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 Home  Topics  Chapter 1 : Cost Analysis  Chapter 2 : Replacement Studies  Chapter 3 : Economic Analysis of Investment Alternatives  Chapter 4 : Cost Estimation  Chapter 5 : Depreciation  Chapter 6 : Human Resource


Chapter 6 : Human Resource Management

Q. 1. Define Human Resource Management. Ans. The management, who deals with Atiministrative activities associated with Ji timan resources planning, recruitment, selecting, orientation, training, appraisal, motivation, remuneration, etc. is

Management  Chapter 7 : Procurement and Placement  Chapter 8 : Training and Development  Chapter 9 : Job Satisfaction  Chapter 10 : Integration and Maintainence

called HRM. It is a model of personnel management that forces on the individual rather than taking a collective approach. Responsibility for human resource management is often devolved to line management. It is characterized by an emphasis on strategic integration, employee commitment, workforce flexibility, and quality of goods and services.

Q. 2. Define HRMS. Ans. A Human Resources Management System (HRMS) is a software application that combines many human resources functions, including benefits administration, payroll, recruiting and training, and performance analysis and review into one package.

Q. 3. What are the various objectives of human Resource

Management? Ans. Objectives are benchmarks against which actions of an HRM department are evaluated. The following is one listing of these objectives. Societal objective. To be socially responsible to the needs and challenges of society while minimizing the negative impact of such demand upon the organisation. The failure o organisations to use their resources for society’s benefit may result in restrictions. For example, societies may pass laws that limit human resource decisions. Organizational objective. To recognize that HRM exists to contribute to organizational effectiveness. HRM is not an end in itself; it is only a means ‘to assist the organisation with its primary objectives. Simply stated, the department exists to serve the rest of the organisation. Functional objective. To maintain

the department’s contribution at a level appropriate to the organization’s needs. Resources are wasted when HRM is more or less sophisticated than the organisation demands. A department’s level of service must be appropriate for the organisation it serves. Personal objective. To assist employees in achieving their personal goals, at least insofar as these goals enhance the individual’s contribution to the organisation. Personal objective of employees must be met if workers are to be maintained, retained and motivated. Otherwise, employee performance and satisfaction may decline, and employees may leave the organisation.

Q. 4. Define HRA. Ans. Human resource accounting

(HRA) Human resource accounting (HRA) is defined as the process of identifying, quantifying, accounting and forecasting the value of human resources in order to facilitate effective FIRM. People in organisation differ from other assets — unlike capital items and materials they cannot be owned by an organization.

Q. 5. What is Teleworking? Ans. An important variation in working patterns has been the growth in teleworking and/or homeworking. There are five main types of teleworking: 1. multi-site : alternation between working on an employer’s premises and working elsewhere, usually at home but also in a telecottage or telecentre. 2. tele-homeworking : work based

at home, usually for a single employer and involving low-skilled work performed by people who are tied to their homes.. 3. freelance: work for a variety of different clients. 4. mobile: work carried out using communication technologies such as mobile phones, fax machines, PC connections via the Internet often by professional, commercial, technical and managerial staff who work ‘on the road’ 5. Reloaded back-functions (call centres) : specialist centres carrying out activities such as data entry, airline bookings telephone banking, telephone sales and helpline services.

Q 6 Describe HRM activities and objectives Ans. Efficient and effective Human Resource management is a challenge to all HR professionals.

Staffing, training and helping to manage people so that the organisation is likely to increase the performance level is imperative to work in a productive manner. Normally, human resource functions are trackmg data points on each employee. These might include experiences capabilities, skills, data, personal histories and payroll records. In the most general sense businesses carry out different activities dealing with managing their approaches to employee benefits and compensation, as well as employee records and personnel policies. Among the core HR activities there are payroll, time and labour management, benefit administration and HR management. These activities correlate with the HR objectives which are largely the responsibility of Human Resources. The foremost objectives of Personnel services are an efficient and effective personnel ,and payroll system responsive to staff needs

together with the flexible remuneration system. These objectives can be attained by implementation of different modules, such as budgets and commencements module, applicant tracking module, occupational health and safety module, etc. None the less important HR objective is the industrial relations services implying establishing effective relationship between the employer and the staff. Complete and comprehensive policy framework should be established for risk management, safety and health issues. Staff should be well informed about safety and health issues in the workplace. What is required to gain this objective is the staff’s participation in a wide range of training and awareness programs in the area of safety and health. Staff development objective can be realized through different skills development courses designed to encourage further skills development necessary to carry out

their responsibilities. Some organisations consider equity and diversity services as their objective and provide information about the procedures for sexual harassment, racial harassment and equity grievances, thus making the staff well aware of the policies. The initiatives include awaranes programs in relation to equity and diversity. In the long run it leads to an increase in the number of staff who have attended the training sessions and know the issues. Human Resource services provision is closely connected with strategic policies, planning and coordination of an orgaii4ltion. A wide range of human resource strategies aimed at more flexible planning can include improved links between performance and remuneration, improved performance measurement procedures for all staff, improved recruitment and retention strategies, and encouragement of skills development. One more objective

results in consultancy support provided on the basis of improved information about both the employer and HR staff needs and working requirements. HR objectives stimulate the development of people to be their best in order to meet the needs of an organization A successful performance management system including department, team and individual business objective, personal development plans,performance appraisal, career planning, etc, aims at enhancing the personnel’s commitment to developing the bus mess long-term and can gwe challenges which will enhance the staff personal growth Moreover, if an organization can assess the workforce changes needed by business, implement the necessary optimization and measure the results using up-to-date technology system, it will get data having a critical role in monitoring and controlling overall performance

Q. 7. What are the various stages of evolution of HRM. Ans. Evolution of the Concept of HRM The various stages or phases in the tansition or evolution of Personnel Management into Human Resource Management are shown below: (a) The Commodity Concept: Labour was regarded as a commodity or a tool to be bought or sold. (b) The Factor of Production Concept : Labour is like any other factor of production, viz, money, materials, land, etc. (c) The Goodwill Concept Welfare measures like safety, first aid, lunch room, rest room will have a positive impact on worker’s productivity (d) The Paternalistic Concept Management must assume a fatherly or protective attitude towards employee It means

satisfying the various needs of employees as parents meet the requirements of their child (e) The Humanitarian Concept To improve productivity, physical, social and psychological needs of workers must be fulfilled and met. (t) The Human Resource Concept Employees are the most valuable assets in the organization (g) The Emerging Concept : Employees should be accepted as partners of the organization They should belong to the organization as they are running their own organization

Q 8 What is the Scope of HRM Ans The main aim of HRM is Competztwe advantage through people It involves the following points (a) Change in Thinking Process Achieving competitive success

through people involves fundamentally changing the thinking of the concerns, that how they think about the workforce consisting of people and the management employment relationship (b) Co-operation with Employees It means achieving success by working with people, not by replacing them or limiting the scope çf their activities (c) Strategic Viewpoint it involves seeing the workforce as a source of strategic advantage, not just a cost to be minimized

Q 9 Differentiate personnel management and Human Resource Management Ans The sole purpose of personnel management was to attain corxtpetitive advantage and best results for the organization The individuals interests, desires and aspirations were submerged into the

organization objectives and goals Where as, HRM projects the ‘development of individual in accordance with his interests, desires & aspirations. So that the individuals would be motivated to make their best contribution towards the accomplishment of goals. While personnel function was designed to respond to the organization objectives like profit of maximization, HRM visualized human elements of enterprise as important resources. The term human resources at the macro level spell the total sum of all the components(like skill & creative ability) possessed by all the people, where as the term personnel even at the macro level is limited to only employees of all organization. One must not be under impression that HRM has replaced traditional personnel management rather we can say that HRM has absorbed the personnel function in its refined

form. HRD is an integral part of Human Resource Management. Due to the amalgamation of Personnel function in its refined way with HRM, it became necessary for every organization to develop skills, talents, potentialities, capabilities & attitude of company work to meet the emerging challenges. Hence HRD policies have been adopted. HRD strategies are supposed to bring forth necessary changes in skills capabilities & attitude of people who are required to cope with the emerging changes. Thus HRD has become an integral part of Human Resource Management.

Q. 10. HRM planning. Ans. Planning is very important to our everyday activities. Several definitions have been given by different writers what planning is all about and its importance to achieving our objectives. It is amazing that this important part of HR is mostly ignored in HR in most organizations because those at the top do not know the value of HR planning. Organizations that do not plan for the future have less opportunities to survive the competitions ahead. The six steps of HR planning that is : Forecasting; inventory, audit, HR Resource Plan; Actioning of Plan; Monitoring and Control. Quoting Monday et (1996) they define it as a systematic analysis of HR needs in order to ensure that correct number of employees with the necessary skills are available when they are required.

When we prepare our planning programme, Practitioners should bear in mind that their staff members have their objective they need to achieve. This is the reason why employees seek employment. Neglecting these needs would result in poor motivation that may lead to unnecessary poor performance and even Industrial actions. The following flow chart shows the relationship among that variables that ultimately determine the HR plans an organization will develop.

Q. 11. Explain the concept of development of a HRM strategy. Ans. Faced with rapid change

organizations need to develop a more focused and coherent approach to managing people. In just the same way a business requires a marketing or information technology strategy it also requires a human resource or people strategy In developing such a strategy two critical questions must be addressed.


What kinds of people do you need to manage and run your business to meet your strategic business objectives? What people programs and initiatives must be designed and implemented to attract, develop and retain staff to compete effectively?

In order to answer these questions four key dimensions of an organization must be addressed. These are

Culture the beliefs, values, norms and management style of the organization


Organization : the structure, job roles and reporting lines of the organization People : the skill levels, staff potential and mangemént capability Human resources systems the people focused mechanisms which deliver the strategy employee selection, communications, training, rewards, career development, etc.


Frequently in managing the people element of their business senior managers will only focus on one or two dimensions and neglect to deal with the others. Typically, companies reorganize their structures to free managers from bureaucracy and drive for more entrepreneurial flair but then fail to adjust their training or reward systems. When the desired entrepreneurial behaviour does not emerge

managers frequently look confused at the apparent failure of the changes to deliver results. The fact is that seldom can you focus on only one area. What is required is a strategic perspective aimed at identifying the relationship between all four dimensions. If you require an organization’ which really values quality and service you not only have to retrain staff, you must also review the organization, reward, appraisal and communications systems The pay and reward system is a classic problem in this area Frequently organizations have payment systems which are designed around the volume of output produced. if you then seek to develop a company which emphasizes the product’s quality you must change the pay systems. Otherwise you have a contradiction between what the chief executive is saying about quality and what your

payment system is encouraging staff to do.

Q. 12. Describe the Steps in developing HRM strategy. Ans. Step 1 : Get the ‘big picture’ Understand your business strategy • Highlight the key drivlig forces of your business. What are they? e.g. technology, distribution competition, the markets. • What are the implications of the dnving forces for the people side of your busmess? • What is the fundamental people contribution to bottom line business performance? Step 2 : Develop a Mission Statement or Statement of Intent That relates to the people side of the business. Do not be put off by negative reactions to the words or references to idealistic statements - it is the actual process of thinking through

the issues in a formal and explicit manner that is important. What do your people contribute? Step 3 Conduct a SWOT analysis of the organization Focus on the internal strengths and weaknesses of the people side of the business • Consider the current skill and capability issues Vigorously research the external business and market environment High light the opportunities and threats relating to the people side of the business • What impact will/might they have on business performance • Consider skill shortages • The impact of new technology on staffing levels From this analysis you then need to review the capability of your personnel department Complete a SWOT analysis of the department-consider

in detail the department’s current areas of operation, the service levels and competences of your personnel staff. Step 4 : Conduct a detailed human resources analysis Concentrate on the organization’s COPS (culture, orgafliZatiQn, people, HR systems) • Consider Where you are now ? Where do you want to be? • What gaps exists between the reality of where you are now and where you want to Be exhaust your analysis of the four dimensions. Step 5 : Determine critical people Issues Go back to the business strategy and examine it against your SWOT and COPS Analysis • Identify the critical people issues namely those people issues that you must address

Those which have a key impact on the delivery of your business strategy • Prioritize the critical people issues. What will happen if you fail to address them? Remember you are trying to identify where you should be focusing your efforts and resources. Step 6: Develop consequences and solutions For each critical issue highlight the options for managerial action generate, elaborate and create don’t go for the obvious. This is an important step as frequently people. jump for the known rather than challenge existing assumptions about the way things have been done in the past. Think about the consequences of taking various couises of action. Consider the mix of HR systems needed to address the issues. Do you need to improve

communications, training or pay? What are the implications for the business and the personnel function? Once you have worked through the process it should then be possible to translate the action plan into broad objectives. These will need to be broken down into the specialist HR Systems areas of: • employee training and development • management development • organization development. • performance appraisar • employee reward • employee selection and recruitment • manpower planning • communication Develop your action plan around the critical issues Set targets and dates for the accomplishment of the key

objectives. Step 7: Implementation and evaluation of the action plans The ultimate purpose of developing a human resource strategy is to ensure that the objectives set are mutually supportive so that the reward and payment systems are integrated with employee training and career development plans. There is very little value or benefit in training people only to then frustrate them through a failure to provide ample career and development opportunities.

Q. 13. Name the various functions of Human resource management. Ans. The various functions are 1. Ans. Selection

2. Training and Development 3. Performance Evaluation and Management 4. Promotions 5. Redundancy 6. Industrial and Employee Relations 7. Record keeping of all personal data. 8 Compensation, pensions, bonuses etc m liaison with Payroll 9 Confidential advice to internal ‘customers’ m relation to problems at work & 10. Career development

Q. 14. Define Human Resources. Ans. Human resource is a term with which many organizations describe the combination of traditionally administrative personnel functions with performance, Employee Relations and resource planning The field draws upon concepts developed

in Industrial/Organizational Psychology. Human resources has at leat two related interpretations depending on context. The original usage derives from political economy and economics where it was traditionally called labour, one of four factors of production The more common usage within corporations and businesses refers to the individuals within the firm, and to the portion of the firm’s organization that deals with hiring,firing, training, and other personnel issues.

Q. 15. Importance of HR planning. Ans. Planning is not as easy as one might think because it requires a concerted effort to come out with a programme that would easy your work. Commencing is complicated but once you start and finish it you have a smile

because everything moves smoothly Planning is a process that have to be commenced from somewhere and completed for a purpose. It involves gathering information that would enable managers and supervisors make sound decisions. The information obtained is also utilized to make better actions for achieving the objectives of the Organization. There are many factors that you have to look into when deciding for an HR Planning Programme. HR Planning involves gathering of information, making objectives, and making decisions to enable the organization achieve its objectives. Surprisingly, this aspect of HR is one of the most neglected in the HR field. When HR Planning is applied properly in the field of HR Management, it would assist to address the following questions: 1. How many staff does the Organization have? 2. What type of employees as far as

skills and abilities does the Company have? 3. How should the Organization best utilize the available resources ? 4. How can the Company keep its employees? HR planning makes the organization move and succeed in the 2[St Century that we/ are in. Human Resources practitioners who prepare the HR Planning programme would assist the Organization to manage its staff strategically The programme assist to direct the actions of HR department. The programme does not assist the Organization only but it will also facilitate the career planning of the employees and assist them to achieve the objectives as well. This augment motivation and the Organization would become a good place to work. HR Planning forms an important part of Management information system. HR have an enormous task keeping pace with all the changes and ensuring that the Right people are

available to the Organization at the right time. It is changes to the Composition of the workforce that force managers to pay attention to HR planning The changes in composition of workforce not only influence the appointment to staff, but also the methods of selection, training, compensation and motivation. It ecomes very critical when Organizations merge, plants are relocated, and activities re scaled down due to financial problems.

Q. 16. Describe the steps required for HR planning, Ans. Various steps in HR planning Forecasting HR Planning requires that we gather data on the Organizational goals objectives, One should understand where the Organization wants to go and how it wants to get to that point. The needs of the employees

are derived from the corporate objectives of the Organization. They stern from shorter and medium term objectives and their conversion into action budgets (eg) establishing a new branch in New Delhi by January 2006 and staff it with a Branch Manager (6,000 USD, Secretary 1,550 USD, and two clerical staff 800 USD per month. Therefore, the HR Plan should have a mechanism to express planned Company strategies into planned results and budgets so that these can be converted in terms of numbers and skills required. Inventory After knowing what human resources are required in the Organization, the next step is to take stock of the current employees in the Organization. The HR inventory should not only relate to data concerning numbers, ages, and locations, but also an analysis of individuals and skills. Skills inventory provides valid information on professional and technical skills

and other qualifications provided in the firm. It reveals what skills are immediately available when compared to the forecasted HR requirements. Audit We do not live in a static World and our HR resources can transform dramatically. HR inventory calls for collection of data the HR audit requires systematic examination and analysis of this data. The Audit looks at what had occurred in the past and at present in terms of labour turn over, age and sex groupings, training costs and absence. Based on this information, one can then be able-to predict what will happen to HR in the future in the Organization. HR Resource Plan Here we look at career Planning and HR plans. People are the greatest asserts in any Organization. The Organization is at liberty to develop its staff at full pace in the way ideally suited to their individual capacities. The main reason is that

the Organization’s objectives should be aligned as near as possible, or matched, in order to give optimum scope for the developing potential of its employees. There fore areer planning may also be referred to as HR Planning or succession planning. The questions that should concern us are: (a)Are we making use of the available talent we have in the Organization, and have we an enough provision for the future? (b)Are employees satisfied with our care of their growth in terms of advancing their Career? Assignment of individuals to planned future posts enable the administration to ensure that these individuals may be suitably prepared in advance. Actioning of Plan There are three fundamentals necessary for this first step. (1) Know where you are going. (2) There must be acceptance and

backing from top management for the planning. (3) There must be knowledge of the available resources (i.e.) financial, physical and human (Management and technical). Once in action, the HR Plans become Corporate plans. Having been made and concurred with top management, the plans become a part of the company’s long-range plan. Failure to achieve the HR Plans due to cost, or lack of knowledge, may be a serious constraints on the long-range plan. Below is an illustration of how HR Plan is linked to corporate Plan. The link between HR Plan and Strategic Management

Monitoring and Control. This is the last stage of HR planning in the Organization. Once the programme has been accepted and implementation launched, it has to be controlled. HR department has to make a follow up to see what is happening in terms of the available resources. The idea is to make sure that we make use of all the available talents that are at our disposal failure of which we continue to struggle to get to the top.

Q. 17. What is the bad impact of poor HR Planning. Ans. Poor HR planning and lack of it in the Organization may result in,

huge costs and financial loses. It may result in staff posts taking long to be filled. This augment costs and hampers effective work performance because employees are requested to work unnecessary overtime and may not put more effort due to fatigue, If given more work this may stretch them beyond their limit and may cause unnecessary disruptions to the production Of the Organization. Employees are put on. a disadvantage because their live programmes are disrupted and they are not given the chance to plan for their career development. The most important reason why HR Planning should be managed and implemented is the costs involved. Because costs forms an important part of the Organizations budget. workforce Planning enable the Organization to provide HR provision costs. When there is staff shortage, the organization should not just appoint discriminately, because of tl costs implications of the other options, such as training and

transferring of staff, have to be considered.

Q. 18. Describe the functions of HRM in detail. Ans. Function 1 : Manpower planning The penalties for not being correctly staffed are costly. • Understaffing loses the business economies of scale and specialization, orders. customers and profits. • Overstaffing is wasteful and expensive, if sustained, and it is costly to eliminate because of modem legislation in respect of redundancy payments, consultation. minimum periods of notice, etc. Very importantly, overstaffing reduces the competitive efficiency of the business. Planning staff levels: requires that an assessment of present and future needs of tl organization be

compared with present resources and future predicted resources Appropriate steps then be planned to bring demand and supply into balance. Thus the first step is to take a ‘satellite picture’ of the existing workforce profile (numbers, skills, ages, flexibility, gender, experience, forecast capabilities, character, potential, etc. of existing employees) and then to adjust this for 1, 3 and 10 years ahead by amendments for normal turnover, planned staff movements, retirements,tc, in line with the business plan for the corresponding time frames. The result should be a series of crude supply situations as would be the outcome of present planning if left unmodified. (This, clearly, requires a great deal of information accretion, classification and statistical analysis as a subsidiary aspect of personnel management)

-.What future demands will be is only influenced in part by the forecast of the personnel manager, whose main task may well be to scrutinize and modify the crude predictions of other managers. Future staffing needs will derive from Sales and production forecasts • The effects of technological change on task needs • Variations in the efficiency productivity, flexibility of labor as a result of training, work study, organizational change, new motivations, etc. • Changes in employment practices (e.g. use of subcontractors or agency staffs, hiving-off tasks, buying in, stibstitution, etc.) Variations, which respói?1 to new legislation; e.g. payroll taxes or their abolition,new health and safety requirements. • Changes in Government policies (investment incentives, regional or

trade granetc.) What should emerge from this blue sky gazing’ is a thought out’ and logical staffing demand schedule for varying dates in the future which can then be compared with the crude supply schedules. The comparisons will then indicate what steps must be taken to achieve a balance. That, in turn, will involve the further planning of such recruitment, training, retraining, labor reductions (early retirement/redundancy) or changes in workforce utilization as will bring supply and demand into equilibrium, not just as a one-off but as a continuing workforce planning exercise the inputs to which will need constant varying to reflect ‘actual’ as against predicted experience on the supply side and changes in production actually achieved as against forecast n the demand side. Function 2: Recruitment and selection of employees

Recruitment of staff should be preceded by An. analysis of the job to be done (i.e. an analytical study of the tasks to be performed to determine their essential factors) written into a job description so that the selectors know what physical and mental charateristics applicants must possess, what qualities and attitudes are desirable and what characteristics are a decided disadvantage; • In the case of replacement staff a critical questioning of the need to recruit at all (replacement should rarely be an automatic process). • Effectively, selection is ‘buying’ an employee (the price being the wage or salary multiplied by probable years of service) hence bad buys can be very expensive. For that reason some firms (and some firms for particular jobs) use external expert consultants for recruitment and selection.

• Equally some small organizations exist to ‘head hunt’, i.e. to attract staff with high reputations from existing employs to the recruiting employer However the ‘cost’ of poor selection is such that, even for the mundane day-to-day jobs, those who recruit and select should be well trained to judge the suitability of applicants. The main sources of recruitment are : • Internal promotion and internal introductions (at times desirable for morale purposes) • Careers officers (and careers masters at schools) • University appointment boards • Agencies for the unemployed . • Advertising (often via agents for specialist posts) or the use of othçr local media (e.g. commercial radio)

Where the organization does its own printed advertising it is useful if it has some identifying logo as its trade mark for rapid attraction and it must take care not to offend the sex, race, etc. antidiscrimination legislation either directly or indirectly. The form on which the applicant is to apply (personal appearance, letter of application, completion of a form) will vary according to the posts vacant and-numbers to be recruited. It is very desirable in many jobs that claim about experience and statements about qualifications, are thoroughly checked and that applicants unfailingly complete a health questionnaire (the latter is not necessarily injurious to the applicants chance of being appointed as firms are required to employ a percentage of disabled people). Before letters of appointment are sent any doubts about medical

fitness or capacity (in employments where hygiene considerations are dominant) should be resolved by requiring by requiring applicants to attend a medical examination. This is especially so where, as for example in the case of apprentices, the recruitment is for a contractual period or involves the firm in training costs. Interviewing can be carried out by indviduals (e.g. supervisor or departmental manager),by panels of interviewers or in the form of sequential interviews by different experts and can vary from a five minute chat’ to a process of several days. Ultimately personal skills in judgement are probably the most important, but techniques to aid judgement include selection testing for: • Aptitudes (particularly useful for school leavers) • Attainments -

• General intelligence (All of these need skilled testing and assessment.) In more senior posts other techniques are : • Leaderless groups • Command exercises Group problem solving (These are some common techniques — professional selection organizations often use Other techniques to aid in selection.) Training in interviewing and in appraising candidates is clearly essential to good recruitment.Largely the former consists of teaching interviewers how to draw ou4- the interviewee and the latter how to xratex the candidates. For consistency (and as an aid to checking that) rating often consists of scoring candidates for experience, knowledge, physical/ mental capabilities, intellectual levels, motivation, prospective potential, leadership abilities etc.

(according to the needs of the post). Application of the normal curve of distribution to scoring eliminates freak judgements Functions 3: Employee motivation To retain good staff and to encourage them to give of their best while at work requires attention to the financial and psychological and even physiological rewards offered by the organization as a continuous exercise. Basic financial rewards and conditions of service (e.g. working hours per week) are determined externally (by national bargaining or government minimum wage legislation) in many occupations but as much as 50 per cent of the gross pay of manual workers is often the result of local negotiations and details (e.g. which particular hours shall be worked) of conditions of services are often more important than the basics. Hence there is scope for financial and other motivations to be used at local

levels. As staffing needs will vary with the productivity of the workforce (and the industrial peace achieved) so good personnel policies are desirable. The latter can depend upon other factors (like nvironment, welfare, employee benefits, etc.) but utiless the wage packet is accepted as ‘fair and just’ there will be no motivation. Hence while the technicalities of payment and other systems may be the concern of others, the outcome of them is a matter of great concern to human resource management. Increasingly the influence of behavioral science discoveries are becoming important not merely because of the widelyacknowledged limitations of money as a motivator, but because of the changing mix and nature of tasks (e.g. more service and professional jobs and far fewer unskilled and

repetitive production jobs). The former demand bettereducated, mobile and multi-skilled employees much more likely to be influenced by things like job satisfaction, involvement, participation, etc. than the economically dependent employees of yesteryear. Hence human resource management must act as a source of information about and a source of inspiration for the application of the findings of behavioral science. It may be a matter of drawing the attention of senior mangers to what is being achieved elsewhere and the gradual education of middle managers to new points of view on job design, work organization and worker autonomy. Function 4: Employee evaluation An organization needs constantly to take stock of its workforce and to assess its Performance in existing jobs for

three reasons: • To improve organizational performance via improving the performance of Individual contributors (should be an automatic process in the case of good managers, but (about annually) two key questions should be posed: • What has been done to improve the performance of a person last year ? • and what can be done to improve his or her performance in the year to come?) • To identify potential, i.e. to recognize existing talent and to use that to fill vacancies higher in the organization or to transfer individuals into jobs where better use can be made of theirabi1ities or developing skills. • To provide an equitable method of linking payment to performance where there are no numerical criteria (often this

salary performance review takes place about three months later and is kept quite separate from 1. and 2. but is based on the same assessment). On-the-spot managers and supervisors, not HR staffs, carry out evaluations. The personnel role is usually that of: Advising top management of the principles and objectives of an evaluation system and designing it for particular organizations and environments. Developing systems appropriately in consultation with managers, supervisors and staff representatives. Securing the involvement and cooperation of appraisers and those to be appraised. Assistance in the setting of objective standards of evaluation/ assessment, for






5. 6.


example Defining targets for achievement; Explaining how to quantify and agree objectives; Introducing self-assessment; Eliminating complexity and duplication. Publicizing the purposes of the exercise and explaining to staff how the system will be used.

Organizing and establishing the necessary training of managers and supervisors whp will carry out the actual evaluations/ appraisals. Not only training in principles and procedures but also in the human relations skills necessary. (Lack of confidence in their own ability to handle situations of poor performance is the main weakness of assessors.) Monitoring the scheme — ensuring it does not fall into disuse, following up on training/ job exchanges etc. recommendations, reminding managers of their responsibilities.

Full-scale periodic reviews should be a standard feature of schemes since resistance to evaluation/appraisal schems is common and the temptation to water down or render schemes ineffectual is ever present (managers resent the time taken if nothing else). Basically an evaluation -appraisal scheme is a formalization of what is done in a more casual manner anyway (e.g. if there is a vacancy, discussion about internal moves and internal attempts to put square pegs into ‘squarer holes’ are both the results of casual evaluation). Most managers approve merit payment and that too calls for evaluation. Made a standard routine task, it aids the development of talent, warns the inefficient or uncaring and can be an effective form of motivation.

Q. 19. What are HRM Policies ? Ans. Whatever the size of the

organization and however the HRM function is structured and located, there will be a need to communicate to employees their terms and conditions of employment. These employment guidelines are usually reflected in the HRM policies. The HRM policies are general statements that serve to guide decision making. As guides rather than as hard and fast rules, policies are somewhat flexible, requiring interpretation and judgment in their use. Some potential policy statements that affect HRM would be: the provision of a safe place for employees to work the encouragement of all employees to achieve as much of their human potential as possible. the provision of remuneration that will encourage a high level of productivity ensuring that current employees are considered first for any vacancy that might occur. the provision for voluntary and involuntary


Q. 2O Describe the functions and activities of HRM. Ans. In order to achieve the objectives of an organisation, the HRM section or department must carry out a number of functions. The key functions of HRM can be summarized as the acquisition, maintenance, development and termination of employees.

Management Information System Acquisition. This is the ‘getting’ phase of HRM. It includes estimating both the future demand and supply for human resources and integrating these resources into a total human resource strategy. In other words, the objectives and future directions of the organisation must be known before any reliable forecasts of people needs can be made. The acquiring process includes recruiting, selection and the socialization or induction of new employees. Maintenance. This is the ‘keeping’

function and involves providing benefits, services and working conditions that are needed if inviduals are to remain committed to the workplace. Development. This encompasses the whole domain of training and development, which has become a major area of concern and expense for organisations. Developing also includes the concept of organisational change and development and how these processes impact upon employees. Termination. This is the ‘saying goodbye’ activity and is sometimes known as the separation phase of employment It involves such issues as retirement, redundancy, resignation and dismissal. These issues have become of major importance in organizations in recent years. Moreover, here have been many legislative developments in Australia that have had a major impact on the arrangements for terminating the employment contract. (The Howard government

is proposing further reforms to industrial relations in Australia in 2005 which will make it easier for employers to terminate employees by reducing their protection against ‘unfiar dismissal’. The HRM functions are broad sweeping. Within each of these functions there are a number of activities that human resource specialists must carry out if these functions are to be fulfilled. Human resources activities are those actions taken to provide and maintain an appropriate workforce for the organisation. The five most common activities of HRM personnel in organizations are identified as: planning for human resource needs staffing identified personnel need Performance management and remuneration for employees Improving employees and the work environment Establishing and maintaining

effective working relationships.

Q. 21. Define HRD. Ans. Human Resource Development is the framework for helping employees develop their personal and organizational skills, knowledge and abilities. Human Resource Development includes such opportunities as employee training, employee career development, performance management and development, coaching, succession planning, key employee identification and organization development.

Q. 22. What is the Importance of HRM in changing scenario of Indian Business Ans. India is today one of the six fastest growing economies of the world. The country ranked fourth in

terms Purchasing Power Parity (PPP) in 2001. The business and regulatory environment is evolving and moving towards constant improvement. A highly talented, skilled and English-speaking human resource base forms its backbone. The Indian economy has transformed into a vibrant, rapidly growing consumer market, comprising over 300 million strong middle class with increasing purchasing power. India provides a large market for consumer goods on the one hand and imports capital goods and technology to modernize its manufacturing base on the other. The resource management is important in India is the east population. However,with the right amount of resources and technology. Management should only be as necessary as any other foreign industry. India has a serious lack of both. Royal families and natural resource speculators have manipulated the countries economic affairs to work entirely in their

favour. Therefore the even spacing of wealth and assets have been dramatically reduced. Effective management whether it be sector organization or human reourcingis vital in order to keep Indian industries intact let alone progress. People are our greatest asset’ is a mantra that companies have been chanting for years. But only a few companies have started putting Human Resources Management (HRM) systems in place that support this philosophy. There are a number of challenges in the Indian If industry which require the serious attention of HR managers to ‘find the right candidate’ and build a ‘conducive work environment’ which will be beneficial for the employees, as well as the organisation. The IT industry is already under stress on account of persistent problems such as attrition, confidentiality, and loyalty. Other problems are managing people, motivation to adopt new technology changes, recruitment and training,

performance management, development, and compensation management. With these challenges, it is. timely for organisations to rethink the ways they manage their people. Managing HR in the knowledge based industry is a significant challenge for HR managers as it involves a multi task responsibility. In the present scenario, HR managers perform a variety of responsibilities. Earlier their role was confined to administrative functions like managing manpower requirements and maintaining rolls for the organisation. Now it is more strategic as per the demands of the industry. Human resource management (HRM) is emerging as a vital component to.the growth potentials of any economy. The business conglomerations world wide and in India is considering better human resource generative patterns to cater to its needs structure. Billions of dollars are spent by companies in

training, recrutiment and performance maintenance to utilize the vast potential of personnel. HRM has evolved from mere recruitment styles to more complex methodologies overlapping many dimensions spanning from personality types of personnel to instructional research methods. In contemporary context, for organizations to excel and run successfully, collaboration with its ‘People’ coniponent is indispensable. Each change1 as it unfolds creates the need for HR practitioners to take a fresh look at then i, considerate attention and therafter leadership initiative to help the organizations seize competitive advantage. Indian business organizations are facing many challenges to be more innovative and customer driven; to renew and revitalize an organization; and to maximize return on investments, etc. These are challenges having several implications for HRM in terms of increased scope and significance in

the contemporary situation.. Thus the people management though had a revolutionary trend upto industrial relations approach, has been enjoying a transformation and evolutionary trend thereafter thus moving from ad-hoc people based decisions to the present rational and metric based decisions supported by metric based policies and practices. The nature of employment has also been phenomenally changing in an evolutionary manner from fixed hours to flexible hours, full time with extended hours to part-time and limited hours, time based to peformance assigned based payment methods and working from an office location to working from home and virtual locations and localised management control to global and virtual place of work demanding a complete re-look into the managing the work engagement pattern and work place. The globalisation has enhanced the technology, business and global

economics, phenomenal mergers and acquistions with sequential consolidation of the business activities, improved competitive edge and business standards, the, speed of business execution with global product and services. The market compulsions, global quality standards have phenomenally made a demand on HRM to change its structure, approach, functioning with a greater result orientation. Thus, HRM today is moving from just people driven to business driven approach. HR strategically with a business sense to be part of the mainstream of the organisation are expected to facilitate the following needs. * Accelerated turn-out rate in managing people to adapt, contribute and to align with organisation to facilitate apt and healthy competition.

* Managing growth, business process skills, facilitative growth and policies and practices that facilitates growth and merger and acquisitions, virtual campus, virtual money, company identity, networking competence across countries, people branding etc. * Promoting various forms of employment that are unconventional to meet various forms employment needs from local to national and further to international locations making it a global employment of larger. magnitude. * Managing heterogeneous work groups, business complexities, anticipative compensation and benefit practices, better coordination of resources and projects across geographies, managing cross-functional needs with

diagnostic and facilitation skills under geographical dispersed conditions, to match the speed of the activity and business with specific service level agreements for sustenance and growth of critical/niche process. Analysing its external environment, influences and trends (over which it has no control) Formulating plans to implement necessary changes. These four categories are important stages in the strategic planning process. Soft HRP is concerned with the formulation of the mission, goals objectives and strategy of the organisation and how variables such as growth, product, life cycle, competitive advantage and HR development will impact on its human resources. Hard HRP concerns the determination of the type of activities the HR department will need to carry out in order to

ascertain the appropriate level of human resources; whether its current level is sufficient; whether there is a deficiency in one department over another, etc. Again according to Torrington and Hall, hard HRP activities include: Forecasting: the number of employees that will be required in the future to support the demand for the organisation’s products and services. This forecasting also includes assessment of the internal and external supply of human resources. Analysis : of how current employees are being utilised throughout the organisation and how this impacts on demand Monitoring and review : reconciling HR plans with actual practice and facilitating amendments to plans as necessary.

Q. 23. Explain the Role of Human Resource Planning.

Ans . The prime role of HRP is to ensure that an organisation has the right quantity and quality of employees doing the right thing in the right place at the right time and at the right cost to the organisation. In achieving this, HRP has a number of more specific roles, as follows lo determine and facilitate the levels and types of recruitment that may be required To assess current levels and attributes of staffing and determine whether reductions are necessary (redundancy) To assess whether redeployment can be used as an alternative to downsizing To identify the need for training and development To assess current employment costs in relation to other organisational costs (wage costs account for over 60% of an organisation’s expenses)

Q. 24. Describe the process of Human Resource planning. Ans .I he process of HR planning is complex, but m its simplest from it centres around two main activities: Demand — forecasting the demand for staff within the various corporate functions. It entails analysing the information and determining the numbers and attributes (knowledge skills and atitudes) of staff that will be needed at any given time Supply — ensuring that the forecast level of demand can be met these activities must be proactive rather than reactive, which means that they must be planned. This requires extensive information about the nature of employment and employees within the organisation and of the labour market outside of it failing to establish a correct balance between the supply of, and demand for, labour in an Organisation can lead to Shortage of staff or of skills: if a

business employs fewer staff than it requires, it is unlikely to be able to meet its production and sales targets, machinery and stock will be unused, and its trading profit is likely to be reduced Surplus of staff a business which finds itself employing mon staff than it needs will incur wage and salary costs which cannot be funded from employing such staff on productive forms of activity These and other problems occur regularly in business, as employers have to adjust their trading plans in accordance with continual changes in market place conditions. HRP cannot protect an organisation from the need to adjust its personnel policies in response to changes in the market place. It can, however, provide for a more orderly adjustment, by attempting to identify in advance the trends in demand and supply of staff which indicate whether future needs should be met by recruitment and

training of new staff — or, alternatively by reducing the size of the workforce. The importance of HRP is that it provides the means of ensuring that personnel policies and their objectives are properly integrated into the business policies, goals and objectives.

Q.25. What are different stages of Human Resource planning. Ans .Four stages involved in the process of HRP: Analysis of Existing Resources A profile of the workforce, based on certain characteristics which are relevant for planning purposes — supplemented, in some instances, by analysis of certain issues, such as absenteeism or overtime working. HR Demand Forecasting An analysis of the staffing requirements nccessary for the organisation to succeed in achieving

its business objectives, taking into account the requirements of the corporate plan. HR Supply Forecasting A forecast of anticipated changes in the supply of labour - this takes account of anticipated losses from the existing workforce and the external supply of suitable staff from sources outside -the organisation. HR Plan By bringing together information obtained from the first three stages, an analysis of the action required to bridge the gap between the demand forecast and the supply forecast is ma4e. This action may determine the activities to be undertaken under several personnel policies.

Q. 26. What is HR Demand and Supply Forecasting. Ans.The HR demand forecast is an estimate of the numbers of staff

required in order to carry out the level of business or service which is anticipated. The basis of this should be a corporate forecast, from which the manpower needs can be derived. The HR forecast takes account of forecasts about the general economy, and those of the specific businuss or organisation, to arrive at the conclusion of whether to increase or decrease staff, and exactly what type of staff will be needed. This process is summarised in Figure.

The, supply of labour will depend on the availability of suitable staff who can be recruited from outside the organisation and the potential for

developing existing employees to meet new requirements.

Q. 27. What are the Basic Elements of Human Resource Practices. Ans. Planning and Appraisal. How an. organization sets goals, plans performance provides ongoing coaching, and evaluates performance of employees (individual and/or teams). Indiviaul and Team Development. How an organization identifies the needs for employee skill development, education and growth and how they meet those needs. Career Planning. How an organization strives to help employees to learn their strengths and to match these strengths, aptitudes, preferences

and abilities to future work. Hiring. I-Tow an organization defines and fills positions and roles with qualified people from within and/or outside the organization; how an organization orients these new employees. Career Pathing. How an organization (for key positions and roles) determines the logical progression of jobs, roles, assignments, and development to provide a sufficient pool of qualified candidates and icumbents. Succession Planning. How an organization systematically identifies key roles and positions, determines performance requirements and targets a group of people to fill these positions and roles in the future. Job Design. How an organization determines the best methods for accomplishing a work product or result. The two major types are the individual job and the team.

Classification. The systematic process for evaluating the size and appropriate salary ranges for different jobs and roles in an organization. Compensation WRecognitio Other Rewards. How an organization pays and rewards employees (individuals and/or teams), through salary, bonuses, benefits and/or non-financial rewards.

Q. 28. Explain the features of Human Resource Management (HRM). Ans. Human Resources Management is the planning, organizing, directing and controlling the operative functions of procurement, development, compensation and maintenance of human resource of an organization’s goals or objectives. It is responsible for getting the best people, training them and providing

mechanism to ensure that these employees maintain their productive affiliations with the organizations. 1. Scope/Goals of Human Resource Management Human Resource Management is concerned with the Teople’ dimensions of the organizations. The organizational objectives can be pest attained by acquiring human resource, develop their skills, motivate them for high performance and ensure that they continue to maintain their commitment and loyalty towards the organization. The scope of Human Resource Management is vast. It covers all the activities in the working life of an employee. The activities that come under the purview of Human Resource Management are (a) Human Resource Planning: This element involves determining the organizations human resource needs, strategies and philosophies. It involves analysis of the internal and external factors like skills

needed, number of vacanices, trends in the labour market etc. (b) Recruitment and Selection: Recruitment is concerned with developing a pool o1 candidates in line with the human resource plan. Selection is the process of matching people and their career needs and capabilities with the jobs and career paths. It ends with the ultimate hiring of a candidate. (c) Training and Development: This involves identification of individual potentialities and helping in the development of key competencies through planned learning process The competencies are to be developed to enable individuals to perform current as well as future jobs. (d) Organizational Development : This element assures healthy inter and intra-unit relationships. It helps work groups in initiating and managing change. (e) Career Development: It is

assuring an alignment of the management It is a process of achieving an optional match of individual and organizational needs if) Job Design This elemetl defines the tasks, authority and systems of a job It also ensures integration of individual jobs across the unit. (g) Performance Management System : The performance management systems ensure linkages between individual and organizational goals. It aims at ensuring that every individuals efforts and actions support the goals of the organization (h) Compensation and Benefits: This element focuses on a fiar, consistent and equitable compensation and benefits to the work force. (i) Employee Assistance The focus of this element is to provide problem solving counseling to individual employees.

The purpose is to help employees in overcoming personal and job-related problems. (J)Labour Relations : This variable assures healthy union-organization relationship.It aims at creating an environment of industrial peace and harmony (k) HR Research and Information Systems and Audit: This element ensures a reliable and proof HR information base. It not only evaluates personnel policies and programmes but also highlights the need and areas of change.

Q. 29. What are the Limitations of HR planning? Ans. (a) it is very difficult to ascertain the future manpower requirements of an organization, as the future is always uncertain. As such the predictions are bound to go wrong.

(b) Human Resource Planning is more relevant in countries that face scarcity of human resource In a country like India, Human Resource Planning is of little assistance since manpower. is available in abundance. Also the legal compulsions render Human Resource Planning redundant. (c) Human Resource Planning is a time-consuming and costly process. The recruitment and selection process is time-consuming and requires the services of experts. This can all add to the cost. (d) Human Resource Planning is beneficial in organizations that adopt a professional approach and at the same time are conscious about the changing environment. Traditional business houses often adopt a very indifferent approach towards environmental changes.This limits the scope of Human Resource Planning. . (e) Human Resource Planning are beneficial where adequate skilled

manpower is available. In cases where skilled manpower is not easily available, Human Resource Planning serves no. purpose. .. . (F) Human Resource Planning is also made difficult in organizations that have a very high labour turnover In such organizations Estimating the manpower requirments is a Herculean task While prediciting the retirement is easier, it is difficult to determine voluntary quits, prolonged illness and death This restricts the scope of Human Resource Planning.

Q. 30. Write a short note on. Ans. Human Resource Development in India HR holds a key position in any scheme of development because the development process is the sum total of our productive efforts, guided, managed and executed

through our human resource. India has realized the importance of HRD and vigorous efforts are on to break the shackles of all economic and social constrain through the application of the HRD concept and practices. Today, HR is the only factor that can facilitate effective use of science and technology. If India needs to develop, she has to attain the goal of molding HR in the right persprive. HRD helps in incorporating high levels of skills and knowledge. This not only leads to improvement of the quality of the product but also reduction of cost production. HRD approach will assist in evolving policies which will be useful in generating job satisfaction, career deyelopment opportunities and in alleviating the sense of frustrations among the human beings. Many organisations in India have started implementing HRD programmes. The objectives of HRD cannot be achieved without an effective HRM

system. Q. 31. Explain the Factor affecting Human Resource Planning. Ans. Human Resource planing is a dynamic is a dynamic and on-going process. This is because organization operates in unstable and unpredictable environment. HRP needs constant updating to effectively meet the changing strategies and objectives The process of updating is not very simple, since HRP is influenced by many factors. These are: (a) Type of Organization :The type of organization determines the production process and number and type of staff needed Manufacturing organizations have a more complex structure compared to service organization It goes without saying that the HRP differs according to the nature of the organization

(b) Strategy of Organization : The human resource needs of an organization depend on the strategic plan adopted by it. For example, growth of the business calls for hiring of additional labour, while mergers will need a plan for layoffs. (c) Environmental Uncertainties : Organizations operate under changing political, social and economic conditions. The environmental changes demand carefully formulated HR policies The HR manager has to evolve suitable mechanism to deal with uncertainties through career development, succession planning, retirement schemes etc. (d) Time period : Human Resource Planning also depend on the time period, and according short-term or long-term plans are adopted. The time span is based on the degree of environmental uncertainties For example, an organization operating in an unstable environment must adopt short-term plans, while an organization operating under failry

stable environment can adopt longterm plans (e) Information :The type and quality of information used in making forecasts is an important factor influencing Human Resource Planning In the absence of a well source developed information mechanism Human Resource Planning is just impossible Accurate and timely human resource information system helps in getting better quality personnel. (t) Nature of jobs being filled Job: vacancies are very common and arise due to promotions, retirements, termination of services growth, expansion, etc HRP is required to ensure that suitable candidates are recruited (g) Off-loading :This implies giving part of the organizations work to outside parties If an organization prefers off-loading to recruitment of more people, Human Resource Planning is not required.

Q. 32. Explain the Need and importance of Human Resource Planning. Ans .Human Resource planning translate the organization objectives and plans into the number of workers needed to meet these objectives. In the absence of HRP, estimation of an organization human resource need is reduced, to more guesswork. The need and in’ ort’nce of ‘Human RLsurce Planning’ is as follows (a) Future manpower requirements : Human Resource planning help in determining the future manpower requirements. In the absence of proper planning, an organization may face problems related to overstaffing and under-staffing. This can be avoided through HRP. (b) Adjusting to change :, Factors like competition, technology, government policies, etc. generate

changes in job contents, skill requirments, number and type of personnel, etc. Such changes can be effectively tackled through HRP. ‘ (c) Creating talented personnel : The present day’s job are becoming more complex and therefore demand exceptional intellectual skills. While the existing staff becomes redundant, the HR manager has to attract and retain qualified and skilled personnel. He is also required to deal with issues such as career development, succession planning, etc. HRP is an answer to all such questions. (d) Protection of weaker sections : An HR manager has to ensure that sufficient representation is given to candidates from weaker sections, physically handicapped and socially and politically oppressed citizens. A proper and realistic human resource plain is needed to ensure equal employment and promotional appointments to such groups. (e) Execution of personnel functions: HRP provides valuable

and timely information for desiging and execution of personnel functions like recruitment, selection, transfers, promotions, layoffs, training and development and performance appraisal. (F) Human assets : Every organization makes heavy investment in its human resource. This calls for effective use of the available skills and abilities. In the light of this increasing investment in huamn resource, HRP becomes indispensable. (g) Breaking the resistance to change: It is a known fact the employees resist change. The resistance is due to family attachments, fear of failure to cope with new jobs, new environment, etc. The organization can no longer move its employees anywhere and any time it wants. The only way out of this problem is planning. (h) Reduction in personnel costs :HRP helps the organization to anticipate imbalances in HR. This, in turn, facilitates reduction in

personnel costs. (t) Managerial development: HRP faciliates planning for future needs. This helps in better planning of assignments to develop managers and to ensure that the organization has a steady supply of experienced and skilled employees. (j) International strategies : Global operations are becoming very common. International expansion strategies are not possible without HRP. -it facilitates the process of meeting staffing needs.