Critical Review On HR Practices of An Organization

CRITICAL REVIEW ON HR PRACTICES FOLLOWED IN AN ORGANIZATION
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CRITICAL REVIEW ON HUMAN RESOURCE PRACTICES

FOLLOWED IN AN ORGANIZATION
BY :-
NEHA SEHGAL
REGISTRATION NO. :- 200641625
SUBMITTED TO :-
SYMBIOSIS CENTRE FOR DISTANCE LERNING,
SYMBIOSIS BHAVAN, 1065 B, GOKHALE CROSS ROAD,
MODEL COLONY,
PUNE-411 016.
JULY, 2006
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SYMBIOSIS CENTRE FOR DISTANCE LERNING, PUNE

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CONTENTS
TITLE PAGE NO.

ACKNOWLEDGEMENT
ANNEXURE – 1
Chapter 1 – The Concept and Functions of Human Resource Management
Chapter 2 – Human Resource Planning
Chapter 3 – Job Analysis
Chapter 4 – Staffing
Chapter 5 – Orientation
Chapter 6 – Training & Development
Chapter 7 – Performance Appraisal
Chapter 8 – Career Planning
Chapter 9 – Compensation
Chapter10 – Benefits
Chapter 11 – Labour Relations
Chapter 12 – Record Keeping
Chapter 13 – Personnel Research
BIBLIOGRAPHY
Human Resources and Personal Management – by William B. Werter, Jr and

Keith Davis
Search engines employed on internet:
www.google.co.in
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ACKNOWLEDGEMENT
I feel great pleasure in expressing my deepest sense of gratitude to my family members,

friends and colleagues whose precious guidance, encouragement and sympathetic attitude
were immensely helpful and invaluable throughout the present work. I must avow that without
their able guidance, inspiring supervision, this dissertation would not have seen the light of the
day.
Also I would like to thank my parents and they deserve more than I can express in words.
However, I would like to use this opportunity to express my deepest and most sincere feelings
of indebtedness and gratitude to them for their affection, forbearance and inspiration.
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ANNEXURE – 1
NAME NEHA SEHGAL
REGISTRATION 200641625
NO.
PROGRAM NAME POST GRADUATE DIPLOMA IN BUSINESS

ADMINISTRATION WITH SPECILIZATION IN HUMAN
RESOURCE MANAGEMENT
ADDRESS H. NO. 2406, SECTOR – 7A, FARIDABAD – 121006,

HARYANA.
PROJECT TITLE CRITICAL REVIEW ON HUMAN RESOURCE PRACTICES

FOLLOWED IN AN ORGANIZATION
OBJECTIVE THE MAIN OBJECTIVE OF THIS WORK IS TO

UNDERSTAND THE INTRINSIC ASPECTS OF THE HUMAN
RESOURCE FUNCTION/PROCESSES FOLLOWED IN AN
ORGANIZATION LIKE RECRUITMENT, SELECTION,
TRAINING & DEVELOPMENT, AND OTHER WELFARE
PROGRAMMES. IT ALSO THROWS LIGHT ON OTHER
ACTIVITIES THAT HR DEPARTMENT PERFORMS LIKE
PERFORMANCE APPRAISAL, SALARY DISBURSEMENT,
MAINTAINING LEAVE RECORDS/ACCOUNTS,
GRIEVANCE HANDLING, INDUSTRIAL RELATIONS,
CONVEYANCE, CANTEEN ALLOWANCES ETC. THIS
PROJECT GIVES AN INSIGHT VIEW ON VARIOUS
PROCEDURES FOLLOWED BY HR DEPARTMENT AND
THE PROBLEMS FACE BY THEM.
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NEED FOR THE HUMAN RESOURCES ARE THE MOST IMPORTANT

TOPIC ASSETS OF THE COMPANY. THEY ARE THE MOST
UNPREDICTABLE AND COMPLEX CREATURES ALSO
AND TO MANAGE THEM IS A HERCULEAN TASK. THE
SUCCESS OR FAILURE OF AN ORGANIZATION DEPENDS
UPON THE KIND OF PEOPLE THE FIRM HIERS AND HOW
WELL THEY MANAGE THEM. HUMAN RESOURCE
MANAGEMENT HAS THEREFORE BEEN EMERGED AS A
REVOLUTION IN THIS REGARD. IT IS AN
INDISPENSABLE PART OF THE ORGANIZATION AND
WITHOUT PROPER FUNCTIONING OF HR DEPARTMENT,
WHOLE ORGANIZATION CANNOT RUN SMOOTHLY AND
EFFICIENTLY.
THIS PROJECT HAS BEEN UNDERTAKEN TO MAKE ONE

UNDERSTAND THE IMPORTANCE OF HUMAN
RESOURCE MANAGEMENT AND ITS FUNTIONS IN AN
ORGANIZATION AND HOW IT HELPS IN SMOOTH
RUNNING OF THE ORGANIZATION.
METHODOLOGY THE METHODOLOGY ADOPTED FOR THE PRESENT

AND PROCEDURE WORK IS A MIX OF BOOKS, NEWSPAPERS, JOURNALS
OF WORK AND REPORTS.
BOOKS ON CULTURE AND HUMAN RESOURCE

DEVELOPMENT ARE THE THEORETICAL INPUTS IN
THIS WORK AND IT IMMENSELY HELPED IN THE
DESIGN OF THE PROJECT.
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NEWSPAPER ARTICLES TOO WERE REFERRED FOR THE

LATEST INFORMATION ABOUT THIS PROJECT. THE
VOLUMINOUS INTERNET SITES TOO WERE
INSTRUMENTAL IN THE RESEARCH FOR THIS WORK.
CHAPTERISATION THIS PROJECT HAS BEEN DIVIDED INTO FOURTEEN

CHAPTERS. EACH CHAPTER IS THE EXPLAINATION OF
DIFFERENT FUNCTIONS OF HUMAN RESOURCE
MANAGEMENT.
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CHAPTER – 1
THE CONCEPT AND FUNTIONS OF HUMAN RESOURCE

MANAGEMENT
1.0 Before we start off with various Human Resource functions that an organization
performs, we must know the meaning of Human Resource Management.
Therefore, the objective of this chapter is to understand the meaning and

concept of Human Resource Management and also to explain the functions of
HR. Responsibilities and new roles of HR practitioners can also be considered as
objectives.
1.1 INTRODUCTION
Human resource management (HRM) is an approach to the management of

people, based on four fundamental principles.
• First, human resources are the most important assets an organization has
and their effective management is the key to its success.
• Second, this success is most likely to be achieved if the personnel policies
and procedures of the enterprise are closely linked with, and make a major
contribution to, the achievement of corporate objectives and strategic
plans.
• Third, the corporate culture and the values, organizational climate and
managerial behavior that emanate from that culture will exert a major
influence on the achievement of excellence.
This culture must, therefore, be managed which means that organizational values
may need to be changed or reinforced, and that continuous effort, starting from
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the top, will be required to get them accepted and acted upon.
• And finally, HRM is concerned with integration – getting all the members
of the organization involved and working together with a sense of
common purpose.
1.2 CONCEPT OF HUMAN RESOURCE MANAGEMENT
HRM is a strategic approach to the acquisition, motivation, development and

management of the organization’s human resources. It is a specialized field that
attempts to develop an appropriate corporate culture, and introducing programs,
which reflects and supports the core values of the enterprise and ensure its
success. HRM is proactive rather than reactive, i.e., always looking forward to
what needs to be done and then doing it, rather than waiting to be told what to do
about recruiting, paying or training people, or dealing with employee relations
problems as they arise.
The techniques for the application of HRM will include many familiar functions
of personnel managers, such as manpower planning, selection, performance
appraisal, salary administration, training and management development. These
will be overlaid by special programs designed to improve communication
systems, involvement, commitment, and productivity. Broadly, there are three
meanings attached to the concept of HRM.
• In the first place, persons working in an organization are regarded as a

valuable source, implying that there is a need to invest time and effort in
their development.
• Secondly, they are human resources, which mean that they have their own
special characteristics and, therefore, cannot be treated like material
resources. The approach focuses on the need to humanize organizational
life and introduce human values in the organization.
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• And thirdly, human resources do not merely focus on employees as

individuals, but also on other social realities, units and processes in the
organization.
These include the role or the job a person has in the organization, the dyadic unit,
(consisting of the person and his superior), the various teams in which people
work, inter-team processes, and the entity of the total organization.
In its essence, HRM is the qualitative improvement of human beings who are
considered the most valuable assets of an organization – the sources, resources,
and end-users of all products and services. HRM is, no doubt, an outgrowth of
the older process and approach. But it is much more than its parent disciplines
viz., personnel management, and behavioral science. HRM is also more
comprehensive and deep-rooted than training and development. Its approach is
multi-disciplinary from the beginning to the end. It is a scientific process of
continuously enabling the employees to improve their competency and capability
to play their present as well as future expected roles so that the goals of the
organization are achieved more fully and at the same time the needs of the
employees are also met to an adequate extent.
HRM is a production model approach to personnel management. The HRM

model is characterized as being employee-oriented with an emphasis on the
maximization of individual skills and motivation through consultation with the
workforce so as to produce high levels of commitment to company strategic
goals. It is a resource to be used to its fullest capacity. It is an asset to be
invested in HRM is concerned with both the structures of work in a firm and with
all the related employment practices that are needed to carry out the work. HRM
is not simply about HR or people practices; it is about the management of
work and people in the firm.
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Managing people includes both individual and collective dimensions. The

traditional personnel management is non-strategic, separate from the business,
reactive, short-term, and constrained by a limited definition of its role as dealing
with mostly unionized and low level employees. The major attention of
traditional personal administration or management while the major attention of
HRM is on developing people and their competencies. If personnel
management is curative, HRM is preventive. The key distinguishing feature
of HRM is its evolving strategic role.
HRM essentially emphasizes and incorporates those expectations, which are not
being fulfilled through the traditional personnel management. It integrates in a
meaningful way the various sub-systems like performance appraisal, potentially
appraisal and development, career planning, training and development,
organization development, research and systems development, rewards, employee
welfare and quality of work life, industrial relations, and human resource
information. Under the HRM approach, some basic assumptions about human
resources are also different from the traditional approach. The important
assumptions of HRM are as follows:
• The members of an organization are reservoirs of untapped resources.

• There is a scope for unlimited development of these resources.
• It is more in the nature of self-development than development thrust from
outside.
• The organization also undergoes development with the overall benefits
along with the development of its members.
• The organization further develops a culture in which utmost emphasis is
placed on harmonious superior-subordinate relations, teamwork, and
collaboration among different groups of individuals, open communication,
and above all, integration of the goals of the organization with the needs
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of the employees.
• Top management takes the initiative for HRM, formulates necessary plans
and strategies, and creates an overall climate and support for its
implementation.
The management of human resources is more of an art than a science. In

practice, it is an art full of pitfalls, judgment calls, and learning from past
mistakes.
1.3 OBJECTIVES OF HRM
The primary objective of HRM is to ensure the availability of competent and

willing workforce to an organization. Apart from this, there are other objectives
too. Specifically, HRM objectives are four fold –
1.3.1 Societal Objective
The societal objectives are socially and ethically responsible for the needs and
challenges of society. While doing so, they have to minimize the negative impact
of such demands upon the organization. The failure of organizations to use their
resources for society’s benefit in ethical ways may lead to restrictions. For
example, the society may limit human resource decisions to laws that enforce
reservation in hiring and laws that address discrimination, safety or other such
areas of societal concern.
1.3.2 Organizational Objective
The organizational objectives recognize the role of human resource management

in bringing about organizational effectiveness. Human resource management is
not an end in itself; it is only a means to assist the organization with its primary
objectives. Simply started the human resource department exists to serve the rest
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of the organization.
1.3.3 Functional Objective
Functional objectives try to maintain the department’s contribution at a level

appropriate to the organization’s needs. Human resources are to be adjusted to
suit the organization’s demands. The department’s level of service must be
tailored to fit the organization it serves.
1.3.4 Personal Objectives
Personal objectives assist employees in achieving their personal goals, at least in

so far at these goals enhance the individual’s contribution to the organization.
Personal objectives of employees must be met if they are to be maintained,
retained and motivated. Otherwise, employee performance and satisfaction may
decline giving rise to employee turnover.
HRM objectives and their respective functions are illustrated below. The source
is basically from page no. 15 the book entitled ‘Human Resources and Personnel
Management written by William B. Werter, Jr. and Keith Davis.
HRM Objectives Supporting Functions
1. Societal Objectives 1. Legal compliance

2. Benefits
3. Union-management relations
2. Organizational Objectives 1. Human resource planning
2. Employee relations
3. Selection
4. Training and development
5. Appraisal
6. Placement
7. Assessment
3. Functional Objectives 1. Appraisal
2. Placement
3. Assessment
4. Personal Objectives 1. Training and development
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2. Appraisal
3. Placement
4. Compensation
5. Assessment
1.4 HUMAN RESOURCE FUNCTIONS
The role of human resource management is to plan, develop, and administer

policies and programs designed to make expeditious use of an organization’s
human resources. It is that part of management, which is concerned with the
people at work and with their relationship within an enterprise. Its objectives are:
• The effective utilization of human resources;

• Desirable working relationships among all members of the organization;
and
• Maximum individual development
The major functional areas in human resource management are – Planning;

Staffing; Employee development; and Employee maintenance. These four
areas and their related functions share the common objective of an adequate
number of competent employees with the skills, abilities, knowledge, and
experience needed for further organizational goals. Although each human
resource function can be assigned to one of the four areas of personnel
responsibility, some functions serve a variety of purposes. For example,
performance appraisal measures serve to stimulate and guide employee
development as well as salary administration purposes. The compensation
function facilitates retention of employees and also serves to attract potential
employees to the organization. A brief description of usual human resource
functions is given below:
1.4.1 Human Resource Planning
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In the human resource planning function, the number and type of employees
needed to accomplish organizational goals are determined. Research is an
important part of this function because planning requires the collection and
analysis of information in order to forecast human resources supplies and to
predict future human resources needs. The basic human resource planning
strategy is staffing and employee development.
1.4.2 Job Analysis
Job analysis is the process of describing the nature of a job and specifying
the human requirements, such as skills, and experience needed to perform it.
The end product of the job analysis process s the job description. A job
description spells out work duties and activities of employees. Job descriptions
are a vital source of information to employees, managers, and personnel people
because job content has a great influence on personnel programs and practices.
1.4.3 Staffing
Staffing emphasizes the recruitment and selection of the human resources for
an organization. Human resources planning and recruiting precede the actual
selection of people for positions in an organization. Recruiting is the personnel
function that attracts qualified applications to fill job vacancies.
In the selection function, the most qualified applicants are selected for hiring from
among those attracted to the organization by the recruiting function. On
selection, human resource functionaries are involved in developing and
administering methods that enable managers to decide which applicants to select
and which to reject for the given jobs.
1.4.4 Orientation
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Orientation is the first step towards helping a new employee adjusts himself
to the new job and the employer. It is a method to acquaint new employees
with particular aspects of their new job, including pay and benefit programs,
working hours, and company rules and expectations.
1.4.5 Training and Development
The training and development function gives employees the skills and
knowledge to perform their jobs effectively. In addition to providing training
for new or inexperienced employees, organizations often provide training
programs for experienced employees whose jobs are undergoing change. Large
organizations often have development programs, which prepare employees for
higher-level responsibilities within the organization. Training and development
programs provide useful means of assuring that employees are capable of
performing their jobs at acceptable levels.
1.4.6 Performance Appraisal
This function monitors employee performance to ensure that it is at

acceptable levels. Human resource professionals are usually responsible for
developing and administering performance appraisal systems, although the actual
appraisal of employee performance is the responsibility of supervisors and
managers. Besides providing a basis for pay, promotion, and disciplinary action,
performance appraisal information is essential for employee development since
knowledge of results / feedback is necessary to motivate and guide performance
improvements.
1.4.7 Career Planning
Career Planning has developed partly as a result of desire of many employees to
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grow in their jobs and to advance in their career. Career planning activities
include assessing an individual employee’s potential for growth and advancement
in the organization.
1.4.8 Compensation
Human resource personnel provide a rational method for determining how much
employees should be paid for performing certain jobs. Pay is obviously related to
the maintenance of human resources. Since compensation is a major cost to many
organizations, it is a major consideration in human resource planning.
Compensation affects staffing in that people are generally attracted to
organizations offering a higher level of pay in exchange for the work performed.
It is related to employee development in that it provides an important incentive in
motivating employees to higher levels of job performance and to higher paying
jobs in the organization.
1.4.9 Benefits
Benefits are another form of compensation to employees other than direct pay for
work performed. As such, the human resource function of administering
employee benefit shares many characteristics of the compensation function.
Benefits include both the legally required items and those offered at employer’s
discretion. The cost of benefits has risen to such a point that they have become a
major consideration in human resource planning. However, benefits are primarily
related to the maintenance area, since they provide for many basic employee
needs.
1.4.10 Labour Relations
The term ‘labor relations’ refers to interaction with employees who are
represented by a trade union. Unions are organization of employees who join
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together to obtain more voice in decisions affecting wages, benefits, working

conditions, and other aspects of employment. With regard to labor relations, the
personnel responsibility primarily involves negotiating with the unions regarding
wages, service conditions, and resolving disputes and grievance.
1.4.11 Record Keeping
The oldest and most basic personnel function is employee record-keeping. This
function involves recording, maintaining, and retrieving employee-related
information for a variety of purposes.
1.4.12 Personnel Research
All personnel people engage in some form of research activities. In a good

research approach, the object is to get facts and information about personnel
specifics in order to develop and maintain a program that works.
1.5 ROLES PLAYED BY HR MANAGER
HR professionals have an all-encompassing role. They are required to have a

thorough knowledge of the organization and its intricacies and complexities. The
ultimate goal of every HR person should be to develop a linkage between the
employee and the organization because the employee’s commitment to the
organization is crucial. The first and foremost role of HR functionary is to impart
continuous education to employees about the changes and challenges facing the
country in general and their organization in particular. The employees should
know about their balance sheet, sales progress, diversification plans, restructuring
plans, sharp price movements, turnover and all such details. The HR
professionals should impart education to all employees through small booklets,
video films, and lectures. The primary responsibilities of a human resource
manager are:
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• To develop a thorough knowledge of corporate culture, plans and policies.

• To act as an internal change agent and consultant.
• To initiate change and act as an expert and facilitator.
• To actively involve himself in company’s strategy formulation.
• To keep communication lines open between the HRD function and
individuals and groups both within and outside the organization.
• To identify and evolve HRD strategies in consonance with overall
business strategy.
• To facilitate the development of various organizational teams and their
working relationship with other teams and individuals.
• To try and relate people and work so that the organization objectives are
achieved effectively and efficiently.
• To diagnose problems and to determine appropriate solution particularly
in the human resources areas.
• To provide coordination and support services for the delivery of HRD
programs and services.
• To evaluate the impact of an HRD intervention or to conduct research so
as to identify, develop or test how HRD in general has improved
individual or organizational performance.
Pat McLegan has suggested the following new roles of HR practitioner:
• To bring the issues and trends concerning an organization’s external and

internal people to the attention of strategic decision-makers, and to
recommend long-term strategies to support organizational excellence and
endurance.
• To design and prepare HR systems and actions for implementation so that
they can produce maximum impact on organizational performance and
development.
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• To facilitate the development and implementation of strategies for

transforming one’s own organization by pursuing values and visions.
• To create the smoothest flow of products and services to customers; to
ensure the best and most flexible use of resources and competencies; and
to create commitment among the people who help us to meet customers’
needs whether those people work directly for the organization or not.
• To identify learning needs and then design and develop structured learning
programs and materials to help accelerate learning for individuals and
groups.
• To help individuals and groups work in new situations and to expand and
change their views so that people in power move from authoritarian to
participative models of leadership.
• To help people assess their competencies, values, and goals so that they
can identify, plan, and implement development actions.
• To assist individuals to add value in the workplace and to focus on the
interventions and interpersonal skills for helping people change and
sustain development.
• To assess HRD practices and programs and their impact and to
communicate results so that the organization and its people accelerate
their change and development.
According to Dave Ulrich – there are four roles which HR play as below:
• Strategic partner role – turning strategy into results by building

organizations that create value;
• A change agent role – making change happen and, in particular, help it
happen fast;
• An employee champion role-managing the talent or the intellectual
capital within a firm; and
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• An administrative role – trying to get things to happen better, faster and

cheaper.
Human resource management has received tremendous attention in recent years.

Its role in organizations has also undergone a substantial change and may
organizations have gradually oriented themselves from the traditional personnel
management to a human resource management approach, although many see it as
the ‘old wine in a new bottle’. The basic approach of HRM is to perceive the
organization in its totality. Its emphasis is not only on production and
productivity but also on the quality of life. It seeks to achieve the fullest
development of human resources and the fullest possible socio-economic
development.
With business going global and competition becoming intense today, HR has
traveled a long way from its conventional role as a support function to being a
strategic business partner in the present technology leveraged era.
1.5 SUMMARY
The human resources of an organization represent one of its largest investments.

The objectives of HRM include the organization right, providing effective
motivation and leadership, obtaining and developing the right people, paying and
treating them fairly, and getting them involved in working productively. The
attainment of these objectives necessitates the performance of several functions.
The main HRM systems are – Appraisal system; Career system; Training system;
Work system; Cultural system; and Self-renewal system.
All systems and sub-systems of HRM must be incorporated in the organization

while setting the goals and objectives. This will also integrate the purposes and
processes and make HRM more meaningful. Human resources functions are
many and varied and include such things as human resource planning, recruiting,
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selecting, training, counseling employees, compensation management, and

employer-employee relations. In small organizations, most human resource
functions are performed by owners or operating managers. Large organizations
usually have a human resource or personnel department that is responsible for
coordinating and directing the human resource functions. Successful human
resource management is essential to organizational growth and success.
In the light of new challenges, there are indications that human resource people
will play an increasingly important role in an organization’s long-range planning
and policy-making activities.
CHAPTER – 2
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HUMAN RESOURCE PLANNING
2.0 Keith Davis has rightly pointed out, “An organization should identify their
short-run and long-run employee needs examining their corporate
strategies”. This statement helps us understand that one should always adopt a
situational approach to be more effective. Another most important conclusion is
that it is the corporate strategies and objectives that set a planning horizon.
Managers follows a systematic process or a model when planning for HR. The
following figure (Fig. 2.1) drawn on the next page will illustrate the same.
The process of the HR planning begins with considering the organizational

objectives and strategies. Then both external and internal assessments of HR
needs and supply sources must be done and forecasts developed. Key to assessing
internal human resources is having solid information, which is accessible through
ORGANIZATIONAL
a human re-source information system (HRIS).
OBJECTIVES AND
STRATEGIES
Once the assessments are complete, forecasts must be developed to identify the
mismatch between HR supply and HR demand. HR strategies and plans to adress
the imbalance,
SCAN EXTERNAL both short and long term, must be developed.
ANALYZE INTERNAL
ENVIRONMENT FOR
CHANGES AFFECTING
INVENTORY OF HR
LABOUR SUPPLY CAPABILITIES
FORECASTING
ORGANIZATIONA SURVEY OF
L NEED FOR PEOPLE
PEOPLE AVAILABLE
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HR STRATEGIES
AND PLANS
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Figure 2.1 : This figure illustrates the HR Planning Process
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CHAPTER – 3
JOB ANALYSIS
3.0 Job Analysis is a process to identify and determine in detail the particular job
duties and requirements and the relative importance of these duties for a given
job. Job Analysis is a process where judgements are made about data collected on
a job.
3.1 The Job; not the person An important concept of Job Analysis is that the
analysis is conducted of the Job, not the person. While Job Analysis data may be
collected from incumbents through interviews or questionnaires, the product of
the analysis is a description or specifications of the job, not a description of the
person.
3.2 Purpose of Job Analysis
The purpose of Job Analysis is to establish and document the 'job relatedness' of
employment procedures such as training, selection, compensation, and
performance appraisal.
Determining Training Needs
Job Analysis can be used in training/"needs assessment" to identify or develop:

• training content
• assessment tests to measure effectiveness of training
• equipment to be used in delivering the training
• methods of training (i.e., small group, computer-based, video,
classroom...)
Compensation
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Job Analysis can be used in compensation to identify or determine:

• skill levels
• compensable job factors
• work environment (e.g., hazards; attention; physical effort)
• responsibilities (e.g., fiscal; supervisory)
• required level of education (indirectly related to salary level)
Selection Procedures
Job Analysis can be used in selection procedures to identify or develop:

• job duties that should be included in advertisements of vacant positions;
• appropriate salary level for the position to help determine what salary
should be offered to a candidate;
• minimum requirements (education and/or experience) for screening
applicants;
• interview questions;
• selection tests/instruments (e.g., written tests; oral tests; job simulations);
• applicant appraisal/evaluation forms;
• orientation materials for applicants/new hires
Performance Review
Job Analysis can be used in performance review to identify or develop:

• goals and objectives
• performance standards
• evaluation criteria
• length of probationary periods
• duties to be evaluated
3.3 Methods of Job Analysis
Several methods exist that may be used individually or in combination. These

include:
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• review of job classification systems

• incumbent interviews
• supervisor interviews
• expert panels
• structured questionnaires
• task inventories
• check lists
• open-ended questionnaires
• observation
• incumbent work logs
A typical method of Job Analysis would be to give the incumbent a simple

questionnaire to identify job duties, responsibilities, equipment used, work
relationships, and work environment. The completed questionnaire would then be
used to assist the Job Analyst who would then conduct an interview of the
incumbent(s). A draft of the identified job duties, responsibilities, equipment,
relationships, and work environment would be reviewed with the supervisor for
accuracy. The Job Analyst would then prepare a job description and/or job
specifications.
The method that you may use in Job Analysis will depend on practical concerns
such as type of job, number of jobs, number of incumbents, and location of jobs.
3.4 What Aspects of a Job Are Analyzed
Job Analysis should collect information on the following areas:
Duties and Tasks

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The basic unit of a job is the performance of specific tasks and duties.
Information to be collected about these items may include: frequency, duration,
effort, skill, complexity, equipment, standards, etc.
Environment
This may have a significant impact on the physical requirements to be able to
perform a job. The work environment may include unpleasant conditions such as
offensive odors and temperature extremes. There may also be definite risks to the
incumbent such as noxious fumes, radioactive substances, hostile and aggressive
people, and dangerous explosives.
Tools and Equipment

Some duties and tasks are performed using specific equipment and tools.
Equipment may include protective clothing. These items need to be specified in a
Job Analysis.
Relationships
Supervision given and received. Relationships with internal or external people.
Requirements
The knowledge, skills, and abilities (KSA's) required to perform the job. While
an incumbent may have higher KSA's than those required for the job, a Job
Analysis typically only states the minimum requirements to perform the job.
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CHAPTER – 4
STAFFING
4.0 An organization requires the services of human beings. They are the dynamic
elements of it. Without the right kind of persons, an organization structure is only
an unproductive empty shell. Thus, any person occupying a position should have
enough talent to meet its requirements. Staffing basically involves matching jobs
and individuals. It involves a number of functions such as planning, selection,
training and appraisal of the individuals in the organization.
4.1 Meaning of Staffing
The term staffing stands for manning various positions in the organization. It is
defined as “the process involved in identifying, assessing, placing, evaluating and
developing individuals at work.” According to Theo Haiman, “Staffing function
is concerned with the placement, growth and development of all those members
of the organization whose function is to get things done through the efforts of
other individuals.” In the words of Koontz and O’Donnell, “The staffing function
pertains to the recruitment, selection, development, training and compensation of
subordinate managers.”
The staffing function of management pertains to the determination of manpower

requirements of the organization and providing it with adequate number of
competent people at all its levels. Thus manpower planning, recruitment, training
and development, appraisal and remuneration of workers are included in staffing.
4.2 Need and Importance of Staffing

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Since efficient managers are an asset in every enterprise, the need for them is
increasing day-by-day. Several reasons which have increased the importance of
the staffing function of management are as follows:
4.2.1 Better performance. Since performance of an organization depends on the

quality of the persons employed, the function of staffing is very significant.
4.2.2 Use of technology. With technological changes taking place everyday, the right
type of persons are required to make use of the technology.
4.2.3 Development of manpower. In order to avoid a sudden disruption in the

enterprise activities, the manpower requirement should be decided beforehand.
4.2.4 Optimum use of manpower. Although every concern spends some money on its
personnel by way of recruitment, selection, training, wages, and salaries, it can
enjoy optimum results only through efficient staffing.
4.2.5 Recognition of human relations. Human factor determines the success of a

business enterprise to a great extent. Thus, the morale of the employees should be
kept high through various financial and non-financial incentives and the right kind
of working conditions
4.3 Steps in the Staffing Process
The various steps in the staffing process are as follows:
4.3.1 Manpower planning. It is the determination of the future requirement of

personnel.
4.3.2 Recruitment and selection. It involves selecting the best candidates from among
the applicants to fill various jobs in the organization.
4.3.3 Placement. It is assigning the right job to the right person in the organization.
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4.3.4 Training and development. Every organization has some special jobs that need
certain specialized skills. Thus, the staff appointed has to be trained and their
abilities have to be developed commensurate with the organizational objectives.
4.3.5 Compensation or remuneration. It is concerned with developing a system of

adequate and equitable remuneration of personnel commensurate with their
contribution to the objectives of the organization.
4.3.6 Performance appraisal. It deals with the appraisal of the workers’ performance.
4.4 Principles of Staffing
4.4.1 Principle of the Objective of Staffing
The objective of staffing is to ensure that organization roles are filled by those
qualified employees who are able and willing to occupy them.
4.4.2 Principle of Staffing
The clearer the definition of organization roles and their human requirement and
the better the technique of manager appraisal and training employed, the higher
the managerial quality.
4.4.3 Principle of Job Definition
The more precisely the results expected from managers are identified, the more
clearly their position can be defined.
4.4.4 Principle of Managerial Appraisal
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The more clearly, verifiable objectives and required managerial activities are
identified the more precise can be the appraisal of mangers against these criteria.
4.4.5 Principle of Training Objective
The more precisely the training objectives are stated; the more likely are the
chances of achieving them.
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CHAPTER – 5
ORIENTATION
5.0 New employee orientation effectively integrates the new employee into your
organization and assists with retention, motivation, job satisfaction, and quickly
enabling each individual to become contributing members of the work team.
Orienting employees to their workplaces and their jobs is one of the most
neglected functions in many organizations. An employee handbook and piles of
paperwork is not sufficient anymore when it comes to welcoming a new
employee to your organization. The most frequent complaints about new
employee orientation are that it is overwhelming, boring, or that the new
employee is left to sink or swim. The result is often a confused new employee
who is not productive and is more likely to leave the organization within a year.
With an ongoing labor crunch, developing an effective employee orientation

experience continues to be crucial. It is critical that new hire programs are
carefully planned to educate the employee to the values, history and who is who
in the organization. A well thought out orientation program, whether it lasts one
day or six months, will help not only in retention of employees, but also in
productivity. Organizations that have good orientation programs get their people
up to speed faster, have better alignment between what the employees do and
what the organization needs them to do, and have lower turnover rates.
5.1 Purposes of Orientation
It is used for the following purposes:
5.1.1 To Reduce Startup-Costs
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Proper orientation can help the employee get "up to speed" much more quickly,
thereby reducing the costs associated with learning the job.
5.1.2 To Reduce Anxiety
Any employee, when put into a new, strange situation, will experience anxiety
that can impede his or her ability to learn to do the job. Proper orientation helps
to reduce anxiety that results from entering into an unknown situation, and helps
provide guidelines for behavior and conduct, so the employee doesn't have to
experience the stress of guessing.
5.1.3 To Reduce Employee Turnover
Employee turnover increases as employees feel they are not valued, or are put in
positions where they can't possibly do their jobs. Orientation shows that the
organization values the employee, and helps provide tools necessary for
succeeding in the job.
5.1.4 To Save Time For Supervisor & Co-Workers
Simply put, the better the initial orientation, the less likely supervisors and co-
workers will have to spend time teaching the employee.
5.1.5 To Develop Realistic Job Expectations, Positive Attitudes and Job

Satisfaction
It is important that employees learn early on what is expected of them, and what
to expect from others, in addition to learning about the values and attitudes of the
organization. While people can learn from experience, they will make many
mistakes that are unnecessary and potentially damaging.
5.2 Two Kinds of Orientation

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There are two related kinds of orientation. The first we will call
Overview Orientation, and deals with the basic information an employee will
need to understand the broader system he or she works in. Overview Orientation
includes helping employees understand:
• government in general, the department and the branch
• important policies and general procedures (non-job specific)
• information about compensation and benefits
• safety and accident prevention issues
• employee and union issues (rights, responsibilities)
• physical facilities
Often, Overview Orientation can be conducted by the personnel department with

a little help from the branch manager or immediate supervisor, since much of the
content is generic in nature.
The second kind of orientation is called Job-Specific Orientation, and is the

process that is used to help employees understand:
• function of the organization, and how the employee fits in
• job responsibilities, expectations, and duties
• policies, procedures, rules and regulations
• layout of workplace
• introduction to co-workers and other people in the broader organization.
Job specific orientation is best conducted by the immediate supervisor, and/or

manager, since much of the content will be specific to the individual. Often the
orientation process will be ongoing, with supervisors and co-workers supplying
coaching.
5.3 The main reasons orientation programs fail
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• The program was not planned.

• The employee was unaware of the job requirements.
• The employee does not feel welcome.
All new employees should complete a new employment orientation program that
is designed to assist them in adjusting to their jobs and work environment and to
instill a positive work attitude and motivation at the onset.
A thoughtful new employee orientation program can reduce turnover and save an
organization thousands of dollars. One reason people change jobs is because they
never feel welcome or part of the organization they join. The most important
principle to convey during an orientation is commitment to continuous
improvement and continual learning. That way, new employees become
comfortable with asking questions to obtain the information they need to learn,
problem solve and make decisions.
A well thought out orientation process takes energy, time and commitment;
however it usually pays off for the individual employee, the department, and the
organization.
5.4 Guidelines for orientation
• Orientation should begin with the most important information (basic job
survival).
• Orientation should emphasize people as well as procedures and things.
Employees should have a chance to get to know people and their
approaches and styles in both social and work settings.
• Buddy an employee to a more experienced person, but make sure the more
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experienced person wants to buddy up, and has the interpersonal skills.
This provides ongoing support.
• Introduce employees to both information and people in a controlled way.
A new employee can't absorb everything at once, so don't waste your
time. Space out introductions.
5.5 Conclusion
Orientation (or lack of it) will make a significant difference in how quickly an
employee can become more productive, and also has long term effects for the
organization.
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CHAPTER – 6
TRAINING & DEVELOPMENT
6.0 The challenges associated with the changing nature of work and the workplace
environment is as real for the campus as elsewhere. Rapid change requires a
skilled, knowledgeable workforce with employees who are adaptive, flexible, and
focused on the future.
The quality of employees and their development through training and education
are major factors in determining long-term profitability of a small business. If you
hire and keep good employees, it is good policy to invest in the development of
their skills, so they can increase their productivity.
Training often is considered for new employees only. This is a mistake because
ongoing training for current employees helps them adjust to rapidly changing job
requirements.
6.1 Purpose of Training and Development
Reasons for emphasizing the growth and development of personnel include
• Creating a pool of readily available and adequate replacements for

personnel who may leave or move up in the organization.
• Enhancing the company's ability to adopt and use advances in technology
because of a sufficiently knowledgeable staff.
• Building a more efficient, effective and highly motivated team, which
enhances the company's competitive position and improves employee
morale.
• Ensuring adequate human resources for expansion into new programs.
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Research has shown specific benefits that a small business receives from training
and developing its workers, including:
• Increased productivity.
• Reduced employee turnover.
• Increased efficiency resulting in financial gains.
• Decreased need for supervision
Employees frequently develop a greater sense of self-worth, dignity and well-

being as they become more valuable to the firm and to society. Generally they
will receive a greater share of the material gains that result from their increased
productivity. These factors give them a sense of satisfaction through the
achievement of personal and company goals.
6.2 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
Your business should have a clearly defined strategy and set of objectives that
direct and drive all the decisions made especially for training decisions. Firms that
plan their training process are more successful than those that do not. Most
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business owners want to succeed, but do not engage in training designs that
promise to improve their chances of success. Why? The five reasons most often
identified are:
Time
Small businesses managers find that time demands do not allow them to train
employees.
Getting started
Most small business managers have not practiced training employees. The
training process is unfamiliar.
Broad expertise
Managers tend to have broad expertise rather than the specialized skills needed
for training and development activities.
Lack of trust and openness

Many managers prefer to keep information to themselves. By doing so they keep
information from subordinates and others who could be useful in the training and
development process.
Skepticism as to the value of the training

Some small business owners believe the future cannot be predicted or controlled
and their efforts, therefore, are best centered on current activities i.e., making
money today.
A well-conceived training program can help your firm succeed. A program

structured with the company's strategy and objectives in mind has a high
probability of improving productivity and other goals that are set in the training
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mission.
For any business, formulating a training strategy requires addressing a series of

questions.
• Who are your customers? Why do they buy from you?
• Who are your competitors? How do they serve the market? What
competitive advantages do they enjoy? What parts of the market have they
ignored?
• What strengths does the company have? What weaknesses?
• What social trends are emerging that will affect the firm?
The purpose of formulating a training strategy is to answer two relatively simple

but vitally important questions: (1) What is our business? and (2) What should our
business be? Armed with the answers to these questions and a clear vision of its
mission, strategy and objectives, a company can identify its training needs.
6.3 Identifying Training Needs
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 your employees to do these tasks. This analysis will provide
some benchmarks against which the effectiveness of a training program can be
evaluated. Your firm should know where it wants to be in five years from its
long-range strategic plan. What you need is a training program to take your firm
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from here to there.
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

companywide 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, you would be remiss not to ask your
customers what they like about your business and what areas they think should be
improved. In summary, the analysis should focus on the total organization and
should tell you (1) where training is needed and (2) where it will work within the
organization.
Once you 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 you 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 identify a training
need.
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6.4 Selection of Trainees
Once you have decided what training is necessary and where it is needed, the next
decision is who should be trained? For a small business, this question is crucial.
Training an employee is expensive, especially when he or she leaves your firm for
a better job. Therefore, it is important to carefully select who will be trained.
Training programs should be designed to consider the ability of the employee to

learn the material and to use it effectively, and to make the most efficient use of
resources possible. It is also important that employees be motivated by the
training experience. Employee failure in the program is not only damaging to the
employee but a waste of money as well. Selecting the right trainees is important
to the success of the program.
6.5 Training Goals
The goals of the training program should relate directly to the needs determined
by the assessment process outlined above. Course objectives should clearly state
what behavior or skill will be changed as a result of the training and should relate
to the mission and strategic plan of the company. Goals should include milestones
to help take the employee from where he or she is today to where the firm wants
him or her in the future. Setting goals helps to evaluate the training program and
also to motivate employees. Allowing employees to participate in setting goals
increases the probability of success.
6.6 Training Methods
There are two broad types of training available to small businesses: on-the-job
and off-the-job techniques. Individual circumstances and the "who," "what" and
"why" of your training program determine which method to use.
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On-the-job training is delivered to employees while they perform their regular

jobs. In this way, they do not lose time while they are learning. After a plan is
developed for what should be taught, employees should be informed of the
details. A timetable should be established with periodic evaluations to inform
employees about their progress. On-the-job techniques include orientations, job
instruction training, apprenticeships, internships and assistantships, job rotation
and coaching.
Off-the-job techniques include lectures, special study, films, television

conferences or discussions, case studies, role playing, simulation, programmed
instruction and laboratory training. Most of these techniques can be used by small
businesses although, some may be too costly.
Orientations are for new employees. The first several days on the job are crucial
in the success of new employees. This point is illustrated by the fact that 60
percent of all employees who quit do so in the first ten days. Orientation training
should emphasize the following topics:
• The company's history and mission.
• The key members in the organization.
• The key members in the department, and how the department helps fulfill
the mission of the company.
• Personnel rules and regulations.
Some companies use verbal presentations while others have written presentations.
Many small businesses convey these topics in one-on-one orientations. No matter
what method is used, it is important that the newcomer understand his or her new
place of employment.
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Lectures present training material verbally and are used when the goal is to
present a great deal of material to many people. It is more cost effective to lecture
to a group than to train people individually. Lecturing is one-way communication
and as such may not be the most effective way to train. Also, it is hard to ensure
that the entire audience understands a topic on the same level; by targeting the
average attendee you may undertrain some and lose others. Despite these
drawbacks, lecturing is the most cost-effective way of reaching large audiences.
Role playing and simulation are training techniques that attempt to bring
realistic decision making situations to the trainee. Likely problems and alternative
solutions are presented for discussion. The adage there is no better trainer than
experience is exemplified with this type of training. Experienced employees can
describe real world experiences, and can help in and learn from developing the
solutions to these simulations. This method is cost effective and is used in
marketing and management training.
Audiovisual methods such as television, videotapes and films are the most
effective means of providing real world conditions and situations in a short time.
One advantage is that the presentation is the same no matter how many times it's
played. This is not true with lectures, which can change as the speaker is changed
or can be influenced by outside constraints. The major flaw with the audiovisual
method is that it does not allow for questions and interactions with the speaker,
nor does it allow for changes in the presentation for different audiences.
Job rotation involves moving an employee through a series of jobs so he or she

can get a good feel for the tasks that are associated with different jobs. It is
usually used in training for supervisory positions. The employee learns a little
about everything. This is a good strategy for small businesses because of the
many jobs an employee may be asked to do.
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Apprenticeships develop employees who can do many different tasks. They

usually involve several related groups of skills that allow the apprentice to
practice a particular trade, and they take place over a long period of time in which
the apprentice works for, and with, the senior skilled worker. Apprenticeships are
especially appropriate for jobs requiring production skills.
Internships and assistantships are usually a combination of classroom and on-

the-job training. They are often used to train prospective managers or marketing
personnel.
Programmed learning, computer-aided instruction and interactive video all

have one thing in common: they allow the trainee to learn at his or her own pace.
Also, they allow material already learned to be bypassed in favor of material with
which a trainee is having difficulty. After the introductory period, the instructor
need not be present, and the trainee can learn as his or her time allows. These
methods sound good, but may be beyond the resources of some small businesses.
Laboratory training is conducted for groups by skilled trainers. It usually is

conducted at a neutral site and is used by upper- and middle management trainees
to develop a spirit of teamwork and an increased ability to deal with management
and peers. It can be costly and usually is offered by larger small businesses.
6.7 Trainers
Who actually conducts the training depends on the type of training needed and
who will be receiving it. On-the-job training is conducted mostly by supervisors;
off-the-job training, by either in-house personnel or outside instructors.
In-house training is the daily responsibility of supervisors and employees.

Supervisors are ultimately responsible for the productivity and, therefore, the
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training of their subordinates. These supervisors should be taught the techniques

of good training. They must be aware of the knowledge and skills necessary to
make a productive employee. Trainers should be taught to establish goals and
objectives for their training and to determine how these objectives can be used to
influence the productivity of their departments. They also must be aware of how
adults learn and how best to communicate with adults. Small businesses need to
develop their supervisors' training capabilities by sending them to courses on
training methods. The investment will pay off in increased productivity.
There are several ways to select training personnel for off-the-job training
programs. Many small businesses use in-house personnel to develop formal
training programs to be delivered to employees off line from their normal work
activities, during company meetings or individually at prearranged training
sessions.
There are many outside training sources, including consultants, technical and
vocational schools, continuing education programs, chambers of commerce and
economic development groups. Selecting an outside source for training has
advantages and disadvantages. The biggest advantage is that these organizations
are well versed in training techniques, which is often not the case with in-house
personnel.
The disadvantage of using outside training specialists is their limited knowledge
of the company's product or service and customer needs. These trainers have a
more general knowledge of customer satisfaction and needs. In many cases, the
outside trainer can develop this knowledge quickly by immersing himself or
herself in the company prior to training the employees. Another disadvantage of
using outside trainers is the relatively high cost compared to in-house training,
although the higher cost may be offset by the increased effectiveness of the
training.
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Whoever is selected to conduct the training, either outside or in-house trainers, it

is important that the company's goals and values be carefully explained.
Training Administration
Having planned the training program properly, you must now administer the
training to the selected employees. It is important to follow through to make sure
the goals are being met. Questions to consider before training begins include:
• Location.
• Facilities.
• Accessibility.
• Comfort.
• Equipment.
• Timing.
Careful attention to these operational details will contribute to the success of the
training program.
An effective training program administrator should follow these steps:
• Define the organizational objectives.
• Determine the needs of the training program.
• Define training goals.
• Develop training methods.
• Decide whom to train.
• Decide who should do the training.
• Administer the training.
• Evaluate the training program.
Following these steps will help an administrator develop an effective training

program to ensure that the firm keeps qualified employees who are productive,
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happy workers. This will contribute positively to the bottom line.
6.8 Evaluation of Training
Training should be evaluated several times during the process. Determine these
milestones when you develop the training. Employees should be evaluated by
comparing their newly acquired skills with the skills defined by the goals of the
training program. Any discrepancies should be noted and adjustments made to the
training program to enable it to meet specified goals. Many training programs fall
short of their expectations simply because the administrator failed to evaluate its
progress until it was too late. Timely evaluation will prevent the training from
straying from its goals.
6.9 General Benefits from Employee Training and Development
There are numerous reasons for supervisors to conduct training among

employees. These reasons include:
• Increased job satisfaction and morale among employees
• Increased employee motivation
• Increased efficiencies in processes, resulting in financial gain
• Increased capacity to adopt new technologies and methods
• Increased innovation in strategies and products
• Reduced employee turnover
• Enhanced company image, e.g., conducting ethics training (not a good
reason for ethics training!)
• Risk management, e.g., training about sexual harassment, diversity
training
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CHAPTER – 7
PERFORMANCE APPRAISAL
7.0 There is, says Dulewicz (1989), "... a basic human tendency to make judgements
about those one is working with, as well as about oneself." Appraisal, it seems, is
both inevitable and universal. In the absence of a carefully structured system of
appraisal, people will tend to judge the work performance of others, including
subordinates, naturally, informally and arbitrarily.
Performance appraisal may be defined as a structured formal interaction between

a subordinate and supervisor, that usually takes the form of a periodic interview
(annual or semi-annual), in which the work performance of the subordinate is
examined and discussed, with a view to identifying weaknesses and strengths as
well as opportunities for improvement and skills development.
In many organizations - but not all - appraisal results are used, either directly or
indirectly, to help determine reward outcomes. That is, the appraisal results are
used to identify the better performing employees who should get the majority of
available merit pay increases, bonuses, and promotions.
By the same token, appraisal results are used to identify the poorer performers
who may require some form of counseling, or in extreme cases, demotion,
dismissal or decreases in pay. (Organizations need to be aware of laws in their
country that might restrict their capacity to dismiss employees or decrease pay.)
Whether this is an appropriate use of performance appraisal - the assignment and

justification of rewards and penalties - is a very uncertain and contentious matter.
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7.1 People differ in their abilities and their aptitudes. There is always some difference
between the quality and quantity of the same work on the same job being done by
two different people. Performance appraisals of Employees are necessary to
understand each employee’s abilities, competencies and relative merit and worth
for the organization. Performance appraisal rates the employees in terms of their
performance.
It is a powerful tool to calibrate, refine and reward the performance of the

employee. It helps to analyze his achievements and evaluate his contribution
towards the achievements of the overall organizational goals.
By focusing the attention on performance, performance appraisal goes to the heart

of personnel management and reflects the management's interest in the progress
of the employees.
7.2 Objectives of Performance appraisal:
• To review the performance of the employees over a given period of time.

• To judge the gap between the actual and the desired performance.
• To help the management in exercising organizational control.
• Helps to strengthen the relationship and communication between superior
– subordinates and management – employees.
• To diagnose the strengths and weaknesses of the individuals so as to
identify the training and development needs of the future.
• To provide feedback to the employees regarding their past performance.
• Provide information to assist in the other personal decisions in the
organization.
• Provide clarity of the expectations and responsibilities of the functions to
be performed by the employees.
• To judge the effectiveness of the other human resource functions of the
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organization such as recruitment, selection, training and development.

• To reduce the grievances of the employees.
Almost all organizations practice performance appraisal in one form or another to

achieve certain objectives. These objectives may vary from organization to
organization or even within the same organization from time to time. It has been
found that there are two primary objectives behind the use of this methodology.
One is to use it as an evaluation system and second, to use it as a feedback
system.
The aim of the evaluation system is to identify the performance gap. This means
that it helps determine the gap between the actual performance of the employee
and that required or desired by the organization.
The aim of the feedback system is to inform the employee about the quality of his
work or performance. This is an interactive process by which the employee can
also speak about his problems to his superior.
An effective performance appraisal system should emphasis individual objectives,

organizational objectives and also mutual objectives. From the viewpoint of
individual objective the performance appraisal should talk about
• What task the individual is expected to do?
• How well the individual has done the task?
• How can his performance be further improved?
• His reward for doing well.
From the organizational view point a performance appraisal should generate

manpower information, improve efficiency and effectiveness serve as a
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mechanism of control and provide a rational compensation structure. In short the

appraisal system establishes and upholds the principle of accountability in the
absence of which organization failure is the only possible outcome.
Finally, talking about mutual goals, the emphasis is on growth and development,
harmony, effectiveness and profitability.
7.3 Methods of Performance Appraisal
In order to achieve the objectives, a variety of performance appraisal methods

have been developed. The choice of method depends on organizational ethos, its
objectives, size, product and technology.
The most traditional method is the Confidential Report method where the
supervisor makes an evaluation of his subordinate on the basis of certain
characteristics like loyalty, intelligence, conduct, character etc. In some other
methods like Graphic Rating scale and the Ranking Methods though the
process is simple it is plagued with subjectivity. In the Critical Incidents method
a balance sheet of on-job-behavior for each employee is generated which can then
be used at the end of the year to see how well the employee has performed.
In 1961 Peter Drucker popularized the Management by Objectives (MBO)

method. In this method the subordinate in consultation with the supervisor chalks
out short term objectives followed by specific actions that he has to carry out. The
goals are finally set and are action oriented. The goals set should be specific,
measurable, achievable, review able and time bound and most importantly it
should be aligned with the goal of the organization. At the end of a specified time
period, the activities are jointly reviewed by both the subordinate and his
supervisor. Depending on the performance of the subordinate, the goals are
modified or redesigned for the next period of time.
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The MBO is thus a performance oriented system. A well thought out MBO
system provides multiple benefits. It establishes a link between the performance
of the individual and the organization. It is easy to implement because those who
carry out the plan also participates in setting it up. Each employee becomes aware
of the task he has to perform. This leads to better utilization of capacity and talent.
It promotes better communication and information sharing. It provides guidelines
for self evaluation as well as evaluation by the superior against set tasks and
goals. It facilitates guidance and counseling.
But most organizations engage in a retrospective performance appraisal. In this

process some objectives that were agreed upon in the beginning of the year are
dragged out and the appraisee and the manager discuss and debate about how well
each of these objectives was achieved.
This procedure has many flaws. It does not address the basic human needs in the
motivation process. Feedback should be as immediate as possible, it should focus
on actual things and the individual involved should be given the opportunity to
correct his behavior. But the traditional procedure is too late. It is difficult to
remember events a month old let alone events that had occurred over ten months
ago.
7.4 Performance Management and Performance Appraisal
Many people mistake performance appraisal for performance management.

Actually, performance management is a much bigger system, and is much more
valuable to managers and companies (and employees) than performance
appraisal. The essential components or parts of an effective performance
management system include:
• Performance Planning (includes employee goal setting / objective setting)
• Ongoing Performance Communication
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• Data Gathering, Observation and Documentation

• Performance Appraisal Meetings
• Performance Diagnosis and Coaching
Performance Management is an ongoing process of measuring and adjusting

performance continually focusing on behaviors throughout the year. It is a
continuous process not an event. It is not the same as performance appraisal,
which is an assessment of the employee’s performance by both the employee and
his superior jointly, with the purpose of allocating a score that may be used for
both development and salary or promotion purposes.
Performance Management includes Performance Appraisal as one of its elements.

Performance Management should became part of day to day workplace behavior.
Some organizations have adopted an online Performance Management system.
Going online with performance management puts ownership of the process in the
hands of the individual as opposed to the traditional manager driven system. It
allows direct communication between the individual and the manager via online
journals at times convenient to both. It links performance with the individual’s
learning and development plans and also to the organizational goals, values and
competencies.
In fact performance appraisal is the least important component of a performance

management system. To quote Robert Bacal ‘If all you do is appraisal -- if you
don't do planning and have ongoing communication, collect data, and diagnose
problems, you are wasting your time.’ In fact it's even worse than that. If all you
do is performance appraisal, you will almost be guaranteed that morale will
suffer, performance problems will increase, and the manager's job will become
much harder.
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7.5 Modern Trends
A growing number of front running organizations like Ford, Microsoft and Sun
Microsystems, have adopted a performance appraisal model in which best-to-
worst ranking methods are used to identify poor performers. The identified poor
performers are then given a time period during which they have to show an
improvement in their performance. In cases where the employee fails to improve
his performance he is asked to leave the organization gracefully and a severance
package is offered to him. If the employee refuses to leave then his service is
terminated and no compensation is offered. This system is called “rank and yank
strategy”. Advocates of this system feel that it continually motivates employees to
better their performance since nobody would like to be included in the poor
performance band. But the flip side of this strategy is that employees become too
competitive and team spirit is not nurtured.
Effective organizations are not build merely on investment and returns but more
on the quality of the workforce, its commitment to the organizational goals and
investments made to attract train and retain superior human capital. An integrated
Performance Management system is essential to get the best out of its people.
Employee performance is linked to company performance. This helps in
achieving the organizational goal and creates a performance culture in the
company. Invention, creativity, diversity of perspectives is fostered. Employees
act as one company one brand.
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CHAPTER – 8
CAREER PLANNING
8.0 Attracting and keeping good staff is a challenge within today's labour market.
One strategy that will help you with this is to encourage all staff to engage in
career planning. If your staff have clear direction and goals they are more likely to
be satisfied in their job and this could mean less staff turn over for your business.
Career planning is essential to retain the good staff you already have.
8.1 Purpose of career planning
When you organise or support career planning, you give staff a clear message that
you support their employment advancement within your organisation. By helping
people to plan career choices that are realistic and suitable, you are offering them
the opportunity for future satisfaction within your business and you
significantly lower the risk of them leaving.
In the process of developing a career plan, employees will gain a better idea of:
• what type of work they are best suited to within your organisation
• what training and education they will need to pursue the work they would
most like within your organisation
• the strategy that will help them get where they want to be.
8.2 The process of career planning
Career planning is the key process in career management. It uses all the
information provided by the organization's assessments of requirements, the
assessments of performance and potential and the management succession plans,
and translates it in the form of individual career development programs and
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general arrangements for management development, career counseling, mentoring

and management training.
8.3 Career planning the competency band approach
It is possible to define career progression in terms of the competencies required

by individuals to carry out work at progressive levels of responsibility or
contribution. These levels can be described as competency bands.
Competencies would be defined as the attributes and behavioral characteristics

needed to perform effectively at each discrete level in a job or career family. The
number of levels would vary according to the range of competencies required in a
particular job family. For each band, the experience and training needed to
achieve the competency level would be defined.
These definitions would provide a career map incorporating 'aiming points' for
individuals, who would be made aware of the competency levels they must reach
in order to achieve progress in their careers. This would help them to plan their
own development, although support and guidance should be provided by their
managers, and HR specialists. The provision of additional experience and training
could be arranged as appropriate, but it would be important to clarify what
individual employees need to do for themselves if they want to progress within
the organization.
The advantage of this approach is that people are provided with aiming points and
an understanding of what they need to do to reach them. One of the major causes
of frustration and job dissatisfaction is the absence of this information.
Career planning is for core people as well as high flyers
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The philosophy upon which career plans are based refers not only to advancing
careers to meet organizational and individual requirements, but also the need to
maximize the potential of the people in the organization in terms of productivity
and satisfaction under conditions of change, when development does not
necessarily mean promotion.
Career planning is for individuals as well as the organization
Career planning procedures are always based on what the organization needs. But
they have to recognize that organizational needs will not be satisfied if individual
needs are neglected. Career planning has to be concerned with the management of
diversity.
Career plans must therefore recognize that:

members of the organization should receive recognition as individuals with
unique needs, wants, and abilities;
individuals are more motivated by an organization that responds to their
aspirations and needs;
individuals can grow, change and seek new directions if they are given the right
opportunities, encouragement and guidance.
8.4 Career planning techniques
Career planning uses all the information generated by the succession plans,
performance, and potential assessments and self assessments to develop programs
and procedures which are designed to implement career management policies,
achieve succession planning objectives and generally improve motivation,
commitment and performance. The procedures used are those concerned with:
personal development planning .
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training and management development.

mentoring
career counseling
In addition, career planning procedures may cater for the rising stars by 'fast
tracking' them, that is, deliberately accelerating promotion and giving them
opportunities to display and enlarge their talents. But these procedures should pay
just as much, if not more, attention to those managers who are following the
middle route of steady, albeit unspectacular, progression.
8.5 Career counseling
Performance management processes, should provide for counseling sessions

between individuals and their managers. These sessions should give the former
the opportunity to discuss their aspirations and the latter the chance to comment
on them helpfully and, at a later stage, to put forward specific
Career development proposals to be fed into the overall career management

programs.
8.6 Personal development planning
Personal development planning is carried out by individuals with guidance,

encouragement and help from their managers/HRM as required. A personal
development plan sets out the actions people propose to take to learn and to
develop themselves. They take responsibility for formulating and implementing
the plan, but they receive support from the organization and their managers in
doing so. The purpose is to provide a 'self organized learning framework'.
Personal development planning consists of the following stages:
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Analyze current situation and development needs. This can be done as part of a
performance management process.
Set goals. These could include improving performance in the current job,
improving or acquiring skills, extending relevant knowledge, developing
specified areas of competence, moving across or upwards in the organization, or
preparing for changes in the current role.
Prepare action plan. The action plan sets out what needs to be done and how it
will be done under headings such as outcomes expected (learning objectives), the
development activities, the responsibility for development (what individuals are
expected to do and the support they will get from their manager, the HR
department or other people), and timing. A variety of activities tuned to individual
needs should be included in the plan, for example observing what others do,
project work, planned use of e learning programs and internal learning resource
centres, working with a mentor, coaching by the line manager or team leader,
experience in new tasks, guided reading, special assignments and action
8.7 Management Development
Formal approaches to management development
The formal approaches to management development include:

development on the job through coaching, counseling, monitoring and feedback
by managers on a continuous basis associated with the use of performance
management processes to identify and satisfy development needs, and with
mentoring;
development through work experience, which includes job rotation, job
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enlargement, taking part in project teams or task groups, 'action learning', and
secondment outside the organization;
formal training by means of internal or external courses;
structured self development by following self managed learning programs agreed
as a personal development plan or learning contract with the manager or a
management development adviser these may include guidance reading or the
deliberate extension of knowledge or acquisition of new skills on the job.
The formal approaches to management development are based on the

identification of development needs through performance management or a
development centre. The approach may be structured around a list of generic or
core competences which have been defined as being appropriate for managers in
the organization.
8.8 Informal approaches to management development
Informal approaches to management development make use of the learning

experiences that managers meet during the course of their everyday work.
Managers are learning every time they are confronted with an unusual problem,
an unfamiliar task or a move to a different job. They then have to evolve new
ways of dealing with the situation. They will learn if they analyse what they did to
determine how and why it contributed to its success or failure.
8.9 Competency based management development
Competency based management development uses competency frameworks as a

means of identifying and expressing development needs and pointing the way to
self managed learning programs or the provision of learning opportunities by the
organization.
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Competency based management development may concentrate on a limited

number of core or generic competences which the organization has decided will
be an essential part of the equipment of their managers if they are going to take
the organization forward in line with its strategic plans. For example:
strategic capability to understand the changing business environment,

opportunities for product market development, competitive challenges and the
strengths and weaknesses of their own organization in order to identify optimum
strategic responses;
change management capability to identify change needs, plan change programs
and persuade others to participate willingly in the implementation of change
team management capability to get diverse groups of people from different
disciplines to work well together.
relationship management to network effectively with others to share information
and pool resources to achieve common objectives;
international management to be capable of managing across international frontiers
working well with people of other nationalities.
8.10 Mentoring
Mentoring is the process of using specially selected and trained individuals to

provide guidance and advice which will help to develop the careers of the
'prot6g6s' Allocated to them.
Mentoring is aimed at complementing learning on the job, which must always be

the best way of acquiring the particular skills and knowledge the job holder needs.
Mentoring also complements formal training by providing those who benefit from
it with individual guidance from experienced managers who are 'wise in the ways
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of the organization'.
Mentors provide for the person or persons allocated to them :
advice in drawing up self development programs or learning contracts; general

help with learning programs; guidance on how to acquire the necessary
knowledge and skills to do a new job; advice on dealing with any administrative,
technical or people problems individuals meet, especially in the early stages of
their careers; information on 'the way things are done around here' the corporate
culture and
its manifestations in the shape of core values and organizational behaviour ;

coaching in specific skills;
help in tackling projects not by doing it for the trainees but by pointing them in
the right direction, that is helping people to help themselves;
a parental figure with whom the trainee can discuss their aspirations and concerns
and who will lend a sympathetic ear to their problems.
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CHAPTER – 9
COMPENSATION
9.0 Compensation is a systematic approach to providing monetary value to employees

in exchange for work performed. Compensation may achieve several purposes
assisting in recruitment, job performance, and job satisfaction.
Compensation is a tool used by management for a variety of purposes to further

the existance of the company. Compensation may be adjusted according the the
business needs, goals, and available resources.
9.1 Compensation may be used to:

• recruit and retain qualified employees.
• increase or maintain morale/satisfaction.
• reward and encourage peak performance.
• achieve internal and external equity.
• reduce turnover and encourage company loyalty.
• modify (through negotiations) practices of unions.
Recruitment and retention of qualified employees is a common goal shared by

many employers. To some extent, the availability and cost of qualified applicants
for open positions is determined by market factors beyond the control of the
employer. While an employer may set compensation levels for new hires and
advertize those salary ranges, it does so in the context of other employers seeking
to hire from the same applicant pool.
Morale and job satisfaction are affected by compensation. Often there is a balance
(equity) that must be reached between the monetary value the employer is willing
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to pay and the sentiments of worth felt be the employee. In an attempt to save
money, employers may opt to freeze salaries or salary levels at the expense of
satisfaction and morale. Conversely, an employer wishing to reduce employee
turnover may seek to increase salaries and salary levels.
Compensation may also be used as a reward for exceptional job performance.

Examples of such plans include: bonuses, commissions, stock, profit sharing, gain
sharing.
9.2 Components of a compensation system
Compensation will be perceived by employees as fair if based on systematic

components. Various compensation systems have developed to determine the
value of positions. These systems utilize many similar components including job
descriptions, salary ranges/structures, and written procedures.
The components of a compensation system include:
Job Descriptions
A critical component of both compensation and selection systems, job
descriptions define in writing the responsibilities, requirements, functions, duties,
location, environment, conditions, and other aspects of jobs. Descriptions may be
developed for jobs individually or for entire job families.
Job Analysis
The process of analyzing jobs from which job descriptions are developed. Job
analysis techniques include the use of interviews, questionnaires, and
observation.
Job Evaluation
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A system for comparing jobs for the purpose of determining appropriate

compensation levels for individual jobs or job elements. There are four main
techniques: Ranking, Classification, Factor Comparison, and Point Method.
Pay Structures
Useful for standardizing compensation practices. Most pay structures include
several grades with each grade containing a minimum salary/wage and either
step increments or grade range. Step increments are common with union
positions where the pay for each job is pre-determined through collective
bargaining.
Salary Surveys
Collections of salary and market data. May include average salaries, inflation
indicators, cost of living indicators, salary budget averages. Companies may
purchase results of surveys conducted by survey vendors or may conduct their
own salary surveys. When purchasing the results of salary surveys conducted by
other vendors, note that surveys may be conducted within a specific industry or
across industries as well as within one geographical region or across different
geographical regions. Know which industry or geographic location the salary
results pertain to before comparing the results to your company.
9.3 Different types of compensation
Different types of compensation include:

• Base Pay
• Commissions
• Overtime Pay
• Bonuses, Profit Sharing, Merit Pay
• Stock Options
• Travel/Meal/Housing Allowance
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• Benefits including: dental, insurance, medical, vacation, leaves,

retirement, taxes...
9.4 Compensation Plans
Develop a program outline.

• Set an objective for the program.
• Establish target dates for implementation and completion.
• Determine a budget.
Designate an individual to oversee designing the compensation program.

• Determine whether this position will be permanent or temporary.
• Determine who will oversee the program once it is established.
• Determine the cost of going outside versus looking inside.
• Determine the cost of a consultant's review.
Develop a compensation philosophy.

• Form a compensation committee (presumably consisting of officers or
at least including one officer of the company).
• Decide what, if any, differences should exist in pay structures for
executives, professional employees, sales employees, and so on (e.g.,
hourly versus salaried rates, incentive-based versus noncontingent pay).
• Determine whether the company should set salaries at, above, or below
market.
• Decide the extent to which employee benefits should replace or
supplement cash compensation.
Conduct a job analysis of all positions.
• Conduct a general task analysis by major departments. What tasks must
be accomplished by whom?
• Get input from senior vice presidents of marketing, finance, sales,
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administration, production, and other appropriate departments to

determine the organizational structure and primary functions of each.
• Interview department managers and key employees, as necessary, to
determine their specific job functions.
• Decide which job classifications should be exempt and which should be
nonexempt.
• Develop model job descriptions for exempt and nonexempt positions
and distribute the models to incumbents for review and comment;
adjust job descriptions if necessary.
• Develop a final draft of job descriptions.
• Meet with department managers, as necessary, to review job
descriptions.
• Finalize and document all job descriptions.
Evaluate jobs.
• Rank the jobs within each senior vice president's and manager's
department, and then rank jobs between and among departments.
• Verify ranking by comparing it to industry market data concerning the
ranking, and adjust if necessary.
• Prepare a matrix organizational review.
• On the basis of required tasks and forecasted business plans, develop a
matrix of jobs crossing lines and departments.
• Compare the matrix with data from both the company structure and the
industrywide market.
• Prepare flow charts of all ranks for each department for ease of
interpretation and assessment.
• Present data and charts to the compensation committee for review and
adjustment.
Determine grades.
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• Establish the number of levels - senior, junior, intermediate, and

beginner - for each job family and assign a grade to each level.
• Determine the number of pay grades, or monetary range of a position at
a particular level, within each department.
Establish grade pricing and salary range.

• Establish benchmark (key) jobs.
• Review the market price of benchmark jobs within the industry.
• Establish a trend line in accordance with company philosophy (i.e.,
where the company wants to be in relation to salary ranges in the
industry).
Determine an appropriate salary structure.

• Determine the difference between each salary step.
• Determine a minimum and a maximum percent spread.
• Slot the remaining jobs.
• Review job descriptions.
• Verify the purpose, necessity, or other reasons for maintaining a
position.
• Meet with the compensation committee for review, adjustments, and
approval.
Develop a salary administration policy.

• Develop and document the general company policy.
• Develop and document specific policies for selected groups.
• Develop and document a strategy for merit raises and other pay
increases, such as cost-of-living adjustments, bonuses, annual reviews,
and promotions.
• Develop and document procedures to justify the policy (e.g.,
performance appraisal forms, a merit raise schedule).
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• Meet with the compensation committee for review, adjustments, and

approval.
Obtain top executives' approval of the basic salary program.

• Develop and present cost impact studies that project the expense of
bringing the present staff up to the proposed levels.
• Present data to the compensation committee for review, adjustment, and
approval.
• Present data to the executive operating committee (senior managers and
officers) for review and approval.
Communicate the final program to employees and managers.

• Present the plan to the compensation committee for feedback,
adjustments, review, and approval.
• Make a presentation to executive staff managers for approval or change,
and incorporate necessary changes.
• Develop a plan for communicating the new program to employees,
using slide shows or movies, literature, handouts, etc.
• Make presentations to managers and employees. Implement the
program.
• Design and develop detailed systems, procedures, and forms.
• Work with HR information systems staff to establish effective
implementation procedures, to develop appropriate data input forms,
and to create effective monitoring reports for senior managers.
• Have the necessary forms printed.
• Develop and determine format specifications for all reports.
• Execute test runs on the human resources information system.
• Execute the program.
Monitor the program.

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• Monitor feedback from managers.

• Make changes where necessary.
• Find flaws or problems in the program and adjust or modify where
necessary.
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CHAPTER – 10
BENEFITS
10.0 Fringe benefits are one of the means to ensure, maintain and increase the material
welfare of employees. Employees who get fringe benefits are stimulated to give
out their best so as to increase their productivity and to develop a sense of
belongingness to the organization.
10.1 MEDICLAIM
Some of the large organization provides medical benefits to their employees and
their family members. This benefit creates a feeling of attachment with the
organization. It is given to the employees up to the limit of Rs. 50,000/-. The
details required for this purpose are:
• Name of the Employee

• Name of the Department
• Date of Birth
• Name of the Nominee
• Relationship with the Nominee
• Address with Contact Numbers
10..2 PERSONAL ACCIDENT INSURANCE
In personal accident insurance claim up to Rs. 20,000/- is given to the employee

or Rs. 1,000/- per week till the rejoining of the employee. The details required for
this purpose are discussed below:
• Name of the Employee
• Name of the Department
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• Date of Birth
• Name of the Nominee
• Relationship with the Nominee
• Address and Contact Numbers
10.3 BIRTHDAY CELEBRATION
A separate database is maintained related to the birthdays of the employees. At

the month end, a common birthday party is being celebrated for all the employees
whose birthdays are on that particular month. This gives a sense of association,
openness and freedom among the employees.
10.4 REWARDS AND RECOGNITION
In order to encourage the employees for the better performance; schemes of

reward and recognition are being applied. Under this, those employees who have
performed in an excellent way are being given rewards that would encourage the
zeal of better performance among the employees.
10.5 CANTEEN
Perhaps no employees benefits have received as much attention these years as that
of canteens. Some organization has statutory obligation to provide such facilities
as Section 46 of the Factories Act, 1948, impose a statutory obligation to
employers to provide canteens in factories employing more than 250 workers.
Others have provided such facilities voluntarily. Foodstuffs are provided at
subsidized price in these canteens. Some companies provide lunchroom when
canteen facilities are not available. The cost incurred, are then deducted from the
salary of the employee.
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10.6 CONCLUSION
According to HR policy, some benefits in way of facilities are to be provided to

the employees working in the organization by the authorities to encourage the
individuals. It enhances both speed and accuracy of the employee and helps the
organization to run in a smooth way.
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CHAPTER – 11
LABOUR RELATIONS
11.0 India is a country having diverse religions and cultures. It becomes necessary to
harmonize industrial relations in the country with respect to such diversity.
India’s trade performance during 2003–04 was influenced by a number of factors
which include productivity changes in the manufacturing sector, recovery of
global economy and world trade, continued trade promotion and trade facilitation
efforts of the government, and an appreciating Indian Rupee against the US
dollar. Hence India has a wide variety of labour laws which are essential for the
smooth functioning of industrial relations in the country.
In the year 2003–04, the Indian economy appeared to be in a resilient mode in

terms of growth, inflation and balance of payment. Real gross domestic product is
estimated to have grown by 8.1%. As per the Monthly Economic Report, of the
Ministry of Finance, Government of India, dated October 2004, the overall
industrial growth during the period April–August 2004 stood at 7.9% as
compared to 5.9% during the period April–August 2003; the growth in mining,
manufacturing and electricity during the period April–August 2004 was 5.2%,
8.2% and 7.7% as compared to 4.1%, 6.5% and 2.5% respectively during the
corresponding period in the previous year. The data available from the 945
employment exchanges in the country indicates that in February 2004, the number
of job seekers registered with the employment exchanges was 4.11 crore, out of
which 70% were educated (10th standard and above). The number of women job
seekers registered was 1.07 crore (26% of the total number of job seekers).
Women constitute a significant proportion of the labour force. Female
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participation in the workforce, however, varies across rural-urban areas.

According to the 58th round survey of National Sample Survey Organization
(NSSO), (carried out from July to December 2004) , the female workforce
participation rate in rural areas declined to 281 per 1000 compared to 299 during
the period July to December 1999-2000.
Therefore it could be seen that there exists a huge workforce in India, large
amount of which is in the unorganized sector and therefore needs to be integrated
alongwith the organized sector.
11.1 Compliance with labour laws and standing orders
While conforming to the essentials of the laws of contracts, a contract of

employment must adhere also to the provisions of labour laws and the rules
contained under the Standing Orders of the establishment.
The Minimum Wages Act 1948 has classified workers as:

• unskilled;
• semi-skilled;
• skilled; and
• highly skilled.
11.1.1 The Industrial Employment (Standing Orders) Act 1946
Classification should be made as per the Standing Orders. Where there are no
Standing Orders or service rules applicable to employees, then classification can
be made either based on trade tests or any other test which is reasonable and in
accordance with the Model Standing Orders. Generally, the workers are classified
as
• apprentice/trainee;
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• casual;
• temporary;
• badli/substitute;
• probationer;
• permanent; and
• fixed period employees
11.1.2 Factories Act of 1948
The main objectives of the Factories Act are

• to regulate working conditions in factories;
• to ensure that basic minimum requirements for the safety, health and
welfare of the factory workers are provided; and
• to regulate of working hours, leave, holidays, overtime and employment of
children, women and young persons.
This act applies to all factories including Government factories. A “factory” as

defined in the Act means any premises including the precincts:
• where ten or more workers are employed on any day of the preceding 12
months and a manufacturing process is carried on with the aid of electric
power; and
• where 20 or more workers are employed on any day of the preceding 12
months and a manufacturing process is carried on without the aid of
electric power.
The obligations of the employers are, practically speaking, the rights of the
employees to claim the minimum health and safety measures and welfare
amenities as provided for in the Act, observance of working hours, holidays,
overtime, annual leave and special protection against hazardous processes and
dangerous substances, to obtain information relating to workers’ health and safety
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77
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at work from the occupier, to get trained by or through the occupier, in respect of
workers’ health and safety, to represent to the Inspector directly or though a
representative in the matter of inadequate provision for protection of health or
safety in the factory, not to pay any fee or charge for the facilities or appliances
provided by the employer and to claim wages for or in lieu of allowable leave
under the provisions of the Payment of Wages Act.
11.1.3 Payment of Wages Act 1936
Under the Payment of Wages Act 1936 the following are the common obligations
of the employer:
• every employer is primarily responsible for payment of wages to
employees. The employer should fix the wage period (which may be per
day, per week or per month) but in no case it should exceed one month;
• every employer should make timely payment of wages. If the employment
of any person is being terminated, those wages should be paid within two
days of the date of termination; and
• the employer should pay the wages in cash, ie in current coins or currency
notes. However wages may also be paid either by cheque or by crediting
in employee’s bank account after obtaining written consent.
11.1.4 Minimum Wages Act 1948
The employer is bound to pay to every employee engaged by him wages at a rate
not less than the minimum rates of wages fixed for that class of employees
without making any deduction (except as permitted under the Payment of Wages
Act). The employees are entitled to the minimum wages at all times and under all
circumstances.
11.1.5 Workmen’s Compensation Act 1923
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78
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The empoyer must pay compensation for an accident suffered by an employee

during the course of employment and in accordance with the Act. The employer
must submit a statement to the Commissioner (within 30 days of receiving the
notice) giving the circumstances attending the death of a worker as result of an
accident and indicating whether the employer is liable to deposit any
compensation for the same. It should also submit an accident report to the
Commissioner within seven days of the accident.
11.1.6 Employees Provident Funds and Miscellaneous Provisions Act 1952
The employer must pay its and the employees’ contributions and administrative
charges as required under the Act and schemes. Financial difficulty is no excuse
for non-payment. The contribution has to be made irrespective of the fact whether
wages are paid to the employee due to lockout, strike, or other related reason.
Employer must furnish the necessary returns to the Provident Funds
Commissioner.
11.2 Other Related Issues
11.2.1 Punishment
In industrial law, punishments other than dismissal which an employer can

impose (depending upon the gravity of misconduct) are recommended as a
measure of disciplinary action on a worker. These alternatives can be in the form
of:
• warning;
• fine;
• withholding of increment;
• demotion;
• suspension; and
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• discharge.
11.2.2 Courts and Tribunals
Some important points to note regarding the courts and tribunals:

• The first stage of review of the employer’s disciplinary action against a
worker is by the Labour Court or Industrial Tribunal appointed under the
Act.
• Unlike ordinary civil courts, the Industrial Tribunal’s jurisdiction does not
commence on the basis of any party approaching it directly but
commences on the basis of reference made by the appropriate Government
under the Act.
• Labour Tribunals are expected to hold proceedings expeditiously and to
submit the award to the appropriate Government within the specified time,
if any.
• The award requires publication within a 30 day period from the date of its
receipt by the appropriate Government.
• An award of the Industrial Tribunal ordinarily becomes enforceable on the
expiry of 30 days from the date of its publication.
11.3 Duties Of Employers To Third Parties
11.3.1 Liability to government and revenue authorities
The State is an integral component of industrial relations. The four main tenets of
the Government’s labour policy can be summed up as:
• to exercise political control over the industrial movement without
jeopardizing the legal rights of entrepreneurs or employees;
• to maintain industrial peace;
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80
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• to encourage and recognise trade unions and employers’ federations for

collective bargaining; and
• to ensure that individual rights should not be infringed.
(This is done through administrative and executive agencies. The employers are
under obligation to Government for the peaceful observance of the above
functions).
Employers are liable to pay taxes, contributions and assistance to various revenue
authorities created by statute, such as income tax, central excise and sales tax
under the central sales tax and state government sales tax laws. Employers must
make timely deposits of contributions to the Provident Fund and the ESI
authorities (under the law in force) and must file timely returns to respective
authorities. Employers are automatically governed by the intention of the various
legislation.
11.4 Obligations Of The Parties
Under various labour legislation, both the employer and employee have various
statutory obligations to each other. Apart from the statutory obligations, there are
certain principles peculiar to the contract of employment: cooperation, care and
fidelity which are at the root of the employment relationship.
Employer and employee must cooperate to facilitate the performance of their

mutual obligations under the contract of employment. The important general
obligations of the employers and employees are discussed in the following
paragraphs.
11.4.1 Employers’ obligations to the employee
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81
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The employer’s obligations to the employees are:

• to provide each employee a copy of the service rules and a copy of
Standing Orders, (if any).
• to provide each employee a copy of the appointment letter or employment
contract.
• to pay the wages/salary on time.
• to communicate any change in terms of service in writing to the employee.
• to pay bonuses to eligible employees, under the provisions of the Bonus
Act of 1965.
• to deposit its contribution to the provident fund and the ESI along with the
contributions of the employee.
• to ensure security of staff and tools while on duty.
• to provide tools that are functional.
• to comply with the provisions of the employment contract and Standing
Orders if the employer wishes to terminate the services of the employee.
• to indemnify employees against expenses and liabilities incurred in the
course of employment.
11.4.2 Employees’ obligations to the employer
The employee’s obligations to the employer are:

• to perform the job peacefully and carefully.
• to obey the orders of superiors.
• to safeguard the assets of the Company, which are in possession.
• to account for all monies and property received in the course of
employment.
• to inform and take permission for his future leave, so that the employer
can make alternate arrangements.
• to observe the employment contract or service rules applicable.
• to give notice to the employer of an intention to leave the organisation as
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82
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per the employment contract or service rules.
Terms implied by legislation and the courts.
11.5 Breach Of Contract
Avenues Available To Employer

When a worker/employee either individually or collectively is found guilty of any
violation of the employment contract, the employer can take the following
actions:
• disciplinary action;
• forced leave;
• transfer of job;
• demotion;
• termination;
• dismissal;
• suspension; and
• the right to claim compensation.
Disciplinary action
The employer may initiate disciplinary action against the worker by serving a
show cause notice. The worker is required to reply to the notice within stipulated
time with relevant facts and proof, failing which rigorous action can be taken.
Forced leave
The employer can insist and can grant leave to the worker as a matter of warning.
The intention of this strategy is a worker will not be allowed to join with other
workers for the time being.
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83
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Transfer of job
As a matter of punishment for violation of employment contract, the employer
can transfer a worker to another department, unit, or place of work, where it will
be inconvenient for the worker to work, so that after some time the worker leaves
the organisation on his/her own.
Demotion
If a worker is found guilty of a violation of the employment contract and the
employer does not want to take hard action, the employer may demote the worker,
or may start to keep records of performance in a confidential report for the future
purpose of deciding further promotions, increments and other benefits.
Termination
The biggest avenue available to an employer is termination of the services of an
employee. Termination can be done in accordance with the provisions of
Industrial Disputes Act. Where the Standing Orders are in operation in the
concerned establishment, termination shall be in accordance with such Standing
Orders. If an appointment letter/contract of employment contains provisions
relating to termination, it must be observed strictly.
Dismissal
Dismissal occurs when the employer strikes the name of the employee from the
rolls for the commission of a ‘serious misconduct’ in violation of the contract.
The employer has to observe the conditions precedent to dismissal.
Suspension
The employer can suspend any worker during domestic enquiry conducted against
such an employee for an alleged violation. However, the employee has to be
given subsistence allowance during such suspension until the domestic enquiry
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84
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ends. If the enquiry finds the worker guilty, employment can be terminated
according to the seriousness of the ‘misconduct’.
Right to claim compensation

Under the Indian Contract Act of 1872, when a contract has been broken, the
party who suffers by such breach is entitled to receive, from the party who has
broken the contract, compensation for any loss or damage caused (which naturally
arose in the usual course of things). For example, when a worker has agreed not to
divulge trade secrets or information relating to employer’s business to third party
and then subsequently breaches this secrecy clause, the employer is entitled to
seek damages from the employee.
Rights available under the Industrial Disputes Act of 1947

The employer can raise a dispute and can approach the appropriate authorities
established under the Act for the settlement of the dispute. It can take actions in
accordance with the directions given by such authorities. In dealing with illegal
strikes by the employees, the employer will be liable as a principal offender under
the Penal Code, if “he assists, abets, aids, enables another in the commission of
the offence or procures that other to commit the offence”.
11.6 Termination Provisions & Notice
Termination means the end of the employment service. It can be initiated by

either party. After termination, the employer/employee relationship comes to an
end. Certain provisions must be followed in respect of termination. Generally
termination provisions are mentioned in the contract of employment or in the
Standing Orders applicable to the industry.
Reasons For Termination
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85
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Employer-initiated termination
Employer-initiated termination can occur for the reasons:
• fixed term/contract coming to an end;
• unsatisfactory probation;
• termination by notice;
• medical reasons;
• breach of contract;
• dismissal;
• retirement; and
• retrenchment.
Employee-initiated termination
Employee-initiated termination can occur in the following instances:
• resignation during probation;
• resignation with notice;
• breach of contract; and
• medical reasons.
Termination provisions
Notice should be in writing. If an employee intends to leave the service, the
employee should give notice of this intention in writing to the employer. If the
employee wishes, the employer has the right to accept the resignation with
immediate effect (subject to payment in lieu of time worked).
The notice provisions for termination

As provided specifically in the contract of service, the employer may terminate
the services of an employee after giving notice in writing or on payment of wages
in lieu. The employer reserves the right to require an employee to work and not to
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86
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relieve the employee during the notice period.
For temporaries, casuals and probationers, no notice is required if the service is

terminated before the expiry of the period, subject to the provisions of the
statutes.
There is no provision in law specifying the number of days of notice to be given

to an employee while terminating services. Normal practice is that one-month
notice is given for junior-level employees, with up to three months for senior
level employees.
11.7 The Shops & Establishment Act
The Shops and Establishment Act is a state legislation act and each state has
framed its own rules for the Act. The object of this Act is to provide statutory
obligation and rights to employees and employers in the unauthorized sector of
employment, i.e., shops and establishments. This Act is applicable to all persons
employed in an establishment with or without wages, except the members of the
employers’ family.
This Act lays down the following rules:

• working hours per day and week.
• Guidelines for spread-over, rest interval, opening and closing hours,
closed days, national and religious holidays, overtime work.
• Employment of children, young persons and women.
• Rules for annual leave, maternity leave, sickness and casual leave, etc.
• Rules for employment and termination of service.
Under this Act, registration of shop/establishment is necessary within thirty days
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87
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of commencement of work. Fifteen days of notice is required to be served before

the closing of the establishment State government can exempt, either permanently
or for specified period, any establishments from all or any provisions of this Act.
11.7 Future Trends
Whistleblower protection
Effective from April 1, 2005, the Securities and Exchange Board of India (SEBI)
directed Indian stock exchanges to implement a new set of reporting
requirements, commonly known as Clause 49, for listed companies. Included in
Clause 49 is a non mandatory direction for companies to establish an internal
whistleblower policy. Corporate whistleblower policies would establish a
mechanism for employees to report to management concerns about unethical
behaviour, actual or suspected fraud, or violations of the company’s code of
conduct or ethics policy. The whistleblower mechanism also could provide for
direct access to the chairperson of the company audit committee in exceptional
cases, as well as safeguards for employees who availed themselves of the
whistleblower procedures.
National Rural Employment Guarantee Act 2005

The aforementioned Act was notified on September 7, 2005 and the scheme
launched on February 2, 2006. The objective of the Act is to enhance the
livelihood security of the people in rural areas by generating wage employment
through works that develop the infrastructure base of that area. The choice of
work suggested addresses the causes of chronic poverty like drought,
deforestation, and soil erosion. The objective behind suggesting certain key
activities/works is to rejuvenate the natural resources of the area to stimulate the
local economy enabling those who work for wage employment in creating an
asset to take advantage of it to engage in productive ways of self employment,
and augment their income. Section 4 of the Act provides that within six months
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88
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from the date of commencement of the Act, every state government shall, by
notification, make a scheme for providing not less than 100 days of guaranteed
employment in a financial year to every household in the rural areas covered
under the scheme and whose adult members volunteer to do unskilled manual
work subject to the conditions laid down in the Act.
Labour Participation in Management

But there is a silver lining as well for the workers in the country which could be
seen from the inclusion in the Board of Kanan Devan Hill Plantations Company
of Ms. A Chandra, a worker in the largest participatory management tea company
in the world. Seventeen years of dedicated service has got her into the Board of
the Rs.105 crore company. The lady still earns Rs.82.65 for a day’s work and still
lives in the worker’s lane with the rest of the workers.
Employee Stock Option Scheme

Employee Stock Option Schemes (ESOPs) are a method of employee
compensation. They can be useful if the firm is growing rapidly and seriously
wishes to retain a good and efficient work force.
List of various Central Labour Acts
Laws related to Industrial Relations

1 The Trade Unions Act, 1926
The Trade Unions (Amendments) Act, 2001
2 The Industrial Employment (Standing Orders) Act, 1946
The Industrial Employment (Standing Orders) Rules, 1946

3 The Industrial Disputes Act, 1947
Laws related to Wages
1 The Payment of Wages Act, 1936
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89
…………………………………………………………………………………………………………………………………….
The Payment of Wages Rules, 1937

The Payment of Wages (AMENDMENT) Act, 2005
2 The Minimum Wages Act, 1948
The Minimum Wages (Central) Rules, 1950

3 The Working Journalist (Fixation of Rates of Wages) Act, 1958
Working Journalist (Conditions of service) and Miscellaneous Provisions

Rules, 1957
4 The Payment of Bonus Act, 1965
The Payment of Bonus Rules, 1975

Laws related to Working Hours, Conditions of Services and Employment
1 The Factories Act, 1948
2 The Dock Workers (Regulation of Employment) Act, 1948
3 The Plantation Labour Act, 1951
4 The Mines Act, 1952
5 The Working Journalists and other Newspaper Employees’ (Conditions of
Service and Misc. Provisions) Act, 1955
The Working Journalists and other Newspaper Employees’ (Conditions of

Service and Misc. Provisions) Rules, 1957
6 The Merchant Shipping Act, 1958
7 The Motor Transport Workers Act, 1961
8 The Beedi & Cigar Workers (Conditions of Employment) Act, 1966
9 The Contract Labour (Regulation & Abolition) Act, 1970
The Contract Labour Regulation Rules
10 The Sales Promotion Employees (Conditions of Service) Act, 1976
The Sales Promotion Employees (Conditions of Service) Rules, 1976

11 The Inter-State Migrant Workmen (Regulation of Employment and
Conditions of Service) Act, 1979
12 The Shops and Establishments Act
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90
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13 The Cinema Workers and Cinema Theatre Workers (Regulation of

Employment) Act, 1981
The Cinema Workers and Cinema Theatre Workers (Regulation of

Employment) Rules, 1984
The Cine Workers’ Welfare Fund Act, 1981.

14 The Dock Workers (Safety, Health & Welfare) Act, 1986
15 The Building & Other Construction Workers (Regulation of Employment &
Conditions of Service) Act, 1996
16 The Dock Workers (Regulation of Employment) (inapplicability to Major
Ports) Act, 1997
Laws related to Equality and Empowerment of Women
1 The Maternity Benefit Act, 1961
2 The Equal Remuneration Act, 1976
Laws related to Deprived and Disadvantaged Sections of the Society
1 The Bonded Labour System (Abolition) Act, 1976
2 The Child Labour (Prohibition & Regulation) Act, 1986
3 The Children (Pledging of Labour) Act, 1933
Laws related to Social Security

1 The Workmen’s Compensation Act, 1923
The Workmen's Compensation (Amendments) Act, 2000
2 The Employees’ State Insurance Act, 1948
3 The Employees’ Provident Fund & Miscellaneous Provisions Act, 1952
The Employees’ Provident Fund & Miscellaneous Provisions (Amendment)
Act, 1996
4 The Payment of Gratuity Act, 1972
The Payment of Gratuity Rules
5 The Unorganised Woekers' Social Security Act 2008
The Unorganised Workers' Social Security Rules 2008
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91
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Laws related to Labour Welfare

1 The Mica Mines Labour Welfare Fund Act, 1946
2 The Limestone & Dolomite Mines Labour Welfare Fund Act, 1972
3 The Beedi Workers Welfare Fund Act, 1976
4 The Beedi Workers Welfare Cess Act, 1976
The Beedi Worker's Welfare Cess Act Rules, 1977
5 The Iron Ore Mines, Manganese Ore Mines & Chrome Ore Mines Labour
Welfare Fund Act, 1976
6 The Iron Ore Mines, Manganese Ore Mines & Chrome Ore Mines Labour
Welfare Cess Act, 1976
7 The Cine Workers Welfare Fund Act, 1981
8 The Cine Workers Welfare Cess Act, 1981
9 The Employment of Manual Scavengers and Construction of Dry latrines
Prohibition Act, 1993
Laws related to Employment & Training
1 The Employment Exchanges (Compulsory Notification of Vacancies) Act,
1959
The Employment Exchanges (Compulsory Notification of Vacancies) Rules,
1959
2 The Apprentices Act, 1961
Others
1 The Fatal Accidents Act, 1855
2 The War Injuries Ordinance Act, 1943
3 The Weekly Holiday Act, 1942
4 The National and Festival Holidays Act
5 The War Injuries (Compensation Insurance) Act, 1943
6 The Personal Injuries (Emergency) Provisions Act, 1962
7 The Personal Injuries (Compensation Insurance) Act, 1963
8 The Coal Mines (Conservation and Development) Act, 1974
10 The Labour Laws (Exemption from Furnishing Returns and Maintaining
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92
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Register by Certain Establishments) Act, 1988

11 The Public Liability Insurance Act, 1991
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93
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CHAPTER – 12
RECORD KEEPING
12.0 The oldest and most basic personnel function is employee record-keeping. This
function involves recording, maintaining, and retrieving employee-related
information for a variety of purposes. Records, which must be maintained,
include application forms, health and medical records, employment history (jobs
held, promotions, transfers, lay-offs), seniority lists, earnings and hours of work,
absences, turnover, tardiness, and other employee data. Complete and up-to-date
employee records are essential for most personnel functions. More than ever
employees today have a great interest in their personnel records. They want to
know what is in them, why certain statements have been made, and why records
may or may not have been updated. Personnel records provide the following:
• A store of up-to-date and accurate information about the company’s

employees.
• A guide to the action to be taken regarding an employee, particularly by

comparing him with other employees.
• A guide when recruiting a new employee, e.g. by showing the rates of pay
received by comparable employees.
• A historical record of previous action taken regarding employees.
• The raw material for statistics, which check and guide personnel policies.
• The means to comply with certain statutory requirements.
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94
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CHAPTER – 13
PERSONNEL RESEARCH
13.0 All personnel people engage in some form of research activities. In a good
research approach, the object is to get facts and information about personnel
specifics in order to develop and maintain a program that works. It is impossible
to run a personnel program without some pre-planning and post-reviewing. For
that matter, any survey is, in a sense, research. There is a wide scope for research
in the areas of recruitment, employee turnover, terminations, training, and so on.
Through a well-designed attitude survey, employee opinions can be gathered on
wages, promotions, welfare services, working conditions, job security, leadership,
industrial relations, and the like. In spite of its importance, however, in most
companies, research is the most neglected area because personnel people are too
busy putting out fires. Research is not done to put out fires but to prevent them.
13.1 Research is not the sole responsibility of any one particular group or department
in an organization. The initial responsibility is that of the human resource
department, which however should be assisted by line supervisors and executives
at all levels of management. The assistance than can be rendered by trade unions
and other organizations should be ignored, but should be properly made use of.
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CRITICAL REVIEW ON HR PRACTICES FOLLOWED IN AN ORGANIZATION

CRITICAL REVIEW ON HUMAN RESOURCE PRACTICES

SYMBIOSIS CENTRE FOR DISTANCE LERNING, PUNE

TITLE PAGE NO.

Human Resources and Personal Management – by William B. Werter, Jr and

Search engines employed on internet:

SYMBIOSIS CENTRE FOR DISTANCE LERNING, PUNE

I feel great pleasure in expressing my deepest sense of gratitude to my family members,

SYMBIOSIS CENTRE FOR DISTANCE LERNING, PUNE

NAME NEHA SEHGAL

PROGRAM NAME POST GRADUATE DIPLOMA IN BUSINESS

ADDRESS H. NO. 2406, SECTOR – 7A, FARIDABAD – 121006,

PROJECT TITLE CRITICAL REVIEW ON HUMAN RESOURCE PRACTICES

OBJECTIVE THE MAIN OBJECTIVE OF THIS WORK IS TO

SYMBIOSIS CENTRE FOR DISTANCE LERNING, PUNE

NEED FOR THE HUMAN RESOURCES ARE THE MOST IMPORTANT

THIS PROJECT HAS BEEN UNDERTAKEN TO MAKE ONE

METHODOLOGY THE METHODOLOGY ADOPTED FOR THE PRESENT

BOOKS ON CULTURE AND HUMAN RESOURCE

SYMBIOSIS CENTRE FOR DISTANCE LERNING, PUNE

NEWSPAPER ARTICLES TOO WERE REFERRED FOR THE

CHAPTERISATION THIS PROJECT HAS BEEN DIVIDED INTO FOURTEEN

SYMBIOSIS CENTRE FOR DISTANCE LERNING, PUNE

THE CONCEPT AND FUNTIONS OF HUMAN RESOURCE

Therefore, the objective of this chapter is to understand the meaning and

Human resource management (HRM) is an approach to the management of

SYMBIOSIS CENTRE FOR DISTANCE LERNING, PUNE

1.2 CONCEPT OF HUMAN RESOURCE MANAGEMENT

HRM is a strategic approach to the acquisition, motivation, development and

• In the first place, persons working in an organization are regarded as a

SYMBIOSIS CENTRE FOR DISTANCE LERNING, PUNE

• And thirdly, human resources do not merely focus on employees as

HRM is a production model approach to personnel management. The HRM

SYMBIOSIS CENTRE FOR DISTANCE LERNING, PUNE

Managing people includes both individual and collective dimensions. The

• The members of an organization are reservoirs of untapped resources.

SYMBIOSIS CENTRE FOR DISTANCE LERNING, PUNE

The management of human resources is more of an art than a science. In

1.3 OBJECTIVES OF HRM

The primary objective of HRM is to ensure the availability of competent and

1.3.1 Societal Objective

1.3.2 Organizational Objective

The organizational objectives recognize the role of human resource management

SYMBIOSIS CENTRE FOR DISTANCE LERNING, PUNE

1.3.3 Functional Objective

Functional objectives try to maintain the department’s contribution at a level

1.3.4 Personal Objectives

Personal objectives assist employees in achieving their personal goals, at least in

1. Societal Objectives 1. Legal compliance

SYMBIOSIS CENTRE FOR DISTANCE LERNING, PUNE

1.4 HUMAN RESOURCE FUNCTIONS

The role of human resource management is to plan, develop, and administer

• The effective utilization of human resources;

The major functional areas in human resource management are – Planning;

1.4.1 Human Resource Planning

SYMBIOSIS CENTRE FOR DISTANCE LERNING, PUNE

1.4.2 Job Analysis

SYMBIOSIS CENTRE FOR DISTANCE LERNING, PUNE

1.4.5 Training and Development

1.4.6 Performance Appraisal

This function monitors employee performance to ensure that it is at

1.4.7 Career Planning