shortage or surplus employees are transferred to avoid lay-offs
• Replacement – When operations are declining, retain old employees
• Versatility - To make employee versatile & competent on more than one skill
• Shift – On rotation basis or special request
• Remedial – Correction of initial fault placement
Separation
Resignation – Employee willingly leaves the job when he finds a better offer.
Lay-off
• Temporary separation for defined period
• Failure, refusal or inability of employer to give employment to a worker who is in the
pay roll but has not been retrenched
• Lay-off are due
◦ Shortage of stock
◦ Accumulation of stock
◦ Breakdown of machinery
◦ Any unforeseen reason
• 50% Payments
• Laid off employees are called back asap to normalize production
Dismissal
• Termination of employee initiated by employer
• Should be supported by just & sufficient reasons
• Drastic steps should taken after careful thought
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26. • Reason for dismissal
◦ Poor or below standard performance
◦ Excessive Absenteeism
◦ Serious Misconduct
◦ False statement of qualification given at time of employment
◦ Theft of company property
◦ Not abiding by company rules
• Should be avoided as far as possible & should taken after all the efforts of salvaging
in the employee have failed
Retrenchment
• Labour is replaced by machinery
• Closure of Department
• All the employees plus employer lose their job
VRS
• Employees sent home willingly
• Handsome compensation is paid
• Painless method of trimming staff down
Industrial Accident
According to Factories Act, 1948 -If an employee suffers a bodily injury in industrial
establishment and is unfit to resume his duties within 48 hours and It is an unexpected
event which is neither anticipated nor designed to occur then he/she is entitled to
Workmen's Compensation Act, 1923
Causes of accidents
• Unsafe conditions at work place
◦ Defective plants, equipments, tools, material, infrastructure etc.
◦ Improperly guarded equipments
◦ Hazardous arrangement or procedure in & around equipments
◦ Unsafe storage, congestion & overloading
◦ Inadequate safety devices
◦ Wrong / faulty layout & bad location
◦ Improper illumination: glare, insufficient light
◦ Improper ventilation
◦ Poor house keeping
• Unsafe acts
◦ Operating without authority
◦ Failing to warn other employees of possible danger
◦ Not using safety equipments
◦ Throwing material on the floor carelessly
◦ Operating or working at unsafe levels of speed
◦ Using unsafe equipments or using equipments unsafely
◦ Taking unsafe position
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27. ◦ Distracting, teasing, abusing, quarrelling, day-dreaming
• Other causes
◦ Untrained/young employees sustain more injuries
◦ Addiction to alcoholism or drugs
◦ Aggressive & negative supervision
◦ More frequency at night shifts
◦ Working in adverse conditions, stress, fatigue, boredom, insecurity
◦ Women employees have better safety records
Grievance
Grievance is dissatisfaction or feeling of injuries in connection with ones employment
situations that is brought to notice of the management
Need for grievance procedure
• Grievance disturbs the employee which effects his moral, productivity & willingness
to work with others. If it causes an explosive or distributive event a well designed
grievance procedure can handle it better.
• It serves as outlet for employee gripes, discontent & frustration.
• It serves a check on arbitrary actions of management
Causes of Grievances
• Complaints & demands of compensation
• Complaints against colleagues, supervisor, disciplinary measures & procedure,
promotion/ demotion / transfers, individual assessment
Prerequisites of Grievance
• Conformity with prevailing legislature
• Clarity
• Simplicity
• Promptness
• Training
• Follow ups
Discipline
Discipline regulates the behaviour of an employee in the organization as law regulates the
behaviour of people in the society
Meaning
• Discipline refers to condition or attitude prevailing in employees with respect to rules
& regulations of an organization
• It means co-operating & behaving in an orderly way as a responsible person
• A force the prompts individual & groups to observe rules, regulations & procedure
necessary for effective functioning
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28. Objectives
• To obtain a wiling acceptance of rules, regulations & procedures to obtain goals
• To develop an element of certainty despite several difference in informal behaviour
patterns
• To develop a sprite of tolerance & desire to make adjustments
• To give & seek direction & responsibility
• To create an atmosphere of respect of human personality & human relations
• To increase efficiency & morale so as to increase productivity
The Red Hot Stove Rule
The Red Hot Stove Rule – Without the continual support & regard of the of the
subordinates, no manager can get the things done. But disciplinary action against
offending employee is painful & generates resentment on his part. Hence a question arises
as to how to impose discipline without generating resentment.
This is possible through what Douglas McGregor called the “Red Hot Stove Rule” which
draws an analogy between touching a hot stove & undergoing discipline
• The burn is immediate
• He had a warning. When the stove was red hot, he knew what would happen if he
touched it.
• The effect is consistent. Everyone who touches the hot stove gets burnt.
• The effect is impersonal. A person is burnt not because of who he is but because he
touched the hot stove.
The same thing is true with discipline. The disciplinary procedure should start immediately
after an omission is noticed. It should give a clear-cut warning regarding the extent of
punishment for an offence. The same punishment should be consistently given for the
same type of offence. Irrespective of an offence, a punishment should be imposed.
Domestic Enquiry
• Disciplinary procedure from within the organization
• Immediate supervisor or personnel manager does the enquiry
• Call for employee explanation, Issue show cause notice if necessary, full fledged
enquiry, Call for witness/documents/events, enquiry report
• Final report to the management
Disciplinary Procedure
• Issue a letter of charge & call the employee for the explanation
• Consider the explanation
• Show cause notice
• Full fledged enquiry
• Consider the enquiry proceeding, findings & make a final report
• Follow up
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29. Types Of Punishment
• Oral warning
• Written warning
• Loss of privileges & fines
• Punitive suspension
• Withholding increment
• Demotion
• Termination
HR Audit
HR audit refers to examination & evaluation of policies, practices & procedures to
determine the efficiency & effectiveness of Human Resource Management. It is quality
control check of HR activities in a department or company & evaluation of how these
activities support organization strategy.
Objectives
• To evaluate the management problems
• To seek explanation & information on questions like Why & what
• To evaluate how much of the polices the managers have implemented
• To evaluate the employees
Benefits
• Identification of contribution of HR Department
• Improvement of image of HR Department
• Encouragement of greater responsibilities & duties
• Clarification of responsibilities & duties
• Stimulation of uniformity of HR polices & procedures
• Finding critical problems
• Ensuring compliance with legal requirements
• Acceptance of necessary changes
• Review of information system
Scope Of HR Audit
HR audit must cover activities of department along with personnel functions, uses of its
procedures by managers & its impact on employees. Scope of audit
• Human resource functions – for each HRM functions, auditor must
◦ define objective of the function
◦ Identify who is responsible for its performance
◦ Review the performance
◦ Develop corrective action plan if any deviation
◦ Follow up action plan
• Managerial compliance
◦ Involves audit of managerial compliance of personnel policies, procedures &
legal provision
• Human resource climate
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30. ◦ It has an impact on employee motivation & satisfaction. The quality of the
climate can be measured by employee turnover, absenteeism, safety records &
attitude survey
• Corporate audits
◦ Corporate strategy helps organization gain competitive advantage.
Understanding has strong implications on HR planning, staffing, remuneration,
industrial relations & other HR activities
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