HRM Notes

Human Resource Management 16MBA21
SEMESTER II
HUMAN RESOURCE MANAGEMENT

Subject Code: 16MBA21 IA Marks: 20
No. of Lecture Hours / Week: 04 Exam Hours: 03
Total Number of Lecture Hours: 56 Exam Marks: 80
Practical Component: 01 Hour / Week
Unit 1 : (8 hours)
Human Resource Management:
Introduction, meaning, nature, scope of HRM. Importance and Evolution of the concept of HRM.
Major functions of HRM, Principles of HRM, Organization of Personnel department, Role of HR
Manager. HRM’s evolving role in the 21st century.
Unit2: (10hours)
Job Analysis: Meaning, process of Job Analysis, methods of collecting job analysis data, Job
Description and Job Specification, Role Analysis.
Human Resource Planning: Objectives, Importance and process of Human Resource Planning,
Effective HRP.
Unit 3: (10 hours)

Recruitment: Definition, Constraints and Challenges, Sources and Methods of Recruitment,
New Approaches to recruitment.
Selection: Definition and Process of Selection.
Placement: Meaning, Induction/Orientation, Internal Mobility, Transfer, Promotion, Demotion
and Employee Separation.
Unit 4: (8 hours)
Training and development: Training v/s development, Training v/s Education, Systematic
Approach to Training, Training Methods, Executive Development, Methods and Development of
Management Development, Career and Succession Planning.
Dept. of MBA/SJBIT Page 1

Unit5: (10 hours)

Performance Appraisal: Concept of Performance Appraisal, the Performance Appraisal
Process, Methods of Performance Appraisal, Essential Characteristic of an Effective Appraisal
System.
Compensation: Objectives of Compensation Planning, Job Evaluation, Compensation Pay
Structure in India, Wage and Salary Administration, Factors Influencing Compensation
Levels, Executive Compensation.
Unit 6: (10 hours)

Employee Welfare: Introduction, Types of Welfare Facilities and Statutory Provisions.
Employee Grievances: Employee Grievance procedure, Grievances Management in Indian
Industry.
Discipline: Meaning, approaches to discipline, essential of a good disciplinary system, managing
difficult employees.
Practical Component:
1. Give a case and ask the students to prepare the recruitment advertisement for a newspaper.
2. Expose students to standard selection tests followed in various sectors.
3. Exploring training and development practices.
4. Exploring performance appraisal practices in various sectors.
5. Exploring employee separation practices.
6. Give a job analysis case and ask the students to prepare job description and job Specification.
7. Ask the students to prepare an appointment letter for the post of office manager of a Company
known to you.
RECOMMENDED BOOKS:
1. Human Resource Management – Rao V. S. P, Excel BOOKS, 2010
2. Human Resource Management - Cynthia D. Fisher, 3/e, AIPD, Chennai.
3. Human Resources Management: A South Asian Perspective, Snell, Bohlander, &
Vohra, Cengage Learning, 16th Rep., 2012.
4. Human Resource Management - Lawrence S. Kleeman, Biztantra, 2012.
5. Human Resource Management – Aswathappa K HPH

REFERENCE BOOKS:
1. Human Resource Management - John M. Ivancevich, 10/e, McGraw Hill.
2. Human Resource Management in practice - Srinivas R. Kandula, PHI, 2009
3. Managing Human Resources - Luis R Gomez-Mejia, David B. Balkin, Robert L.
Cardy, 6/e, PHI, 2010.
4. P.Subba Rao, Human Resource Management & Industrial relations, Himalaya
Publishing House, Mum
Table of Contents
Sl.NO Content Page No
1 Introduction to Human Resource Management 4-12

2 Job Analysis & Human resource Planning 13-20
3 Recruitment, Selection and Placement 21-39
4 Training & Development 40-53
5 Performance appraisal & Compensation 54-71
6 Employee welfare, Grievances & Discipline 72-81

Unit 1
Human Resource Management
Introduction:
Human resource is the most important asset of any organisation.HR are the building blocks and
are required skills to make an organization to achieve the set goal & targets. HRM is all about
how to induce people to make an organization by getting the people who can make an
organization, enabling those people to acquire required capabilities to make a successful
organization and motivating them to contribute their resources continuously for running the
organization successfully. An organization may be a manufacturing firm, a business concern, an
insurance company a government agency a social organization, hospital, and university, a school
or a religious trust, cause oriented groups. It may be small or large, simple or complex. An
organization is a human grouping in which work is done for the accomplishment of some
specific goals or mission. HRM is a broad sense may be defined as management function that
Helps, Manages, Recruit and Select, Train and Develop Members/Employees for an
organization. It is obviously concerned with the people’s dimensions in organization.
Meaning of HRM
It is this human resources which is of paramount importance in the success of any organization
because most of the problems in organizational settings are human and social rather than
physical, technical or economic failure to reorganize this fast cause immense loss to the nation,
enterprise and individual. HRM is a broad sense may be defined as management function that
helps, manages, recruit, select, Train and develop members for an organization. It is obviously
concerned with the people’s dimensions in organization. The principal component of an
organization is its human resource or people at work. Human resources may be defined as the
resource with the knowledge skills, creative ability, talents and aptitudes.
Nature and Scope of HRM
The Nature of HRM depends on the Role performed. Earlier, it was Line Managers who
performed HR Roles. But, now HR Professionals perform the roles of HRM. The scope of HRM
is vast. All major activities in the working life of an employee from Recruitment till retirement
comes under the purview of HRM. It consist of the following areas:
Nature of HRM
Employee hiring

Employee and executive remuneration

Employee motivation
Employee maintenance
Industrial relations
Prospects of HRM
Importance and Evolution of HRM

Human Resource are the most important asset of any organization. HRM is an important
strategic tool for an organization. It helps to establish on organization’s sustainable competitive
advantage.
Frederick Taylor develops his ideas on scientific management. Taylor advocates scientific
selection of workers based on qualifications and also argues for incentive-based compensation
systems to motivate employees. The interpretation of the Hawthorne Studies' begins to have an
impact on management thought and practice. Greater emphasis is placed on the social and
informal aspects of the workplace affecting worker productivity. Increasing the job satisfaction
of workers is cited as a means to increase their productivity. Many companies establish
departments devoted to maintaining the welfare of workers. The discipline of industrial
psychology begins to develop. Industrial psychology, along with the advent of World War I,
leads to advancements in employment testing and selection.
The interpretation of the Hawthorne Studies' begins to have an impact on management thought
and practice. Greater emphasis is placed on the social and informal aspects of the workplace
affecting worker productivity. Increasing the job satisfaction of workers is cited as a means to
increase their productivity. In the U.S., a tremendous surge in union membership between 1935
and 1950 leads to a greater emphasis on collective bargaining and labor relations within
personnel management. Compensation and benefits administration also increase in importance as
unions negotiate paid vacations, paid holidays, and insurance coverage.
Three trends dramatically impact HRM. The first is the increasing diversity of the labor force, in
terms of age, gender, race, and ethnicity. HRM concerns evolve from EEO and affirmative action
to "managing diversity." A second trend is the globalization of business and the accompanying
technological revolution. These factors have led to dramatic changes in transportation,

communication, and labor markets. The third trend, which is related to the first two, is the focus
on HRM as a "strategic" function. HRM concerns and concepts must be integrated into the
overall strategic planning of the firm in order to cope with rapid change, intense competition, and
pressure for increased efficiency.
Major functions of HRM

Human Resource Planning
Recruitment & Selection
Compensation & Benefits
Performance Appraisals
Training & Development
Line functions
 Planning: research and plan about wage trends, labour market conditions, union demands and
other personnel benefits. Forecasting manpower needs etc.
 Organizing: organizing manpower for the achievement of organizational goals and

objectives.
 Staffing: recruitment & selection of employees
 Directing: issuance of orders and instructions, providing guidance and motivation to

managers and employees.
 Controlling: regulating personnel activities and policies according to plans. observations and
comparisons of deviations
Staff functions
 Procurement: planning, recruitment and selection, induction and placement
 Development: training, development, career planning and counselling.
 Compensation: wage and salary determination and administration
 Integration: integration of human resources with organization.
 Maintenance: sustaining and improving working conditions, retentions, employee

communication

 Separations: managing separations caused by resignations, terminations, layoffs, death,

medical sickness etc.
Principles of HRM
Principles of Human Resources Management have been well summarized. This involves the
proper management of all aspects of the people you are working with bearing in mind that
human resources is the most valuable resource your firm has. This means that the financial,
health, transportation, tools and anything employees need to work should be well taken care of.
Companies should ensure that they remunerate their employees accordingly. The employees
reward system should be able to sustain the organization. . Firms should be able to take charge of

their employees and ensure that productivity and quality is achieved and maintained. Control
should be exercised carefully so that it does not seem like tyranny. All the steps taken by a firm
in the management of human resources must be in line with the mission and vision of the firm.
Human Resources managers should direct their focus on what the company needs
and employee abilities. Communication is very important in every organization. Through
communication, firms can ensure there is flow of information that is necessary for efficiency.
Creativity is key if a firm is to be efficient in human resources management. Firms should adopt
new ways of human resources management as long as it fits their companies. It is an
organizations responsibility to ensure that their employees are skilled to do their duties. Because
the competence of a firm depends on that of its employees, firms should do everything to
increase employee capabilities for example, by training them. Firms must ensure that they
remain the best brand to most of their clients by maintaining their credibility. They should put in
place strategies that ensure all employees have a clear sense of direction to a common goal.
Change is inevitable for businesses. The fastest business to embrace change in management
of their human resources is better placed to produce better results. Every organization has
objectives which they intend to meet both for themselves and for their clients. To meet these
goals, firms need committed staff therefore it is the firms responsibility to keep their employees
motivated so as to ensure they are committed to the organizations course.
Organization of personnel department
Status of the HR department in the total organization structure depends on whether a unit is small
or large. In most of the small organizations, there is no HR department, usually owners recruit
the staff and decide the salary and other benefits. Office staff/accountants handle all the HR
activities.
A large small unit will have manager/directors heading the HR department. A large company
with many plants will have either a centralized HR department or decentralized HR departments
at all the plants. E.g. BHEL, ITI, L&T, HAL etc. relating to each plant are handled by respective
HR department whereas the broad policies, matters, concerning executives are handled by the
centralized department at the head/corporate office.
Many HR duties are assumed by management
-HR dept. size grows as these duties increase
-HR dept. increases in size as need grows

-specialization also increases with size of dept

Line & Staff organization Structure
Refers to a pattern in which staff specialists advise managers to perform their duties. Staff
managers provide advice to the line manager who are generally specialists in the field.
Staff positions are purely advisory in nature. They have a right to recommend but have no
authority to enforce their preference on other dept.
Role of HR
The personnel manager typically performance a variety of roles, such as the roles of conscience
of a counselor, a mediator, a company spokesman, a problem solver and a change agent he
performs other miscellaneous roles according to the needs of a situation.
1. The conscience role: who reminds the management of its moral and ethical obligations to its
employees
2. Counselor role: employees consult for their mortal health, mental, physical and career
problems.
3. Mediator role: role of a peacemaker to settle the disputes between Labour and management.
4. Spokesperson: the company as he deals with the key operations and functions of the
organization.
5. Problem solver: who the issues that HRM and overall long range organization planning.
6. Change event: to introduce and implement major institutions changes. He takes the imitative
for installing organizational development Programmes.
7. Helper: the line managers learn to detect and solve its own problem.
8. Other miscellaneous roles as the situation arise when a problem arises and nobody wants
to deals with it.
Therefore the ideal HR manager is an advisor to help line management to make more reliable
personnel decisions for the purpose of effective contribution to industry.
Duties and responsibilities of a HR manager:

1. Providing purposeful direction to the firm.
2. Managing survival and growth.
3. Maintaining firm’s efficiency in terms of profits generation.
4. Meeting the challenge of increasing competition, change and technology.

5. Managing for innovation.

6. Building human organization.
7. Retaining talent and creating sense of loyalty.
8. Sustaining leadership effectiveness.
9. Maintaining balance between creativity and conformity.
10. Learning new management techniques.
HRM’s evolving role in the 21st century
HR as a strategic partner:
Executives with people management skills would be able to steal the show, since they help
integrate corporate goals with employee expectations in a successful way.HR executives would
be able to smoothly move into top management positions, using their soft skills to good
advantage.
2. Talent Hunting, developing, retaining star employees: The 21 st century Corporation would be
looking for people with cross functional expertise with strong academic background and team
management skills. Corporates pay attention to talent acquisition, development and retention
through novel developmental efforts, compensation packages and incentives apart from flexible
work schedules.
3. Lean and Mean Organizations
Organizations will be forced to eliminate low-end jobs, say goodbye to older employees with
limited skill sets, outsource work to specialized institutions in an attempt to save costs and
remain highly competitive. As a result obtaining employee loyalty and commitment would be
quite challenging in such a scenario.
4. Labour relations
LPG Reforms means the end of the road for trade unions. They will lose their countslowly but
steadily. Governmental influence in labour- management relations would have only historical
significance as employment-related issues begin to be dictated by market forces.
5. Health care benefits
To attract talented workforce healthier work environments would be an absolute necessity.
Employers would be obliged to give their employees safe, healthy and secure work
environments. Wellness programs to solve potential health problems, Office décor, and furniture

design and space utilization with a view to improve the comfort levels of employees are the top
priorities of HR in the current scenario.
Factors influencing HRM
In a dynamic Global environment, factors influencing HRM strategy are listed below:
1. Level of technology and quality issues;
2. Organizational life cycle & age/ history of the subsidiary;
3. Culture parochialism (narrow mindedness) of the organization & nation;
4. Costs of localized vs. common approach;
5. Corporate International Strategy;
6. Level of Development in Foreign Locations;
7. Diversity of product or service;
8. Organizational life cycle & experience;
9. Local political & legal constraints on staffing & tax provisions;
10. Judgments on quality of local personnel.
Challenges and Opportunities in HRM
Demographic changes--particularly the aging of the workforce--present significant challenges as
organizations prepare for the next wave of retirement. These circumstances provide opportunities
for HR professionals to demonstrate leadership by implementing creative staffing policies such
as phased retirement, job-sharing and retiree "recycling." HR professionals are acutely aware of
the changes taking place within the profession itself. In its strategic leadership role, HR must
deal with more complexity in its areas of responsibility and must find ways to measure the value
of human capital and demonstrate its return on investment.
To drive organizational success, HR professionals must understand the implications of these
trends not only for HR, but also for their organization as a whole. HR leaders willa find
opportunities in these developments and must put programs and practices in place today to meet
the challenges of tomorrow.
Institutions of repute which impart HRM education in India
1. Indian Institute of Management, Ahmedabad (IIM A)

2. Indian Institute of Management, Calcutta (IIM C)
3. Indian Institute of Management, Bangalore (IIM B

4. Indian Institute of Management, Lucknow (IIM L)

5. XLRI - Xavier Labour Research Institute, Jamshedpur
6. ISB - Indian School of Business, Hyderabad
7. FMS - Faculty of Management Studies, University of Delhi
8. Indian Institute of Management, Indore (IIM I)
9. Indian Institute of Management, Calicut (IIM K - Kozhikode)
10. Jamnalal Bajaj Institute of Management Studies, Mumbai (JBIMS)
11. S. P. Jain Institute of Management Studies, Mumbai (SPJIMR)
12. Shailesh J. Mehta School of Management, IIT Mumbai (Bombay)
13. Management Development Institute, Gurgaon (MDI)
14. NarseeMonjee Institute of Management Studies, Mumbai (NMIMS)
15. Xavier Institute of Management, Bhubaneswar (XIM B)

Unit 2
Job Analysis & Human resource Planning
Meaning
Job analysis is a process in which jobs are studied to determine what tasks and responsibilities
they include, their relationship to other jobs, conditions under which work is performed and the
personal characteristics required for satisfactory performance. Job analysis consists of two parts,
a statement of work to be performed and the skill and knowledge which must be possessed by
any one filling the job.
Process of Job analysis
Organization Analysis
Selection of job to be analyzed
Data collection
Job description
Job specification
Steps involved
1) Strategies:
a) Extent of employees involvement in job analysis
b) The level of detail of job analysis
c) Timing and frequency of job analysis
d) Past oriented Vs. Future Oriented job analysis
2) Collection of background information: Organisation charts, class specification & existing
job description
3) Selection of representative position to be analysed: In order to analyse – selecting a
representative position.
4) Collection a job description: On features of the job, required employee behavior &
human requirement
5) Developing a job description: Contents of jobs in term of function & operations as given
in job description
6) Developing a job specification: Converting job description into job specification
Describes – Personal qualities, traits, skills, knowledge & background for getting job
done.

7) Developing employee specification: Conversion of job specification into employee

specification, which includes, physical qualification, educational qualification,
experience.
Methods of collecting job analysis data
 Observation
 Interview with job holder
 Interacting with experts in the field
 Gathering information with past performers
 Seeking consultants
 Observation
 Performing the job.
 Critical incidents
 Interview- individual & group
 Panel of experts
 Diary method
 Questionnaire
 Structured & Unstructured
Types of Job analysis Information
 Work Activities:
 Machines, Tools, Equipment’s and Work Aids used
 Personal requirements
 Job context
Outcomes of Job Analysis
The information obtained from job analysis is classified into three categories.
– Job description
– Job specification
– Job evaluation
Job Description
• A job description is a written statement of the duties, responsibilities, required
qualifications and reporting relationships of a particular job.

• The job description is based on objective information obtained through job analysis.
• Job description acts as an important resource for
– Describing the job to potential candidates
– Guiding new hired employees in what they are specifically expected to do
– Providing a point of comparison in appraising whether the actual duties align
with the stated duties.
It includes the following details
Job title
Occupational code
Reports to
Job on
Supervise
Grade level
As on date
Functions
Duties and responsibility
Job characteristics
Job specification
• Job specifications specify the minimum acceptable qualifications required by the individual to
perform the task efficiently. Based on the information obtained from the job analysis procedures,
job specification identifies the qualifications, appropriate skills, knowledge, and abilities and
experienced required to perform the job.
• Job specification is an important tool in the selection process as it keeps the attention of the
selector on the necessary qualifications required for that job.
It includes the following details
Job title
Gender
Experience
Qualification
Location of the job
Physical health

Education
Appearance
Mental abilities
Special abilities
Special knowledge and skills
Other details
Role Analysis
At middle and higher Management levels, a clear definition of expected and unexpected job
related behavior is not possible. A role is a set of expectations people have about the behavior of
a person in a position. A position holder may perform 3 types of roles 1.Expected Role,
2.Perceived Role and 3.Enacted Role. The incumbent’s role is observed and feedback is provided
for further improvement.
It includes the following
Analysis the essential roles, tasks and responsibilities in that particular job
Collecting the list of roles to be performed
Sequencing the tasks and process
Analysis the skills and competencies for the task performance
Matching the skills required and the job demand.
SWOT analysis of the employee
Human Resource Planning
The process of analyzing and identifying the need for and availability of human resources so that
the organization can meet its objectives. Top HR executive and subordinates gather information
from other managers to use in the development of HR projections for top management to use in
strategic planning and setting organizational goals such as Small Business and HR Planning
Issue Attracting and retaining qualified outsiders, Management succession between generations
of owners, Evolution of HR activities as business grows, Family relationships and HR policies
Objectives
Human resource planning involves the hiring, development and retention of employees in the
achievement of organizational goals. This includes analysis of the current workforce and how it
aligns with future employment needs. By planning for the future, human resources creates action
plans aimed to satisfy organizational goals. Consider Future Workforce

• Organizations use strategic planning to achieve goals. This relates to the organization's vision,
mission and strategic objectives. An organization must analyze its future employment needs. If
an organization decides it must increase productivity by 25 percent, it may need to grow its
workforce by 2 percent. If an organization wants to increase market share by moving offices into
new locations, it must consider the human resource requirements. Analyze Current Workforce
• With future workforce needs considered, human resource planning must analyze the
competency of the present workforce. Comparing future needs with current workforce strengths
and abilities will identify gaps or surpluses. Future Preparation
• Considering workforce surpluses and deficits, human resources must prepare action plans for
the workforce. This includes identifying the type and number of employees needed, employee
competency, budget considerations, recruiting and retaining measures, and the development and
training of employees. Evaluation Process
• Ensuring objectives are being met by the future workforce requires an evaluation process. This
will determine if the workforce is adequate to satisfy strategic goals. Planning for this process
now will more easily and quickly identify future workforce gaps or surplus.
Importance and Process of Human Resource Planning
Importance of HRP
Human Resources Planning (HRP) anticipates not only the required kind and number of
employees but also determine the action plan for all the functions of personnel management .The
major benefits of Human resource planning are:
 It checks the corporate plan of the organization.
 It offsets uncertainly and change .But the HRP offsets uncertainties and changes to the
maximum extent possible and enables the organization to have right men at right time
and in right place.
 It provides scope for advancement and development of employees through training,
development etc.
 It helps to anticipate the cost of salary enhancement, better benefits etc.
 It helps to anticipate the cost of salary, benefits and all the cost of human resources
facilitating the formulation of budgets in an organization.

 To foresee the need for redundancy and plan to check it or to provide alternative
employment in consultation with trade unions, other organizations and government
through remodeling organizational, industrial and economic plans.
 To foresee the changes in values, aptitude and attitude of human resources and to change
the techniques of interpersonal, management etc.
 To plan for physical facilities, working conditions and the volume of fringe benefits like
canteen, schools, hospitals, conveyance, child care centers. Quarters, company stores etc.
 It gives an idea of type of tests to be used and interview techniques in selection based on
the level of skills, qualifications, intelligence, values etc., of future human resources.
 It causes the development of various sources of human resources to meet the
organizational needs.
 It helps to take steps to improve human resource contributions in the form of increased
productivity, sales turnover etc.
 It facilities the control of all the functions, operations, contribution and cost of human
resources.
Process of Human Resource Planning
HR Strategies
– The means used to anticipate and manage the supply of and demand for human
resources.
• Provide overall direction for the way in which HR activities will be
developed and managed.
Scanning the External Environment
• Environmental Scanning
– The process of studying the environment of the organization to pinpoint
opportunities and threats.
• Environment Changes Impacting HR
– Governmental regulations
– Economic conditions
– Geographic and competitive concerns
– Workforce composition
Internal Assessment of the Organizational Workforce

• Auditing Jobs and Skills

– What jobs exist now?
– How many individuals are performing each job?
– How essential is each job?
– What jobs will be needed to implement future organizational strategies?
– What are the characteristics of anticipated jobs?
Organizational Capabilities Inventory
HRIS databases—sources of information about employees’ knowledge, skills, and
abilities (KSAs)
– Components of an organizational capabilities inventory
• Workforce and individual demographics
• Individual employee career progression
• Individual job performance data
Forecasting HR Supply and Demand
• Forecasting
– The use of information from the past and present to identify expected future
conditions.
• Forecasting Methods
– Judgmental
• Estimates—asking managers’ opinions, top-down or bottom-up
• Rules of thumb—using general guidelines
• Delphi technique—asking a group of experts
• Nominal groups—reaching a group consensus in open discussion
– Mathematical
• Statistical regression analysis—
• Simulation models
• Productivity ratios—units produced per employee
• Staffing ratios—estimates of indirect labor needs
• Forecasting Periods
– Short-term—less than one year
– Intermediate—up to five years

– Long-range—more than five years

Effective of HRP
Diagnostic Measures of HR Effectiveness
– HR expense per employee
– Compensation as a percent of expenses
– HR department expense as a percent of total expenses
– Cost of hires
– Turnover rates
– Absenteeism rates
– Worker’s compensation per employee

Unit 3
Recruitment, Selection and Placement
Definition
The process of attracting individuals on a timely basis, in sufficient numbers, and with
appropriate qualifications, and encouraging them to apply for jobs with an organization
.Recruitment is the process of locating and encouraging potential applicants to apply for existing
or anticipated job openings. It is actually a linking function, together those with jobs to fill and
those seeking jobs.
Eg: Recruitment ad of a foreign bank may invite applications from chartered accountants who
have cleared the CA examination in the first attempt only.
Recruitment is a process of searching for prospective employees and stimulating and
encouraging them to apply for jobs in an organization.” ‘FLIPPO’
Recruitment is the discovering of potential candidates.
“For actual or anticipated organizational vacancies. It is the linking activity… bringing together
those with the jobs to fill & those seeking jobs” ‘DAVID’.
“Recruitment is the process to discover the sources of manpower to meet the requirements of
staffing schedule and to employ effective measures for attracting the manpower” ‘YODER’.
HRP Support the organization ability to acquire, retain and develop the best talent and skills.
• Determine present and future manpower requirements of the organization in coordination with
planning and job analysis activities.
• Obtain the number and quality of employees that can be selected in order to help the
organization to achieve its goals and objectives.
• Create a pool of candidates so that the management can select the right candidate for the right
job from this pool
• Attract and encourage more and more candidates to apply in the organization.
• Increase the pool of candidates at minimum cost.
• Acts as a link between the employers and the job seekers
• Infuse fresh blood at all levels of the organization
• Meet the organization's legal and social obligations regarding the composition of its workforce.
• Increase the effectiveness of various recruiting techniques

Constraints and Challenges

Poor image: of the company – declining industry-earning a bad name, poor quality
Products-nepotism
Unattractive job: job without challenges, devoid of career growth
Conservative internal policies: A policy if internal promotions based on seniority, experience,
job knowledge may result in loss of effective hands from outside.
Limited budgetary support: Recruitment efforts costs money.
Restrictive Policies of Government: governmental policies on recruitment/promotion based on
seniority, reservation, ex-service men, disabled persons etc.
Sources and Methods of Recruitment
The organizations differ in terms of their size, business, processes and practices. A few decisions
by the recruitment professionals can affect the productivity and efficiency of the organization.
Organizations adopt different forms of recruitment practices according to the specific needs of
the organization. The organizations can choose from the centralized or decentralized forms of
recruitment, explained below:
Centralized Recruitment
The recruitment practices of an organization are centralized when the HR / recruitment
department at the head office performs all functions of recruitment. Recruitment decisions for all
the business verticals and departments of an organization are carried out by the one central HR
(or recruitment) department. Centralized from of recruitment is commonly seen in government
organizations.
Benefits of the centralized form of recruitment are:
• Reduces administration costs
• Better utilization of specialists
• Uniformity in recruitment
• Interchangeability of staff
• Reduces favoritism
• Every department sends requisitions for recruitment to their central office
Decentralized Recruitment
Decentralized recruitment practices are most commonly seen in the case of conglomerates
operating in different and diverse business areas. With diverse and geographically spread

business areas and offices, it becomes important to understand the needs of each department and
frame the recruitment policies and procedures accordingly. Each department carries out its own
recruitment. Choice between the two will depend upon management philosophy and needs of
particular organization. In some cases combination of both is used. Lower level staffs as well as
top level executives are recruited in a decentralized manner
Sources of Recruitment
• Internal: within Organization
• External: outside Organization
Internal Sources of Recruitment
• Internal sources of candidates
– Finding candidates
– Hiring employees the second time around
– Succession planning
Outside sources of Recruitment
– Executive recruiters
• Entrepreneurs and HR
– College recruiting
• Recruiting goals
• On site visits
• Internship
– Referrals and walk-ins
– Internet recruiting
– Employment agencies
• Public agencies
• Nonprofits
• Private agencies
Temporary agencies and alternative staffing
• Benefits and costs
• Guidelines for success

Methods of Recruitment Sources

INTERNAL SOURCE
• Transfers
• Promotion
• Up gradating
• Dependent of deceased family member
EXTERNAL SOURCE
• Advertisement
• Education Institutions
• Employment Agencies
• Voluntary Application
• Word of Mouth
• Rec. at factory gate
• Job Portals
• Acquisitions & Mergers
• Head Hunting & Poaching
• Contractor/ Outsourcing
Internal Recruitment
ADVANTAGES
• Familiarity of Candidate
• Available information & observation
• Selection& Socialization – less expensive
• Enhances Employee Morale
• Retention of Employees
Disadvantages
 Lack of New Ideas
• Expensive Training Programs
• Political & Personal Bias
• Ripple Effect
• Some Unhappy Employees
External Recruitment

Advantages
• New Ideas
• Valuable Information – Competitors
Moves & Strategies
• Diverse Skills & Vast Experience
Disadvantages
• Lack of Reliability
• Committing Mistakes
• Expensive Process
• Orientation Process – Time
Consuming
• De-motivates Internal Employees
New Approaches to recruitment
Walk-in: A walk-in interview is a job screening that happens without an appointment or
scheduled meeting. They are common at career fairs and informal meet-and-greet sessions, and
they conduct various tests and interviews. Employers may offer candidates a job at the end, but
more often than not, the meetings are used as a way to quickly narrow down the applicant pool.
Top candidates are often invited for a more formal
interview at a later date.
Consult-in: The busy and dynamic companies request the potential job seekers to approach them
personally and consult them regarding the jobs. The companies select the suitable candidates
form among such candidates through the selection process.
Head-Hunting: The Company’s request the professional organizations to search for the best
candidates particularly for the senior executive positions. The professional organizations search
for the most suitable candidates and advise the company regarding the filling up of the positions.
Head hunters are also called as search consultants.
Body shopping: Professional Organizations and hi-tech training institutes develop a pool of
human resources for the possible employment. The prospective employers contact these
organizations to recruit the candidates. Otherwise, the organizations themselves approach the
prospective employees to place their human resources. These professional and training

institutions are called body shoppers and these activities are known as body shopping. The body
shopping is used mostly for computer professionals.
Business alliances: Business alliances like acquisitions, mergers, and take-overs help in getting
resources. In addition, the companies do also have alliances in sharing their human resources on
ad-hoc basis. It does mean that, the company with surplus human resources offers the services of
their employees to other needy organizations.
E-recruitment: The technological revolution in telecommunication helped the Organizations to
use the internet as a source of recruitment. Organizations advertise the job vacancies through the
World Wide Web (www) internet. The job seekers send their applications through email or
internet. Alternatively, job seekers place their CVs in the world wide web/internet, which can be
drawn by the prospective employers depending upon their requirements.
Advertising
A classic employment recruitment technique is the "help wanted" advertisement in your local
newspaper. While you can still utilize this form of recruitment, an online ad can be more cost-
effective and reach a broader audience. Ads placed on job websites or on your business website
can draw potential employees from a wider geographic area. For targeted recruitment, you can
place ads on industry specific job boards.
Career Fairs
• For entry-level jobs, career fairs can help you recruit recent graduates and individuals who
want to change careers. Some colleges and universities sponsor on-campus career fairs that can
help you recruit well-educated employees for your business. Job fairs also provide an easy way
to collect resumes to help fill future vacancies.
Database
• Maintain a database or filing system for potential employees based on resumes collected at
career fairs, from your website or from manual submissions. When looking to fill a vacancy,
review your file of resumes for potential applicants and send queries to possible candidates. This
recruitment method can help fill vacancies faster at a lower overall cost than starting a fresh
recruiting effort.
Employment Agencies
• If you are searching for employees with specific skills, you may want to work with a recruiting
agency that screens and potentially tests applicants based on the skills you require. While the

initial cost of utilizing an employment agency may be high, the long- term reward of a well-
placed, highly capable employee can be greater than the initial recruitment cost.
Internal Recruiting
• Internal recruiting is an effective method of filling vacancies. Existing employees have an
established track record that can be matched to a current vacancy. Even if the employee needs
some additional training to fulfill all the position requirements, companies gain valuable
employee relation benefits by hiring from within. Promoted employees may demand lower
compensation than those hired from external sources; in addition, you decrease turnover by
providing advancement opportunities.
• Employee Referrals
Your existing employees can be a great source of providing recruitment referrals. They may
know of a good match for a vacancy that would not respond to more traditional recruitment
methods. Many potential employees are working for other companies and are not actively
looking for employment, but may be enticed to change employment for the right opportunity.
You should encourage employee referrals by providing bonuses for all new hires employed
based on a referral.
Selection
Definition
The process of interviewing and evaluating candidates for a specific job and selecting an
individual for employment based on certain criteria. Employee selection can range from a very
simple process to a very complicated process depending on the firm hiring and the position.
Certain employment laws such as anti-discrimination laws must be obeyed during employee
selection.“Selection is the process of choosing among the candidates from within the
organization or from the outside, the most suitable person for the current position for the future
position” ‘Koontz’.“Objective of selection decision is to choose the individual who can most
successfully perform the job from the pool” .
Selection Procedure is not a single act but is essentially a series o methods or stages by which
different types of information can be gathered through various selection techniques. At each step,
facts may come to light which are useful for comparison with the job requirement &
Employment specifications information’s required to be collected are

 Candidate’s qualification . Nature and Behavior

 Experience . Knowledge
 Physical & Mental ability . Aptitude
Process of Selection
Methods of Selection
(a) Tests:
1. Aptitude Tests:
– Mental or Intelligence test
– Mechanical test
– Psycho-motor test
2. Achievement Tests:
- Job Knowledge test
- Work sample test
3. Personality Tests:
– Objective test
– Projective test
– Situation test
4. Interest Tests:

(b) Interviews
1. Informal Interview
2. Formal Interview
3. Patterned or Structured Interview
4. Non-Directed or Unstructured Interview
5. Depth Interview
6. Group Interview
7. Stress Interview
8. Panel or Board Interview
Steps in scientific selection procedure / process
(i) Job Analysis
(ii) Recruitment
(iii) Application form
(iv) Written examination
(v) Preliminary Interview
(vi) Business Games
(vii) Tests
(viii) Final interview
(ix) Medical Examination
(x) Reference
(xi) Line managers decision
(xii) Job offer
(xiii)Employment
Job Analysis: Is the basis for selecting the Right candidate. Organizations to finalize, job
analysis, Job description, job specifications, & Employee specifications before proceeding to the
next step of selection
Human Resources Plan: Every company plans for the required number & kind of employees
for a future date. This is the basis for Recruitment function.
Recruitments: Process of searching for prospective employees and stimulating them to apply for
jobs in an organization. It is the basis for the remaining techniques of the selection.

Development of Bases for selection: To select appropriate candidates from the Applicants pool,
towards this the organization may borrow / Adopt Techniques/ Bases.
Application Form: A traditional method of securing information from the prospective

candidates also can be used for screening candidates at Preliminary level. Information to be
covered in an Application form is
(i) Personal Background information

(ii) Educational Attainments.
(iii) Work experience
(iv) Salary
(v) Personal details
(vi) References.
Written Examination: Conducted for the qualified candidates after they are screened on the
basis of application blanks enables to make sure the candidates ability in
(i) Aptitude, (ii) Reasoning (iii) Knowledge in various disciplines (iv) General
Knowledge, (v) English Knowledge.
Preliminary Interview:
- To gather necessary information from the prospective applicants and to

assess the applicants suitability to the job.
- Information provided by candidates may be related to job or personal

specifications regarding Education- Experience – salary expected – aptitude
towards the job- Age – Physical Appearance – other physical requirements.
- A process useful in eliminating undesirable/unsuitable candidates.
- If candidate satisfy most of the areas of job requirements, he may be

selected for further process.
Also known as stand-up interviews or screening interviews.
- Also useful in providing basic information about company to candidates

Caution – Care to be taken to ensure that desirable ones are not eliminated.
BUSINESS GAMES:
 Are widely used as a selection techniques for selecting management

trainees, Managerial personnel at junior, middle & Top positions
 Help to evaluate applicants in the areas of

- Decision making
- Identifying the potentialities
- Handling the situation
- Human relations skills etc
 Technique Adopted Generally
Participants are placed in a hypothetical work situation and are requested

to play the role situation in the game.
The Hypothesis: The most successful candidates in the game will be the most successful ones on
the job in the selection process.
Business games and their utility
(i) Case Study : Analytical job general or decision making skills

(ii) Role Play : Human Relations skills
(iii) In-Basket Method: Situational judgment, social relations
(iv) Sensitivity: Degree of openness, concern to others Tolerance
for Individual Differences.
(v) Simulations: Encountering, Situation analysis skills.
Group Discussion: A method where groups of successful applicants are brought around a
conference table and are asked to discuss a case study or a subject matter.
 A technique used to secure further information regarding the suitability of the candidate for
the job.

 Candidates in the group are required to analyze, discuss and alternative solutions and select a
sound solution.
 A selection panel observes the candidates in the areas of
 Initiating discussion – Explaining the problem,
 - Soliciting unrevealing information based on given information and using common

sense.
 - Keenness to observe discussion of others.
 - Clarifying controversial issues – Influencing others
 - Speaking effectively
 -Concealing and mediating arguments among the participants and summarizing or

concluding aptly.
 - Selection panel, based on the observation judges candidate’s skills and ranks them
according t heir merit.
 - In some cases the selection panel may also ask the candidates to write the summary of
the group discussion in order to know the candidates writing ability as well.
Placement:
Meaning
Placement is the process of assigning a specific job to each of the selected candidates. It involves
assigning a specific rank and responsibility to an individual. It implies matching the requirements
of a job with the qualifications of the candidate.
Induction/Orientation
Induction
It is the process of receiving and welcoming an employee when he joins a company and giving
him the information about the company. An applicant after being hired, he/she must be inducted
and placed a chosen job.
Induction or orientation conveys 3 types of information
1. A review of the organization’s history, founding fathers, objectives, products, services as
well as how the employee’s job contributes to the organization needs.
2. General information about the daily work routine.
3. A detailed presentation, perhaps in a Boucher of the organization policies, work rules and

employee benefits.
Purpose / need of Induction (Objectives)
1. Many organizations are known to spend a few weeks / months on orientation
Programmes.
2. The ides is the make the new employees feel at ‘home’ in the new environment.
3. New employee will be anxious about their jobs, colleagues, superiors and company rules to
remove, this fear / anxiety, orientation programmes are required.
4. The adjustment of the employee to the company depends on the expectations from the jobs /
holders.
5. It expectations are high, adjustment is difficult. It expectations are moderate, adjustment is
comfortable.
Topics covered in the Induction Programmes:
1. Organizational Issues: History, organization details, names and titles of top management,
employees Title and department layout of the company, probationary period, products/services,
overview of production company policies and rules, discipline, employee, handbook, safety
procedure.
2. Employee Benefits: Pay scale, leave, training and education benefits, Insurance benefits,
Retirement programs, other benefits.
3. Introduction: To superior, co-workers, subordinates, training and others.
4. Job Details: Job location, job tasks, job objectives, relationship to other jobs.
Types of Induction:
1. Formal or informal
2. Individual or collective
3. Serial or disjunctive
Induction Problems:
1. Untrained supervisors
2. Incapable employee
3. Wrong placements
4. Trial induction
5. Formalities or Induction

Internal Mobility
Internal mobility (mobility or talent mobility) is a dynamic internal process for moving talent
from role to role – at the leadership, professional and operational levels. To achieve internal
mobility, companies must adopt the principles of succession management at all ranks; provide
transparent discussion of skills and potential, as well as organizational needs; and, focus on
development across critical talent pools, based on business needs.
Transfers
A transfer involves a change in the job, place of the job of an employee without a change in
responsibilities or salary. Transfer is a regular procedure in banks and other government
establishments. E.g. once in 3 years, a bank employee is transferred. Transfer is different from
promotion. Transfers do not accompany with salary like or responsibility change. Transfers are
frequent but promotions are not frequent.
Reasons for transfer
The reasons for transfers vary from organization to organization and from individual to
individual within an organization. Generally speaking the following are the reasons for transfers.
 There is a shift (transfer) from the department of surplus employees to the department of
shortage of employees to maintain a balance.
 To remove the incompatibility between a workers & a boss or between coworkers.
 Correction of faulty initial placement of a worker.
 Based on the interests & capabilities of an individual, transfer is ordered.
 To remove the effect of monotony of an employee’s job & less productivity.
 Employees health may be a problem in a particular department (working conditions)
 Family issues, female employees request for the transfer to place where her husband is
living
Principles of transfers
The organization should frame a transfer policy & execute the transfer function accordingly
.Such a policy must be based on the following principles
 The frequency of transfers & minimum gap between the transfers should be decided, so
that the employees are prepared for it.

 The decision on the authority of the transfers should be carried out. Usually the
department head carries out the transfers. But it should be centralized to the HR
department.
 The criteria for transfers should be strictly followed.
 Transfers should be clearly defined as permanent or temporary.
 The effect of transfers on the salary & others benefits should be clearly evaluated.
 Employee’s interests & capabilities should be taken care while transferring him for better
results.
 Transfers should be carried out in the interest of the organization (to achieve
organizational objectives)
Types of transfers
1) Production transfers:
A shortage or surplus of the labour force is common in different departments in a plant or several
plants in organization. The surplus labour is shifted to the labour shortage department. E.g. new
projects, new products, new models.
2) Replacement transfers:
In this type, a junior employee may be replaced by a senior employee to avoid laying off the
senior employee.
3) Versatility transfers:
They are carried out to make employees versatile & competent in more than one skill. E.g. Bank
employees are transferred from one section to another over a period of time so that they may
acquire the necessary skills to attend to the various activities of the bank. Versatile
operations are useful at the time of rush hours E.g. from credit card section to Loan Section.
4) Shift transfers:
Industrial establishments operate for more than one shift. Transfers between shifts are common,
on a rotation basis. Transfers are also carried out according to an employee’s request. E.g. From
day shift to night shift & vice versa.
5) Remedial transfers:
Remedial transfers are also called personal transfers as they are requested by the employee’s.
E.g. the initial placement of an employee May be faulty or the worker may not along with his
/her superior or with coworkers. The health problem/accident, stagnancy demands a transfer.

Promotion
It is an improvement in pay, prestige, position and responsibilities of an employee within his/her
organization. Promotion increases the responsibility and salary, apart from better working hours,
better location & pleasant working conditions. A promotion is the ultimate achievement for some
employee and hence they achieve it through hard work & good performance. But some
employees follow short cut path to achieve the desired goal. Some employees refuse to be
promoted as, they loose their overtime incentives, and they also refuse because of added
responsibilities.
Objectives of promotion
To maintain employees for higher productivity.
1. To attract and retain the services of qualified and competent people.
2. To recognize and reward the efficiency of an employee.
3. To increase the effectiveness of an employee and of the organization.
4. To fill up higher vacancies from within the organization.
5. To build loyalty, morale and a sense of belongingness in the employee.
6. To improve upon others that opportunities are available to them. If they perform well.
Basis/principles of promotion
Promotion is a double edged weapon. If handled carefully. It contributes to employee satisfaction
and motivation. If mishandled, it leads to discontentment, frustration, skepticism & other
problems among employees and ends up with a high rate of labour turnover. Hence it is the
responsibility of HR department to frame a sound (proper) promotional policy and ensure its
implementation. The promotion policy should be clear on the following matter.
A) The management must make it clear whether to fill up higher positions by internal
promotions or recruit people from outside. Generally speaking top positions in an organization
are filled through external recruitment. The lower positions are filled up by promotions from
within.
B) A further decision on the basis of promotion should be determined, whether the promotions
are based in seniority or merit or both.
C) Policy of promotion against vacancies or non-vacancies time bound promotions is given
&sometimes vacancies are created to avoid frustration among aspirants for promotion.

D) A promotion policy should establish a well-defined chest which shows the clear path of
promotions.
E) Frequent promotions are not advised because an employer has to pay more salary and an
employee does not response to sudden promotions.
F) A job analysis and performance appraisal should be followed by promotions. Job analysis
provides the information of job demands performance appraisal enables the management, to
know the suitability of the employee with the job.
G) The promotion policy should be discussed with labour unions & their acceptance should be in
order to avoid conflict.
H) Proper opportunities & publicity should be given to the merit based promotion.
Seniority as the basis for promotion:
An employee with the longest period of service will get promoted, Irrespective of his merit. This
practice is followed in unionized industrial establishments, governments sectors.
Merits
1. Easy to administer.
2. Labour unions welcome seniority based promotions.
3. Less argument for fixing seniority criteria.
4. Seniors are more experienced.
5. Subordinates are more willing to work under a senior boss with good experience.
6. Loyalty is rewarded.
Demerits
1. Merit is discouraged
2. Young & competent people may get frustrated and might leave the organisation
3. Results of promotions may not be Upto the work.
Merit based promotion
An employee based on his merit is promoted by hard work and dedication.
Merits
1. Efficiency is encouraged, recognized & rewarded
2. Competent people are retained & they have better prospects.
3. Productivity increases
Demerits

1. Unhappy senior employees & they may refuse to work under a younger boss.
2. Scope for favoritism.
3. Loyalty & strength of service are not rewarded.
4. Opposition from union leaders.
In the non-unionized companies, merit based promotions are given because such companies are
having the pressures of union.
Seniority for promotion should be considered only when there are more than one aspirant of
equal merit.
Types of Promotion
1. Horizontal promotion:
This type of promotion involves an increase in responsibility & pay and a change in designation,
but with the same job classification. E.g. Lower division clerk is promoted to the position of
upper division clerk. Here the job type of clerk remains the same.
2. Vertical promotion:
This type of promotion results in greater responsibility, prestige & pay together with a change in
the nature of the job. E.g. an officer promoted as a manager. The job type is different, in this type
of promotion.
3. Dry promotion:
It merely increases pay & a change in designation. But the responsibilities do not change or
increase. E.g. engineers to senior managers
Demotion and Employee Separation.

A demotion is a compulsory reduction in an employee's rank or job title within the organizational
hierarchy of a company, public service department, or other body. A demotion may also lead to
the loss of other privileges associated with a more senior rank and/or a reduction in salary or
benefits. An employee may be demoted for violating the rules of the organization by a behavior
such as excessive lateness, misconduct, or negligence. In some cases, an employee may be
demoted as an alternative to being laid off, if the employee has poor job performance or if the
company is facing a financial crisis. A move to a position at the same rank or level elsewhere in
the organization is called a lateral move or deployment. A voluntary move to a lower level is also

a deployment as it is not a compulsory reduction in level. is often misinterpreted simply as the

opposite of a promotion, however it is only one means of undergoing a reduction in work level.
Employee separation
According to Yoder, separation is a negative recruitment. It may be in the form of resignation,
Dismissal or discharge, suspension, retrenchment or lay-off.
Employee separation is a sensitive issue for any organization. Usually, an employee leaves the
organization after several years of service. Thus, the permanent separation of employees from an
organization requires discretion, empathy and a great deal of planning. Employee may be
separated as consequence of resignation, removal, death, permanent incapacity, discharge or
retirement. Employee may also be separated due to the expiration of an employment contract or
as part of downsizing of the workforce. Organizations should never harass the employees,
especially in the case of resignation, just because they are quitting the organization. In fact, a
quitting employee of the organization must be seen as a potential candidate of the future for the
organization and also the brand ambassador of its HR policies and practices. However, many
organizations are still treating their employees as "expendable resources “and discharging them
in an unplanned manner whenever they choose to do so. Each organization must have
comprehensive separation policies and procedures to treat the departing employees equitably and
ensure smooth transition for them. Further, each employee can provide a wealth of information
to the organization at the time of separation. Exit interviews can be conducted by the HR
department to ascertain the views of the leaving employees about different aspects of the
organization, including the efficacy of its HR policies.

Unit 4
Training and development
Training v/s development
Training
Training refers to the Imparting of specific skills, abilities and knowledge to an employee,
Training is transfer of knowledge from a trainer to a trainee. Training is an attempt to improve
current or future employee performance by increasing an employee’s ability to perform through
learning, by changing the employee’s attitude or increasing his skills and knowledge. Training is
acquiring new skills through classroom learning. It has a short term and narrow focus of skills
acquisition. Training is led by an instructor. Training is a learning process which seeks relatively
a permanent change in behaviour that occurs as a result of experience. Training is a learning
process which seeks relatively a permanent change in behaviour that occurs as a result of
experience. Training is the art of increasing the knowledge and skills of an employee for doing a
particular job.
Significance
 Improves profitability & profit orientation with positive attitude
 Improves job knowledge & skills at all levels of organization
 Improves morale of workforce, helps people identify organization goal
 Improves relationship between boss & subordinates
 AIDS in organizational development, helps to prepare guideline for work
 AIDS in understanding & carrying out organizational policies
 MIS – at all department for future needs
 Organisation becomes more effective in decision making & problem solving
 AIDS in developing, leadership skills, motivation, loyalty, better attitude
 AIDS in increasing productivity & quality work
 Help in keeping cost down – production, personnel & Administration
 Develops a sense of responsibility to the organization
 Improves labour management relations
 Reduces outside consulting costs by using internal competency
 Stimulates preventive management as opposed to putting out fires

 Creative appropriate climate for growth & communication

 Helps employee adjust to changes
 Aids in handling conflicts, thereby helping to prevent stress & tension
Eg: Learning to fire a rifle, Computer training etc.
Development
Development includes learning, experiencing and practicing the knowledge, skills and attitude
which improves the overall personality of an individual it has a long-term and broader
perspective of integrated development of individuals. The developmental interventions includes
counseling, mentoring, feedback, spiritual activities, community service etc. Development is
exploring the potential through awareness, practice and modification. Development is the
process of transition of an employee from a lower level of ability, skill & knowledge to that of
higher level. This transition is influenced by education, training, work experience and
environment. This will improve value of individual employees in terms of his self-development,
career growth & contribution to organization. Development covers not only those which bring
about growth of performance, but also those which bring about growth of personality, help
individuals in the progress towards majority & actualization of their potential capacities, so that
they become not only good employees but better men women
Training v/s Education
Scope
Is narrower in scope and more specific whereas Education is wider in scope and more general in
purpose
Process
Is the act of increasing the knowledge & skills of an employee while doing a job the process of
increasing the general knowledge & understanding of employees
Purpose
Is Job oriented (skill learning) is theory oriented (Conceptual learning) content is practice based
and company/Machine specific
Content is generally aimed at improving the talents of a person
Place of Delivery
Vocational based training Institutes Schools, colleges

Systematic Approach to Training

Training is most effective when it is planned, implemented and evaluated in a systematic way.
Unplanned, uncoordinated and haphazard training efforts greatly reduce the learning that can be
expected.
The table below shows three major components of a systematic approach to training.
Assessment: Determining the training needs and identifying the objectives
Implementation: Selecting training methods and conducting the training
Evaluation: Comparing the training outcomes against criteria
The Training Process
The model below traces the steps necessary in the training process:
 Organizational Objectives
 Needs Assessment
 Is There a Gap?
 Training Objectives
 Select the Trainees
 Select the Training Methods and Mode
 Choose a Means of Evaluating
 Administer Training
 Evaluate the Training
Needs analysis, Training needs can be assessed by analyzing three major human resource areas:
the organization as a whole, the job characteristics and the needs of the individuals. This analysis
will provide answers to the following questions:
 Where is training needed?

 What specifically must an employee learn in order to be more productive?
 Who needs to be trained?
Begin by assessing the current status of the company how it does what it does best and the
abilities of employees to do these tasks. This analysis will provide some benchmarks against

which the effectiveness of a training program can be evaluated. Firm should know where it wants
to be in five years from its long-range strategic plan.
Second, consider whether the organization is financially committed to supporting the training
efforts. If not, any attempt to develop a solid training program will fail.
Next, determine exactly where training is needed. It is foolish to implement a company-wide

training effort without concentrating resources where they are needed most. An internal audit
will help point out areas that may benefit from training. Also, a skills inventory can help
determine the skills possessed by the employees in general. This inventory will help the
organization determine what skills are available now and what skills are needed for future
development.
Also, in today's market-driven economy, would be remiss not to ask customers what they like
about business and what areas they think should be improved. In summary, the analysis should
focus on the total organization and should tell (1) where training is needed and (2) where it will
work within the organization.
Once have determined where training is needed, concentrate on the content of the program.
Analyze the characteristics of the job based on its description, the written narrative of what
the employee actually does. Training based on job descriptions should go into detail about how
the job is performed on a task-by-task basis. Actually doing the job will enable to get a better
feel for what is done.
Individual employees can be evaluated by comparing their current skill levels or performance to
the organization's performance standards or anticipated needs. Any discrepancies between actual
and anticipated skill levels identifies a training needed
Training design
The first step in the design of training involves an assessment of training needs. The assessment
comprises -
 Observing workers performing normal duties

 Interviewing workers and others

 Studying routine reports or performance reviews, along with job descriptions
 Identifying performance problems
The second step involves defining the training program’s learning objectives. The learning
objectives, which are derived from the needs assessment, specify the observable, measurable
actions that each learner will be able to demonstrate as a result of participating in the training
activities.
The third step is the creation and implementation of a training program to improve performance,
taking into account the experience and educational levels of the personnel and the time and
resources available for training.
Options range from short courses to long-term placements in academic institutions in the
country, in the region, or overseas, and non–classroom-based interventions, such as on-the-job
training, coaching, and mentoring.
All options must be weighed against the immediate operational needs of the program or
institution, because facilities may not have enough personnel to operate when staff members go
for training.
Training implementation
Implementation
•Pilot Test & revision. Most revisions are refinements of execution points and time frames •
Train‐the‐trainer & revision. Adjustments made are very minor at this stage, usually limited to
delivery execution details or typographical edits.
Regional / Divisional / Areabased deployment. For smaller organizations this is a single step, an
d coordination requirements are low.
Training evaluation
The specification of values forms a basis for evaluation. The basis of evaluation and the mode of
collection of information necessary for evaluation should be determined at the planning stage.
The process of training evaluation has been defined as "any attempt to obtain information on the
effects of training performance and to assess the value of training in the light of that

information." Evaluation leads to controlling and correcting the training programme. Hamblin
suggested live levels at which evaluation of t raini ng can take place, viz. reactions, learning, job
behaviour, organisation and ultimate value .
(i) Reactions: Training programme is evaluated on the basis of the trainee's reactions to the
usefulness of coverage of the matter, depth of the course content, method of presentation,
teaching methods etc.
(ii) Learning: Training programme, trainer's ability and trainee ability are evaluated on the
basis of quantity of content learned and time in which it is learned and the learner's ability to use
or apply the content he learned.
(iii) Job Behaviour: This evaluation includes the manner and extent to which the trainee has
applied his "naming to his job.
(iv) Organization: This evaluation measures the use of training, learning and change in the job
behaviour of the department/organization in the form of increased productivity, quality, morale,
sales turnover and the like.
(v) Ultimate Value: It is the measurement of the ultimate result of the contributions of the
training programme to the Company goals like survival, growth, profitability etc. and to the
individual goals like development of personality and social goals like maximizing social benefit.
The various methods of training evaluation are:
o Immediate assessment of trainees' reaction to the programme.
o Trainees' observation during the training programme.
o Knowing trainees' expectations before the training programme and collecting
their views regarding the attainment of the expectations after training.
o Seeking opinion of the trainee's superior regarding his/her job performance and
behaviour before and after training.
o Evaluation of trainee's skill level before and after the training programme
o Measurement of improvement in trainees on the job behaviour.
o Examination of the testing system before and after sometime of the training
programme.
o Measurement of trainee's attitudes after the training programme.
o Cost-benefit analysis of the training programme.

o Seeking opinion of trainee's colleagues regarding his/her job performance and

behaviour.
o Measurement of levels in absenteeism, turnover, wastage/scrap, accidents,
breakage of the machinery during pre and post period of the training programme.
o Seeking opinions of trainee's subordinates regarding his/her job performance and
behaviour.
Training Methods
On-The-Job Training Methods
This type of training, also known as job instruction training, is the most commonly used method.
Under this method, the individual is placed on a regular job and taught the skills necessary to
perform that job. The trainee learns under the supervision and guidance of a qualified worker or
instructor. On-the-job training has the advantage of giving firsthand knowledge and experience
under the actual working conditions. While the trainee learns how to perform a job, he is also a
regular worker rendering the services for which he is paid. The problem of transfer of trainee is
also minimized as the person learns on-the-job. The emphasis is placed on rendering services in
the most effective manner rather than learning how to perform the job. On-the-job training
methods include job rotation, coaching, job instruction or training through step-by-step and
committee assignments.
(i) Job Rotation: This type of training involves the movement of the trainee from one job to
another. The trainee receives job knowledge and gains experience from his supervisor or trainer
in each of the different job assignments. Though this method of training is common in training
managers for general management positions, trainees can also be rotated from job to job in
workshop jobs. This method gives an opportunity to the trainee to understand the problems of
employees on other jobs and respect them.
(ii) Coaching: The trainee is placed under a particular supervisor who functions as a coach in
training the individual. The supervisor provides feedback to the trainee on his performance and
offers him some suggestions for improvement. Often the trainee shares some of the duties and
responsibilities of the coach and relieves him of his burden. A limitation of this method of
training is that the trainee may not have the freedom or opportunity to express his own ideas.

(iii) Job Instruction: This method is also known as training through step by step. Under this
method, the trainer explains to the trainee the way of doing the jobs, job knowledge and skills
and allows him to do the job. The trainer appraises the performance of the trainee, provides
feedback information and corrects the trainee.
(iv) Committee Assignments: Under the committee assignment, a group of trainees are given
and asked to solve an actual organizational problem. The trainees solve the problem jointly. It
develops team work. (See Box 9.6 for examples on training).
Off-the-Job Methods
Under this method of training, the trainee is separated from the job situation and his
attention is focused upon learning the material related to his future job performance. Since the
trainee is not distracted by job requirements, he can place his entire concentration on learning the
job rather than spending his time in performing it. There is an opportunity for freedom of
expression for the trainees. Companies have started using multimedia technology and
information technology in training (See Box 9.7 and Box 9.8) Off-the-job training methods are
as follows:
(i) Vestibule Training: In this method, actual work conditions are simulated in a class room.
Material, files and equipment which are used in actual job performance are also used in training.
This type of training is commonly used for training personnel for clerical and semi-skilled jobs.
The duration of this training ranges from days to a few weeks. Theory can be related to practice in
this method.
(ii) Role Playing: It is defined as a method of human interaction that involves realistic behaviour
in imaginary situations. This method of training involves action, doing and practice. The
participants play the role of certain characters such 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 and relations.
(iii) Lecture Method: The lecture is a traditional and direct method of instruction. The instructor
organizes this material and gives it to a group of trainees in the form of a talk. To be effective, the
lecture must motivate and create interest among the trainees. An advantage of the lecture method is
that it is direct and can be 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 transfer of
training effectively.
(iv) Conference or Discussion: It is a method in training the clerical, professional and supervisory
personnel. This method involves a 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 has the distinct advantage over the lecture method, in that the discussion
involves two-way communication and hence feedback is provided. The participants feel free to
speak in small groups. The success of this method depends on the leadership qualities of the person
who leads the group.
(v) Programmed Instruction: In recent years, this method has become popular. The subject-
matter to be learned is presented in a series of carefully planned sequential units. These units are
arranged from simple to more complex levels of instruction. The trainee goes through these units
by answering questions or filling the blanks. This method is expensive and time consuming.
Executive Development
Executive development is the whole of activities aimed at developing the skills and
competencies of those that (will) have executive positions in Organizations. While "executive"
and "manager" and "leader" are often used interchangeably, "executive" is commonly used to
signify the top 5% to 10% of the organization. Similarly, "development" and "training" and
"education" are often used as synonyms, however "development" is generally seen as the most
encompassing of the three in terms of activities that build skills and competencies. While it is
typical to find organizations that have dedicated corporate training & development people and
processes, it is not always the case that an organization will have a dedicated executive
development set of activities. In some organizations (typically large multi-nationals), there is a
separate executive development team, in other organizations executive development is handled
as one of many activities by the larger corporate training group, and in yet other scenarios there
is no executive development activity to speak of. In contrast to other corporate training &
development activities, which have as their core purpose to build tactical skills for employees,
executive development plays a different role for the organization. Indeed some executive
development is conducted for the purpose of building tactical skills (sometimes referred to as
"hard skills" such as business fundamentals- finance, marketing, operations and also "soft skills"
such as communication and team building), yet executive development is also used to evaluate

future potential future executives as well as a mechanism for the CEO and the executive team to
cascade their strategies, goals, and even elements of the culture to the rest of the management
team and ultimately the organization. In the best of cases, executive development not only helps
an organization execute its key strategies, it can also help provide input to the strategy creation
process. In this way, executive development is much more strategic than typical corporate
training & development which is used for most employees of an organization.
Methods and Development of Management Development

Management development is the process by which managers learn and improve their
management skills In Organizational development (OD), management effectiveness is
recognized as a determinant of Organizational success. Therefore investment in management
development can have a direct benefit to the organization. In 2004, the money spent per year per
manager on management and leadership development was £1,035, an average of 6.3 days per
manager. Most management development does not involve outside classes. Management
development is the overall concept that describes the many ways that organizations help
employees develop their personal and organizational skills, either as managers in a management
job or with an eventual management job in mind. Building the skills of managers through
management development options is critical to the effective functioning of your organization.
This is because of the power of a manager to impact the organization through his or her oversight
of the work of other employees.
In fact, the managers in your workplace are the single most important factor in employee
engagement, employee motivation, and building a productive workplace. Managers are the key
to employee retention and the main reason employees leave their current employer. So, the need
for management development is significant and can provide a significant payback.
Outbound Management Development Programs
These programmes generally revolve around activities designed to improve leadership,
communication skills, planning change management, delegation, teamwork, and motivation.
Participants are divided into teams and assigned tasks or activities for completion in a specified
time. Achievement and performance during these activities is reviewed in group discussions to
identify behaviours that enhance performance or lead to failure or decreased performance.

Strategies are formulated to deal with factors that hinder, and these strategies are then put to use
in the activities that follow, to test their effectiveness.
Career and Succession Planning
A career is a sequence of positions held by a person during the course of a lifetime. It comprises
of a series of work related activities that provide continuity, order and meaning to a person’s life.
Traditional Career
– Sequence of positions held within an occupation
– Context of mobility is within an organization
– Characteristic of the employee
• Protean (Variable) Career
– Frequently changing based on changes in the person and changes in the work
environment
– Employees take major responsibility for managing their career.
Career management is the process through which employees:
 Become aware of their own interests, values, strengths, and weaknesses.
 Obtain information about job opportunities within the company.
 Identify career goals.
 Establish action plans to achieve career goals.
A shortage of employees to fill open positions
– Lower employee commitment
– Inappropriate use of monies (taxes/resources) allocated for training and development programs
From the employees’ perspective, lack of career management can result in:
– Frustration
– Feelings of not being valued by the company
– Being unable to find suitable employment should a job change be necessary due to mergers,
acquisitions, restructuring, or downsizing.
Career motivation refers to:
– Employees’ energy to invest in their careers
– Their awareness of the direction they want their careers to take
– The ability to maintain energy and direction despite barriers they may encounter
Career motivation has three aspects:

– Career resilience (spirit)

– Career insight
– Career identity
Succession planning
Succession planning is a process for identifying and developing internal people with the potential
to fill key business leadership positions in the company. Succession planning increases the
availability of experienced and capable employees that are prepared to assume these roles as they
become available. Taken narrowly, "replacement planning" for key roles is the heart of
succession planning. Effective succession or talent-pool management concerns itself with
building a series of feeder groups up and down the entire leadership pipeline or progression. A
strategy for passing each key leadership role within a company to someone else in such a way
that the company continues to operate after the incumbent leader is no longer in control.
Succession planning ensures that businesses continue to run smoothly after the business’s most
important people move on to new opportunities, retire or pass away.
Career development is important for companies to create and sustain a continuous learning
environment. A study conducted by PWC of companies in finance, online services, hospitality,
real estate and high-tech industries suggests that companies that are successful at managing the
employee growth that accompanies business expansion and increased demand for their products
and services focus on recruitment, career development, culture orientation and communications.
These companies emphasize that employees are responsible for career management.
Employees, managers, human resource managers, and the company share the responsibility for
career planning.
Roles in Career Management:
EMPLOYEE MANAGER COMPANY HR MANAGER

Self-Assessment Coaching Develop systems to Information and
Self-Development Counseling support career advice
action plan Communicating management Specialized services
Create Visibility Request information Develop culture that (testing, counseling
through Good from other company supports career or workshops).
Relationships resources management

Seek Challenge
a) Employees’ Role:
The employees must approach their manager to initiate career-related discussion as part of the
personal development planning process. Regardless of how sophisticated the company’s career
planning system is, employees should engage in career management actions.
Take the initiative to ask for feedback from managers and peers regarding their skill strengths
and weakness.
Identify their stage of career development and development needs.
Seek challenges by gaining exposure to a range of learning opportunities (sales assignments,
product design assignments, administrative assignments).
Interact with employees from different work groups inside and outside the company
(professional associations, task forces).
Create visibility through good performance.
b) Manager’s Role:
Regardless of the type of Career management system in the company, managers should play a
key role in career management process. Because managers are the primary source of information
about position openings, training courses and other developmental opportunities. To help
employees deal with career issues, managers need to be effective in four roles: Coach, appraiser,
advisor and referral agent.
Coach-Probe problems, interests, values, listen to the needs, define and clarify concerns.
Appraiser-Clarify company standards and job responsibilities and company needs and give
timely feedback.
Advisor-Generate options, experiences and relationships, assist in goal setting and provide
recommendations.
Referral Agent-Link to career management resources and follow up on career management plan.
c) Human Resource Manager’s Role:
HR managers should provide information or advice about training and development
opportunities. Also, HR managers should provide specialized services such as testing to
determine employees’ values, interests and skills, prepare employees for job searches and offer
counseling and career-related problems.

d) Company’s Role:
Companies are responsible for providing employees with the resources needed to be successful
in career planning. These resources include specific programs as well as processes for career
management:
Career workshops (seminars on how career management system works, self-assessment, goal
setting and helping managers understand and perform their roles in career management.
Information on career and job opportunities
Career planning workbooks (printed guides that direct employees through a series of exercises,
discussions and guidelines relating to career planning).
Career counseling (advice from a professionally trained counselor who specializes in working
with employees seeking assistance with career issues).
Career paths (planning job sequences and identifying skills needed for advancement within and
across job families, such as moving from technical jobs to management jobs).
The company also needs to monitor the career planning system to (ensure that managers and
employees are using the system as intended and evaluate whether the system is helping the
company meet its objectives.

Unit 5
Performance Appraisal and compensation
Concept of Performance Appraisal

Performance appraisal may be understood as the assessment of an individual’s performance in a
systematic way. The performance being measured against such factors as job knowledge, quality
and quantity of output, initiative, leadership abilities, supervision, dependability, cooperation,
Judgment, versatility, health etc. It is the systematic evaluation of the individual with respect to
his/her performance on the job and his/her potential for development. A system that involves
employee evaluations once a year with an ongoing effort to provide feedback and coaching so
that performance can be improved is performance management system.(PMS).
PA-Performance appraisal is the systematic description of an employee’s strengths and
weaknesses. Thus performance appraisal is a part of Performance management system.
Assessment is generally not confined to past performance alone .Potentials of the employee for
future performance must also be assessed. Therefore a more comprehensive definition is
Performance Appraisal is a formal, structured system of measuring and evaluating job related
behaviour and outcomes to discover how and why the employee is presently performing on the
job and how the employee can perform more affectively in the future so that the employee,
organization and society all benefits” This definition states behaviour is also a part of the
assessment .Behaviour can be active or passive – do something or do nothing. Either way
behaviour affects job results, employee assessment is as old as the concept of management.
The process of performance appraisal helps the employee and management to know the level of
employee’s performance compared to the standard pre-determined level useful to decide upon
employee promotion/ transfer salary etc. Performance appraisal indicates the level of desired
performance level, level of actual performance and the Gap between these two. This Gap should
be bridged through Human Resource techniques like, Training, executive development etc.
Method of evaluating behaviour of Employees in the work spot including both the quantitative
and qualitative aspect of Job performance. Performance is measured in terms of results and not
efforts. Important features are.
 It is the systematic description of an employee’s job relevant strength and weakness.

 To find how well the employee is performing the job and establish a plan of improvement.
 Appraisals are arranged periodically according to a definite plan
 Performance evaluations not job Evaluation. It refers to how well someone is doing the
assigned job. Job evaluation determines how much a job is worth to the organization and
therefore what range of pay should be assigned to the job.
 Performance appraisal is a continuous process in every large scale organization.
 Is a way to find out interpersonal relationship
 Provides job satisfaction of the employees on the job assigned
 A system by which favoritism and Discrimination by superiors can overcome- a fair judgment.
The following are the objectives :
 To effect promotions based on competence & performance
 To confirm the services of probationary employees after the completion of probationary
period.
 To assess the training & development needs of employees.
 To decide on pay rise(unorganized sector)
 To let the employees know where they stand & to guide them for their development.
 To improve communication between a superior & subordinate & to set goals.
 To ask HR programmes such as selection training & transfer are effective or not
 To create and maintain a satisfactory level of performance
 Assist managers to take decision: On promotion, transfer, extension of tenure,
Termination etc. In such cases objective assessment of performance is needed.
 Training and development: Needs of employees vary depending on their skill level.
Knowledge Level, Experience. Hence as accurate, up to date information in regard to their
competence level is needed. Appraisal provide this.
 Validation of selection criteria: for certain position or skill.
 Feedback to employees: Adequate & Relevant on time feedback is made available for
corrective action, motivation etc.
 Reward Management; Upto date, accurate, objective, performance evaluation is needed
for selecting employees to receive such awards.
 Manpower planning: for these purposes appraisal is useful

- Towards long term successive – planning career paths.

- Determination of future vacancies & consequent promotional avenues.
To sum up performance appraisal primary purpose / objective are
 Compensation
 Performance feedback
 Training
 Promotion
 Manpower Planning
 Plan Lay off, Retrenchment etc
The Performance Appraisal Process
The following are the steps
Performance goal setting/Standard performance
Communicating the standards performance to employees
Measuring the actual performance
Comparing the actual and standard performance
Identifying the gap
Framing training and development actions to meet the gap
Methods of Performance Appraisal

1. Traditional method
2. Modern methods

Traditional method
1. Graphic Rating Scale
Ranking Method
2. Paired comparison method
3. Forced Distribution method.
4. Checklist Methods
 Simple check list
 Weighted check list
 Forced choice method
5. Essay free from appraisal
6. Group appraisal
7. Confidential Reports.
Modern methods
1. Behaviorally anchored rating scales bars
2. Assessment center
3. Human Resource Accounting
4. Management by Objective.
5. Psychological Appraisal
There are numerous methods which have been devised to measure the quantity and quality of
employees’ job performance. Each of the methods could be effective for some purposes, for
some organizations. These methods are appropriate as per the company’s requirements. Broadly
are the approaches to appraisal can be classified into a) past oriented methods b) future oriented
method.
Past oriented method:
Rating scale methods:
This is the simplest and most popular technique for appraising employee performance. The
typical rating scale system consists of several numerical scales, each representing a job related
performance criterion such as dependability, imitative, output, attendance, attitude, cooperation
and etc... Each scale ranges from excellent to poor. The rater checks the appropriate performance
level on each criterion; then computes the employees total numerical score. The number of

points may be linked to salary increases, whereby total points = corresponding percentage of
increase in salary.
Rating Scale:
Instructions: - for the following performance factors, please indicate on rating scale, your
evaluation of the employee.
Employee name: ____________ Dept: _________
Raters name: _______________ Date: _________
Excellent Good Acceptance Fair Poor
Dependability
Initiative
Overall output
Attendance
Attitude
Cooperation
Quality of work
Total
Grand total
Advantages: adaptability, easy to use, low cost, nearly every type of job can be evaluated with
this rating scale, if the job performance is changed. A large number of employees can be
evaluated in short time; the rater do not require training to use this scale.
Disadvantage: Biases influence valuation.

Check lists:
Here a check list of statements on the traits of the employee and his/her job is prepared in two
columns i.e. ‘yes’ and ‘no’ column. The rates (immediate superior) ticks the ‘yes’ column if the
answer to the statement is positive and in column ‘no’. if the answer is negative. Assessment is
done in the HR department. Certain points are given to ‘yes’ & ‘no’ column to become a
weighed check list depending on the points. Increases in salary are determined thereafter.

PARAMETERS YES NO
Is the employee really interested in the job
Does he/she possess adequate knowledge about the job?
Is his/her attendance satisfactory?
Does he/she maintain his/her equipment in good
Condition?
Does she/he cooperate with coworkers?
Does he/she keep his/her temper?
Does he/she obey orders?
Does he/she observe safety preparations?
Does he/she complete the work?
Does he/she evade responsibility?
(ii) Ranking Method:

Rank as best to worst on some characteristics. Bajaj, Tempo, BASF use this. Rank the
best and worst in the first stage and go on the same way with remaining, to complete rating of all
employees.
(iii) Paired comparison Method:
Followed where number of employee are less. Assign each employee a capital letter A,B,C etc.
Pair the objectives, put them in a chart & each plotted pair against write in the letter of employee
who is found superior and given a positive comparison total and a percentage of total positive
evaluation. This positive comparison given in the paired comparison method has an advantage
over other comparative methods. (Ranking and forced Distribution)
(iv) Forced Distribution:
after assigning marks to the performance of each employee, Distributor in a pattern to confirm to
normal frequency Distribution. The limitation is that, in a group if all are outstanding, it is
difficult to place people at lower category. Usha, JCT, SPL follow this method.

No
Of
Employee
40% 20%
Average Below 10%
10%20% Average
Excel Good On
Ent satisfactory
 Scores
Checklist Method.
(i) Simple Checklist (ii) Weighted checklist (iii) Forced choice
Method
Rater checks on a statement of Performance Ratings on Large number of statements in
behavior of an employee as various Behaviour of Groups are prepared. Each group
positive / negative. Employee employee is given a weight consists of four descriptive
performance is rated on age. Weighted performance statements concerning employee
number of positive choice score is compared with the behavior. Two Statements
Statement meaning may vary overall assessment standards to favourable Two Statements,
Rater to Rater find out the overall Unvavourable. Appraiser to select
performance of an employee. one statement that mostly
Demerit: The consuming rater deserves employee’s behavior.
may not fully know items Demerit: Objective evaluation not
contributing to the successful possible – Rater may not fully
performance. understand equally desirable/ un
desirable
Critical incident method: A continuous rating method, instead of once in 6 months or 1 year
Annual Rating.
Supervisor records employee performance on critical incidents both positive and negative
characters on specially designed note book. Rating done based on notebook data. Reduces Bias
in evaluation short coming. Critical incidents not defined for comparison – All capital (ITC,
VOLTAS, VST follow this) incident may not be knowing to supervisor.

Essay or Free form of appraisal: Manager is required to write a short essay describing each
employee’s performance during the rating period. This format emphasizes Evaluation of overall
performance. Based on strength and weakness of employee rather than specific job dimension.
Supervisory BIAS and HOLO effect required by asking supervisor to enumerate specific
examples of employee behavior.
To Enumerate Specific examples of employee behavior.
Demerit.
- Difficult to take decisions based on essays- No standard
- to compare- Evaluators may vary in their skills of essay
- Writing & the employee actual performance will depend
- On the writing skills of the appraiser.
-
BPL, BIRLA, 3M, Wheels India & BATA follow this method.
Group Appraisal; An employee is appraised by a Group of appraisers. Group consist of

Immediate superiors, Managers, HODs of other Department, who have close contacts,
Consultants. HOD of the concerned employee will be chairman and immediate supervisor,
coordinator for group activities and he explains other members about job character, Demands,
standard of performance etc.
The Group rating against standard performance discussed with the concerned widely used by
Kinetic Honda, Birla, VXL, Bluestar used essentially for promotion, Demotion and
Retrenchment.
Confidential Reports: A traditional method of Assessment based on observations, Judgments and
in turn, superior appraises. Superior does not allow the employee knows the Report and his
performance superior rates on his subordinates.
- Strengths - Attitude to work - punctuality - Character
- weakness - Sincerity - Attendance - Friendliness
- Intelligence - Commitment - Conduct - Cooperation etc
Followed by Most of PSU & Organizations, though suffer Limitations.

Modern methods
Behaviourly Anchored Rating Scales: BARS
Combines Elements of Traditional Rating Scales and Critical Incident Methods
Using BARS: Job Behaviour from Critical Incidents – Effective Ineffective Behaviours are
described more objectively.
Method: Individuals who are familiar with a particular job to identify its major components and
then rank and validate specific behavior for each of the components, then they rank and validate
specific behaviours for each of the components emphasis on pooling the thought process of
people who will use the scales both as Evaluators and Evaluees.
Step: I. Collect Critical Incidents: Supervisors job Holders Describe Effective In effective,
Indifference Behaviour Related to Job performance.
Step II. Identify performance Dimension: Convert Critical incidents into Key performance
dimension, Generally about 5 to 10 Dim for a job.
Step III. Reclassification of Incidents: Another Group to reclassify the Critical Incidents
Generated > 75% agreed ones selected.
Step IV. Assigning Scale value to the Incidents: 1 to 9 scale
1- Ineffective performance- Higher value- Effective performance.
Step V. Producing the Final Instrument; About Six/Seven incidents for each performance
dimension. Scale to its mean value.
Assessment centre: First applied in the German Army in 1930s
Technique: It is a system or organization, where assessment of several individuals done by
various experts using different techniques some of the method used are: Role Playing, Case
Studies, Stimulation Exercise, In Basket, structured insight, Transactional analysis. This is not a
technique of performance appraisal by itself.
Human Resource Accounting: Deals with Cost and Contribution of human resources to the
organization. Employee contribution can be taken as positive when contribution is more than the
cost and cost of employee includes Cost of manpower, planning, recruitment, selection,
Induction, Placement, Training, Development, etc. Bank of Baroda, SAIL, ITC Ltd, Made
attempts to follow this method.

Management by Objectives: ‘MBO’ focuses attention on particularly set goals that are tangible,
verifiable and measurable.
‘MBO’ is done along the following lines
Emphasis is on what must be accomplished rather than how it is to be accomplished.
- Subordinate and Superior jointly Determine Goals to be accomplished during the
Appraisal period and level of performance to meet specific goals.
- During the appraisal period the superior and subordinates update and alter the
Goals as necessary to suit business environment both superior and subordinate
jointly discuss whether the subordinate achieved the Goals. If not identify reasons
for deviations viz. Market change, strike / lockout etc.
Essential Characteristic of an Effective Appraisal System.
1. Strategic congruence: an ideal PA should be congruent with the unit and organizations
strategy. Individual goals must be aligned with unit and organizational goals.
2. Thoroughness: system should be thorough regarding 4 dimensions. First all employees should
be evaluated (including managers). Second, all major job responsibilities (including behaviors,
results). Third, evaluation should include performance spanning the entire review period (not just
few months or weeks). Finally, feedback should be given on positive performance aspects as
well as those that are in need of improvement.
3. Practicality: It should be easy-to-use system for taking decisions and benefits should
overweigh costs.
4. Meaningfulness: the standards and evaluations must be relevant and important, assessment
must be for those functions which are under employees control, evaluation should be regular, and
result should be useful for administrative decisions
5. Specificity: it should be specific and provide detailed and concrete guidance to employees
about what is expected from them and how they have to meet these expectations. Identification
of effective and ineffective performance: system should distinguish between effective and
ineffective behaviors and results
7. Reliability: A good system should be free of error.
8. Validity: The system should include relevant (include all performance facets), not deficient
(do not leave any important aspects out), and are not contaminated (do not include factors
outside of the control of the employee)

9. Acceptability and fairness: A good system is acceptable and is perceived as fair by all
participants. Perceptions of fairness are subjective, eg: perceptions are individualistic (United
States) and collectivistic (Korea) cultures.
10. Inclusiveness: Good systems include input from multiple sources and concerns of all the
people who will be affected by the outcome.
11. Openness: Good systems have no secrets, feedback should be given frequently, and it is two
way communication process where information is exchanged and hence it should be clear, open
and honest.
12. Correct ability: It is difficult to have a system to be completely objective, but it should have a
mechanism to correct the errors.
13. Standardization: Performance is evaluated consistently across people & time, to achieve this,
ongoing training of individuals of appraisers is a must and hence appraisal is standardized.
14. Ethicality: Managers suppresses his personal interest in providing evaluations, and evaluates
for performance dimensions with sufficient information, and the privacy of employee is
respected.
Compensation
Objectives of Compensation Planning

Compensation is what employees receive in exchange for their contribution to the organisation.
Compensation is a comprehensive payment including pay, incentives and benefits offered by
employers for hiring the services of employees. Remuneration is the compensation an employee
receives in return for his/her contribution to the organization. Remuneration occupies an
important place in the life of an employee.
 His/her standard of living, status in the society, motivation, loyalty & productivity
depend upon the remuneration he/she receives.
 For employer too, employee remuneration is significant because of its contribution to the
cost of production.
 Many battles (in the form of strikes & lockouts) are fought between the employer and the
employees, on issues relating to wages or bonus.

 For HRM too, employee remuneration is a major function since HR specialists has a
difficult task of fixing wages & wages differentials acceptable to employees and their
leaders.
Compensation has been an extremely important issue for both, the employer and employee. This
is because money is a crucial incentive and directly or indirectly related with fulfillment of all
human needs.
• Employees sell their hands and brain in order to fulfill their primary needs and employers hire
them to achieve their organizational objectives. Therefore the employer’s and employee’s
perspectives vary on matters concerning compensation. Another perspective from employer’s
point of view is to assess its impact on wide range of employee’s attitude, behaviors and
ultimately its effectiveness on organization’s success.
• Compensation directly influences key outcomes like job satisfaction, attraction, retention,
performance, skill acquisition, cooperation and flexibility etc. While employer’s objective is
concerned with primarily productivity, the employee’s emphasis may be on higher compensation
to offset their increased cost of living and perhaps the price his skill will fetch in the competitive
job market.
• Compensation therefore remains one of the most strategic and important functions of human
resource management. Over the years, compensation has become a complicated issue. Not only
are the problems of internal equity and external parity important, but also the larger issues of the
wider economy and society impinge on the problem of compensation.
Components of compensation
Compensation consists of mainly 2 types’ monetary benefits & non-monetary benefits
Monetary benefits:
a. Wages& salary:
Wages represent hourly rates of pay & salary refers to the monthly rate of pay. Wages &salaries
are subject to annual increments. They differ from employee to employee and depend upon the
nature of job, seniority & merit.
b. Increments:
Also called as ‘payments by results’. Incentives are paid in addition to wages & salaries.
Incentives depend upon productivity, sales, profit or cost reduction efforts.

There are 2 types of incentives

1. Individual incentive is given to specific employee based on his performance.
2. Group incentive is given to a group to a based on the team effort in achieving the goals.
The amount is divided equally to its members.
c. Fringe benefits
Includes employee benefits such as provident fund, medical care, hospitalization, accident relief,
health & group insurance, canteen, uniform, recreation and etc…
d. Perks:
These are given to executives & include company car, club membership, paid holidays, furnished
house, stock & shares. Perks are essential to retain competent executives.
Non-monetary benefits:
Challenging job opportunities, recognition of merit, growth prospects, competent supervision,
comfortable working conditions, job sharing & flextime.
Objectives of compensation planning
The most important objective of any pay system is fairness or equity. The term equity has three
dimensions:
Internal Equity: This ensures that more difficult jobs are paid more
External Equity: This ensures that jobs are fairly compensated in comparison to similar jobs in
the labour market.
Individual Equity: It ensures equal pay for equal work: each individual pay’s fair in comparison
to others doing the same/similar jobs.
New & Desired Behavior: loyalty, commitment, initiative
Control costs: effective compensation management ensures that employees are neither overpaid
nor underpaid
Comply with legal rules: Compensation should satisfy with government rules, bonus,
allowances, benefits etc.
Ease of operation: Compensation management should be transparent and easy to understand
Employee compensation is designed to have 3 objectives
1. To attract capable employees to the organization
2. To motivate than towards superior performance
3. To retain their services over an extended period of time.

Job Evaluation
Job evaluation is the process of analyzing and assessing the various jobs systematically to
ascertain their relative worth in an organization”. Jobs are evaluated on the basis of their content
& are placed in the order of their importance, in this way; a job hierarchy is established in the
organization. The purpose of job evaluation is to fix the salary among various jobs. Here jobs are
ranked &then wages are fixed and not the job holders. For job holders, separate evaluation
performance evaluation is carried out.
Job evaluation process starts with defining objectives of evaluation & ends with establishing age
& salary differentials.
A job evaluation programme involves answering several questions.
 Which jobs are to be evaluated?
 Who should evaluate the jobs?
 What training do the evaluators need?
 How much time is involved?
 What should be the criteria for evalution?
 What methods of evaluation are to be employed?
Objectives of job evaluation
 To fix the salary among various jobs
 To review salary & wages from time to time
 To classify jobs & responsibility to maintain the organization structure
 To motivate employees for better productivity and human relations
 To reduce complaints & labour turnover
 To help in performance appraisal programme i.e. promotions
Techniques/methods of job evaluation

Ranking/grading method (non analytical method):
This is the simplest & inexpensive method of job evaluation. The assessment is done by looking
at the worth of each job on the basis of little .But the job is not broken down into factors or
elements. Each job is compared with others and its place is determined.
Analytical methods of job evaluation
Factors are checked for job analysis

Factors comparison method:
Factors of jobs are compared, the factors are
a. Mental requirements
b. Skill requirements
c. Physical exertion
d. Responsibility
e. Job conditions.
Accordingly ranks are assigned to each factor. The total value of ranks is converted into salary.
Merits: all jobs can be evaluated.
Demerits: Complicated & expensive, Time consuming
Point ranking method
The factors start with selection of job factors, construction of degrees for each factors and
assignment of points to each degree.
Advantages:
 A job is split into a number of factors. The worth of each job is determined based on
factors.
 Systematic & explainable to the employees
 Simple & easy to administer
Disadvantage:
 Points allotment & degree identification
 Range of points and grades allotted is difficult to calculate.
E.g. 231 to 249 – grade 7
250 to 259 – grade 6
A point 1 difference changes the grade
Limitations of job evaluation
a. Difficult to measure factors accurately
b. Difficult in deciding salary calculations. E.g. secretary job & receptionist job
c. It depends on the standards & formulae for salary calculations & hence salary may be
less than the cost of living.
d. Complicated procedures & difficult to understood.

Compensation Pay Structure in India

Demand & supply of Labour influence wage and salary fixation. A low wage may be fixed when
the supply of Labour exceeds the demand for it. A higher wage will have to be paid when the
demand exceeds supply e.g. skilled Labour. But in our country there are plenty of workers e.g.
unskilled Labour and they are underpaid, to avoid this exploitation, minimum wages act of 1948
is established. In contrast, there is a shortage of technicians, computer specialists and
professional managers. High remuneration packages are necessary to retain these skilled
employees. Current trends in salary, Productivity also influences wage fixation. A number of
factors influence the wage fixation. They are categorized into external and internal
factors.
Wage and Salary Administration
The term “Wage & salary administration” or “compensation administration” denotes the process
of managing a company’s compensation programme. The goals of compensation administration
are to design a cost effective pay structure that will attract, motivate and retain competent
employees. Employee compensation may be classified into two types-base compensation and
supplementary compensation. Base compensation refers to monetary payments to employees in
the form of wages and salaries. The term wages implies remuneration to workers doing manual
work. The term salary is usually defined to mean compensation to office, managerial, technical
and professional staff.
Factors Influencing Compensation levels
Job needs
b) Ability to pay
c) Cost of living
d) Prevailing wage rates
e) Unions
f) Productivity
g) State regulation
h) Demand & supply of labour
Types of compensation

Time rate system: Employees are simply paid a predetermined rate per week, or hour for the
actual time they have worked. The basic rate for the job can be fixed by negotiation by reference
to local rates, or by job evaluation. This system is prevalent in the engineering and processing
industries among clerical, supervisory and managerial personnel.
Advantages: Earnings are predictable and steady. Need not argue with supervision and rate-
fixers about piece rate or time allowances.
Disadvantages: do not provide motivation of a direct incentive relating the reward to the effort.
• This problem can be overcome by adopting a system of measured day work and merit
award.
Piece rate system
• Straight Piece work: is payment of a uniform price per unit of production. This is most
appropriate where production is repetitive in character and can easily be divided into similar
units. In this system, you can pay a worker a flat money price for each piece or operation
completed (money piece work), or you can pay him for the time allowed to complete a task (time
piece work). In this latter case, if the worker completes the job in less than the allowed time he
gains the advantage of time saved.
• Differential Piece work: Systems allow you to adjust wage cost per unit in relation to output. In
this system, the wages cost per unit of production falls as output increases. At the same time the
hourly rate of workers earnings still increases, although not in proportion to the increased output.
This system is possible where it is early to relate effort to production and the work is
standardized, repetitive and measurable. Quality should be kept in mind while adopting the piece
rate system.
Executive Compensation.
Executive compensation in India is built around three important factors:
a) Job complexity:
It depends on the size of the company as measured its sales volume, earnings and assets growth,
the geographical dispersal of the unit etc.
b) Employers ability to pay:
It is also a major factor to be considered while deciding executive compensation.
Eg: a sick bank cannot afford to pay the same kind of salary as paid by a flourishing bank.
c) Executive human capital:

The economic theory of Human capital sys that the compensation of a worker should be equal to
his marginal productivity. The productivity of an executive likewise depends on his
qualifications, job knowledge, experience and contribution.
In recent years, companies are paying allowances like stock options. Educational, recreational,
academic allowances and several other developmental initiatives aimed at improving the overall
personality of an executive. The following are the perks given to executives
Physical exam
• Company car
• Financial counseling
• Company plane
• Income tax preparation
• First-class air travel
• Ountry club membership
• Uncheon club membership
• Estate planning
• Employee stock options(ESOP)
• Personal liability insurance
• Spouse travel
• Chauffeur service
• Reserved parking
• Executive dining room
• Home security system
• Car /phone
• Financial seminars/Coupons
• Loans at low or no interest
• Legal counseling

Unit 6
Employee Welfare
Introduction
Employee or labour welfare is a comprehensive term including various services, benefits and
facilities offered to employees by the employer. Through such generous fringe benefits the
employer makes life worth living for employees. The welfare amenities are extended in addition
to normal wages and other economic rewards available to employees as per the legal provisions.
According to Dr.Parandikar” labour welfare work is work for improving the health, safety and
general wellbeing and the industrial efficiency of the workers beyond the minimum standard laid
down by labour legislation”
Welfare measures may also be provided by the government, trade unions and non-government
agencies in addition to the employer. The basic purpose of labour welfare is to enrich the life of
employees and keep them happy and contented. Welfare measures may be both statutory and
voluntary. Labour laws require the employer to extend certain benefits to employees in addition
to wages. Voluntary benefits are the result of employer’s generosity, enlightenment and
philanthropic feelings.
Types of Welfare Facilities and Statutory Provisions.

Welfare services may broadly be classified into two categories
1. Intramural activities which are provided within establishment such as latrines and urinals,
crèches’, rest centers, canteens, uniforms, library. Medical aid, subsidized food, shift allowance
etc.
2. Extramural activities which are undertaken outside the establishment such as family planning,
child welfare, cooperative stores, credit societies, vocational guidance, holiday homes, leave
travel facilities, transport to and from the place or work .etc.
Statutory Provisions.
Employers are required to offer welfare facilities to workers under different labour laws.
The Factories Act, 1948
The Act provides the following services to workers:
 Washing facilities to male and female workers separately
 Facilities for storing and drying clothes

 Facilities for occasional rest for workers who work in a standing position for long hours.
 First aid boxes or cupboards- one for every 150 workers and the ambulance facility if
there are more than 500 workers
 Canteens, where there are more than 250 workers
 Shelters rest rooms and lunch rooms where over 150 workers are employed
 Crèche, if 30 or more workers are employed
 Welfare officer, if 500 or more workers are employed.
The Plantation Act, 1951
The Act provides for the following:
 A canteen if 150 or more workers are employed
 Crèche, if 50 or more women workers are employed
 Recreational facilities for workers and their children
 Educational arrangements in the estate if there are 25 or more children of workers,
between the age of 6 and 12
 Housing facilities for every worker and his family residing in the estate.
 Medical aid to workers and their families’ sickness and maternity allowance.
 Providing umbrellas, blankets, raincoats to workers as a protection against rain or cold as
prescribed by the state government.
 Welfare officer, if 300 or more workers are employed.
The Mines Act, 1951
 Shelters for taking food and rest if 50 or more workers are employed
 First aid boxes and first-aid rooms if 150 or more workers are employed.
 A canteen if employing 250 or more workers
 A crèche if employing 50 or more females
 Pit-head baths equipped with showers, sanitary latrines
 Welfare officer if 500 or more workers are employed
The Motor Transport Act, 1961
 First aid equipment in each transport vehicle

 Medical facilities at the operating and halting centers

 Canteen if employing 100 or more workers
 Comfortable, clean, ventilated and well-lighted rest rooms at every place where
motortransport workers are required to halt at night.
 Uniforms, rain coats to conductors, drivers and line checking staff for protection against
cold and rain
 Prescribed amount of washing allowance to the above staff members.
The Contract Labour (Regulation and Abolition) Act,1970
The act requires the contractor to extend the following benefits to workers:
 Canteen, if employing 100 or more workers
 Rest rooms or other suitable alternative accommodation where contract labour is required
 to halt at night in connection with the work of an establishment Washing facilities
 First aid boxes equipped with prescribed contents.
Labour Welfare Officer
The Factories act, 1948, The Plantation act 1951 and the Mines act 1951 provide for the
appointment of a labour Welfare Officer if the number of workers employed within a unit
exceeds 500(300 as per the plantation act).The post has been created specifically to:
1. Eliminate the malpractices of the recruitment system
2. Improve labour administration in the factories
3. Serve as a liaison with the state labour commissioner
The Labour Welfare Officer should possess a university degree/diploma in social service form a
recognized institution and adequate knowledge of local language where the factory is situated.
The duties and Responsibilities of a Labour Welfare Officer many be summarized (Central
Welfare Officers Rules 1951)
 Advisory: advising & suggesting in the formulation of labour laws
 Service oriented: Offers help to workers to solve their problems
 Supervisory: He can supervise, inspect and regulate welfare activities
 Functional: Check the implementation of labour laws
 Policing: He can forward workers grievances to management, can influence
Industrialrelations and can restrain workers from resorting to illegal strikes and lockouts

 Mediation: can mediate and build harmony between labour and management
Employee Grievances
A grievance is a sign of employees’ discontent with job and its nature. Grievance is caused due
to the difference between the employee expectation and management practice
Causes of Grievance
• Wages, Incentives
• Job Classifications
• Foreman/Supervisor
Disciplinary Measures
• Promotions
• Transfer/Night Shift
• Safety And Health Measures
• Non Availability Of Materials
• Violation Of Contracts
• Improper Job Assignment
• Work Conditions
Employee Grievance procedure
3 important principles of grievance settlement are
1. Settlement at the lowest level
2. Settlement as expeditiously (speedily and efficiently) as possible
3. Settlement to the satisfaction of the aggrieved
Settlement of grievances at 3 levels
• Immediate supervisor(reply within 2 days)
• Departmental/factory head(reply within 3 days)
• Grievance committee(within 7 days)
• Else, appeal for further voluntary arbitration
Grievances Management in Indian Industry.-Grievance Machinery
• A grievance machinery is required to administer the grievance procedure
• Departmental representatives are selected to take forward the grievance procedure to
solve the problems as a committee

At present, there are three legislations dealing with grievances of employees working in
industries. The Industrial Employment (Standing Orders) Act, 1946, requires that every
establishment employing 100 or more workers should frame standing orders. These should
contain, among other things, a provision for redressal of grievances of workers against unfair
treatment and wrongful actions by the employer or his agents. The Factories Act, 1948, provides
for the appointment of a Welfare officer in every factory ordinarily employing 500 or more
workers. These Welfare officers also look after complaints and grievances of workers. They will
look after proper implementation of the existing labor legislation. Besides, individual disputes
relating to discharge, dismissal or retrenchment can be taken up for relief under the Industrial
Disputes Act, 1947, amended in 1965. However, the existing labor legislation is not being
implemented properly by employers. There is lack of fairness on their part. Welfare officers have
also not been keen on protecting the interests of workers in the organized sector. In certain cases,
they are playing a dual role. It is unfortunate that the public sector, which should set up an
example for the private sector, has not been implementing labor laws properly.
Grievances Management in Indian Industry.
Guidelines for Handling Grievances
The following guidelines may help a supervisor while dealing with grievances. He need not
follow all
these steps in every case. It is sufficient to keep these views in mind while handling grievances.
Treat each case as important and get the grievance in writing.
 Talk to the employee directly. Encourage him to speak the truth. Give him a patient
hearing.
 Discuss in a private place. Ensure confidentiality, if necessary.
 Handle each case within a time frame.
Examine company provisions in each case. Identify violations, if any. Do not hold back
the remedy if the company is wrong. Inform your superior about all grievances.
 Get all relevant facts about the grievance. Examine the personal record of the aggrieved
worker. See whether any witnesses are available. Visit the work area. The idea is to find
where things have gone wrong and who is at fault.
 Gather information from the union representative, what he has to say, what he wants, etc.
Give short replies, uncovering the truth as well as provisions. Treat him properly.

 Control your emotions, your remarks and behavior.

 Maintain proper records and follow up the action taken in each case.
Discipline
Meaning
• Discipline refers to a condition or attitude among employees with respect to rules and
regulations of an organization
• Discipline refers to the orderliness in working and behavior
Objectives of Discipline
• To obtain a willing acceptance of the rules, regulations
• To impart an element of certainty
• To develop the spirit of tolerance and adjustments
• To give and seek direction and responsibility
• To create an atmosphere of respect
• To increase the working efficiency and morale of the employees
Approaches to discipline
1. Positive Approach
2. Progressive discipline
3. Red Hot stove Rule
4. Judicial Approach to Discipline in
India.
A Positive Approach to Employee Discipline
Traditionally, methods for maintaining discipline have been punitive in nature. The relatively
new concept of a non-punitive positive discipline system is winning increasing acceptance
among many employers. The purpose of this method is to enable employees to truly confront
their performance or attendance problems and take responsibility for their actions.
To be effective, disciplinary action should emphasize correcting the problem rather than
punishing the
Offender. It should maintain the employee's dignity and self-respect. It should provide for
increasingly
Serious steps if the problem is not resolved, and it should ultimately result in a change in the
employee's

Behavior and performance.

Like traditional approaches, the positive discipline approach involves a number of formal steps
that increase in seriousness. But unlike punitive disciplinary systems, the positive approach
emphasizes reminders of expected performance — not warnings or reprimands for misconduct.
Step 1: Oral Reminder — The first step in the positive discipline approach is a meeting between
a supervisor and the employee to discuss the problem. The supervisor tells the employee the
reason for the rule that has been violated, tells the employee the specific changes that are
required, and expresses confidence that the employee will correct the problem and the
expectation that no further action will be needed. No record of the meeting is placed in the
employee's file. This is communicated to the employee, hopefully providing a strong incentive
for improvement.
Step 2: Written Reminder — If the problem continues, the supervisor again talks to the employee
— seriously, but without threats. The supervisor tells the employee what is expected and asks the
employee to confirm that he or she understands what changes must be made. At the end of the
discussion, the supervisor tells the employee that a written summary of their conversation will be
placed in the employee's file. It's recommended that the employee be asked to sign the report of
the documented discussion.
Step 3: Decision-Making Leave — In traditional discipline systems, the next step involves
suspending the offending employee for several days. In the positive discipline approach, the
supervisor tells the employee to remain at home the following day and to use that time to make a
final decision as to whether she or he can meet the organization's standards. The employee is told
that the organization wants to keep him or her as a productive member of the work force, but that
the decision is up to the employee — and future violations will result in termination. The
employee is told to report back to the supervisor after the decision-making leave day to let the
supervisor know his or her decision. The employee may be asked to develop a plan for
improving his or her performance. Upon returning to work, the results of the meeting with the
supervisor should be documented, signed by the employee, and placed in the employee's
personnel file.
Progressive Approach to discipline
It is an employee disciplinary system that provides a graduated range of responses to employee
performance or conduct problems. Disciplinary measures range from mild to severe, depending

on the nature and frequency of the problem. For example, an informal coaching session might be
appropriate for an employee who is tardy or violates a minor work rule, while a more serious
intervention -- or even termination -- might be called for if an employee commits serious
misconduct or doesn't improve a performance problem after receiving several opportunities to do
so.
Most large companies use some form of progressive discipline, although they don't necessarily
call it by
that name. Whether they are referred to as positive discipline programs, performance
improvement plans,
corrective action procedures, or some other title, these systems are all similar at their core,
although they
might vary in the details. All are based on the principle that the company's disciplinary response
should be appropriate and proportionate to the employee's conduct.
Red Hot stove Rule

The "Hot-Stove Rule" of Douglas McGregor gives a good illustration of how to impose
disciplinary action without generating resentment. This rule draws an analogy between touching
a hot stove, and undergoing discipline. When you touch a hot stove, your discipline is
immediate, with warning, consistent, and impersonal.
These four characteristics, according to McGregor, as applied to discipline are self-serving and
may be
explained as follows:
1. When you touch the Hot stove, you burn your hand. The burn was immediate. Will you blame
the hot stove for burning your hand? Immediately, you understand the cause and effect of the
offense. The discipline was directed against the act not against anybody else. You get angry with
yourself, but you know it was your fault. You get angry with the hot stove too, but not for long
as you know it was not its fault. You learn your lesson quickly.
2. You had warning as you knew the stove was red hot and you knew what would happen to you
if you touched it. You knew the rules and regulations previously issued to you by the company
prescribing the penalty for violation of any particular rule so you cannot claim you were not
given a previous warning.

3. The discipline was consistent. Every time you touch the hot stove you get burned. Consistency
in the administration of disciplinary action is essential. Excessive leniency as well as too much
harshness creates not only dissatisfaction but also resentment.
4. The discipline was impersonal. Whoever touches the hot stove gets burned, no matter who he
is. Furthermore, he gets burned not because of who he is, but because he touched the hot stove.
The discipline is directed against the act, not against the person. After disciplinary action has
been applied, the supervisor should take the normal attitude toward the employee.
Judicial Approach to Discipline in India
The Industrial Employment (Standing Orders) act was passed in 1946 with a view to improve the
industrial relations climate. The Act requires that all establishments must define the service rules
and prepare standing orders. The term standing orders refers to the rules and regulations which
govern the conditions of employment or workers. They indicate the duties and responsibilities on
the part of both the employer and the employees. The standing order contain rules relating to:
Classification of employees ,working hours, holidays, shift working, attendance ,leave,
suspension,
termination, stoppage of work etc..
Thus standing order specify the terms and conditions which regulate the employee-employer
relationship
within a unit. Any violation of these terms and conditions may lead to misconduct or
indiscipline.
Essential of a good disciplinary system
To avoid conflict and lawsuits, managers must administer discipline properly.
1. Rules and Performance criteria
2. Documentation of the facts
3. Consistent response to rule violations
4. Training of supervisors
5. Prompt action
6. Impersonal discipline
7. Reasonable penalty
Follow-up
Principles of a Natural Justice

• The employee must be indicated about the charge against him

• The employee must be given a chance for defense
• The enquiry must be fair and impartial
• The evidence should be put forward in front of the employee
• Punishment should be appropriate with the misconduct
Managing difficult employees.
Problem employees are those employees who create problems within the organization. Substance
abusers, angry or withdrawn workers, personnel with excessive absenteeism, and the terminating
employees provide challenges to nurse managers. In each case the nurse manager must be alert to
the symptoms of problems, help the employee solve the problem, and evaluate the results.
Types of problem employee:-
 Substance abusers
 Angry or withdrawn employees
 Decreased productivity
 Absenteeism
 Terminating employees
When the delinquent employee is going to be punished, the type of punishment should be a
commensurate with the severity of the omission or misconduct.
Different types of punishment resulting from various types of omission or misconduct are as
follows:
 Oral warnings
 Written warnings
 Loss of privileges and fines
 Punitive suspension
 Withholding of increments
 Demotion
 Termination


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Human Resource Management 16MBA21

HUMAN RESOURCE MANAGEMENT

Unit 3: (10 hours)

Dept. of MBA/SJBIT Page 1

Unit5: (10 hours)

Unit 6: (10 hours)

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Sl.NO Content Page No

1 Introduction to Human Resource Management 4-12

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Employee and executive remuneration

Importance and Evolution of HRM

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Major functions of HRM

 Organizing: organizing manpower for the achievement of organizational goals and

 Staffing: recruitment & selection of employees

 Directing: issuance of orders and instructions, providing guidance and motivation to

 Development: training, development, career planning and counselling.

 Compensation: wage and salary determination and administration

 Integration: integration of human resources with organization.

 Maintenance: sustaining and improving working conditions, retentions, employee

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 Separations: managing separations caused by resignations, terminations, layoffs, death,

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-specialization also increases with size of dept

Duties and responsibilities of a HR manager:

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5. Managing for innovation.

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1. Indian Institute of Management, Ahmedabad (IIM A)

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4. Indian Institute of Management, Lucknow (IIM L)

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7) Developing employee specification: Conversion of job specification into employee

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• Auditing Jobs and Skills

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– Long-range—more than five years

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Constraints and Challenges

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Methods of Recruitment Sources

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 Candidate’s qualification . Nature and Behavior

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Application Form: A traditional method of securing information from the prospective

(i) Personal Background information

- To gather necessary information from the prospective applicants and to

- Information provided by candidates may be related to job or personal

- A process useful in eliminating undesirable/unsuitable candidates.