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Chapter 1 Introduction to human resource management

Definition (concept for 2 marks) - Edwin Flippo defies HRM as
planning, organizing, directing, 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

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

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 1940s to 1960s saw the
introduction of new technology to help workers.
The 1960s 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 70s the focus was on
efficiency of labour wile in the 80s the focus was on new technology,
making it necessary for new rules and regulations. In the 90s 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

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

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
Challenges before the HR manager/before modern personnel

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 creating gender sensitivity
and in providing a good working environment to the women

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 regarding 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

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 currently
working but also in other companies which the employees may join
in the future.

3. Better relations between union and management :-
Healthy HRM practices can help the organization to
maintain co-ordinal relationship with the unions. 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.

4. Helps an individual to work in a team/group :-
Effective HR practices teach individuals team work and
adjustment. The individuals are now very comfortable while
working in team thus team work improves.

5. Identifies person for the future :-
Since employees are constantly trained, they are ready to
meet the job requirements. The company is also able to identify
potential employees who can be promoted in the future for the top
level jobs. Thus one of the advantages of HRM is preparing people
for the future.

6. Allocating the jobs to the right person :-
If proper recruitment and selection methods are followed, 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.

7. 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.

Chapter 2 Job analysis, 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. Job analysis is the process of
studying and collecting information relating to operations and
responsibilities of a specific job. It can be explained with the help of the
following diagram

Job analysis

Job description Job specification

Job title/ name of the job Qualification

Working hours Qualities

Duties and responsibilities Experience

Working conditions Family background

Salary and incentives Training

Machines to be handled on the job 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.
b) Job specification
where we explain the qualities required by people applying for the job.

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. Job analysis is the process
of studying and collecting information relating to operations and
responsibilities of a specific job.
The following are the benefits of job analysis.

1. Organizational structure and design :-
Job analysis helps the organization to make suitable changes
in the organizational structure, so that it matches the needs and
requirements of the organization. Duties are either added or deleted
from the job.

2. Recruitment and selection :-
Job analysis helps to plan for the future human resource. It
helps to recruit and select the right kind of people. It provides
information necessary to select the right person.

3. Performance appraisal and training/development :-
Based on the job requirements identified in the job analysis,
the company decides a training program. Training is given in those
areas which will help to improve the performance on the job.
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.

4. Job evaluation :-
Job evaluation refers to studying in detail the job
performance by all individual. The difficulty levels, skills required
and on that basis the salary is fixed. Information regarding qualities
required, skilled levels, difficulty levels are obtained from job

5. 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. Similarly when we transfer an employee to another
branch the job must be very similar to what he has done before. To
take these decisions we collect information from job analysis.

6. Career path planning :-
Many companies have not taken up career planning for their
employees. This is done to prevent the employee from leaving the
company. When we plan the future career of the employee,
information will be collected from job analysis. Hence job analysis
becomes important or advantageous.
7. Labour relations :-
When companies plan to add extra duties or delete certain
duties from a job, they require the help of job analysis, when this
activity is systematically done using job analysis the number of
problems with union members reduce and labour relations

8. Health and safety :-
Most companies prepare their own health and safety, plans
and programs based on job analysis. From the job analysis
company identifies the risk factor on the job and based on the risk
factor safety equipments are provided.

9. 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, this
information is collected from job analysis, which is why job
analysis becomes important.

Methods of job analysis (5/10 marks)

Def: - A job is defined as a collection of duties and responsibilities which
are given together to an individual employee. Job analysis is the process
of studying and collecting information relating to operations and
responsibilities of a specific job.
There are different methods used by organization to collect information
and conduct the job analysis. These methods are

1. Personal observation :-
In this method the observer actually observes the concerned
worker. 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, job analysis is prepared.

2. 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, the difficulty level of the job, the efforts
required etc.
3. Interview method :-
In this method an interview of the employee is conducted. A
group of experts conduct the interview. They ask questions about
the job, skilled levels, and difficulty levels. They question and
cross question and collect information and based on this
information job analysis is prepared.

4. 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, how it was handled, qualities
required and difficulty levels etc. critical incident method gives an
idea about the job and its importance. (a critical means important
and incident means anything which takes place in the job)

5. Questioner method :-
In this method a questioner is provided to the employee and
they are asked to answer the questions in it. The questions may be
multiple choice questions or open ended questions. The questions
decide how exactly the job analysis will be done. The method is
effective because people would think twice before putting anything
in writing.

6. Log records :- (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. A log record is a book in which employees record
/write all the activities performed by them on the job. The records
are extensive as well as exhausted in nature and provide a fair idea
about the duties and responsibilities in any job.

7. HRD records :-
Records of every employee are maintained by HR
department. The record contain details about educational
qualification, name of the job, number of years of experience,
duties handled, any mistakes committed in the past and actions
taken, number of promotions received, area of work, core
competency area, etc. based on these records job analysis can be
Job design

Definitions: - (2marks)
Job design is the process of
a) Deciding the contents of the job.
b) Deciding methods to carry out the job.
c) Deciding the relationship which exists in the organization.
Job analysis helps to develop job design and job design matches the
requirements of the job with the human qualities required to do the job.

Factors affecting job design: - There are various factors which affect job
design in the company. They can be explained with the help of diagram.

Factors affecting job design

Behavioral factors
1. Task
1. Employee
availability and
1. Feed back
2. Process or flow
of work in
2. Social and
2. Autonomy
3. Ergonomics 3. Variety
4. Work practices

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, how the job design must be done. Incase
the company is not in a position to appoint many people; a single
job may have many duties and vice versa.
b) The process or flow of work in the organization :-
There is a certain order in which jobs are performed in the
company. 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.

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.

d) Work practices :-
Every organization has different work practices. Although
the job may be the same the method of doing the job differs from
company to company. This is called work practice and it affects
job design.

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.
They are not able to get employees with specific education levels
for jobs and have to depend on other countries due to this job
design gets affected.

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, auspicious time, inauspicious time, etc. to
suit the Indian conditions. This applies to every country and
therefore job design will change accordingly.

III] Behavioral factors :-
Job design is affected by behavioral factors also. These factors are

a) Feedback :-
Job design is normally prepared on the basis of job analysis
and job analysis requires employee feedback based on this
employee feedback all other activities take place. Many employees
are however not interested in providing a true feedback because of
fear and insecurity. This in turn affects job deign.

b) Autonomy :-
Every worker desires a certain level of freedom to his job
effectively. This is called autonomy. 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 effectively.

c) Variety :-
When the same job is repeated again and again it leads to
burden and monotony. This leads to lack of interest and
carelessness on the job. Therefore, while preparing job design
certain amount of variety must be provided to keep the person
interested in the job.

Methods of job design

There are various methods in which job design can be carried
out. These methods help to analysis the job, to design the contents of the
and to decide how the job must be carried out .these methods are as
follows :- (5 marks each)

I. Job rotation
II. Job enlargement
III. Job enrichment

I. Job Rotation :- (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. The company tracks his performance on every job and
decides whether he can perform the job in an ideal manner. Based on
this he is finally given a particular posting.

Job rotation is done to decide the final posting for the employee e.g.
Mr. A is assigned to the marketing department whole he learns all
the jobs to be performed for marketing at his level in the
organization .after this he is shifted to the sales department and to
the finance department and so on. 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. Avoids monopoly :-
Job rotation helps to avoid monopoly of job and enable the
employee to learn new things and therefore enjoy his job

2. Provides an opportunity to broaden ones knowledge :-
Due to job rotation the person is able to learn different job in
the organization this broadens his knowledge

3. Avoiding fraudulent practice :-
In an organization like bank jobs rotation is undertaken to
prevent employees from doing any kind of fraud i.e. 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.

Disadvantages of Job Rotation

1. Frequent interruption :-
Job rotation results in frequent interruption of work .A
person who is doing a particular job and get it comfortable
suddenly finds himself shifted to another job or department .this
interrupts the work in both the departments

2. Reduces uniformity in quality :-
Quality of work done by a trained worker is different from
that of a new worker .when a new worker I shifted or rotated in the
department, he takes time to learn the new job, makes mistakes in
the process and affects the quality of the job.

3. Misunderstanding with the union member :-
Sometimes job rotation may lead to misunderstanding with
members of the union. The union might think that employees are
being harassed and more work is being taken from them. In reality
this is not the case.
Job enlargement

There are various methods in which job design can be carried out. These
methods help to analysis the job, to design the contents of the and to
decide how the job must be carried out .these methods are as follows :- (5
marks each)

I. Job rotation
II. Job enlargement
III. Job enrichment

II. Job enlargement :- (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. Job enlargement involves combining various activities
at the same level in the organization and adding them to the existing
job. It increases the scope of the job. It is also called the horizontal
expansion of job activities.
Jon enlargement can be explained with the help of the
following example - If Mr. 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. A performs 7 activities on the job.
It must be noted that the new activities which have been
added should belong to the same hierarchy level in the organization.
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 employees skill. Job enlargement is
also essential when policies like VRS are implemented in the

Advantages of job enlargement

1. 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.

2. Improves earning capacity :-
Due to job enlargement the person learns many new
activities. When such people apply foe jobs to other companies
they can bargain for more salary.

3. Wide range of activities :-
Job enlargement provides wide range of activities for
employees. Since a single employee handles multiple activities the
company can try and reduce the number of employees. This
reduces the salary bill for the company.

Disadvantages of job enlargement

1. Increases work burden :-
Job enlargement increases the work of the employee and not
every company provides incentives and extra salary for extra work.
Therefore the efforts of the individual may remain unrecognized.

2. Increasing frustration of the employee :-
In many cases employees end up being frustrated because
increased activities do not result in increased salaries.

3. 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. These
methods help to analysis the job, to design the contents of the and to
decide how the job must be carried out .these methods are as follows :- (5
marks each)

I. Job rotation
II. Job enlargement
III. Job enrichment

III. Job enrichment :- (concept 2 marks)
Job enrichment is a term given by Fedric herzberg.
According to him a few motivators are added to a job to make it
more rewarding, challenging and interesting. According to
herzberg the motivating factors enrich the job and improve
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. The motivating factors can be

a) Giving more freedom.

b) Encouraging participation.

c) Giving employees the freedom to select the method of

d) Allowing employees to select the place at which they would
like to

e) Allowing workers to select the tools that they require on the

f) Allowing workers to decide the layout of plant or office.

Job enrichment gives lot of freedom to the employee but at the
same time increases the responsibility. Some workers are power
and responsibility hungry. Job enrichment satisfies the needs of the

Advantages of job enrichment

1. Interesting and challenging job :-
When a certain amount of power is given to employees it
makes the job more challenging for them, we can say that job
enrichment is a method of employee empowerment.

2. Improves decision making :-
Through job enrichment we can improve the decision
making ability of the employee by asking him to decide on factory
layout, method and style of working.

3. Identifies future managerial caliber :-
When we provide decision making opportunities to
employees, we can identify which employee is better that other in
decision making and mark employees for future promotion.
4. Identifies higher order needs of employees :-
This method identifies higher order needs of the employee.
Abraham maslows theory of motivation speaks of these higher
order needs e.g. ego and esteemed needs, self actualization etc.
These needs can be achieved through job enrichment.

5. Reduces work load of superiors :-
Job enrichment reduces the work load of senior staff. When
decisions are taken by juniors the seniors work load is reduced.

Disadvantages of job enrichment

1. Job enrichment is based on the assumptions that workers have
complete knowledge to take decisions and they have the right
attitude. In reality this might not be the case due to which there can
be problems in working.

2. Job enrichment has negative implications ie. Along with usual
work decision making work is also given to the employees and not
many may be comfortable with this.

3. Superiors may feel that power is being taken away from them and
given to the juniors. This might lead to ego problems.

4. This method will only work in certain situations. Some jobs
already give a lot of freedom and responsibility; this method will
not work for such jobs.

5. Some people are internally dissatisfied with the organization. For
such people no amount of job enrichment can solve the problem.

Chapter 3 Human resource planning/manpower planning

Def. of human resource planning :- (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. 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.
From human resource planning the organization identifies how
many people it has currently and how many people will be required in
future. Based on this information major human resource decisions are

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. 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.
The process of HRP involves various steps they can be explained
with the help of the following diagram.

Human resource planning

Personal requirement Personal supply
Forecast Forecast

Yes No

Personal Personal
Surplus Shortage
(100=125) (100=75)

Layoff Overtime
Termination Recruitment/hiring
VRS Subcontracting


1. Personnel requirement forecast :-
This is the very first step in HRP process. Here the HRP
department finds out department wise requirements of people for
the company. The requirement consists of number of people
required as well as qualification they must posses.

2. Personnel supply forecast :-
In this step, HR department finds out how many people are
actually available in the departments of the company. The supply
involves/includes number of people along with their qualification.

3. Comparison:-
Based on the information collected in the 1
and 2
step, the
HR department makes a comparison and finds out the difference.
Two possibilities arise from this comparison

a. No difference :-
It is possible that personnel requirement = personnel
supplied. In this case there is no difference. Hence no
change is required.

b. Yes, there is a difference :-
There may be difference between supply and
requirement. The difference may be
i. Personnel surplus
ii. Personnel shortage

4. Personnel surplus :-
When the supply of personnel is more than the requirement,
we have personnel surplus. We require 100 people, but have 125
people. That is we have a surplus of 25 people. Since extra
employees increase expenditure of company the company must try
to remove excess staff by methods of
i. Layoff
ii. Termination
iii. VRS/CRS

5. Personnel shortage :-
When supply is less than the requirement, we have personnel
shortage. We require 100 people; we have only 75 i.e. we are short
of 25 people. In such case the HR department can adopt methods
like Overtime, Recruitment, Sub-contracting to obtain new
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. 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.
The process of HRP plays a very important role in the
organization. The importance of HRP can be explained as follows.

1. Anticipating future requirement :-
Thru this process of HRP, the company is able to find out
how many people will be required in future. Based on this
requirement the company could take further actions. This method
also helps the company to identify the number of jobs which
will become vacant in the near future.

2. Recruitment and selection process :-
The recruitment and selection process is a very costly affair
for a company. Many companies spend lakhs of rupees on this
process. Therefore recruitment and selection must be carried out
only if it is extremely necessary. HRP process helps to identify
whether recruitment and selection are necessary or not.

3. Placement of personnel :-
Since the HRP process is conducted for the entire
organization, we can identify the requirements for each and every
department. Based on the requirement, we can identify existing
employees and place them on those jobs which are vacant.

4. Performance appraisal :-
HRP make performance appraisal more meaningful. Since
feedback is provided in performance appraisal and employee is
informed about his future chances in same company, the employee
is motivated to work better. Information for all this is collected
from HRP process.

5. Promotion opportunity :-
HRP identifies vacancies in the entire organization including
all the branches of all the company. Therefore when the company
implements promotion policy it can undertake its activities in a
very smooth manner.
Limitations of human resource planning

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. 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.
Although HRP is a very advantageous method it has some
limitations which can be explained as follows

1. The future is uncertain :-
The future in any country is uncertain i.e. there are political,
cultural, technological changes taking place every day. This effects
the employment situation. Accordingly the company may have to
appoint or remove people. Therefore HRP can only be a guiding
factor. We cannot rely too much on it and do every action
according to it.

2. Conservative attitude of top management :-
Much top management adopts a conservative attitude and is
not ready to make changes. The process of HRP involves either
appointing. Therefore it becomes very difficult to implement HRP
in organization because top management does not support the
decisions of other department.

3. Problem of surplus staff :-
HRP gives a clear out solution for excess staff i.e.
Termination, layoff, VRS,. However when certain employees are
removed from company it mostly affects the psyche of the existing
employee, and they start feeling insecure, stressed out and do not
believe in the company. This is a limitation of HRP i.e. it does not
provide alternative solution like re-training so that employee need
not be removed from the company.

4. Time consuming activity :-
HRP collects information from all departments, regarding
demand and supply of personnel. This information is collected in
detail and each and every job is considered. Therefore the activity
takes up a lot of time.
5. Expensive process :-
The solution provided by process of HRP incurs expense.
E.g. VRS, overtime, etc. company has to spend a lot of money in
carrying out the activity. Hence we can say the process is

Reasons for increased importance for HRP/Factors affecting HRP in the

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. 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.

1. Employment :-
HRP is affected by the employment situation in the country
i.e. in countries where there is greater unemployment; there may be
more pressure on the company, from government to appoint more
people. Similarly some company may force shortage of skilled
labour and they may have to appoint people from other countries.

2. Technical changes in the society :-
Technology changes at a very fast speed and new people
having the required knowledge are required for the company. In
some cases, company may retain existing employees and teach
them the new technology and in some cases, the company have to
remove existing people and appoint new.

3. Organizational changes :-
Changes take place within the organization from time to time
i.e. the company diversify into new products or close down
business in some areas etc. in such cases the HRP process i.e.
appointing or removing people will change according to situation.

4. Demographic changes :-
Demographic changes refer to things referring to age,
population, composition of work force etc. A number of people retire
every year. A new batch of graduates with specialization turns out
every year. This can change the appointment or the removal in the
5. Shortage of skill due to labour turnover :-
Industries having high labour turnover rate, the HRP will
change constantly i.e. many new appointments will take place. This
also affects the way HRP is implemented.

6. Multicultural workforce :-
Workers from different countries travel to other countries in
search of job. When a company plans its HRP it needs to take into
account this factor also.

7. Pressure groups :-
Company has to keep in mind certain pleasure. Groups like
human rights activist, woman activist, media etc. as they are very
capable for creating problems for the company, when issues
concerning these groups arise, appointment or retrenchment
becomes difficult.

Definition of VRS (2 marks concept)
VRS refers to voluntary retirement scheme, when company faces
the problem of surplus labour, they have to remove the extra workers.
This needs to be done to avoid increase in cost. One of the methods used
by the companies is the methods used by companies is the VRS scheme.
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

Chapter 4: Recruitment selection and induction

Define recruitment :- (2 marks)
Recruitment is a process of searching for prospective employees
and stimulating them to apply for jobs.

Objectives of recruitment

Recruitment fulfills the following objectives

1. It reviews the list of objectives of the company and tries to achieve
them by promoting the company in the minds of public.
2. It forecasts how many people will be required in the company.
3. It enables the company to advertise itself and attract talented
4. It provides different opportunities to procure human resource.

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 for
selecting people in the company. These methods are
1. Internal sources
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. Promotion 1. Management consultant
2. Departmental exam 2. Employment agency
3. Transfer 3. Campus recruitment
4. Retirement 4. News paper advertisement
5. Internal advertisement 5. Internet advertisement
6. Employee recommendation 6. Walk in interview
Internal sources of recruitment :-

Internal sources of recruitment refer to obtaining people for job from
inside the company. There are different methods of internal recruitment

1. Promotion :-
Companies can give promotion to existing employees. This
method of recruitment saves a lot of time, money and efforts
because the company does not have to train the existing employee.
Since the employee has already worked with the company. He is
familiar with the working culture and working style. It is a method
of encouraging efficient workers.

2. Departmental exam :- (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. People who are interested must
send their application to the HR department and appear for the
exam. Successful candidates are given the higher level job. The
method ensures proper selection and impartiality.

3. Transfer :-
Many companies adopt transfer as a method of recruitment.
The idea is to select talented personnel from other branches of the
company and transfer them to branches where there is shortage of

4. Retirement :- (2 marks)
Many companies call back personnel who have already
retired from the organization. This is a temporary measure. 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.

5. Internal advertisement :-
In this method vacancies in a particular branch are advertised
in the notice board. People who are interested are asked to apply
for the job. 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 branch.
6. Employee recommendation :- (2 marks)
In this method employees are asked to recommend people
for jobs. Since the employee is aware of the working conditions
inside the company he will suggest people who can adjust to the
situation. The company is benefited because it will obtain.

Advantages of internal recruitment

1. Internal methods are time saving.
2. No separate induction program is required.
3. The method increases loyalty and reduces labour turnover.
4. This method is less expensive.

Disadvantages of internal recruitment

1. There is no opportunity to get new talent in this method.
2. The method involves selecting people from those available in the
company so there is limited scope for selection.
3. There are chances of biased and partiality.
4. Chances of employee discontent are very high.

External methods/sources of recruitment

External sources of recruitment refer to methods of recruitment to obtain
people from outside the company. These methods are

1. Management consultant :- (2 marks concept)
Management consultant helps the company by providing
them with managerial personnel, when the company is on the look
out for entry level management trainees and middle level
managers. They generally approach management consultants.

2. Employment agencies :-
Companies may give a contract to employment agencies that
search, interview and obtain the required number of people. The
method can be used to obtain lower level and middle level staff.

3. Campus recruitment :- (2 marks concept)
When companies are in search of fresh graduates or new
talent they opt for campus recruitment. Companies approach
colleges, management, technical institutes, make a presentation
about the company and the job and invite applications. Interested
candidates who have applied are made to go through a series of
selection test and interview before final selection.

4. News paper advertisement :-
This is one of the oldest and most popular methods of
recruitment. Advertisements for the job are given in leading news
papers; the details of the job and salary are also mentioned.
Candidates are given a contact address where their applications
must be sent and are asked to send their applications within a
specified time limit. The method has maximum reach and most
preferred among all other methods of recruitment.

5. Internet advertisement :-
With increasing importance to internet, companies and
candidates have started using the internet as medium of
advertisement and search for jobs. There are various job sites like and etc. candidates can also post their
profiles on these sites. This method is growing in popularity.

6. Walk in interview :-
Another method of recruitment which is gaining importance
is the walk in interview method. An advertisement about the
location and time of walk in interview is given in the news paper.
Candidates require to directly appearing for the interview and have
to bring a copy of their C.V. with them. This method is very
popular among B.P.O and call centers.

Advantages of external recruitment

1. There is influx of new talent in the method.
2. The method encourages more and more competition.
3. There is lesser chance of partiality through this method.
4. If options like campus recruitment have been exercised we get a
chance to employ fresh graduates, thus increasing employment.

Disadvantages of external recruitment

1. The method is costly because it involves recruitment cost,
selection, training cost.
2. The method is time consuming.
3. The method reduces loyalty to the company.

Define selection :- (2 marks)
Selection can be defined as process of choosing the right person for
the right job.

Process of selection :- (10 marks)
The process of selection is different in different companies;
however a general procedure of selection can be framed. This process of
selection can be explained with the help of following diagram

Process of selection

Job analysis


Application blank/form

Written test


Medical examination

Initial job offer

Acceptance/rejection letter

Final offer/letter of appointment


1. Job analysis :-
The very first step in the selection procedure is the job
analysis. The HR department prepares the job description and
specification for the jobs which are vacant. This gives details for
the jobs which are vacant. This gives details about the name of the
job, qualification, qualities required and work conditions etc.
2. Advertisement :-
Based on the information collected in step 1, the HR
department prepares an advertisement and publishes it in a leading
news papers. The advertisement conveys details about the last date
for application, the address to which the application must be sent

3. Application blank/form :-
Application blank is the application form to be filled by the
candidate when he applies for a job in the company. The
application blank collects information consisting of 4 parts- 1)
Personal details 2) Educational details 3) Work experience 4)
Family background.

4. Written test :-
The application which have been received are screened by
the HR department and those applications which are incomplete are
rejected. The other candidates are called for the written test.
Arrangement for the written test is looked after the HR department
i.e. question papers, answer papers, examination centers and hall
tickets etc.

5. Interview :-
Candidates who have successfully cleared the test are called
for an interview. The entire responsibility for conducting the
interview lies with the HR department i.e. they look after the panel
of interviewers, refreshments, informing candidates etc.

6. Medical examination :-
The candidates who have successfully cleared the interview
are asked to take a medical exam. This medical exam may be
conducted by the organization itself (army). The organization may
have a tie up with the hospital or the candidate may be asked to get
a certificate from his family doctor.

7. Initial job offer :-
Candidates who successfully clear the medical exam are
given an initial job offer by the company stating the details
regarding salary, terms of employment, employment bond if any
etc. The candidate is given some time to think over the offer and to
accept or reject.
8. 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.

9. Letter of appointment/final job offer :-
Candidates who send their acceptance are given the letter of
appointment. The letter will state the name of the job. The salary
and other benefits, number of medical leaves and casual leaves,
details of employment bond if any etc. It will also state the date on
which the employee is required to start duty in the company.

10. Induction :-
On the date of joining the employee is introduced to the
company and other employees through am elaborate induction

Types of selection test (5 marks)

Different selection test are adopted by different organization
depending upon their requirements. These tests are specialized test which
have been scientifically tested and hence they are also known as scientific
test. Different types of test can be explained with the help of following

Types of selection test

Aptitude Intelligence Personality Performance
test test test test

Mental ability/
Intelligence test

Medical aptitude

Psycho motor test
I. Aptitude test :-
Aptitude tests are test which assess the potential and ability
of a candidate. It enables to find out whether the candidate is
suitable for the job. The job may be managerial technical or
clerical. The different types of aptitude test are

a. 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
judges the decision making abilities.

b. Mechanical aptitude test :-
This test deals with the ability of the candidate to do
mechanical work. It is used to judge and measure the
specialized knowledge and problem solving ability. It is
used for technical and maintenance staff.

c. Psycho motor test :-
This test judges the motor skills the hand and eye co-
ordination and evaluates the ability to do jobs lie packing,
quality testing, quality inspection etc.

II. Intelligence test :-
This test measures the numerical skills and reasoning
abilities of the candidates. Such abilities become important in
decision making. The test consists of logical reasoning ability, data
interpretation, comprehension skills and basic language skills.

III. Personality test :-
In this test the emotional ability or the emotional quotient is
tested. This test judges the ability to work in a group, inter personal
skills, ability to understand and handle conflicts and judge
motivation levels. This test is becoming very popular now days.

IV. Performance test :-
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. It is used to test
performance of typist, data entry operators etc.

Induction = orientation

Define induction :- (2marks concept/5marks short note)
Induction can be defined as a process of introducing the employee
who is newly elected to the organization. When an employee is given a
letter of appointment he joins the company on duty. The very first thing
that the company does is, introduces the new employee to the
organization and people working there.
An induction program may be conducted at a particular center for
all employees or at different places (branches of the company) for
different employees. Normally the new employee is called together to the
staff training college for the induction program.
The induction starts with an introduction secession about the
company, number of branches, a brief history of the company, number of
products, number of countries operating in, organizational structure,
culture, values, beliefs, the names of top management personnel etc.
Apart from this introductory secession there will be other
secessions also like secessions on behavioral science, soft skill training,
secessions on giving details about the job, salary, bonus, information
about different leaves that can be taken by the employee about upward
mobility in the organization etc.
There are different ways in which secessions can be conducted i.e.
using lecture method, power point presentation, group discussion,
psychological test, roll play secessions etc.
The induction program concludes with the employee reporting for
duty at his respective branch after induction. 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. 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.
After this the company may start a training program for the new

Define placement :- (2 marks concept)
Companies conduct recruitment and selection and finally select
employees. The employees undergo an induction program. After the
induction program is over the employee is given a specific job in the
company. This is called placement.
Chapter 5 Training and Development

Define training/development/managerial/executive development program
:- (2 marks concept)
Training is defined by Wayne Cascio as training consists of
planed programs undertaken to improve employee knowledge, skills,
attitude, and social behavior so that the performance of the organization
improves considerably.
Training is normally viewed as a short process. It is applied to
technical staff, lower, middle, senior level management. 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.

Objectives/purpose/goals of training and development

Training is defined by Wayne Cascio as training consists of
planed programs undertaken to improve employee knowledge, skills,
attitude, and social behavior so that the performance of the organization
improves considerably.
The purpose of training and development can be explained as

1. Improving quality of work force :-
Training and development help companies to improve the
quality of work done by their employees. Training programs
concentrate on specific areas. There by improving the quality of
work in that area.

2. Enhance employee growth :-
Every employee who takes development program becomes
better at his job. Training provides perfection and required practice,
therefore employees area able to develop them professionally.

3. Prevents obsolescence :-
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.
4. Assisting new comer :-
Training and development programs greatly help new
employees to get accustomed to new methods of working, new
technology, the work culture of the company etc.

5. 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
helps in achieving accuracy and perfection.

6. Health and safety measures :-
Training and development program clearly identifies and
teaches employees about the different risk involved in their job, the
different problems that can arise and how to prevent such
problems. This helps to improve the health and safety measures in
the company.

Methods of training operating personnel/factory workers (5 marks imp)

Training is defined by Wayne Cascio as training consists of planed
programs undertaken to improve employee knowledge, skills, attitude,
and social behavior so that the performance of the organization improves
There are different methods of training for operating personnel
(factory workers). Training these workers becomes important because
they handle equipment worth crores of rupees. The different methods can
be explained with the help of following diagram.

Methods of training operating personnel

On the job Apprenticeship Vestibule Job rotation Classroom
method method method method method
1. On the job training method :-
In this method workers who have to be trained are taken to
the factory, divided into groups and one superior is allotted to
every group. This superior or supervisor first demonstrates how the
equipment must be handled, and then the worker is asked to repeat
whatever he has observed in the presence of the supervisor. This
method makes it easy for the employee to learn the details about
specific equipment. Once the worker studies the first equipment
thoroughly the supervisor moves on to the next equipment and so

2. Apprenticeship training :-
In this method both theory and practical session are
conducted. The employee is paid a stipend until he completes
training. The theory sessions give theoretical information about the
plant layout, the different machines, their parts and safety measures
etc. The practical sessions give practical training in handling the
equipment. The apprentice may or may not be continued on the job
after training.

3. Vestibule training :-
In this method of training an atmosphere which is very
similar to the real job atmosphere is created. The surroundings,
equipment, noise level will be similar to the real situation. When an
employee is trained under such conditions he gets an idea about
what the real job situation will be like. Similarly when he actually
starts doing the job he will not feel out of place. This method is
used to train pilots and astronauts. In some places graphics are also
used to create the artificial surroundings. This method involves
heavy investment.

4. Job rotation :-
In this method the person is transferred from one equipment
to the other for a fixed amount of time until he is comfortable with
all the equipments. At the end of the training the employee
becomes comfortable with all the equipment. He is then assigned a
specific task.

5. Classroom method :-
In this method the training is given in the classroom. Video,
clippings, slides, charts, diagrams and artificial modules etc are
used to give training.
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 training consists of planed
programs undertaken to improve employee knowledge, skills, attitude,
and social behavior so that the performance of the organization improves
Various methods are used to train personnel for managerial level
jobs in the company. These methods can be explained with the help of
following diagram.

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


In-basket training
On the job method :- (5 marks)
On the job method refers to training given to personnel inside the
company. There are different methods of on the job training.

1. Job rotation :- (2 marks)
This method enables the company to train managerial
personnel in departmental work. They are taught everything about
the department. Starting from the lowest level job in the
department to the highest level job. 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. Every minute detail is

2. Planned progression :- (2 marks)
In this method juniors are assigned a certain job of their
senior in addition to their own job. 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. It also provides a chance to learn higher level

3. Coaching and counseling :- (2 marks)
Coaching refers to actually teaching a job to a junior. The
senior person who is the coach actually teaches his junior regarding
how the work must be handled and how decisions must be taken,
the different techniques that can be used on the job, how to handle
pressure. There is active participation from the senior.
Counseling refers to advising the junior employee as and
when he faces problems. The counselor superior plays an
advisory role and does not actively teach employees.

4. Under study :- (2 marks)
In this method of training a junior is deputed to work under a
senior. He takes orders from the senior, observes the senior, attends
meetings with him, learns about decision making and handling of
day to day problems. The method is used when the senior is on the
verge of retirement and the job will be taken over by the junior.

5. Junior board :- (2 marks)
In this method a group of junior level managers are
identified and they work together in a group called junior board.
They function just like the board of directors. They identify certain
problem, they have to study the problem and provide suggestions.
This method improves team work and decision making ability. It
gives an idea about the intensity of problem faced by the company.
Only promising and capable junior level managers are selected for
this method.

Off the job training method :- (5 marks)
Off the job training refers to method of training given outside the
company. The different methods adopted here are

1. Classroom method :- (2 marks)
The classroom method is used when a group of managers
have to be trained in theoretical aspects. The training involves
using lectures, audio visuals, case study, role play method, group
discussions etc. The method is interactive and provides very good

2. Simulation :- (2 marks)
Simulation involves creating atmosphere which is very
similar to the original work environment. The method helps to train
manager handling stress, taking immediate decisions, handling
pressure on the jobs etc. An actual feel of the real job environment
is given here.

3. Business games :- (2 marks)
This method involves providing a market situation to the
trainee manager and asking him to provide solutions. 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.

4. Committee :- (2 marks)
A committee refers to a group of people who are officially
appointed to look into a problem and provide solution. Trainee
managers are put in the committee to identify how they study a
problem and what they learn from it.

5. Conference :- (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. The
trainee manager can ask their doubts to these experts and
understand how problems can be solved on the job.

6. 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. Information can be collected
by trainee manager from books, magazines and internet etc.

7. In basket training :- (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 within a
specified time limit. The trainee manager is taught how to prioritize
his work, the activities which are important for his job and how to
take decisions within limited time limit.

Training procedure/process of training :-
Training is defined by Wayne Cascio as training consists of planed
programs undertaken to improve employee knowledge, skills, attitude,
and social behavior so that the performance of the organization improves
Every company has a specific training procedure, depending upon
its requirements. 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

Developing training packages



Follow up
1. Determining training needs of employee :-
In the very 1
step of training procedure, the HR department,
identifies the number of people required training, specific area in
which they need training, the age group of employee, the level in
organization etc. in some cases the employee may be totally new to
the organization. Here the general introduction training is required.
Some employees may have problems in specific areas; here the
training must be specific. This entire information is collected by
HR department.

2. Selecting target group :-
Based on information collected in step 1 the HR department
divides employee into groups based on the following.
Age group
i. The area of training
ii. Level in the organization
iii. The intensity of training etc.

3. Preparing trainers :-
Once the employees have been divided into groups, the HR
department arranges for trainers. Trainers can be in house trainers
or specialized trainers from outside. The trainers are given details
by HR department, like number of people in group, their age, their
level in organization, the result desired at the end of training, the
area of training, the number of days of training, the training budget,
facilities available etc.

4. Preparing training packages :-
Based on the information provided by trainers, he prepares
entire training schedule i.e. number of days, number of sessions
each day, topics to be handled each day, depth of which the subject
should be covered, the methodology for each session, the test to be
given foe each session, handout/printed material to be given in
each session.

5. Presentation :-
On the first day of training program the trainer introduces
himself and specifies the need and objective of the program and
then actually stars the program. The performance of each employee
is tracked by the trained and necessary feedback is provided.
6. Performance :-
At the end of training program the participants reports back
to their office or branches. They prepare report on the entire
training program and what they have learned. They the start using
whatever they have learned during their 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

7. Follow up :-
Based on the em0ployee performance, after training, the HR
department is able to identify what is exactly wrong with training
program and suitable correction is made.

Evaluation of training program
Training is defined by Wayne Cascio as training consists of
planed programs undertaken to improve employee knowledge, skills,
attitude, and social behavior so that the performance of the organization
improves considerably.
Effectiveness of training programs are constantly evaluated by the
company to find if the money, they have invested has been spend
properly or not. Training programs can be evaluated by asking following
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.

1. Reaction :-
Reaction refers to attitude of employee about the training, whether
the employee considers training to be +ve or ve one. If reaction
are +ve then people have accepted the program and changes will be

2. Learning :-
Another method of judging effectiveness is to identify levels
of learning i.e. how much the people have learnt during the
training. This can be found out by trainers mark sheet, the report
submitted by the employee, and actual performance.
3. Behavior :-
The HR department needs to understand behavior of the
employees, to understand the effectiveness of training. The
behavioral change can be seen in how the person interacts with
juniors, peer groups and seniors. They mark change in behavior
and inform the HR department of the success of training program.

4. Result :-
Results provided by employee in monetary terms also
determines effectiveness of training program i.e. employee success
in handling the project, the group performance before and after
training etc.

5. Effectiveness of training program must lead to
i. Increase in efficiency of worker
ii. Reduction in labour turnover
iii. Increase in discipline
iv. Reduction in wastage and therefore cost of production
v. Proper care of tools and equipments
vi. Employee development in career terms
vii. Overall efficiency in the company

Advantages of training programs/training (5 marks)
Training is defined by Wayne Cascio as training consists of
planed programs undertaken to improve employee knowledge, skills,
attitude, and social behavior so that the performance of the organization
improves considerably.
The following are the advantages of training program to the company

1. Increase in efficiency of worker :-
Training programs can help workers to increase their
efficiency levels, improve quality and thereby increase sales for the

2. Reduced supervision :-
When workers have been formally trained they need not be
supervised constantly. This reduces the work load on the
supervisor and allows him to concentrate on other activities in the
3. 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. Due to this the company is able to reduce its cost
its cost of production.

4. Less turnover of labour :-
One of the advantages of the training program is that it
increases the confidence of employees and provides them with
better career opportunities. Due to this employee generally do not
leave the company. There by reducing labour turnover.

5. Training helps new employees :-
A person, who is totally new to the company, has no idea
about its working. Training helps him to understand what is
required from him and helps him to adjust to the new environment.

6. Union management relations :-
When employees are trained and get better career
opportunities. The union starts having a possible attitude about the
management. They feel that the management is genuinely
interested in workers development. This improves union
management relations.

The following are the advantages of training program to the employee

1. Better career opportunities :-
Training programs provide the latest information, develops
talent and due to this the employee is in a position to get better jobs
in the same company or other companies.

2. High rewards :-
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.

3. Increased motivation :-
Employees who have been trained are generally more
confident as compared to others. Since their efforts will be
rewarded in future they are very much interested in improving their
performance. Therefore we can say that their motivation levels are
very high.
4. Group efforts :-
Training programs are not only technical programs but are
also conducted in areas like conflict management, group dynamics
(formal and informal groups), behavioral skills, stress management
etc. this enables employees to put in group effort without facing
problems that groups normally face. In other words training
teaches people to work in a group.

5. Promotion :-
People who attend training programs learn from them and
improve themselves are generally considered for promotion. Thus
training increases chances of promotion.

Chapter 6 Performance appraisal

Definition :- (2 marks)
Performance appraisal is defined by Wayne Cascio as the
systematic description of employees job relevant, strength, weakness.
Performance appraisal may be conducted once in every 6 months
or once in a year. The basic idea of the appraisal is to evaluate the
performance of the employee, giving him a feed back. Identify areas
where improvement is required so that training can be provided. Give
incentives and bonus to encourage employees etc.

Method of performance appraisal (2/5/10 marks***)
Performance appraisal is defined by Wayne Cascio as the
systematic description of employees job relevant, strength, weakness.
Companies use different methods of appraisal for identifying and
appraising the skills and qualities of their employees. The different
methods used can be explained with the help of following diagram.

Methods of performance appraisal

Traditional method Modern method

1. Check list method 1. Role analysis
2. Confidential report 2. Assessment centers
3. Critical incident method 3. management by objective
4. Ranking method 4. Behavioral anchored rating scale
5. Graphic rating scale 5. Psychological testing
6. Narrated essay 6. Human resource accounting
7. 360* Appraisal

Traditional method (5 marks)
Traditional method of performance appraisal has been used by
companies for very long time. A common feature of these methods is
they are all relatively simple and involve appraisal by one senior.

1. Check list method :- (2 marks)
In this method the senior, the boss is given a list of questions
about the junior. These questions are followed by check boxes. The
superior has to put a tick mark in any one of the boxes
This method can be explained with the following eg.

Does the employee have leadership qualities?
Is the employee capable of group efforts?
Has the employee shown analytical skills?
on the job

As seen in the above eg. A questioner containing questions is given
to the senior. This method is an extremely simple method and does
not involve a lot of time. The same set of questioners can be given
foe every employee so that there is uniformity in selecting

2. Confidential report :- (2 marks)
This method is very popular in government departments to
appraise IAS officers and other high level officials. In this method
the senior or the boss writes a report about the junior giving him
details about the performance about the employee. The +ve and
ve traits, responsibilities handled on the job and recommendations
for future incentives or promotions. The report is kept highly
confidential and access to the report is limited.

3. Critical incident method :- (2 marks)
In this method critical or important incidents which have
taken place on this job are noted down along with employees
behavior and reaction in all these situations. Both +ve and ve
incidents are mentioned. This is followed by an analysis of the
person, his abilities and talent, recommendations for the future
incentives and promotions.

4. Ranking method :- (2 marks)
In this method ranks are given to employees based on their
performance. There are different methods of ranking employees.
Simple ranking method
Alternate ranking method
Paired comparison method

i. Simple ranking method :- (2 marks)
Simple ranking method refers to ranks in serial order
from the best employee eg. 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
best and so on until
all 10 have been given ranks.

ii. Alternate ranking :- (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
best employee and give him rank 2 and so on.

iii. Paired comparison :- (2 marks)
In this method each and every person is the group,
department or team is compared with every other person in
the team/group/department. 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.

5. Graphic rating scale :- (2 marks)
Graphic rating scale refers to using specific factors to
appraise people. The entire appraisal is presented in the form of a
chart. The chart contains certain columns which indicate qualities
which are being appraised and other columns which specify the
rank to be given.

Eg. Employee A
Quality of work Quantity of work Intelligence
Very good

The senior has to put a tick mark for a particular quality along with the
ranking. Such charts are prepared for every employee. According to the
department in which they work. Sometimes the qualities which are
judged may change depending upon the department.

6. Narrated essay :- (2 marks)
In this method the senior or the boss is supposed to write a
narrative essay describing the qualities of his junior. He may
describe the employees strength and weakness, analytical abilities
etc. the narrative essay ends with a recommendation for future
promotion or for future incentives.

Modern methods (5 marks)
Modern methods of appraisal are being increasingly used by
companies. Now days one of the striving feature that appraisal involves
is, the opinion of many people about the employee and in some cases
psychological test are used to analyze the ability of employee. These
methods are as follows

1. Role analysis :- (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.
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. The KRA and their improvement
will determine the amount of incentives and benefits which the
employee will receive in future. The appraisal depends upon what
role set members have to say about the employee.

2. Assessment centers :- (2 marks*)
Assessment centers (AC) are places where the employees
are assessed on certain qualities talents and skills which they
possess. This method is used for selection as well as for appraisal.
The people who attend assessment centers are given management
games, psychological test, puzzles, questioners about different
management related situations etc. based on their performance in
these test an games appraisal is done.

3. Management by objective :- (2 marks)
This method was given by Petter Druckard in 1974. It was
intended to be a method of group decision making. It can be use for
performance appraisal also. In this method all members of the of
the department starting from the lowest level employee to the
highest level employee together discus, fix target goals to be
achieved, plan for achieving these goals and work together to
achieve them. The seniors in the department get an opportunity to
observe their junior- group efforts, communication skills,
knowledge levels, interest levels etc. based on this appraisal is

4. Behavioral anchored rating scale :- (2 marks)
In this method the appraisal is done to test the attitude of the
employee towards his job. Normally people with +ve approach or
attitude view and perform their job differently as compared to
people with a ve approach.

5. Psychological testing :- (2 marks)
In this method clinically approved psychological test are
conducted to identify and appraise the employee. A feedback is
given to the employee and areas of improvement are identified.

6. Human resource audit/accounting :- (2 marks)
In this method the expenditure on the employee is compared
with the income received due to the efforts of the employee. A
comparison is made to find out the utility of the employee to the
organization. The appraisal informs the employee about his
contribution to the company and what is expected in future.

7. 360* appraisal :- (2 marks)
In this method of appraisal and all round approach is
adopted. Feedback about the employee is taken from the employee
himself, his superiors, his juniors, his colleagues, customers he
deals with, financial institutions and other people he deals with etc.
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 (5 marks)
Performance appraisal is defined by Wayne Cascio as the
systematic description of employees job relevant, strength, weakness.
Process of performance appraisal followed by different companies
is different. A general procedure is explained below with the help of a
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. Setting performance standards :-
In this very first step in performance appraisal the HR
department decides the standards of performance i.e. they decide
what exactly is expected from the employee for each and every job.
Sometimes certain marking scheme may be adopted eg. A score
90/100 = excellent performance, a score os 80/100 = good. And so

2. Communication standard set to the employee :-
Standards of performance appraisal decided in 1
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

3. Measuring performance :-
The performance of the employee is now measure by the HR
department, different methods can be used to measure performance
i.e. traditional and modern method. The method used depends upon
the companys convenience.

4. Comparing performance with standard :-
The performance of the employee is now judged against the
standard. To understand the score achieved by him. Accordingly
we come to know which category of performance the employee
falls into i.e. excellent, very good, good, satisfactory etc.

5. Discussing result :-
The results obtained by the employee after performance
appraisal are informed or conveyed to him by the HR department.
A feedback is given to the employee asking him to change certain
aspects of his performance and improve them.

6. Collective action :-
The employee is given a chance or opportunity to improve
himself in the areas specified by the HR department. The HR
department constantly receives or keeps a check on the employees
performance and notes down improvements in performance.

7. Implementation and review :-
The performance appraisal policy is to be implemented on a
regular basis. A review must be done from time to time to check
whether any change in policy is required. Necessary changes are
made from time to time.

Limitations of performance appraisal (5 marks)
Performance appraisal is defined by Wayne Cascio as the
systematic description of employees job relevant, strength, weakness.
The following are the limitations of performance appraisal

1. Halo effect :- (2 marks*)
In this case the superior appraises the person on certain
positive qualities only. The negative traits are not considered. Such
an appraisal will no give a true picture about the employee. And in
some cases employees who do not deserve promotions may get it.

2. Horn effect :- (2 marks*)
In this case only the negative qualities of the employee are
considered and based on this appraisal is done. This again will not
help the organization because such appraisal may not present a true
picture about the employee.
3. Central tendency :- (2 marks*)
In this case the superior gives an appraisal by giving central
values. This prevents a really talented employee from getting
promotions he deserves and some employees who do not deserve
any thing may get promotion.

4. Leniency and strictness :-
Some bosses are lenient in grading their employees while
some are very strict. 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.

5. Spill over effect :-
In this case the employee is judged +vely or vely by the
boss depending upon the past performance. Therefore although the
employee may have improved performance, he may still not get the

6. Fear of loosing subordinates and spoiling relations :-
Many bosses do not wish to spoil their relations with their
subordinates. Therefore when they appraise the employee they may
end up giving higher grades which are not required. This is a n
injustice to really deserving employees.

7. Goodwill and techniques to be used :-
Sometimes a very strict appraisal may affect the goodwill
between senior and junior. Similarly when different departments in
the same company use different methods of appraisal it becomes
very difficult to compare employees.

8. Paper work and personal biased :-
Appraisal involves a lot of paper work. Due to this the work
load of HR department increases. Personal bias and prejudice result
in bosses favoring certain people and not favoring others.

Advantages/needs/importance/use/purpose of performance appraisal
(5 marks)
Performance appraisal is defined by Wayne Cascio as the
systematic description of employees job relevant, strength, weakness.

1. Feedback to the employee :-
Performance appraisal is beneficial because it provides
feedback to the employee about his performance. It identifies the
areas for improvement so that employee can improve itself.

2. 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.

3. Helps to decide promotion :-
Performance appraisal provides a report about the employee.
Based on this report future promotions are decided, incentives,
salary increase is decided.

4. 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.

5. Deciding transfers and lay off of the worker :-
Employee with specific talent can be transferred to places
where their talents are utilized properly; similarly decisions
regarding termination of employees depend upon performance
appraisal reports.

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