MBA IInd Sem.

ECB 2010-2012 Chapter 1 Introduction to human resource management

Definition (concept for 2 marks) - Edwin Flippo defies HRM as ³planning, organizing, directin g, controlling of procurement, development, compensation, integration , maintenance and separation of human resources to the end that individual, organizational and social objectives are achieved.´

Features of HRM or characteristics or nature (3 or 4 marks) 1. HRM involves management functions like planning, organizing, directing and controlling 2. It involves procurement, development, maintenance of human resource 3. It helps to achieve individual, organizational and social objectives 4. HRM is a mighty disciplinary subject. It includes the study of management psychology communication, economics and sociology. 5. It involves team spirit and team work.

Evolution of HRM (for 10 or 5 marks) The evolution of HRM can be traced back to Kautilya Artha Shastra where he recommends that government must take active interest in public and private enterprise. He says that government must provide a proper procedure for regulating employee and employee relation In the medieval times there were examples of kings like Allaudin Khilji who regulated the market and charged fixed prices and provided fixed salaries to their people. This was done to fight inflation and provide a decent standard of living During the pre independence period of 1920 the trade union emerged. Many authors who have given the history of HRM say that HRM started because of trade union and the First World War.

The Royal commission in 1931 recommended the appointment of a labour welfare officer to look into the grievances of workers. The factory act of 1942 made it compulsory to appoint a labour welfare officer if the factory had 500 or more than 500 workers. The international institute of personnel management and national institute of labour management were set up to look into problems faced by workers to provide solutions to them. The Second World War created awareness regarding workers rights and 1940¶s to 1960¶s saw the introduction of new technology to help workers. The 1960¶s extended the scope of human resource beyond welfare. Now it was a combination of welfare, industrial relation, administration together it was called personnel management. With the second 5 year plan, heavy industries started and professional management became important. In the 70¶s the focus was on efficiency of labour wile in the 80¶s the focus was on new technology, making it necessary for new rules and regulations. In the 90¶ s the emphasis was on human values and development of people and with liberalization and changing type of working people became more and more important there by leading to HRM which is an advancement of personnel management.

Scope of HRM/functions of HRM The scope of HRM refers to all the activities that come under the banner of HRM. These activities are as follows 1. Human resources planning :Human resource planning or HRP refers to a process by which the company to identify the number of jobs vacant, whether the company has excess staff or shortage of staff and to deal with this excess or shortage. 2. Job analysis design :Another important area of HRM is job analysis. Job analysis gives a detailed explanation about each and every job in the company. Based on this job analysis the company prepares advertisements. 3. Recruitment and selection :Based on information collected from job analysis the company prepares advertisements and publishes them in the news papers. This is recruitment. A number of applications are received after the advertisement is published, interviews are conducted and

the right employee is selected thus recruitment and selection are yet another important area of HRM. 4. Orientation and induction : Once the employees have been selected an induction or orientation program is conducted. This is another important area of HRM. The employees are informed about the background of the company, explain about the organizational culture and values and work ethics and introduce to the other employees. 5. Training and development :Every employee goes under training program which helps him to put up a better performance on the job. Training program is also conducted for existing staff that have a lot of experience . This is called refresher training. Training and development is one area were the company spends a huge amount. 6. Performance appraisal :Once the employee has put in around 1 year of service, performance appraisal is conducted that is the HR department checks the performance of the employee. Based on these appraisal future promotions, incentives, increments in salary are decided. 7. Compensation planning and remuneration :There are various rules regarding compensation and other benefits. It is the job of the HR department to look into remuneration and compensation planning. 8. Motivation, welfare, health and safety :Motivation becomes important to sustain the number of employees in the company. It is the job of the HR department to look into the different methods of motivation. Apart from this certain health and safety regulations have to be followed for the benefits of the employees. This is also handled by the HR department. 9. Industrial relations :Another important area of HRM is maintaining co -ordinal relations with the union members. This will help the organization to prevent strikes lockouts and ensure smooth working in the company.

Challenges before the HR manager/before modern personnel management Personnel management which is know as human resource management has adapted itself to the changing work environment, however these changes are still taking place and will continue in the future therefore the challenges before the HR manager are 1. Retention of the employees :One of the most important challenge the HR manager faces is retention of labour force. Many companies have a very high rate of labour turnover therefore HR manager are required to take some action to reduce the turnover 2. Multicultural work force :With the number of multi cultural companies are increasing operations in different nations. The work force consists of people from different cultures. Dealing with each of the needs which are different the challenge before the HR manager is integration of multicultural labour work force. 3. Women in the work force :The number of women who have joined the work force has drastically increased over a few years. Women employees face totally different problems. They also have responsibility towards the family. The organization needs to consider this aspect also. The challenge before the HR manager lies in creat ing gender sensitivity and in providing a good working environment to the women employees. 4. Handicapped employees :This section of the population normally faces a lot of problems on the job, very few organization have jobs and facilities specially designed for handicapped workers. Therefore the challenge before the HR manager lies in creating atmosphere suitable for such employees and encouraging them to work better. 5. Retrenchment for employees :In many places companies have reduced the work force due to changing economic situations, labourers or workers who are displaced face sever problems. It also leads to a negative atmosphere and attitude among the employees. There is fear and

increasing resentment against the management. The challenge before the HR manager lies in implementing the retrenchment policy without hurting the sentiments of the workers, without antagonizing the labour union and by creating positive attitude in the existing employees. 6. Change in demand of government :Most of the time government rules keep changing. While a lot of freedom is given to companies some strict rules and regulations have also been passed. The government has also undertaken the disinvestment in certain companies due to which there is fear among the employees re garding their job. The challenge before the HR manager lies in convincing employees that their interest will not be sacrificed. 7. Initiating the process of change :Changing the method of working, changing the attitude of people and changing the perception and values of organization have become necessary today. Although the company may want to change it is actually very difficult to make the workers accept the change. The challenge before the HR manager is to make people accept change.

Significance/importance/need of HRM (5/10mks) HRM becomes significant for business organization due to the following reasons. 1. Objective :HRM helps a company to achieve its objective from time to time by creating a positive attitude among workers. Reducing wastage and making maximum use of resources etc. 2. Facilitates professional growth :Due to proper HR policies employees are trained well and this makes them ready for future promotions. Their talent can be utilized not only in the company in which they are currentl y working but also in other companies which the employees may join in the future. 3. Better relations between union and management :-

Improves the economy :Effective HR practices lead to higher profits and better performance by companies due to this the company achieves a chance to enter into new business and start new ventured thus industrial development increases and the economy improves. they are ready to meet the job requirements. Allocating the jobs to the right person :If proper recruitment and selection methods are followed . . 7. Helps an individual to work in a team/group :Effective HR practices teach individuals team work and adjustment. The company is also able to identify potential employees who can be promoted in the future for the top level jobs. the company will be able to select the right people for the right job. When this happens the number of people leaving the job will reduce as the will be satisfied with their job leading to decrease in labour turnover. 4. 6. Identifies person for the future :Since employees are constantly trained. Thus one of the advantages of HRM is preparing people for the future. The individuals are now very comfortable while working in team thus team work improves.Healthy HRM practices can help the organization to maintain co-ordinal relationship with the unions. 5. Union members start realizing that the company is also interested in the workers and will not go against them therefore chances of going on strike are greatly reduced.

Job analysis is the process of studying and collecting information relati ng to operations and responsibilities of a specific job. Job analysis is the process .Chapter 2 Job analysis. Need/importance/purpose/benefits of job analysis Def: .A job is defined as a collection of duties and responsibilities which are given together to an individual employee. b) Job specification where we explain the qualities required by people applying for the job. It can be explained with the help of the following diagram Job analysis Job description Job specification Job title/ name of the job Working hours Duties and responsibilities Working conditions Salary and incentives Machines to be handled on the job Qualification Qualities Experience Family background Training Interpersonal skills As mentioned in the above table job analysis is divided into 2 parts a) Job description where the details regarding the job are given. job design. job evolution Define job analysis (2 mks concept) A job is defined as a collection of duties and responsibilities which are given together to an individual employee.

5. skills required and on that basis the salary is fixed. Training is given in those areas which will help to improve the performance on the job. so that it matches the needs and requirements of the organization. Similarly when we transfer an employee to another branch the job must be very similar to what he has done before. The following are the benefits of job analysis . Performance appraisal and training/development :Based on the job requirements identified in the job analysis. the company decides a training program. Information regarding qualities required. Hence job analysis becomes important or advantageous. . Career path planning :Many companies have not taken up career planning for their employees. 3. The difficulty levels. Similarly when appraisal is conducted we check whether the employee is able to work in a manner in which we require him to do the job. Duties are either added or deleted from the job. Promotions and transfer :When we give a promotion to an employee we need to promote him on the basis of the skill and talent required for the future job. skilled levels. 1. To take these decisions we collect information from job analysis. This is done to prevent the employee from leaving the company. It provides information necessary to select the right person. When we plan the future career of the employee.of studying and collecting information relating to operations and responsibilities of a specific job. 6. Organizational structure and design :Job analysis helps the organization to make suitable changes in the organizational structure. Job evaluation :Job evaluation refers to studying in detail the job performance by all individual. It helps to recruit and select the right kind of people. difficulty levels are obtained from job analysis. information will be collected from job analysis. 4. Recruitment and selection :Job analysis helps to plan for the future human resource. 2.

Job analysis is the process of studying and collecting information relati ng to operations and responsibilities of a specific job. they require the help of job analysis. 8. He makes a list of all the duties performed by the worker and the qualities required to perform those duties based on the information collected.7. Methods of job analysis (5/10 marks) Def: . the difficulty level of the job. Health and safety :Most companies prepare their own health and safety. plans and programs based on job analysis. These methods are 1. Actual performance of the job :In this method the observer who is in charge of preparing the job analysis actually does the work himself. This gives him an idea of the skill required. which is why job analysis becomes important. Labour relations :When companies plan to add extra duties or delete certain duties from a job. . Personal observation :In this method the observer actually observes the co ncerned worker.A job is defined as a collection of duties and responsibilities which are given together to an individual employee. when this activity is systematically done using job analysis the number of problems with union members reduce and labour relations improve. 2. job analysis is prepared. this information is collected from job analysis. From the job analysis company identifies the risk factor on the job and based on the risk factor safety equipments are provided. Acceptance of job offer :When a person is given an offer/appointment letter the duties to be performed by him are clearly mentioned in it. There are different methods used by organization to collect information and conduct the job analysis. the efforts required etc. 9.

core competency area. 7. based on these r ecords job analysis can be done. The method is effective because people would think twice before putting anything in writing. A group of experts conduct the interview. HRD records :Records of every employee are maintained by HR department. qualities required and difficulty levels etc. critical incident method gives an idea about the job and its importance. number of promotions received. (a critical means important and incident means anything which takes place in the job) 5.(2 marks concept) Companies can ask employees to maintain log records and job analysis can be done on the basis of information collected from the log record. Critical incident method :In this method the employee is asked to write one or more critical incident that has taken place on the job. The incident will give an idea about the problem. The records are extensive as well as exhausted in nature and provide a fair idea about the duties and responsibilities in any job. Questioner method :In this method a questioner is provided to the employee and they are asked to answer the questions in it. how it was handled. . Interview method :In this method an interview of the employee is conduct ed. The questions decide how exactly the job analysis will be done.3. area of work. They ask questions about the job. duties handled. number of years of experience. Log records :. name of the job. The questions may be multiple choice questions or open ended questions. 6. The record contain details about educational qualification. They question and cross question and collect information and based on this information job analysis is prepared. etc. A log record is a book in which employees record /write all the activities performed by them on the j ob. any mistakes committed in the past and actions taken. skilled levels. and difficulty levels. 4.

Job analysis helps to develop job design and job des ign matches the requirements of the job with the human qualities required to do the job. how the job design must be done. Factors affecting job design Organizational factors Environmental factors Behavioral factors 1. Variety I] Organizational factors :Organizational factors to refer to factors inside the organization which affect job design they are a) Task characteristics :Task characteristics refer to features of the job that is depending on the type of job and the duties involved in it the organization will decide. Incase . Ergonomics 4. Feed back 2. Work practices 1.Job design Definitions: . Autonomy 3. Employee availability and ability 2. c) Deciding the relationship which exists in the organization.(2marks) Job design is the process of a) Deciding the contents of the job.There are various factors which affect job design in the company. b) Deciding methods to carry out the job. Factors affecting job design: . They can be explained with the help of diagram. Social and cultural expectations 1. Process or flow of work in organization 3. Task characteristics 2.

II] Environmental factors :Environmental factors which affect job design are as follows a) Employee availability and ability : Certain countries face the problem of lack of skilled labour . inauspicious time. This applies to every country and therefore job design will change accordingly. III] Behavioral factors :Job design is affected by behavioral factors also. b) The process or flow of work in the organization :There is a certain order in which jobs are performed in the company. This is called work practice and it affects job design. Incase the company wishes it could combine similar job and give it to one person this can be done if all the jobs come one after the other in a sequence. a single job may have many duties and vice versa. Although the job may be the same the method of doing the job differs from company to company.the company is not in a position to appoint many people. c) Ergonomics (2 marks concept) :Ergonomics refers to matching the job with physical ability and characteristics of the individual and in providing an office environment which will help the person to complete the jobs faster and in a comfortable manner. They are not able to get employees with specific education levels for jobs and have to depend on other countries due to this j ob design gets affected. etc. to suit the Indian conditions. b) Social and cultural expectations : The social and cultural conditions of every country is different so when an MNC appoints an Indian it has to take into account like festivals. These factors are a) Feedback :- . d) Work practices :Every organization has different work practices. auspicious time.

Job rotation is done to decide the final posting for the employee e. This leads to lack of interest and carelessness on the job. Many employees are however not interested in providing a true feedback because of fear and insecurity. Methods of job design There are various methods in which job design can be carried out. Job enlargement III.g.(def 2 marks concept ) Job rotation involves shifting a person from one job to another. so that he is able to understand and learn what each job involves. Job Rotation :. b) Autonomy :Every worker desires a certain level of freedom to his job effectively. A is assigned to the marketing department whole he learns all the jobs to be performed for marketing at his level in the organization . while preparing job design certain amount of variety must be provided to keep the p erson interested in the job.after this he is shifted to the sales department and to . Mr. These methods help to analysis the job.Job design is normally prepared on the basi s of job analysis and job analysis requires employee feedback based on this employee feedback all other activities take place. The company tracks his performance on every job and decides whether he can perform the job in an ideal manner. Job enrichment I.these methods are as follows :. This is called autonomy. This in turn affects job deign. Job rotation II. Based on this he is finally given a particular posting.(5 marks each) I. to design the contents of the and to decide how the job must be carried out . Thus when we prepare a job design we must see to it that certain amount of autonomy is provided to the worker so that he carries his job ef fectively. Therefore. c) Variety :When the same job is repeated again and again it leads to burden and monotony.

when a new worker I shifted or rotated in the department. Disadvantages of Job Rotation 1. Avoiding fraudulent practice :In an organization like bank jobs rota tion is undertaken to prevent employees from doing any kind of fraud i.the finance department and so on.e. Avoids monopoly :Job rotation helps to avoid monopoly of job and enable the employee to learn new things and therefore enjoy his job 2. he takes time to learn the new job. Misunderstanding with the union member :Sometimes job rotation may lead to misunderstanding with members of the union.this interrupts the work in both the departments 2. 3. Provides an opportunity to broaden one¶s knowledge : Due to job rotation the person is able to learn different job in the organization this broadens his knowledge 3. makes mistakes in the process and affects the quality of the job. Frequent interruption :Job rotation results in frequent interruption of work . if a person is handling a particular job for a very long time he will be able to find loopholes in th system and use them for his benefit and indulge ( participate ) in fraudulent practices job rotation avoids this.A person who is doing a particular job and get it comfortable suddenly finds himself shifted to another job or department . The union might think that em ployees are . He is finally placed in the department in which he shows the best performance Job rotation gives an idea about the jobs to be performed at every level. Once a person is able to understand this he is in a better understanding of the working of organization Advantages of job rotation 1. Reduces uniformity in quality :Quality of work done by a trained worker is different from that of a new worker .

It is also called the horizontal expansion of job activities. Advantages of job enlargement 1. It increases the scope of the job. Job enlargement involves combining various activities at the same level in the organization and adding them to the existing job. Job rotation II. Job enlargement There are various methods in which job design can be carried out. Job enlargement :. to design the contents of the and to decide how the job must be carried out .these methods are as follows : .(concept 2 marks) Job enlargement is another method of job design when any organization wishes to adopt proper job design it can opt for job enlargement. By job enlargement we provide a greater variety of activities to the individual so that we are in a position to increase the interest of the job and make maximum use of employee¶s skill. In reality this is not the case. Variety of skills :Job enlargement helps the organization to improve and increase the skills of the employee due to organization as well as the individual benefit. Improves earning capacity :- . It must be noted that the new activities which have been added should belong to the same hierarchy level in the organization. Job enlargement is also essential when policies like VRS are implemented in the company. 2. Jon enlargement can be explained with the help of the following example .If Mr. A performs 7 activities on the job. These methods help to analysis the job. Job enlargement III.(5 marks each) I.being harassed and more work is being taken from them. A is working as an executive with a company and is currently performing 3 activities on his job after job enlargement or through job enlargement we add 4 more activities to the existing job so now Mr. Job enrichment II.

Increases work burden :Job enlargement increases the work of the employee and not every company provides incentives and extra salary for extra work. Job enrichment :. Disadvantages of job enlargement 1.(5 marks each) I.(concept 2 marks) Job enrichment is a term given by Fedric herzberg.these methods are as follows :. This reduces the salary bill for the company. When such people apply foe jobs to other companies they can bargain for more salary. Job enlargement III. 3. Increasing frustration of the employee :In many cases employees end up being frustrated because increased activities do not result in increased salaries. These methods help to analysis the job. Job enrichment III. Problem with union members :Many union members may misunderstand job enlargement as exploitation of worker and may take objection to it. Job enrichment There are various methods in which job design can be carried out. 3. Wide range of activities :Job enlargement provides wide range of activities for employees. Therefore the efforts of the individual may remain unrecognized. to design the contents of the and to decide how the job must be carried out . Job rotation II. According to . Since a single employee handles multiple activities the company can try and reduce the number of employee¶s. 2. challenging and interesting. According to him a few motivators are added to a job to make it more rewarding.Due to job enlargement the person learns many new activities.

Interesting and challenging job : When a certain amount of power is given to employees it makes the job more challenging for them. c) Giving employees the freedom to select the method of working. The motivating factors can be a) Giving more freedom. we can say that job enrichment is a method of employee empow erment. In other words we can say that job enrichment is a method of adding some motivating factors to an existing job to make it more interesting. f) Allowing workers to decide the layout of plant or office. 3. Identifies future managerial caliber : - . b) Encouraging participation.herzberg the motivating factors enrich the job and improve performance. d) Allowing employees to select the place at which they would like to work. 2. Advantages of job enrichment 1. Job enrichment satisfie s the needs of the employees. Some workers are power and responsibility hungry. method and style of working. Improves decision making :Through job enrichment we can improve the decision making ability of the employee by asking him to decide on factory layout. Job enrichment gives lot of freedom to the employee but at the same time increases the responsibility. e) Allowing workers to select the tools that they require on the job.

These needs can be achieved through job enrichment. When decisions are taken by juniors the seniors work load is reduced. we can identify which employee is better that other in decision making and mark employees for future promotion. Superiors may feel that power is being taken away from them and given to the junior¶s. This method will only work in certain situations. . Job enrichment has negative implications ie. 2. Disadvantages of job enrichment 1. 4. Job enrichment is based on the assumptions that workers have complete knowledge to take decisions and they have the right attitude. Some jobs already give a lot of freedom and responsibility.g. Abraham maslow¶s theory of motivation speaks of these higher order needs e. self actualization etc.When we provide decision making opportunities to employees. 5. Reduces work load of superiors :Job enrichment reduces the work load of senior staff. this method will not work for such jobs. For such people no amount of job enrichment can solve the problem. Some people are internally dissatisfied with the organization. Along with usual work decision making work is also given to the employees and not many may be comfortable with this. 3. ego and esteemed needs. 5. 4. Identifies higher order needs of employees : This method identifies higher order needs of the em ployee. In reality this might not be the case due to which there can be problems in working. This might lead to ego problems.

Process of HRP/MP//steps in HRP/MP Human resource planning can be defined as the process of identifying the number of people required by an organization in terms of quantity and quality. The process of HRP involves various steps they can be explained with the help of the following diagram. of human resource planning :. All human resource management activities start with human resource planning. All human resource mana gement activities start with human resource planning. So we can say that human resource planning is the principle/primary activity of human resource management.Chapter 3 Human resource planning/manpower planning Def. So we can say that human resource planning is the principle/primary activity of human resource management. Based on this information major human resource decisions are taken. From human resource planning the organization identifies how many people it has currently and how many people will be required in future.(2 marks concept) Human resource planning can be defined as the process of identifying the number of people required by an organization in terms of quantity and quality. .

Human resource planning Personal requirement Forecast Personal supply Forecast Comparison Differences Yes No Personal Surplus (100=125) Personal Shortage (100=75) Layoff Termination VRS Overtime Recruitment/hiring Subcontracting .

No difference :It is possible that personnel requirement = personnel supplied. Hence no change is required. Personnel supply forecast :In this step. Personnel requirement forecast :This is the very first step in HRP process. We require 100 people. Here the HRP department finds out department wise requirements of people for the company. In this case there is no difference. Personnel shortage 4. Since extra employees increase expenditure of company the company must try to remove excess staff by methods of i. Personnel surplus ii. The suppl y involves/includes number of people along with their qualification. Personnel shortage :- . The difference may be i.1. Two possibilities arise from this comparison a. That is we have a surplus of 25 people. Yes. HR department finds out how many people are actually available in the departments of the company. the HR department makes a comparison and finds out the difference. Termination iii. we have personnel surplus. b. Personnel surplus :When the supply of personnel is more than the requirement. there is a difference :There may be difference between supply and requirement. Comparison:Based on the information collected in the 1 st and 2nd step. 2. The requirement consists of number of people required as well as qualification they must posses. 3. Layoff ii. but have 125 people. VRS/CRS 5.

we can identify the requirements for each and every department. HRP proces s helps to identify whether recruitment and selection are necessary or not.e. The importance of HRP can be explained as follows. 5. Recruitment and selection process :The recruitment and selection process is a very costly affair for a company. Information for all this is collected from HRP process. We require 100 people. 3.When supply is less than the requirement. Many companies spend lakhs of rupees on this process. Since feedback is provided in performance appraisal and employee is informed about his future chances in same company. we can identify existing employees and place them on those jobs which are vacant. 2. we are short of 25 people. Placement of personnel :Since the HRP process is conducted for the entire organization. Performance appraisal :HRP make performance appraisal more meaningful. Sub-contracting to obtain new employee Advantages of HRP/need/importance/role/benefits Human resource planning can be defined as the process of identifying the number of people required by an organization in terms of quantity and quality. In such case the HR department can adopt methods like Overtime. Recruitment. The process of HRP plays a very important role in the organization. Based on the require ment. Based on this requirement the company could take further actions. Anticipating future requirement :Thru this process of HRP. we have personnel shortage. we have only 75 i. the employee is motivated to work better. Promotion opportunity :- . the company is able to find out how many people will be required in future. All human resource management activities start with human resource planning. So we can say that human resource planning is the principle/primary activity of human resource management. 4. Therefore recruitment and selection must be carried out only if it is extremely necessary. 1. This method also helps the company to identify the number of jobs which will become vacant in the near future.

This information is collected in . 3. The future is uncertain :The future in any country is uncertain i. This effects the employment situation. Therefore HRP can only be a guiding factor. Limitations of human resource planning Human resource planning can be defined as the process of identifying the number of people requi red by an organization in terms of quantity and quality. Termination.. regarding demand and supply of personnel. This is a limitation of HRP i. and they start feeling insecure. 2. Accordingly the company may have to appoint or remove people. Therefore when the company implements promotion policy it can undertake its activities in a very smooth manner. Conservative attitude of top management : Much top management adopts a conservative attitude and is not ready to make changes. technological changes taking place every day. Although HRP is a very advantageous method it has some limitations which can be explained as follows 1.HRP identifies vacancies in the entire organization including all the branches of all the company. The process of HRP involves either appointing.e. Therefore it becomes very difficult to implement HRP in organization because top management does not support the decisions of other department.e. All human resource management activities start with human resource planning. VRS. stressed out and do not believe in the company. Time consuming activity :HRP collects information from all departments.e. layoff. We cannot rely too much on it and do every action according to it. it does not provide alternative solution like re -training so that employee need not be removed from the company. 4. ther e are political. Problem of surplus staff :HRP gives a clear out solution for excess staff i. cultural. So we can say that human resource planning is the principle/primary activity of human resource management. However when certain employees are removed from company it mostly affects the psyche of the existing employee.

Technical changes in the society : Technology changes at a very fast speed and new people having the required knowledge are required for the company. the company diversify into new products or close down business in some areas etc.g. 3. Reasons for increased importance for HRP/Factors affecting HRP in the organization.e. 4. company has to spend a lot of money in carrying out the activity. 1. in such cases the HRP process i. Organizational changes :Changes take place within the organization from time to time i. Human resource planning can be defined as the process of identifying the number of people required by an organization in terms of quantity and quality. etc. VRS. appointing or removing people will change according to situation. E. Expensive process :The solution provided by proces s of HRP incurs expense. Hence we can say the process is expensive. in countries where there is greater unemployment. overtime. company may retain existing employees and teach them the new technology and in some cases. Therefore the activity takes up a lot of time. there may be more pressure on the company. 2. the company have to remove existing people and appoint new. In some cases. Similarly some company may force shortage of skilled labour and they may have to appoint people from other countries. 5. So we can say that human resource planning is the principle/primary activity of human resource management.detail and each and every job is considered.e.e. Demographic changes :- . All human resource management activities start with human resource planning. Employment :HRP is affected by the employment situation in the country i. from government to appoint more people.

Definition of VRS (2 marks concept) VRS refers to voluntary retirement scheme. when company faces the problem of surplus labour. media etc. woman activist. A number of people retire every year. This can change the appointment or the removal in the company. composition of work force etc. When a company plans it¶s HRP it needs to take into account this factor also. Pressure groups :Company has to keep in mind certain pleasure. 5. Multicultural workforce :Workers from different countries travel to other countries in search of job. they have to remove the extra workers. This needs to be done to avoid increase in cost. Shortage of skill due to labour turnover : Industries having high labour turnover rate. when issues concerning these groups arise. Groups like human rights activist. One of the methods used by the companies is the methods used by companies is the VRS s cheme.Demographic changes refer to things referring to age. the HRP will change constantly i. . appointment or retrenchment becomes difficult. A new batch of graduates with specialization turns out every year. many new appointments will take place.e. Under this scheme people have put in 20 or more number of years of service are given an option to opt for early retirement benefits and some other amount which is due to them are paid when they leave the company. population. 7. This also affects the way HRP is implemented. as they are very capable for creating problems for the company. 6.

Chapter 4: Recruitment selection and induction Define recruitment :. Internal sources 2. Objectives of recruitment Recruitment fulfills the following objectives 1. It enables the company to advertise itself and attract talented people. Departmental exam 1. 3. 2. It reviews the list of objectives of the company and tries to achieve them by promoting the company in the minds of public. Promotion 2. Employment agency . It provides different opportunities to procure human resource.(2 marks) Recruitment is a process of searching for prospective employees and stimulating them to apply for jobs. These methods are 1. Management consultant 2. External sources The sources can be further explained with the help of following diagram Sources of recruitment (manpower supply) Internal source External sources 1. It forecasts how many people will be required in the company. Methods of recruitment/sources (10/5 marks) Recruitment is a process of searching for prospective employees and stimulating them to apply for jobs Companies can adopt different methods of recruitment f or selecting people in the company. 4.

3. Campus recruitment News paper advertisement Internet advertisement Walk in interview Internal sources of recruitment :Internal sources of recruitment refer to obtaining people for job from inside the company. 3. Transfer Retirement Internal advertisement Employee recommendation 3. 2. He is familiar with the working culture and working style. It is a method of encouraging efficient workers. Retirement :. Since the employee has already worked with the company. 5. Promotion :Companies can give promotion to existing employees. 6. The method ensures proper selection and impartiality. This is a temporary measure. 5. There are different methods of internal recruitment 1. Transfer :Many companies adopt transfer as a method of recruitment. money and efforts because the company does not have to train the existing employee. People who are interested must send their application to the HR department and appear for the exam. People who are interested are asked to apply . 4. The idea is to select talented per sonnel from other branches of the company and transfer them to branches where there is shortage of people. 4. This method of recruitment saves a lot of time.(2 marks) Many companies call back personnel who have already retired from the organization. Departmental exam :. 4. 5.(2 marks) This method is used by government departments to select employees for higher level posts. The advertisement is put up on the notice board of the department. Internal advertisement :In this method vacancies in a particular branch are adve rtised in the notice board. 6. Successful candidates are given the higher level job. The method is beneficial because it gives a sense of pride to the retired when he is called back and helps the organization to reduce recruitment selection and training cost.

4. These methods are 1. External methods/sources of recruitment External sources of recruitment refer to methods of recruitment to obtain people from outside the company. The method involves selecting people from those available in the company so there is limited scope for selection. Chances of employee discontent are very high. Management consultant :. 2.for the job. Employment agencies :Companies may give a contract to employment agencies that search. There is no opportunity to get new talent in this method. The method can be used to obtain lower level and middle level staff. Employee recommendation : . The company is benefited because it will obtain. 2. . interview and obtain the required number of people. 6. No separate induction program is required. 4. 2. Since the employee is aware of the working conditions inside the company he will suggest people who can adjust to the situation. 3.(2 marks concept) Management consultant helps the company by providing them with managerial personnel. There are chances of biased and partiality. The method helps in obtaining people who are ready to shift to another branch of the same company and it is also beneficial to people who want to shift to another bra nch. The method increases loyalty and reduces labour turnover. Disadvantages of internal recruitment 1. This method is less expensive. Internal methods are time saving. They generally approach management consultants. when the company is on the look out for entry level management trainees and middle level managers. 3.(2 marks) In this method employees are asked to recommend people for jobs. Advantages of internal recruitment 1.

6. with them. the details of the job and salary are also mentioned. This method is growing in popularity. Internet advertisement :With increasing importance to internet.P. 5. 4. Candidates are given a contact address where their applications must be sent and are asked to send their applications within a specified time limit. management. 2. If options like campus recruitment have been exercised we get a chance to employ fresh gradua tes. 4. News paper advertisement :This is one of the oldest and most popular methods of etc.3. Advantages of external recruitment 1. thus increasing and monster. The method has maximum reach and most preferred among all other methods of recruitment. Disadvantages of external recruitment . companies and candidates have started using the internet as medium of advertisement and search for jobs. There is lesser chance of partiality through this method. The method encourages more and more competition.V. There are various job sites like naukri.O and call centers. Companies approach colleges. There is influx of new talent in the method.(2 marks concept) When companies are in search of fresh graduates or new talent they opt for campus recruitment. Advertisements for the job are given in leading news papers. 3. Campus recruitment :. technical institutes. This method is very popular among B. Interested candidates who have applied are made t o go through a series of selection test and interview before final selection. candidates can also post their profiles on these sites. An advertisement about the location and time of walk in interview is given in the news paper. Walk in interview :Another method of recruitment which is gaining importance is the walk in interview method. Candidates require to directly appearing for the interview and have to bring a copy of their C. make a presentation about the company and the job and invite applications.

Process of selection :. Job analysis :- .(2 marks) Selection can be defined as process of choosing the right person for the right job. training cost. The method is time consuming. The method reduces loyalty to the company. selection.(10 marks) The process of selection is different in different companies. 3. This process of selection can be explained with the help of following diagram Process of selection Job analysis Advertisement Application blank/form Written test Interview Medical examination Initial job offer Acceptance/rejection lette r Final offer/letter of appointment Induction 1. The method is costly because it involves recruitment cost. 2. however a general procedure of selection can be frame d.1. Selection Define selection :.

3. qualification. This gives details f or the jobs which are vacant. Arrangement for the written test is looked after the HR department i. Written test :The application which have bee n received are screened by the HR department and those applications which are incomplete are rejected. 6. Application blank/form :Application blank is the application form to be filled by the candidate when he applies for a job in the company. 7. examination centers and hall tickets etc.1) Personal details 2) Educational details 3) Work experience 4) Family background. The organization may have a tie up with the hospital or the candidate may be asked to get a certificate from his family doctor. the address to which the application must be sent etc. 2. Medical examination :The candidates who have successfully cleared the interview are asked to take a medical exam. the HR department prepares an advertisement and pu blishes it in a leading news papers. This medical exam may be conducted by the organization itself (army). This gives details about the name of the job. The advertisement conveys details about the last date for application. refreshments. Interview :Candidates who have successfully cleared the test are called for an interview. question papers. 5.The very first step in the selection procedure is the job analysis. The other candidates are called for the written test. The HR department prepares the job description and specification for the jobs which are vacant.e. 4. informing candidates etc. The entire responsibility for conducting the interview lies with the HR department i. qualities required and work conditions etc.e. The application blank collects information consisting of 4 parts . Initial job offer :- . answer papers. Advertisement :Based on the information collected in step 1. they look after the panel of interviewers.

Types of selection test (5 marks) Different selection test are adopted by different organization depending upon their requirements. The s alary and other benefits.Candidates who successfully clear the medical exam are given an initial job offer by the company stat ing the details regarding salary. 10. These tests are specialized t est which have been scientifically tested and hence they are also known as scientific test. details of employment bond if any etc. Induction :On the date of joining the employee is introduced to the company and other employees through am elaborate induction program. terms of employment. 9. The letter will state the name of the job. employment bond if any etc. Letter of appointment/final job offer :Candidates who send their acceptance are given the letter of appointment. It will also state the date on which the employee is required to start duty in the company. number of medical leaves and casual leaves. Types of selection test Aptitude test Mental ability/ Intelligence test Personality test Performance test . Acceptance/ rejection :Candidates who are happy with the offer send their acceptance within a specified time limit to show that they are ready to work with the company. Different types of test can be explained with the help of following diagram. The candidate is given some time to think over the offer and to accept or reject. 8.

Such abilities become important in decision making. Aptitude test :Aptitude tests are test which assess the potential and ability of a candidate. Personality test :In this test the emotional ability or the emotional quotient is tested. quality inspection etc. This test is becoming very popular now days. Intelligence test :This test measures the numerical skills and reasoning abilities of the candidates. This test judges the ability to work in a group. III. It enables to find out whether the cand idate is suitable for the job. IV. quality testing. The job may be managerial technical or clerical. b. The test consists of logical reasoning ability. c. ability to understand and handle conflicts and judge motivation levels. Psycho motor test :This test judges the motor skills the hand and eye co ordination and evaluates the ability to do jobs lie packing. II. The different types of aptitude test are a. inter personal skills. It judges the decision making abilities. Mechanical aptitude test :This test deals with the ability of the candidate to do mechanical work. Mental ability/mental intelligence test : This test is used to measure the over all intelligence and intellectual ability of the candidate to deal with problems. It is used to judge and measure the specialized knowledge and problem solving ability. data interpretation.Intelligence test Medical aptitude test Psycho motor test I. Performance test :- . comprehension skills and basic language skills. It is used for technical and maintenance staff.

After this the company may start a training program for the new employee. When he reports for duty the senior most people in the branch takes the new employee around the office and introduces to all other employees and gives information about the working of the branch. Apart from this introductory secession there will be other secessions also like secessions on behavioral science. group discussion. When an employee is given a letter of appointment he joins the company on duty. introduces the new employee to the organization and people working there. The induction program concludes with the employe e reporting for duty at his respective branch after induction. information about different leaves that can be taken by the employee about upward mobility in the organization etc. values. bonus.e. beliefs. roll play secessions etc. number of branches. culture. number of products. salary. The induction starts with an introduction se cession about the company. The very first thing that the company does is. the names of top management personnel etc. organizational structure. . An induction program may be conducted at a p articular center for all employees or at different places (branches of the company) for different employees. It is us ed to test performance of typist. power point presentation. soft skill training. Induction Induction = orientation Define induction :. psychological test. The senior people regularly stay in touch with the new employee in the first week so that he can make the new employee comfortable and help him to adjust to the company.This test judges and evaluates the acquired knowledge and experience of the knowledge and experience of the individual and his speed and accuracy in performing a job. Normally the new employee is called together to the staff training college for the induction program.(2marks concept/5marks short note) Induction can be defined as a process of introducing the employee who is newly elected to the organization. a brief history of the company. using lecture method. number of countries operating in. secessions on giving details about the job. data entry operators etc. There are different ways in which secessions can be conducted i.

Training provides perfection and required practice. skills. senior level management. therefore employee¶s area able to develop them professionally. Chapter 5 Training and Development Define training/development/managerial/executive development program :. 2. and social behavior so that the performance of the organization improves considerably. Objectives/purpose/goals of training and development Training is defined by Wayne Cascio as ³training consists of planed programs undertaken to improve employee knowledge.´ Training is normally viewed as a short process. Improving quality of work force :Training and development help companies to improve the quality of work done by their employees. This is called placement. skills. When applied to lower and middle management staff it is called as training and for senior level it is called managerial development program /executive development program/development program. After the induction program is over the employee is given a specific job in the company. attitude. Training programs concentrate on specific areas. lower.Define placement :. 3. middle.´ The purpose of training and development can be explained as follows. The employees undergo an induction program. Enhance employee growth :Every employee who takes development program becomes better at his job.(2 marks concept) Training is defined by Wayne Cascio as ³training consists of planed programs undertaken to improve employee knowled ge. attitude. 1. Prevents obsolescence :- . There by improving the quality of work in that area. It is applied to technical staff.(2 marks concept) Companies conduct recruitment and selection and finally select employees. and social behavior so that the performance of the organization improves considerably.

Bridging the gap between planning and implementation : Plans made by companies expect people to achieve certain targets within certain time limit with certain quality for this employee performance has to be accurate and perfect. Training these workers becomes important because they handle equipment worth crores of rupees. the different problems that can arise and how to prevent such problems. Assisting new comer :Training and development programs greatly help new employees to get accustomed to new methods of working. and social behavior so that the performance of the organization improves considerably. new technology. The different methods can be explained with the help of following diagram.´ There are different methods of training for operating personnel (factory workers). 6. 5. This helps to improve the health and safety measures in the company. 4. attitude. Health and safety measures :Training and development program clearly identifies and teaches employees about the different risk involved in their job. Training helps in achieving accuracy and perfection. Methods of training operating personnel/factory workers (5 marks imp) Training is defined by Wayne Cascio as ³training co nsists of planed programs undertaken to improve employee knowledge. the work culture of the company etc. Methods of training operating personnel .Through training and development the employee is up to date with new technology and the fear of being thrown out of the job is reduced. skills.

On the job method Apprenticeship method Vestibule method Job rotation method Classroom method 1. The practical sessions give practical training in handling the equipment. The employee is paid a stipend until he completes training. the different machines. The surroundings. Job rotation :In this method the person is transferred from one equipment to the other for a fixed amount of time until h e is comfortable with all the equipments. At the end of the training the employee . equipment. their parts and safety measures etc. Vestibule training :In this method of training an atmosphere which is very similar to the real job atmosphere is created. 4. Once the worker studies the first equipment thoroughly the supervisor moves on to the next equipment and so on. 2. 3. This superior or supervisor first demonstrates how the equipment must be handled. In some places graphics are also used to create the artificial surroundings. divided into groups and one superior is allotted to every group. The apprentice may or may not be continued on the job after training. Apprenticeship training :In this method both theory and practical session are conducted. and then the worker is asked to repeat whatever he has observed in the presence of the supervisor. noise level will be similar to th e real situation. When an employee is trained under such conditions he gets an idea about what the real job situation will be like. The theory sessions give theoretical information about the plant layout. Similarly when he actually starts doing the job he will not feel out of place. This method makes it easy for the employee to learn the details ab out specific equipment. This method involves heavy investment. This method is used to train pilots and astronauts. On the job training method :In this method workers who have to be trained are taken to the factory.

5. charts. clippings. attitude.´ Various methods are used to train personnel for managerial level jobs in the company. and social behavior so that the performance of the organization improves considerably. These methods can be explained with the help of following diagram. diagrams and artificial modules etc are used to give training. skills. Classroom method :In this method the training is given in the classroom. Video . Methods of training On the job training Off the job training Job rotation Classroom method Planned progression Simulation Coaching and counseling Business games Under study Committees Junior boards Conferences Readings .becomes comfortable with all the equipment. He is then assigned a specific task. slides. Methods of training for managers/methods of development/managerial development/executive development (10/5/2 marks very imp) Training is defined by Wayne Cascio as ³training consists of planed programs undertaken to improve employee knowledge.

Job rotation :. The method allows the employee to slowly learn the job of his senior so that when he is promoted to his senior job it becomes very easy for him to adjust to the new situation. Every minute detail is studied. the different techniques that can be used on the job. Under study :. how to handle pressure. 3. learns about decision making and handling of .(2 marks) This method enables the company to train managerial personnel in departmental work. Starting from the lowest level jo b in the department to the highest level job. Planned progression :. There is active participation from the senior. This helps when the person takes over as a manager and is required to check whether his juniors are doing the job properly or not.In-basket training On the job method :. Counseling refers to advising the junior employee as and when he faces problems. He takes orders from the senior. observes the senior. Coaching and counseling : .(2 marks) In this method juniors are assigned a certain job of their senior in addition to their own job.(2 marks) In this method of training a junior is deputed to work under a senior. 1. 2. They are taught everything about the department. The senior person who is the coach actually teaches his junior regarding how the work must be handled and how decisions must be taken. It also provides a chance to learn higher level jobs. 4.(5 marks) On the job method refers to training given to personnel inside the company. The counselor superior plays an advisory role and does not actively teach employees. There are different methods of on the job training.(2 marks) Coaching refers to actually teaching a job to a junior. attends meetings with him.

Committee :. The method is used when the senior is on the verge of retirement and the job will be taken over by the junior. The method helps to train manager handling stress. They function just like the board of directors.(2 marks) This method involves providing a market situatio n to the trainee manager and asking him to provide solutions. Off the job training method :. Simulation :. case study.(2 marks) In this method a group of junior level managers are identified and they work together in a group called junior board. role play to day problems. The method is interactive and provides very good results. An actual feel of the real job environment is given here. Trainee . They identify certain problem. Classroom method :. The training involves using lectures. 4. they have to study the problem and provide suggestions. handling pressure on the jobs etc.(2 marks) A committee refers to a group of people who are officially appointed to look into a problem and provide solution. audio visuals. 2. Business games :. This method improves team work and decision making ability. 5.(5 marks) Off the job training refers to method of training given outside the company. group discussions etc.(2 marks) Simulation involves creating atmosphere which is very similar to the original work environment . If there are many people to be trained they can be divided into groups and each group becomes a separate team and play against each other. Only promising and capable junior level managers are selected for this method. It gives an idea about the intensity of problem faced by the company. Junior board :. The different methods adopted here are 1. taking immediate decisions. 3.(2 marks) The classroom method is used when a group of managers have to be trained in theoretical aspects.

Information can be collected by trainee manager from books. 6. skills.(2 marks) Conferences are conducted by various companies to have elaborate discussions on specific topics. The company which organizes the conference invites trainee manager and calls for experts in different fields to give presentation or lecture. Readings :.(2 marks) This method involves encouraging the trainee manager to increase his reading related to his subject and then ask him to make a presentation on what he has learned. The trainee manager can ask their doubts to these experts and understand how problems can be solved on the job.´ Every company has a specific training procedure.(2 marks) In this method the training is given to the manager to handle files coming in and to finish his work and take decisions wit hin a specified time limit. The trainee manager is taugh t how to prioritize his work. In basket training :. 5. Training procedure/process of training :Training is defined by Wayne Cascio as ³training consists of planed programs undertaken to improve employee knowledge. the activities which are important for his job and how to take decisions within limited time limit. dep ending upon its requirements. attitude. Conference :. A general training procedure is explained below along with diagram Process/procedure of training Determining training need of employee Select a target group for training Preparing trainers . magazines and internet etc.managers are put in the committee to identify how they study a problem and what they learn from it. and social behavior so that the performance of the organization improves considerably. 7.

the result desired at the end of training. . like number of people in group. Preparing training packages :Based on the information provided by trainers. the number of days of training. number of sessions each day. The intensity of training etc. here the training must be specific. in some cases the employee may be totally new to the organization. the HR department arranges for trainers. 4. 3. he prepares entire training schedule i.Developing training packages Presentation Performance Follow up 1. Age group i. depth of which the subject should be covered. the area of training. the HR department. identifies the number of people required training. The area of training ii. the training budget. their age. Preparing trainers :Once the employees have been divided into groups. Selecting target group :Based on information collected in step 1 the HR department divides employee into groups based on the following. Level in the organization iii. 2. facilities available etc. Determining training needs of employee : In the very 1st step of training procedure. The trainers are given details by HR department. the level in organization etc. Trainers can be in house trainers or specialized trainers from outside. Some employees may have problems in specific areas. Here the general introduction training is required. the age gr oup of employee. This entire information is collected by HR department.e. number of days. topics to be handled each day. handout/printed material to be given in each session. specific a rea in which they need training. the test to be given foe each session. the methodology for each se ssion. their level in organization.

they have invested has been spend properly or not. and social behavior so that the performance of the organization improves considerably. the HR department is able to identify what is exactly wrong with training program and suitable correction is made. The performance of each employee is tracked by the trained and necessary feedback is provided. Training programs can be evaluated by asking following questions. Evaluation of training program Training is defined by Wayne Cascio as ³training consists of planed programs undertaken to improve employee knowledge. Performance :At the end of training program the participants reports back to their office or branches.´ Effectiveness of training programs are constantly evaluated by the company to find if the money. Follow up :Based on the em0ployee performance. whether the employee considers training to be +ve or ±ve one. a) Has change occurred after training? b) Is the change due to training? c) Is the change positive or negative? d) Will the change continue with every training program? A training program should give following resulting changes. 7. Presentation :On the first day of training program the trainer introduces himself and specifies the need and objective o f the program and then actually stars the program. 6. They the start using whatever they have learned during their training. skills. They prepare report on th e entire training program and what they have learned.5. attitude. 1. after training. If reaction . Reaction :Reaction refers to attitude of employee about the training. Their progress and performance is constantly tracked and suitable incentives are given if the participant is able to use whatever he has learned in training.

attitude. Result :Results provided by employee in monetary terms also determines effectiveness of training program i. Reduction in wastage and therefore cost of production v.e. Employee development in career terms vii. . and social behavior so that the performance of the organization improves considerably. Learning :Another method of judging effectiveness is to identify levels of learning i. Increase in efficiency of worker :Training programs can help workers to increase their efficiency levels. to understand the effectiveness of training. 4. and actual performance. Increase in efficiency of worker ii. Overall efficiency in the company Advantages of training programs/training (5 marks) Training is defined by Wayne Cascio as ³training consists of planed programs undertaken to improve employee knowledge. 3. how much the people have learnt during the training. 2. peer groups and seniors. Effectiveness of training program must lead to i.e. They mark change in behavior and inform the HR department of the success of training program. Proper care of tools and equipments vi. The behavioral change can be seen in how the person interacts with juniors. Behavior :The HR department needs to understand behavior of the employees. employee success in handling the project. the report submitted by the employee.´ The following are the advantages of training program t o the company 1. This can be found out by trainers mark sheet.are +ve then people have accepted the program and changes will be possible. Increase in discipline iv. 5. skills. Reduction in labour turnover iii. improve quality and thereby increase sales for the company. the group performance before and after training etc.

This improves union management relations. The following are the advantages of training program to the employee 1. 5. Due to this the company is able to reduce its cost its cost of production. Less turnover of labour :One of the advantages of the training program is that it increases the confidence of empl oyees and provides them with better career opportunities. Training helps new employees :A person. develops talent and due to this the employee is in a position to get better jobs in the same company or other companies. Union management relations :When employees are trained and get better career opportunities. has no idea about its working. Due to this employee generally do not leave the company. Reduced supervision :When workers have been formally trained they need not be supervised constantly.2. The union starts having a possible attitud e about the management. This reduces the work load on the supervisor and allows him to concentrate on other activities in the factory. Reduction in wastage :The amount of material wasted by a trained worker is negligible as compared to the amount of material wasted by an untrained worker. 6. 3. There by reducing labour turnover. High rewards :- . They feel that the management is genuinely interested in workers development. who is totally new to the company. Better career opportunities :Training programs provide the latest information. 4. Training helps him to understand what is required from him and helps him to adjust to the new environment. 2.

group dynamics (formal and informal groups). Therefore we can say that their motivation levels are very high. Promotion :People who attend training programs learn from them and improve themselves are generally considered for promotion. In other words training teaches people to work in a group. Increased motivation :Employees who have been trained are generally more confident as compared to others. Group efforts :Training programs are not only technical programs but are also conducted in areas like conflict management. this enables employees to put in group effort without facing problems that groups normally face. 5. 3.Effective training programs result in improved performance. When performance appraisal is done excellent performance from the employee is rewarded by giving him incentives and bonus. behavioral skills. . 4. Thus training increases chances of promotion. stress management etc. Since their efforts will be rewarded in future they are very much interested in improving their performance.

Ranking method 1. The different methods used can be explained with the help of following diagram. weakness. weakness. Behavioral anchored rating scale . Method of performance apprai sal (2/5/10 marks***) Performance appraisal is defined by Wayne Cascio as ³the systematic description of employee¶s job relevant. Identify areas where improvement is required so that training can be provided. Assessment centers 3. Check list method 2. strength. strength. management by objective 4. Methods of performance appraisal Traditional method Modern method 1.Chapter 6 Performance appraisal Definition :. Give incentives and bonus to encourage employees etc. The basic i dea of the appraisal is to evaluate the performance of the employee. Role analysis 2. giving him a feed back. Companies use different methods of appraisal for identifying and appraising the skills and qualities of their employees. Performance appraisal may be conducted once in every 6 months or once in a year. Critical incident method 4.(2 marks) Performance appraisal is defined by Wayne Cascio as ³the systematic description of employee¶s job relevant. Confidential report 3.

A common feature of these methods is they are all relatively simple and involve appraisal by one senior. 2. The superior has to put a tick mark in any one of the boxes This method can be explained with the following eg. The report is kept highly confidential and access to the report is limited. Check list method :. Narrated essay 5. Y Does the employee have leadership qualities? Y Is the employee capable of group efforts? Y Has the employee shown analytical skills? on the job As seen in the above eg. The +ve and ± ve traits.(2 marks) This method is very popular in government departments to appraise IAS officers and other high level officials. Psychological testing 6. the boss is given a list of questions about the junior. 3. 1. responsibilities handled on the job and recommen dations for future incentives or promotions. The same set of questioners can be given foe every employee so that there is uniformity in selecting employee.5.(2 marks) N N N . These questions are followed by check boxes. Confidential report :. A questioner containing questions is given to the senior. Critical incident method :. This method is an extremely simple method and does not involve a lot of time. 360* Appraisal Traditional method (5 marks) Traditional method of performance appraisal has been used by companies for very long time. In this method the senior or the boss writes a report about the junior giving him details about the performance about the employee. Human resource accounting 7.(2 marks) In this method the senior. Graphic rating scale 6.

Alternate ranking :.(2 marks) Simple ranking method refers to ranks in serial order from the best employee eg. The chart contains certain columns which indicate qualities which are being appraised and other columns which specify the rank to be given. Both +ve and ±ve incidents are mentioned. department or team is compared with every other person in the team/group/department. If we have to rank 10 best employees we start with the first best employee and give him the first rank this is followed by the 2 nd best and so on until all 10 have been given ranks. This is followed by an analysis of the person. recommendations for the future incentives and promotions.(2 marks) In this method the serial alternates between the best and the worst employee. The best employee is given rank 1 and then we move to the worst employee and give him rank 10 again to 2 nd best employee and give him rank 2 and so on. Ranking method :. Graphic rating scale :. 4. The comparison is made on certain criteria and finally ranks are given. This method is superior because it compares each and every person on certain qualities and provides a ranking on that basis.(2 marks) In this method ranks are given to employees based on their performance. The entire appraisal is presented in the form of a chart.(2 marks) In this method each and every person is the group. 5. his abilities and talent. iii.In this method critical or important incidents which have taken place on this job are noted down along with employee¶s behavior and reaction in all these situations.(2 marks) Graphic rating scale refers to using specific factors to appraise people. Paired comparison :. There are different methods of ranking employees. Simple ranking method :. . Simple ranking method Alternate ranking method Paired comparison method i. ii.

Quantity of work Intelligence 6. He may describe the employees strength and weakness. The appraisal depends upon what role set members have to say about the empl oyee. These role set members identify key result areas (KRA 2 marks) (areas where you want improvement are called KRA) which have to be achieved by the employee. According to the department in which they work. These methods are as follows 1. Role analysis :. 2. analytical abilities etc. Narrated essay :.(2 marks*) . Now days one of the striving feature that appraisal involves is.(2 marks) In this method the senior or the boss is supposed to write a narrative essay describing the qualities of his junior. the narrative essay ends with a recommendation for future promotion or for future incentives. Assessment centers :. Modern methods (5 marks) Modern methods of appraisal are being increasingly used by companies.(2 marks) In this method of appraisal the person who is being apprised is called the focal point and the members of his group who are appraising him are called role set members. The KRA and their improvement will determine the amount of incentives and benefits which the employee will receive in future.Eg. Sometimes the qualities which are judged may change depending upon the department. Such charts are prepared for every employee. the opinion of many people about the employee and in some cases psychological test are used to analyze the ability of employee. Employee A Quality of work Excellent Very good good satisfactory poor The senior has to put a tick mark for a particular quality along with the ranking.

Human resource audit/accounting : . Psychological testing :.Assessment centers (AC) are places where the employee¶s are assessed on certain qualities talents and skills which they possess. This method is used for selection as well as for appraisal. his juniors. In this method all members of the of the department starting from the lowest level employee to the highest level employee together discus. 7. based on their performance in these test an games appraisal is done. The appraisal informs the employee about his contribution to the company and what is expected in future. A comparison is made to find out the utility of the employee to the organization.(2 marks) In this method of appraisal and all round approach is adopted. . 5. puzzles. Management by objective : .(2 marks) In this method the expenditure on the employee is compared with the income received due to the efforts of the employee. questioners about different management related situations etc. communication skills. financial institutions and other people he deals with etc. based on this appraisal is done. his superiors. Behavioral anchored rating scale : .(2 marks) In this method clinically approved psychological test are conducted to identify and appraise the employee. It was intended to be a method of group decision making. The seniors in the department get an opportunity to observe their junior. plan for achieving these goals and work together to achieve them. fix target goals to be achieved. Feedback about the employee is taken from the employee himself.(2 marks) In this method the appraisal is done to test the attitude of the employee towards his job. 6. It can be use for performance appraisal also. Normally people with +ve approach or attitude view and perform their job differently as compared to people with a ±ve approach. 360* appraisal :. efforts.(2 marks) This method was given by Petter Druckard in 1974. psychological test. customers he deals with. his colleagues. knowledge levels. A feedback is given to the employee and areas of im provement are identified. 3. The people who attend assessment centers are given management games. interest levels etc.

A score 90/100 = excellent performance. A general procedure is explained below with the help of a diagram. And so on.e. Process of performance appraisal followed by different companies is different.Based on all these observations an appraisal is made and feedback is given. This is one of the most popular methods. Process of performance appraisal Setting performance standards Communicating standards set to the employee Measuring performance Comparing performance with standard Discussing result Collective action Implementation and review 1. Process of performance appraisal (5 marks) Performance appraisal is defined by Wayne Cascio as ³the systematic description of employee¶s job relevant. strength. Setting performance standards : In this very first step in performance appraisal the HR department decides the standards of performance i. a score os 80/100 = good. . Sometimes certain marking scheme may be adopted eg. they decide what exactly is expected from the employee for each and every job. weakness.

The HR department constantly receives or keeps a check on the employee¶s performance and notes down improvements in performance. strength. satisfactory etc. 4. Collective action :The employee is given a chance or opportunity to improve himself in the areas specified by the HR department. Communication standard set to the employee : Standards of performance appraisal dec ided in 1st step are now conveyed to the employee so that the employee will know what is expected from him and will be able to improve his performance. Discussing result :The results obtained by the employee after performance appraisal are informed or conveyed to him by the HR department. To understand the score achieved by him. The following are the limitations of performance appraisal . Accordingly we come to know which category of performance the employee falls into i. Limitations of performance appraisal (5 marks) Performance appraisal is defined by Wayne Cascio as ³the systematic description of employee¶s job relevant. 6. The method used depends upon the company¶s convenience. Necessary changes are made from time to time.e. 3. Implementation and review : The performance appraisal policy is to be implemented on a regular basis. very good. A feedback is given to the employee asking him to change certain aspects of his performance and improve them. Measuring performance :The performance of the employee is now measure by the HR department. weakness.e. different methods can be used to measure performance i. excellent. traditional and modern method. 5. 7. Comparing performance with standard : The performance of the employee is now judged against the standard. A review must be done from time to time to check whether any change in policy is required. good.2.

The negative tra its are not considered. This again will not help the organization because such appraisal may not present a true picture about the employee. Such an appraisal will no give a true picture about the employee. 2.(2 marks*) In this case the superior appraises the person on certain positive qualities only. Horn effect :. Therefore although the employee may have improved performance.(2 marks*) In this case only the negative qualities of the employee are considered and based on this appraisal is done. Paper work and personal biased : - . 7. Therefore when they appraise the employee they may end up giving higher grades which are not required. Employee who really deserves promotions may loose the opportunity due to strict bosses while those who may not deserve may get benefits due to lenient boss. he may still not get the benefit. This prevents a really talented employee from getting promotions he deserves and some employees who do not deserve any thing may get promotion. Halo effect :. Goodwill and techniques to be used :Sometimes a very strict appraisal may affect the goodwill between senior and junior. 8. 5. Central tendency :. And in some cases employees who do not deserve promotions may get it. Leniency and strictness :Some bosses are lenient in grading their employees while some are very strict.1. 6. Spill over effect :In this case the employee is judged +vely or ±vely by the boss depending upon the past performance. This is a n injustice to really deserving employees. 3. 4. Fear of loosing subordinates and spoiling relations : Many bosses do not wish to spoil their relations with their subordinates. Similarly when different departments in the same company use different methods of appraisal it becomes very difficult to compare employees.(2 marks*) In this case the superior gives an appraisal by giving central values.

Helps to decide promotion :Performance appraisal provides a report about the employee. It identifies the areas for improvement so that employee can improve itself. weakness. incentives.Appraisal involves a lot of paper work. 3. Deciding transfers and lay off of the worker :Employee with specific talent can be t ransferred to places where their talents are utilized properly. Training and development : Due to performance appraisal it is easy to understand what type of training is required for each employee to improve himself accordingly training programs can be arranged. Personal bias and prejudice result in bosses favoring certain people and not favoring others. Validation of selection process :Through performance appraisal the HR department can identify whether any changes are required in the selection process of the company normally a sound selection process results in better performance and positive appraisal. salary increase is decided. 4. similarly decisions . Feedback to the employee : Performance appraisal is beneficial because it provides feedback to the employee about his performance. 5. 2. Advantages/needs/importance/use/purpose of performance appraisal (5 marks) Performance appraisal is defined by Wayne Casc io as ³the systematic description of employee¶s job relevant. Due to this the work load of HR department increases. strength. Based on this report future promotions are decided. 1.

Similarly career planning can be done for the employee on the performance appraisal report. . Human resource planning and career development: Companies can plan for future vacancies at higher levels based on performance appraisal reports. 6.regarding termination of employees depend upon performance appraisal reports.

Sign up to vote on this title
UsefulNot useful