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Raj: 98211 33788

Human Resource Management



HRM as concept: HRM is a management function that helps managers recruit, select, train, & develops
members for an organization & even HRM is concerned with the people dimension in organization.


Human resource development: human resource development is a function more concern with training and
development, career planning and development and organizational development.


Job analysis: Job analysis is the process of studying and collecting information relating to the operations and
responsibilities of the specific job.


Profit sharing: profit sharing is a kind of reward which is based on the organizational performance.


Job design: A sequence to Job analysis is Job design. Job analysis helps to develop Job design. Job design
involves deliberate efforts to organize task, duties, and responsibilities, in to a unit of work to achieve a certain
objective. It integrates task, functions, relationships, the rewards, and the qualification required for a job in a
way o meet the needs of employees and the organisation.


Job Rotation: Job rotation involves shifting one employee from one job to another so that he employee is able
to understand and learn what each job involves. Than the organisation tracks the performance of the
employee on every job and decide whether perform a job in an ideal manner. Based on this he is finally given a
particular posting. Job rotation gives an idea about the performance at every level.


Job description: job analysis is followed by job description in job description job title, location, duties, working
condition are decided job description implies listing the picture of job it also says the principle duties and


Job specification: - job description & job specification all different from each other job specification gives the
brief idea of the picture of employee before job evaluation it is the important to decide the job description and
job specification.


HRIS: HRIS is the Human Resource Management System which is a computerized information package that
provides the management with increasing capacity to record store their data. It is the systemic procedure for
collecting, storing, maintaining, and updating data needed by an organisation about its HR. It provides the
accurate & timely data whenever needed. HRIS saves the time in maintaining the book records and has it is
computerized it has the backup if needed. HRIS is very beneficial system for HR department for any


Quality Circles: Quality circle consist of 7-10 people from the same work area who meet regularly to define
analyze and solve quality and related problems in their area. The membership for the same is voluntary, and
meetings are usually held once a week for an hour. During the groups initial meeting the members are trained
in problem solving techniques borrowed from the group dynamics, industrial engineering and quality control.
These techniques includes brain storming, cause-and-effect analysis, controls charts etc.


VRS: VRS is well knows as Voluntary Retirement Scheme. VRS results in separation of the employee from the
employer.VRS is followed where organisation have surplus labour. Firms are required to pay wages for ideal
time if VRS is given to trim surplus labour force. Now a days VRS is consider as painless, & time saving method
for reducing staff strength easing out unproductive older worker & unions too cannot object as the scheme is


Induction: Induction for a candidate is done when the candidate has accepted the offer letter and ready to join
the organisation. Induction simply means introducing the new employee to the organisation. It is simply done
so that candidate becomes aware of the organisational culture, values, belief, policies followed, work nature,
work environment, and most importantly subordinate he is going to work with. Induction is very helpful for the
candidate who is totally new to the organisation so, that candidate has the idea of what is to be done & makes

Prof. Raj: 98211 33788

Human Resource Management


him more comfortable at the work place.


Wages And Salaries: Wages and salaries are the components of remuneration. Wages and salaries are not
similar to each other. Wages represent hourly rates of pay, and salary refers to the monthly rates of pay, in
respect of the number of hrs worked by an employee. The increment for wages and salaries are done annually.
Although this increment differ from employee to employee and even it depends upon the nature of job,
seniority, and merit.


Incentives: Incentives are monetary benefits paid to the workman for their outstanding performance.
Incentives are variable rewards granted to employee according to the level of their performance. The other
name for Incentives is PAYMENT BY RESULTS . Incentives are always a motivational factor for employees.
Employees try to get more and more incentives because it gives increase in the salary as well as performance.
Like wages and salaries are relatively fixed, incentives vary from individual to individual and from period to
period for same individual.


Placement: Placement is allocation of people to the jobs; after an employee is hired he or she must be
replaced on their right job. Placement is done for a new hire, or placement is done in case there is any transfer,
promotion or demotion of the present employees. It is an assignment or reassignment of an employee to new
or different job.


Assessment Centers: Assessment centers is the central location where managers may come together to have
their participation in job related exercises evaluated by the trained observers. Assessment centers are mainly
use for managerial hiring, and evaluating supervisory potential. The principal idea behind the assessment
centers is to evaluate manager over the period of time. Many activities like games, role-plays, brain storming, is
done for this managers so they will learn from this activities & give the best performance on duty.


Human resource planning : it helps to predict hr requirements of an organization & the future supply of
human resource .


Selection: is the process of differentiating between application in order to indentify and hire those with a
greater like hood of success in a job. Selection is the processes of picking individual with requisite qualifications
and competence to fill jobs in an organisation.


Training & Development: Training is the process of imparting specific skills. Training is the process which helps
to impact the skills of an employee. Training helps to develop the basic skills to perform the task its not only
the workers who need training but also the supervisors, managers, executives etc also need the training.


Industrial relation: essentially IR is concern with the relationship between management and workers for
resolving any industrial dispute.


performance appraisal :In simple terms, performance appraisal may be understood as the assessment of an
individual`s performance in a systematic way, the performance being measured against such factors as job
knowledge, quality and quantity of output , initiative , leadership abilities, supervision, dependability, co.
Operation, judgment, versatility, health and the like.


Ranking methods: - In the method the performance of the employee is judged and employees are compound
each other for ranking purpose. The rank is given in descending order.


Grading Method: In the grading method greats or classes are first established and carefully define the raters
evaluate. The grades are given to employees on their performance of during the job. The grades may be like, O
(Outstanding) A (excellent), B (very good), C (for good), D (for fair) and E (poor).


Group appraisal :- in this method a group of evaluators assess the employees. A group can be composed of
Supervisor and Head of the department. Personal experts the group evaluates and judged the performance

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Human Resource Management



Check list method :- a check list method is the method of list consisting a number of statement about the
qualities of employees and his behavior is prepared.


Critical Incident Method: The concept behind this method is that there are certain keys acts of behavior which
makes different between success and failure. This act arises out of when incident occur while performing the


Easy method:- In this method a rater is required to write a paragraph as regards is subordinate, strengths,
weakness, potentials and so on.


Modern techniques / methods : Modern method of performance appraisal are more superior that the
traditional on the modern method put the emphasis on improvement of employee performance through
special efforts by management and employ jointly.


Behavioral anchored rating scales (BARS) : It is modern method of performance appraisal behavioral
anchored scales rating scales whose scales points are determine by statement of effective and ineffective
behavioral rater must indicate which behavioral on each scale describe the performance of an employee.


Psychological appraisals: Psychological appraisals focus on future potential and not actual performance.
Industrial psychologists are employed for conducting the appraisal.


360 degree appraisal: 360 degree appraisal is the system in which an employee performance is rated by
superiors, peers, subordinate, and clients. In 360 degree appraisal method only assessing of performance is not
the end, other attributes of the candidates like talent, Behavioral quirks, value, ethical standards, tempers and
loyalty are evaluated by the people who are best placed to do it. At the end of this appraisal, not only the work
performance of a employee is rated but the other attribute to be a good employee is also reflected.


Participative management: It refers to the process of involving employees or employee representatives at all
levels of decision-making; Co-determination is another term of participative management.


Employee turn over or labour turn over: Employee turnover refers to the process of employees leaving an
organization and requiring to be replaced.


Point ranking method: In this method, each jobs evaluated separately, appraising each of the factors such as
skills, effort, and responsibility and working condition combining the separate evaluations into a single point
score for each job.


Career counseling: It is one major method by which organisation can help an employee in his or her career.
Employee need guidance in their career paths and the direction in which they can walk from this is described
as career counseling.


Career Planning : Career planning is the systematic process by which one selects /decides career goals and the
path to achieve or reach this. Rapid improvements in education, training facilities and job opportunities have
encouraged people to plan their career. Career planning provides suitable promotional opportunities.


Personal observation:-In this method the observer actually observes the concern worker. He makes a list of all
the duties perform by the worker and qualities required to perform this duty based on the information and job
analysis is pretended.


Actual performance of the job: In this method observer who 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 .


Interview method: In this method an interview of the employee is conducted. A group expert conduct the
interview they ask question about the job skills levels and difficulty levels. They question and cross question an
employee and based on information collected job analysis is prepared.

Prof. Raj: 98211 33788

Human Resource Management



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


Log records: Companies can ask employees to maintain log records and job analysis can be done on the base of
information collected from the log record. A log record is a book in which employees record or writes or writes
all activities performed by them on the job. The records are extensive and provided a fair idea about the duties
and responsibilities in any job.


Promotions & Transform: When a promotion given to employee it is based on skill & talent required for the
required job. Similarly when we transfer an employee to another branch the job has been similar to what he
has done before to take these decision we collect the information from job analysis.


Ergonomics: Ergonomics is concerned with designing and shaping jobs to fit the physical abilities and
characteristics of employees. Nature of jobs remains the same but the location of tools, switches and other
facilities is changed to make the jobholder feel comfortable.


Autonomy: Every worker desires a certain level of freedom to do his job efficiently this is called autonomy. Job
that give workers authority to make decisions will provide added responsibilities, which tend to increase the
employees sense of recognition and self-esteem.


Feedback Individuals need to receive meaningful feedback about their performance, preferably by evaluating
their own performance and defining the feedback. This implies that they need to ideally work on a complete
product or on a significant part of it.


Job Enlargement: Job enlargement is another method of job design. It involves combining various activity of
the same level in the organization and adding them to the existing job. It increases the slope of the job. It also
called the horizontal expansion of job activities.


Job Enrichment: job enrichment is a term given by Herzberg. According to him a few motivators are added to
a job to make it more rewarding challenging and interesting. According to Herzberg the motivation factors
which the job and improves performance.


Environmental Scanning : environmental scanning refers to the systematic monitoring o the external forces
influencing the organisation.


Demand forecasting : Demand forecasting is the process of estimating the future quantity and quality of
people required. The basis of the forecast must be the annual budget and long term corporate plan,
translated into activity levels for each function and department.


Supply forecasting: Personnel demand analysis provides the manager with the means of estimating the
number and kind of employees that will be required.


HR Programming : Once an organizations personals demand and supply are forecast, the two must be
reconciled or balanced in order that vacancies can be filled by the right employees at the right them.


Recruitment: Recruitment involves attracting and obtaining as many applications as possible from eligible jobseeker. Recruitment is understood as the process of searching for and obtaining applicants for jobs, from
among whom the right people can be selected.


Minimum Wage: Minimum wage is the one which provides not merely for bare sustenance of life, but also for
the preservation of the efficiency of the worker. For this purpose, the minimum wage must also provide for
some measure of education, medical requirements and amenities.


Fair Wage: Fair wage is understood in two ways. In a narrow sense, wage is fair if it is equal to the rate
prevailing in the same trade and in the neighborhood for similar work. In a wider sense, it will be fair if it is

Prof. Raj: 98211 33788

Human Resource Management


equal to the predominant rate for similar work throughout the country and for trades in general.

Downsizing: The term downsizing is used to indicate reduction of excess manpower by suitable measure.
Downsizing of an organisation means reducing the number of employees and adjusting the manpower as per
need of the organisation.


Outsource: Several organisations outsource part of their work to outside parties either in the form of subcontracting or ancillarisation.


Job Transfer: In business organisation, employees are shifted from one post to the other or from one
department to the other or from one unit/plant/ branch of the company to the other. This is called job transfer
of an employee.


Fringe Benefits: In addition to regular wages, allowance and bonus payment, industrial workers are given other
benefits and services called fringe benefits.


Total Quality Management: Total quality management (TQM) refers to the deep commitment of an
organisation to quality.


Trade Unions: Trade unions are voluntary organisations of employees or employers formed to promote and
protect their interests through collective action. Though the terms employees and employers are used, when
we say trade unions they generally refer to employees.


Define HRM & explain its function & objectives or Define HRM & explain its function or Define HRM & explain
its objectives?
Definition of HRM: Edvin Flippo define HRM as planning, organizing, directing, controlling of procurement,
development, compensation, integration, maintenance and separation of human resource to the end that
individual, social and organisational objective is achieved.

Human Resource Management

Prof. Raj: 98211 33788











1. Planning: Preparing forecasts of future HR needs in the light of an organizations environment, mission and
objectives, strategies, and internal strengths and weaknesses, including its structure, culture, technology
and leadership.
2. Staffing: obtaining people with the appropriate skill, abilities, knowledge and experience to fill jobs in the
work organisation. Key practices are human resources planning, job analysis, recruitment and selection.
3. Developing: Analyzing learning recruitment to ensure that employees possess the knowledge and skills to
perform satisfactorily in their job or to advance in the organisation. Performance appraisal can identify
employees key skill and competencies.
4. Monitoring: The design and administration of reward system. HR practices include job evaluation,
performance, appraisal, pay and benefits.
5. Maintaining: The administration and monitoring of workplace safety, health and welfare policies to retain a
competent workforce and comply with statutory standards and regulation.
6. Managing relationship: Encompasses a range of employee involvement/participation schemes in non-union
or union work place. In a union environment this includes negotiating contracts and administrating the
collective agreement.
7. Managing change: This involves helping other to envision the future, communicating this vision, setting
clear expectation for performance and developing the capability to recognize people and reallocate other
8. Evaluating: designing the procedures and process that measure, evaluate and communicate the valueadded component of HR practices and their HR system to the organisation.
The primary objective of HRM is to ensure the availability of a willing workforce to an organisation. HRM
objectives are as follows.

Prof. Raj: 98211 33788

Human Resource Management




1. Societal Objective: The societal objectives of HRM seek to ensure that the organisation becomes socially
responsive. To be ethically and socially responsible to the needs and challenges of the society while
minimizing the negative impact of such demands up on the orgnisation. The failure of organisatons to use
their resources for the society`s benefit in ethical ways may lead to restrictions.
2. Organisational Objective: The organisation has many objectives in itself like primary objective, secondary
objective, etc. The major role of HRM is in bringing about organisational effectiveness. HRM department in
an organisation is not an end in itself it is only a means to guide, mentor, or assist the organisation with its
primary objectives. The main objective of HRM department is to focus on primary objective of organisation
and get it fulfilled.
3. Functional Objective: A successful organisation always depends on the effectiveness and equal contribution
of each department in it. The functional objective of HRM is to maintain the effective and appropriate
contribution of each department according to the organisational needs. If HRM department is not well
organized, then there are chances of wasting the resources. It ultimately will not fulfill the organisational
4. Personal Objective: The personal growth of the employee always leads the growth of the organisation.
HRM department help the employees to grow in the organisation. They assist the employees in achieving
their personal goal to enhance the individual contribution to the organisation. They retain the personal
objective of the employee; always keep motivating them so the performance and specification of the
employee may not decline.



Personnel Management (PM)
(1) Meaning: HRM places emphasis on a continuous (1) PM is a routine, maintenance-oriented
development of people at work. HRM is broader
administrative functions relating to persons
in scope as compared to personnel management.
employed. PM is narrow in scope as compared to
(2) Function: HRM is proactive function. It is (2) PM function is mainly reactive and responds to
concerned with present organisational needs and
the demands of an organisation whenever they
also anticipates future needs and acts
(3) Evolution: HRM is the latest development in the (3) Personnel management precedes HRM.
evolution of management of men.
(4) Rules: It has attached more importance to the (4) It has attached highest importance to rules.
abilities of employees. Rules are to make the life
Performance is evaluated within the framework

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Human Resource Management

of employees convenient.
(5) Initiative: It works on the basis of integrated
(6) Decision making: Its speed of decision making is
(7) Motivation of People: HRM emphasizes on the
satisfaction of higher needs for motivating people
(e.g. challenging jobs and autonomous teams)
(8) Conflict handling: It manages congenial work
climate and culture. It implements wide ranging
personnel strategies.
(9) Training and development: It uses latest
techniques of training and development with
audio-visual facilities.
(10) Behaviour norms: HRM decides behaviour norms
based on individual values and mission of


of rules.
(5) It works on the basis of piecemeal initiative.
(6) Its speed of decision making is slow.
(7) P.M. emphasizes on economic rewards and
traditional job design like job specification for
motivating people for better performance.
(8) It reaches out temporary truce through collective
bargaining. It uses fixed procedures to deal with
employee grievance.
(9) It uses outdated methods of training and
manpower development.
(10) PM decides behaviour norms based on customs
and practices.



The role of HR Manager is as follows:
(1) Specialist: HR manager is an expert. As a specialist, he advises the heads of different functional departments
on various aspects of HRM such as HRP, recruitment, selection, orientation, training, appraisal,
compensation etc. With his advice and suggestions, functional managers can perform these functions
successfully. The HR manager should provide information, suggestions, and help to line managers. He
should get their confidence and goodwill.
(2) Information source:
The HR manager provides valuable information about labour market, labour laws etc. Such information is
required for the formation of proper policies and procedures about human resources. He acts as a record
keeper and researcher to provide the required information.
(3) Change Agent: The HR manager can serve as an internal change agent to initiate and spearhead necessary
improvements in HR practices. As a consultant, he can pro vide necessary infrastructure and support for
organisational development. He helps in introducing and implementing major institutional changes in the
organisation. He is an innovator in HR matters. To be an effective consultant, the HR manager should be
familiar with the needs and changing environment of the organisation.
(4) Controller: The HR manager assists line managers in effective imp [lamentation of HR policies and
programmes. His advice and service is essential for monitoring and controlling the progress. The HR
manager ensures that the HR policies and procedures approved and adopted by the management are being
consistently carried out in all the departments.
(5) Liaison Man: The HR manager is asked to act as a liaison between different departments of an organisation.
(6) Housekeeper: The HR manager looks after the safety, health, welfare etc. Of employees.
(7) Fire Fighter:
In union-management relations, the HR manager acts as a shock absorber. He acts as a trouble shooter. He
is the management defense against trade union activists.



(1) Composition of workforce: The composition of workforce in India is changing rapidly as more women;
minority8 groups etc. are joining the workforce. Organisations now cannot discriminate on the basis of age.
The number of women entering the workforce is increasing due to factors like education, economic
needs, equality of sexed, womens emancipation and suitability for certain soft jobs like public relations,
telephone operator, receptionist, etc. Lounge, skilled and knowledgeable employees are increasingly
occupying positions of importance. Employees now prefer less secure but high paying jobs in multinationals

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Human Resource Management


and other private sector concerns. Employees are no more fascinated by public sector and government
owned and controlled organisations.
Women at work: Women employees today constitute a major share of the work force. The initial reluctance
on the part of the employees to give jobs to women seems to be a thing of the past. In most industries, the
principle of equal pay for equal work has more or less become the rule now. With more females I the work
force, an upswing in the number of dual career couples will force more employees to establish child care
facilities, on or near the company promises and to accommodate the travel, scheduling and moving
needs of dual career employees.
Changes in Employee Values: The changing structure of work force has led to the introduction of new
values in the organisation. Alienation from the job, increasing counter productive behaviour, rising
expectations and changing ideas of employees are some of the factors responsible for the changing values
and values of work force.
Another change in the values of employees is the declining work ethic. A time was there, when
employees regarded their jobs as a central life interest and performed them with single minded devotion.
Level of Education: In the recent years, employees have been entering the organisations with increased
level of formal education. Increased educational level changes the attitudes of the employees. Rather than
relaxing with the feeling that more of education is better, if management does not recognize and
redesign jobs, to effect a match with better qualified personnel, it will be contributing only to frustration,
absenteeism, grievances and turnover. HR managers must find innovative ways of make keeping these
people motivated and satisfied.
Dual Career Couples: Increasing number of dual career professional couples limits the individual flexibility in
accepting physical relocations. Organisations have been used to make use of job moves and physical
relocation as an important means of developing talent. Promotions to higher positions need experience in a
variety of roles in different organisational units.
Size of workforce: Corporate have grown in size considerably in recent years, thanks to global competition
in almost all fields. The size of the workforce consequently has increased, throwing up additional challenges
before HR managers in the form of additional demands for better pay, benefits and working conditions from
various sections of the workforce constantly.
Employee expectations: Instead of attempting to force employees to conform to corporate mould future
managers may well have to make more allowances for individual differences in people. Nowadays, workers
are better educated, more demanding and are ready to voice their strong, violent and joint protests in case
their expectations are not met.
Life-style changes: The life-style patterns of employees have undergone rapid changes in recent times.
Unlike their predecessors, people are now ready to change jobs, shift to new locations, take up jobs in
start-up companies instead of manufacturing units sand even experiment with untested ideas.


Meaning: Personnel Philosophy revolves around managements beliefs and assumptions about people - their
nature, needs, values and their approach to work. These beliefs and assumptions, then, determine how people
should be treated. A well established personnel philosophy plays two important functions.
(1) It gives rise to what one may call the style of management. A manager develops his practices on the basis
of his philosophy. In fact, he is known by the philosophy he holds.
(2) It often creates or redefines operational goals. For example, in organisations which have adopted a
humanistic philosophy, profit may still be the most important goal, but investment in the organisations
human resources may become a powerful sub-goal.
Personal philosophy should be based on the following beliefs:
(1) Human beings are the most important assets in the organisation.
(2) Human beings can be developed to a great extent as they have creative energy which is partially used.
(3) Human beings feel committed to their work in the organisation if they develop belongingness with it.
(4) Human beings are likely to develop a feeling of belongingness if the organisation takes care of them and
their need satisfaction.

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(5) Human beings contribute to the maximum if they get an opportunity to discover their full potential and to
use it.
(6) It is the responsibility of the organisation to create healthy and motivating work climate characterized by
openness, enthusiasm, trust, mutuality and collaboration.
(7) Personnel philosophy is not static. As conditions, as time and experience reveal and as executives change,
personnel philosophy is modified.



Meaning: Personnel manual is a booklet containing the details of personnel policies of an organisation. A
personnel manual contains the philosophy of the organisation, various policies, objectives, practices and
procedures, programmes, the responsibilities of different individuals in the organisation, also contain the
work flow chart, initiation, implementation and approving authorities. It is a usable guidebook for its
employees. Every manager and supervisor should be ale to use the personnel manual as a guidebook when
they want to apply the organizations policy in a given situation. Personnel manual can be referred to when
dealing with personnel problems and taking decisions on personal matters. Such a manual can be given to line
and staff managers for their use and follow up. Due to environmental changes, the personnel policy and
practices will need changes and hence these will have to be flexible.
Contents of the Personnel Manual:
Personnel Manual contains the following information:
(1) Organisations goals and objectives.
(2) Personnel Policy.
(3) The role of the personnel department.
(4) Human Resource Planning.
(5) Job Design, Job Analysis, Job Evaluation.
(6) Recruitment and Selection
(7) Orientation, Induction and Placement
(8) Training and Development Education
(9) Performance Appraisal
(10) Remuneration, Rewards, Incentives
Objectives/Purpose of Personnel Manual:
(1) It provides a systematic approach to administering company policies and practices to directors, managers
and supervisors.
(2) It acts as a basic communication tool for supervisory staff in order to make clear the policies and
practices of the management and thus avoid complaints, grievances before they crop up.
(3) It acts as a tool for preventing difficulties due to lack of understanding of personnel policies and
practices due to unwritten policy, inconsistent policy and absence of proper communication.
(4) It provides fair or equal opportunities to all employees in the organisation irrespective of creed, race,
religion, sex, etc.
(5) It enables managers to have cordial relations with subordinate employees by following the personnel
policies of the company in a fair manner.
(6) When there is a personnel manual containing personnel policies in written form, there can be consistent
application throughout an organization.
Guidelines for preparing Personnel Manual:
(1) The HR manager has to study conditions prevailing in the organisation and discuss the contents with line
(2) A copy of personnel manual can be given to the line managers and others who are in charge of employees
or groups of employees.
(3) The manual being a guide for successful operation of the personnel/HR department, the contents should
be very carefully drafted, after studying standard practices in the region/industry.
(4) The directions in the manual should be followed strictly without any deviation.
(5) It is recommended that apart from manual which is a guide for the management and managers, HR

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department should prepare a Handbook for employees. This handbook will contain information on terms
and conditions of employment, rules of discipline, expectations from employees, policies relating to
employment, remuneration, promotion, grievance handling procedure, rules of discipline etc. The
handbook should clearly mention everything, that employee should know about his employment
(6) Personnel manual should be updated periodically.
(7) The section on legal compliance should be clear and latest; rules and directions to be followed should be
briefly mentioned.


Challenges Faced by HR manager / MANAGEMENT

Problem faced by HR manager or management in new era
HRM is a management function that helps the managers to recruit, select, train, & develop members for an
organisation and even HRM is concerned with the people dimension in organisation. HRM is a vast concept
which consists of certain objective, Functions, policies, principles. Its a challenge in front of HR manager to fulfill
the organisational demand as per organisational needs.
1. Retention Of Employees: One of the major issue that human resource management faces today is constant
outflow of employees. Employees are shifting the job within a few years, while organisation spends lots of
money on selection, induction and training the employees. The HR manager has greater task or challenge in
front of him to build the motivation among his employees to keep them happy so they work with the
organisation for longer time.
2. Multi-Culture Work Force: In an organisation there are group of people working together which are of
different caste and creed, it is a great challenge in front of HR manager to see that the unity among them
does not fall or there is not any dispute between them which may create a barrier for work in organisation.
3. Women In Work Force: Number of womens are increasing for employment or to work in the corporate but
still all of them face the same problem such as long working hour, sexual harassment, discrimination etc.
The HRM manager needs to solve this problem and make them a comfortable environment to work in an
4. Handicapped Employee: The HRM manger needs to make sure that the handicapped worker is comfortable
with the work. Such employees can be provided with special incentives at the work area.
5. Retrenchment of the Employees: Retrenchment results in the separation of the employee from his or her
employer. It refers to the termination of the services of the employee because of the replacement of the
labour by machines.HR manager should be able to make the balance of employees to machines, in such
conditions a proper compensation in terms of VRS, can be offered to an employee. HR manager should able
to rectify the correct employee who is going to continue with the organisation this is a very big challenge in
front of HR manager.
6. Change In Policies Weather Internal Or Government: There can be a sudden change in the government
policies for the particular industry or even there are the possibilities of change in the internal policies of the
organisation in such case its a duty of HR manager to make the employees aware with the same and start
the work or a task again applying the new policies.


Definition: Employee turnover refers to the process of employees leaving an organisation and requiring to be
replaced. High turnover involves increased cost on recruitment, selection & training. In addition high labour
turnover may add to production problems in regards with quality control and difficulty in building team work.
Certain percentage of male labour turnover is available through resignation, retirement, death etc. Transfers do
take place causing displacement in workforce. This people are necessary to be replaced so that quality turnover

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is more important than quantity of people living and joining the organisation.
1. Better hiring practices: An employee i.e. from the process of recruitment to selection should be very
systematic and effective. Employee should be provided with proper knowledge about the nature of the job
he has to perform. The source to the employee should be initially decided. Internal source can be a better
option for the top position. When knowing the person his or her qualification and experience matters and if
a person is not highly qualified & experienced than there are changes of switching him or her from the
organisation in short period.
2. ORIENTATION TRAINING: After a better selection its the responsibility of HR to draw an effective
orientation programme. Its duty of HR manager to make new employee introduce in an organisation. While
in orientation or induction programme a new employee should be informed about the history of the
organisation, work place, cultural, beliefs and more importantly his or her co-workers. This will make him
comfortable at workplace. Training is another basic aspect to make an employee excel in his performance.
Basic training should be given to an employee after his or her joining. Training should be effective such that
once training gets over he or she should effectively perform his or her work.
3. WORKING CONDITIONS: Working conditions should be healthy to work in organisation. Professionalism
must be followed but in friendly manner. The infrastructure should be well maintained by the
administration department. HR should draw the policies which will benefit both the workers and
organisation. The social condition in an organisation also matters a lot. An HR manager should always keep a
track and see that there arent any internal conflicts. If any such thing is noticed it should be brought to
notice immediately.
4. REMUNERATION & BENEFITS: Remuneration is compensation an employee receives in return for his or her
contribution to the organisation. The major function of HR manager is to decide the wage structure. Wage
or compensation decided by the HR manager should be beneficial to both the employee and the
organisation. The remuneration for an employee is decided on his or her qualification, experience and job
he or she is going to perform. An HR manager should always give better remuneration to them to avoid
labour turnover. Benefits like incentive, monetary benefits, perquisites, non-monetary benefits, paid leaves,
commission, overtime wage, bonus etc.
5. OPPORTUNITIES FOR ADVANCEMENT: While recruiting the employee HR can inform or tell him or her
scope to grow in the organisation. HR can draw different policies for promotion or if an employee wants a
transfer than HR can help him or her out. After a certain time period if an employee stays in the
organisation he or she can be provided with loyalty bonus.



HRP essentially involves forecasting personnel needs, assign personnel supply and matching demand supply
factors through-related programmes. The planning process is influenced by overall organisation objectives and
the environment of business.
Environmental Scanning:
Environmental scanning refers to the systematic monitoring o the external forces influencing the organisation.
Managers monitor several forces but the following are pertinent for HRP:
Economic factors, including general and regional conditions.
Technological changes, including robotics and automation.
Demographic changes, including age, composition and literacy.
Political and legislative issues, including laws and administrative rulings.
Social concerns, including child care, and educational facilities and priorities.
By scanning the environment for changes that will affect an organisation, managers can anticipate their impact
and make adjustments early.
Organisation Objectives and Policies.

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HR Plans needs to be based on organisational objectives. In practice, this implies that the objectives of the HR
plan must be derived from organisation objectives. Specific requirement in terms of number and characteristic
of employees should be derived from the organisational objectives. As was stated in the previous chapter,
organisational objectives are defined by the top management and the role of HRP is to subserve the overall
objectives by ensuring availability and utilization of human resources.
Once the organisational objectives are specified, communicated and understood by all concerned. The HR
department must specify its objectives with regard to HR utilization in the organisation.
Objective and Policies

HR Needs Forecast

HR Supply Forecast

HR Programming

HRP Implementation

Control and Evaluation of




Restricted Hiring, Reduced Hours, VRS,

Lay off, etc.

Recruitment and Selection

HR Demand Forecast
Demand forecasting is the process of estimating the future quantity and quality of people required. The basis of
the forecast must be the annual budget and long term corporate plan, translated into activity levels for each
function and department.
Demand forecasting must consider several factors-both external as well as internal. Among the external factors
are competition, economic climate, laws and regulatory bodies, change in technology, and social factors.
Internal factors include budget constraints, production levels, new products and services, organisational
structure, and employee separation. Demand forecasting is common among organisations; through they may
not do personnel-supply forecasting.
They are several good reasons to conduct demand forecasting. It can help:
1) Quantify the jobs necessary for producing a given number of goods or offering a given amount of services;
2) Determine what staff-mix is desirable in the future;
3) Assess appropriate staffing levels in different parts of the organisation so as to avoid unnecessary costs;
4) Prevent shortage of people where and when they are needed most;

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5) Monitor complacence with legal requirements with regard to reservation of jobs.

HR supply Forecast
Personnel demand analysis provides the manager with the means of estimating the number and kind of
employees that will be required. The next logical step for the management is to determine whether it will be
able to procure the required number of personnel and the sources for such procurement. This information is
provided by supply forecasting. Supply forecasting measure the number of people likely to be available from
within and outside an organisation, after making allowance for absenteeism, internal movements and
promotions, wastage and changes in hours, and other conditions of work.
Reasons for supply forecast are that it:
1) Helps quantify number of people and positions expected to be available in future to help the organisation
realise its plans and meet its objectives;
2) Helps clarify likely staff mixes that will exist in the future;
3) Assess existing staffing levels in different parts of the organisation;
4) Prevents shortage of people where and when they are most needed, and
5) Monitors expected future compliance with legal requirements of job reservations.
The supply analysis covers:

Existing human resources

Internal sources of supply

External sources of supply

Once an organizations personals demand and supply are forecast, the two must be reconciled or balanced in
order that vacancies can be filled by the right employees at the right them. HR Programming, the third step in
the planning process, therefore, assumes greater importance.
Implementation requires converting an HR Plan into action. A series of action programmes are initiated as a part
of HR Plan implementation. Some such programmes are recruitment; selection and placement; training and
development; retraining and redeployment; the retention plan; the redundancy plan; and the succession plan.
Control and evaluation represents the final phase in the HRP process. The HR Plan should include budgets,
target, and standards. It should also clarify responsibilities for implementation and control. And establish
reporting procedures which will enable achievements to be monitored against the plan. They should also report
employment costs against budget, and trends in wastage and employment ratios.


Various factors affect HRP. Such factors include external factors. (Business environment, government,
technology changes and global forces) and internal factors (company strategies, HR policies, trade unions and so
on). Important factors affecting Human Resource Planning are as explained below:
(1) Improper linkage between HRP and Corporate Strategy: HRM plays a crucial role in corporate strategic
management and naturally it must be linked to strategic management process. In the absence of such
linkage, neither HRM nor any of its subsystems will contribute effectively. HRP acts as the basis for HRM
and therefore must be linked to corporate strategic management process.
(2) Inadequate appreciation of HRP: Another factor affecting HR planning is the lack of adequate realization of
HRP. Many organisations which do not realise the importance of human assets in the present
competitive environment believe that people are available when they are needed because of increasing
(3) Environment Uncertainty: This factor relates to lack of prediction about the future behaviour of

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environment. High environmental complexity and variability create uncertainty and the exact behaviour of
environment may not be predicted. For example, in the IT sector, employee turnover is high. As a result HRP
turns to be less effective. More meticulous HRP is necessary for such a situation.
(4) Rigidity in attitudes: One more factor responsible for ineffective HRP is the rigidity of attitudes of top
management as well as HR managers. This happens when organisations rename their personnel
department to HR department but retain the old culture.
(5) Inappropriate HR Information System: The effectiveness of HRP depends on timely availability of relevant
information on the contingent factors which are considered while preparing HR plans. Such factors include
organisational strategy, nature of HR market, employee turnover rate, employee productivity, action plans
defining the volume and area of operations, etc.
(6) Conflict between Long term and Short term HRP: One more factor affecting HRP is the conflict between
long term and short term HRP. In the long term HRP, the organisation has flexibility of matching its human
resources and jobs. However, such flexibility is not available in short term HRP in which jobs have to be
matched with existing personnel and some ad-hoc arrangement is required to be made. Gradually, this adholism becomes deep rooted and affects entire HRM process.


The concept of HRIS has been derived from the concept Management Information System (MIS). HRIS may
be defined as:
a systematic procedure for collecting, storing, maintaining and retrieving data needed by an organisation
about its human resources and various activities that are relevant for their management.
The objective of HRIS is to provide accurate, relevant and timely information about human resources and
their functioning in the most cost-effective way. It should provide accurate and relevant information about man
resources and their functioning.
At present, the general trend is to have computerized HRIS (as a better substitute to hand/manually
operated HRIS). Even small organisations use computers for maintaining employee records, payroll processing,
Benefits of Computer Aid HRIS:
(1) Computer aid HRIS develops ability to process data with accuracy and high speed. Computerized processing
has accuracy and speed. This raises overall efficiency of HR department.
(2) Huge data on different aspects of HRM are arranged and stored systematically because of the use of
computer technology.
(3) Information users get quick access to required information because of the use of computers.
(4) Computer based HRIS is economical. It reduces the size of infrastructure required for the operations of HRIS.
Lesser manpower is adequate for maintaining records of different types. Office space required is also
reduced considerably.
(5) There is greater accuracy in the information supplied by8 computer based HRIS. This facilitates quick and
correct decisions on different aspects of HRM.
(6) Quick communication with employees is possible because of the services provided by computer based HRIS.
(7) Due to the use of HRIS, there is considerable reduction in the expenses on maintaining manual records of
staff employed in an organisation.
(8) At present, many HR software packages are available from software vendors. Large organisations in India
have started using HR software packages in the areas of HRP. Bharat Heavy Electricals and ONGC have
developed in-house HR software for HR decision-making.


Separation is a step ahead of demotion. It involves cessation of services of personnel from an organisation. The
employment relationship between an organisation and its employee comes to an end. In the case of layoff,
retrenchment, discharge or voluntary retirement, separation takes place but it is at the initiative of the
employer/management. In the case of retirement, the initiative is by the employee.


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Discharge or termination is a permanent separation of an employee from the organisation for violation of
organisational rules, (dishonesty, carelessness, drunkenness, etc. Dismissal is the termination of service of an
employee by way of punishment for some misconduct or for unauthorized and prolonged absence from duty. In
voluntary retirement, the employer offers attractive package of compensation to those who are willing for
separation on voluntary basis. Such retirement leads to permanent separation of an employee from the

14. What is job analysis?


Job title & Name of job
Working hours
Duties & Responsibility
Working condition
Family background
Salary & incentives
Machine to be handled on the job
Interpersonal skills
As mentioned in the above table Job analysis is divided into two parts.
Job Description
Job description is where the details regarding the jobs are given. Job description implies objective listing of the
of the job title, tasks, duties and responsibilities involved in the job.
Job Specification
Job specification is where we explain the qualities required by people applying for the job. Job specification on
the other hand, involves listening of employee qualifications, skills and abilities. These specifications are needed
to do the job satisfactorily. Often, practitioners make no of distinction between job description and job

15. Explain Job Analysis and the process of job analysis with diagram?
Job analysis : Job analysis is the process of studying and collecting information relating to the operations and
responsibilities of specific job. The immediate products of this analysis are job descriptions and job
The process of job analysis:
The fig. also points out the uses of information about jobs. As may be from the fig. job analysis is useful for
several purposes, such as personnel planning performance appraisal and the like. Each phase in the process of
job analysis is explained in the paragraphs that follow.
Strategic Choices
Gather Information
Process Information
Job Description
Job Specification

Used of Job Description and Job

Performance Appraisal
Training and Development
Job Evaluation and
Health and Safety
Career Planning

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Strategic Choices:
With regards to job analysis, an organisation is required to make at least five choices:
1) The extent of employee involvement in job analysis.
2) The level of details of the analysis.
3) Timing and frequency of analysis.
4) Past-oriented versus future-oriented job analysis.
5) Sources of job data.
Information Gathering
This step involves decisions on three issues
1) What type of data is to be collected?
2) What methods are to be employed for data collection?
3) Who should collect the data?
With regard to the methods for data collection, there are several of them,
1. Observation
Technical Conference
Diary methods
Information Processing
Once the job information has been collected, it needs to be processed, so that it would be useful in various
personnel functions. Specifically, job-related data would be useful to prepare job description and job
Job Description
Job description implies objective listing of the of the job title, tasks, duties and responsibilities involved in the
Job Specification
Job specification on the other hand, involves listening of employee qualifications, skills and abilities. These
specifications are needed to do the job satisfactorily. Often, practitioners make no of distinction between job
description and job specification.

DEFINITION: Job analysis is the process of studying and collecting information relating to the operations and
responsibilities of a specific job. The immediate product of job analysis is job specification and job description.
There are different methods used by organisation to collect information and conduct the job analysis
In this method, the job analyst carefully observes job holder at work. He makes a list of all the duties
perform by the worker and qualities required to perform this duty based on the information and job
analysis is pretended. The observation method is may be used for analysing repetitive, short cycle, unskilled
and semi skilled jobs.
1) This method is simple and easy to use.
2) It provides job information directly to the job analyst
3) It can be learned quickly and easily.
1) Job performance method is time-consuming and job information will be available after some period.

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2) It is a costly method because it required training and it means additional cost.

In this method 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 by employee to
solve the difficulty etc. In this method employees actual performance is analyst.
1. This method is simple and easy to use.
2. It provides job information directly to the job analyst.
3. It can be learned quickly and easily.
1. Its a time consuming method.
In this method an interview of the employee is conducted. A group of experts conduct the interview. They
ask question about the job, skills levels and difficulty levels. They ask question and cross question to an
employee and based on interview analyst collect information.
1) Interview can also be used with observation method to seek clarification on the job related matters.
2) It is suitable and widely used.
1) Time consuming.
2) Possibility of collecting inaccurate data.
3) Success depends upon the support between the analyst and the employee.
In this method employee is asked to write one or more critical incident that has took place on the job. The
incident will give an idea about the problem how it was handled, qualities required and difficulty levels.
Critical incident method gives an idea of the job and its importance and job analysis is prepared.
1) Fairly clear picture of actual job requirement in available by this method.
1) This method is lengthy and time consuming.
2) High degree of skill is required to analyze the content of description given by employees.
In this method a questionnaire is provided to the employee and they are asked to answer the question in it.
The question may be multiple choice questions or open ended question. The question decide how exactly
job analysis will be done. The method is effective because people would think twice before putting anything
in writing.
1) Questionnaire method provides comprehensive information about the job which makes job analysis
complete and satisfactory.
2) This method gives opportunity to all job holders to participate in the method and express themselves
1) Questionnaire method is costly and time consuming method as lot of time and efforts required for
drafting standardized questionnaires.

17. Need /importance/purpose/benefits of job analysis with diagram

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Definition of Job analysis:

Job analysis is collecting the information relating to the operations & responsibility of a specific job. The
immediate products of this analysis are job description and Job specification.


Job Analysis


The following are the benefits of job analysis:

1) Human Resource Planning:
HRP determines as to how many and what type of personnel will be needed in the near future. The number
and the type of personnel are determined by the jobs which needed to be staffed, Job-related information
is, therefore, necessary for HRP.
Recruitment needs to be preceded by job analysis. Job analysis helps the HR manager to locate places to
obtain employees for opening anticipated in the future. An understanding of the type of the skills needed
and type of the job that may open in the future, enables managers to have a better continuity and planning
in staffing their organisation.
Job analysis is useful for an HRD manager inasmuch as it helps him/her know what a given job demands
from the incumbent in terms of knowledge and skills. Training and development programmes can be
designed depending on the job requirements. Selection of trainees is also facilitated by job analysis.
Job evaluation involves determination of relative worth of each job for the purpose of establishing wages
and salary differentials. Relative worth is determined mainly on the basis of job description and job
Job evaluation helps determine wages and salary grades for all jobs. Employees need to be compensated
depending on the grades of the jobs which they occupy. Remuneration also involves fringe benefits, bonus
and other benefits. Remuneration must be based on relative worth of each job.
Performance appraisal involves assessment of the actual performance of an employee against what is
expected of him/her. Such assessment is the basis for awarding promotions, effecting transfer, or assessing
training needs. Job analysis facilitates performance appraisal in as much as it helps fix standards for
performance in relation to which actual performance of an employee is compared and assessed.

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Organisation generally maintains computerized personnel information systems. Such information system is
useful as it helps:
Improve administrative efficiency by speeding up the provision of data, by reducing the resources required
to carry out routine administration, and by freeing the resources for higher-value activities, which are
fundamental to the success of the management
Most companies apply their own health and safety plans and programmed based on job analysis. From the
job analysis company can identify the risk factor on the job and based on that safety equipments are

18. What is job design & explain the factors affecting job design
Job design involves conscious effort to organize tasks, duties and responsibilities into a unit of work to achieve
certain objectives. Job design follows job analysis.
There are various factors which affect job design in the company they can be explained with the help of a
(1)Characteristics of task
(1) feedback
(1) Employee availability & ability
(2) Work Flow
(2) Autonomy
(2) Social & cultural Expectation
(3) Variety
It refers to factors inside the organisation which affect job design.
These factors are as follows:
It refers to features of the job that is depending on the type of job & the duties involved in it. The
organisation should decide; how the job design must be done? In case the company is not in position to
appoint many people, a single job may have many duties and vice-versa.
The flow of work in a firm is strongly influenced by the nature of the product or service. The product or
service usually suggests the sequence and balance between jobs if the work is to be done efficiently.
Ergonomics is concerned with designing and shaping jobs to fit the physical abilities and characteristics of
employees. Nature of jobs remains the same but the location of tools, switches and other facilities is
changed to make the jobholder feel comfortable.
Job design is affected by the behavioral factor in following way:
Individuals need to receive meaningful feedback about their performance, preferably by evaluating their
own performance and defining the feedback. This implies that they need to ideally work on a complete
product or on a significant part of it.
Every worker desires a certain level of freedom to do his job efficiently this is called autonomy. Job that give

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workers authority to make decisions will provide added responsibilities, which tend to increase the
employees sense of recognition and self-esteem.
Lack of variety may cause boredom. Boredom, in turn, leads to fatigue and fatigue cause mistakes. By
injecting variety into jobs, Personnel specialists can reduce errors caused by fatigue.
Environmental factors which affect job design are as follows:
Efficiency consideration must be balanced against the abilities and availability of the people who are to do
the work. When Henry Ford made use of the assembly line, for example, he was aware that most potential
workers lacked any automobile-making experience. So jobs were designed simple and required little
There were days when getting a job was the primary consideration. The worker was prepared to work on
any job and under any working conditions. Not any more, Literacy, knowledge and awareness among
workers have improved considerably, so also their expectation from jobs. Hence jobs must be designed to
meet the expectations of workers.


There are various methods in which job design can be carried out. These methods help to analyse to job to
design the content and to decide how the job must be carried out. These methods are as follows:
Job rotation refers to moving employees from one job to another job to add variety and reduce boredom by
allowing them to perform a variety of tasks. When an activity is no longer challenging, the employee would
be moved to another job at the same level that has similar skill requirements. It reduces boredom and
disinterest through diversifying the employees activities.
Avoids Monopoly: Job rotation helps to avoid the monopoly of job and enables the employee to learn
new thing.
Provides the Opportunity to Broaden the Knowledge: Due to job rotation a person is able to learn
different jobs in the organisation which broadens his knowledge.
Avoiding forbidden practices: In an organisation like bank, job rotation is undertaken to prevent
employees from any kind of mistake. I.e. if a person is handling a particular job for a very long time he
will be able to find loop holes in the system and use them for his own benefit and indulge in forbidden

Frequent interruption:
Job rotation results in frequent interruption in the work. The person who is doing a particular job and
get it comfortable, suddenly find himself shifted to another job or department this interrupt the work in
both departments.

Reduce uniformity in Quality:

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Quality of work done by a trained worker is different from that of a new worker. When a new worker is
shifted or rotated in department he takes time to learn the new job and he may make mistake in the
process and affects the quality of the job.

Misunderstanding with the Union members:

Sometimes job rotation may lead to misunderstanding with the members of the union. The union might
think that employee hired results in more work being taken from them which in reality is not the case.
Job enlargement is another method of job design. It refers to the expansion of the number of
different tasks performed by an employee in a single job. Job enlargement attempt to add somewhat
similar tasks to the existing job so that it has more variety and be more interesting. It increases the slope of
the job. It also called the horizontal expansion of job activities.

Variety of skills: It helps the organisation to improve and increase the skill of the employee due to
which organisation as well as the individual benefits. It can also help to employee to improve their
Improves earning capacity: Due to job enlargement the person learns many new activities when such
techniques are applied on the job. The individual gets an option to get more salary from other
Wide range of activities: Job enlargement provides wide range of activities in job to employee. Since a
single employee handles multiple activities the company can they reduced the number of employees. It
reduces the salary bills for the company.
Increase work burden: Job enlargement increases the work of the employee and not every company
provides incentives and extra salaries for extra work. Therefore the efforts of the individual may remain
Increasing frustration of the employee: In many cases employees get frustrated because of increased
activities which in turn do not result in increased salaries so there is no focus towards the core
development. Career planning becomes difficult and over burden results in long working hours.
Problem with union members: Many union member may miss understand job enlargement as
exploitation of the worker and may take objection towards it.
Meaning: Job enrichment is a term given by Herzberg. According to him a few motivators are added to a
job to make it more rewarding, challenging and interesting. Job becomes enriched when it gives job-holder
more decision-making, planning and controlling power.
The motivating factors can be as follows:
Giving more freedom in decision making power.
Encouraging for participation.
Giving freedom to employees to select the method of working.
Allowing employee to select the job at which they would like to work.
Allowing workers to select the tools that they require at the job.
Allowing worker to decide the layout of plant or office.
Job enrichment gives freedom to the employee but at the same time increases the responsibilities.

Interesting & challenging job: When a certain amount of power is given to an employee it makes a job
more challenging for them. We can say that job enrichment is a method of employee empowerment.
Improves decision making: Through the 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.

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Indentifies future managerial potential: When we provide decision making opportunities to an

employee we can identifies which employee is better than other in decision making and mark employee
for future promotions.
Identifies higher order needs of employee: Abraham Maslows theory of motivation speaks of this
higher needs for e.g. Ego and esteem needs. These needs can be achieved through job enrichment. It
also helped in reducing the work superiors.

Job enrichment is based on the assumption that workers have complete knowledge to take decision and
they have the positive attitude. In reality this may not be problem in the working area.
Job enrichment has negative implications i.e. the additional responsibility given to an employee which
may not be expected by them.
Superiors may feel that power is been taken away from them and given to the junior. This might lead to
ego problems.
Some people are inherently dissatisfied with the organisation for such people low amount of job
enrichment can solve the problem.
Job evaluation is defined as a procedure for determining a work for the job and to determine a level of
compensation for a job.
To provide a standard procedure for fixing salaries
To ensure that wages and salaries are paid according to the qualification and work.
To decide salary using scientific methods of evaluation.
Involves a fair study of the job factors to avoid discrepancy

Job evaluation is very logical method which uses common factors to decide the salary which leads to
equality in the organisation.
New job are adjusted in the existing structure. They are added to the old job and evaluated to the new
There is greater simplification and uniformity in job evaluation.

The job factors fluctuate and evaluation and these factors do not reflect the true value in future.
Job evaluation creates doubts and fear in the minds of the employees. They feel that their efforts may
not be evaluated properly.
Job evaluation programme on procedure take a long time to be installed it requires specialized study by
technical personnel (experts).

Definition: job evaluation is a systematic and orderly process of determining the worth of a each job. It seeks
to determine to relative worth of each job so the salary differentials can be established. In job evaluation only
jobs are rated unlike in performance appraisal where only job holder is rated.

Objective of job evaluation

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Job analysis
Job description
Job evaluation programme

Job specification

Wage survey

Employee classification
The first step in process of the job evaluation is to set or identify the objective of job evaluation. Job
evaluation determined the worth of job. The main objective of job evaluation is to establish satisfactory
wage and salary differentials.
Job analysis is the second step in process of job evaluation. Job analysis is the process of collecting job
related information. Such information helps in the preparation of job description and job specification. Job
analysis refers to collecting information about job ad it include knowledge, skills and ability the incumbent
should process to discharge a job effectively.
Job description is the next step in the process after the job analysis. Job description implies the objective
listing of the title, tasks, duties and responsibilities involve in a job. It implies all details or description about
4. JOB SPECIFICATION: Job description & job specification are different from each other. Job specification
gives brief idea of the picture of employee before job evaluation. Job specification involves listing of
employee qualification, skills and abilities. These specifications are needed to do job satisfactorily.
Once the plan of action is ready the management must explain the same to the employee. This step is
important to clear the doubts of the employees and union leaders. A job evaluation programme involves
answering several questions. The major ones are: 1) which jobs are to be evaluated? 2) Who should
evaluate the jobs? 3) What training do the evaluators need?
Wage survey is time to fix wage and salary differentials. Before fixing such differentials, the wage rate must
be ascertained. Wage survey involves the survey in which one can decide the wage structure given to the
employees for specific job. Wage survey involves wages, insurance, transportation, leaves given to the
employees. Because of wage survey pay scale can be determined.
Employee classification is the stage where the evaluation process comes to end. Here the employees are
classified as per their job, qualification, pay scale and the post on which they have to work. Job evaluation
process comes to an end because job evaluation is the process where the job is analyzed and assessed
which identifies its relative worth in all organisations.

There are two different methods for job evaluation which are described as follows:

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1. Ranking method
The ranking method is considered as the simplest and the most inexpensive method under job evaluation.
The evaluation committee assesses the worth of each job on the basis of its title or on its contents, if the
latter are available. But the job is not broken down in to elements or factors. Each job compared with other
and its place is determined.
The main advantage of ranking method is its simplicity. It is easily understood and easy to operate.
Ranking method is inexpensive and less time consuming.
It involves little paper work.
Ranking method can be used conveniently in small establishment.

Job is not broken into elements or factors each job is compared with others and its place is determined.
So it is a subjective method.
Ranking is not bases on job description but on the raters knowledge of the job.
Not suitable for big organisations.
Grading method is based on the job as a whole. In this method the job classes or grades are first
established. In this method there is such a yardstick in the form of job classes or grades. Under this method
number of grades are decided upon, and the factors corresponding to these grades are then determined.
Facts about job are collected and are matched with the grades which have been established.
This method is easy to understand an easy to operate.
Its more systematic and accurate as compare to making method.
It is suitable to smaller corners as it is economical.
It is difficult to write accurate and precise description of job grades.
The system is inflexible and changes are difficult to introduce.
This system starts with selection of job factor, construction of degree of each factor, and the assignment of
point to each degree. In this method, each jobs evaluated separately, appraising each of the factors such as
skills, effort, and responsibility and working condition combining the separate evaluations into a single point
score for each job. In the point ranking method a series of rating scales is constructed one for each of the
factor which has been selected as important in the work of the position. A certain number of pints are
allowed for each scale. In this way, difference among jobs is referred.
Responsibility on job




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Working conditions
Physical demand
Responsibility for safety


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Point raking method is the procedures adopted is systematic and can easily be explained to the
It gives the exact value for each job.
The method is simple to understand and easy to administer.

Point rating method may suffer from inequalities if listing and weighing of points are defective due to
indifference on the thinking of rater.
Serious doubts are expressed about the range of points allotted and matching them with the job
Its difficult for application.
The factor comparison method is yet another approach for job evaluation in the analytical group. Under this
method, one begins with the selection of factors, usually five of them mental requirements, physical
exertion, and responsibility and job conditions. These factors are assumed to be constant for all the jobs.
Each factor is ranked individually with the other job.
The factor comparison method is more accurate and systematic than the simple ranking method.
The services of experts are used and this makes the system realistic and accurate.

The factor comparison method is complicated, expensive and not easy explainable to employee.
The method is also difficult to install.


Recruitment involves attracting and obtaining as many applications as possible from eligible job- seeker.
Recruitment is understood as the process of searching for and obtaining applicants for jobs, from among whom
the right people can be selected.
A formal definition of Recruitment
It is the process of finding attracting capable applicants for employment. The process begins when new recruits
are sought and ends when their applications are submitted. The result is a pool of applicants from which new
employees are selected.
Purpose and Importance
The general purpose of requirement is to provide a pool of potentially qualified job candidates.
Specifically, the purposes are to:

Determine the present and future requirement of the organisation in conjunction with its personnelplanning and job-analysis activities.

Increase the pool of job candidates at minimum cost.

Help increase the success rate of the selection process by reducing the number of visibly under qualified
or overqualified job applicants.

Help reduce the probability that job applicants, once recruited and selected, will leave the organisation
only after a short period of time.

Meet the organizations legal and social obligation regarding the composition of its workforce.

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Begin identifying and preparing potential job applicants who will be appropriate candidates.

Increase organisational and individual effectiveness in the short term and long term.

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Evaluate the effectiveness of various recruiting techniques and source for all types of job applicants.
(1) Campus Recruitment/Selection: The growth of Management institutes, IITs and Regional and other
Engineering Colleges has provided a popular source of recruitment known as Campus
Recruitment/Selection. It is an excellent source of recruiting/selecting management trainees.
This method of recruitment/selection is easy, quick and economical. It is convenient to the company as
well as candidates.
(2) Press Advertisement: Press advertisement is very widely used for recruitment of all categories of personnel
particularly for the appointment of middle level managers.
Press advertisement is also called Recruitment Advertisement a sits purpose is to give publicity to
vacancies available in the organisation and also appealing deserving candidates to submit applications.
Proforma of application blank is given. Many organisations including public sector banks now accept online
applications only.
(3) Recruitment through Management Consultants and Private Employment Exchanges: Management
consultants (e.g. A. F. Ferguson Associates) make necessary arrangements and select the suitable staff
required by a business unit. For this, they give advertisement, conduct tests and also arrange interviews,
etc. This source is mainly useful for the selection of top level executives. However, this source is costly as
agencies charge high commission for their services.
(4) Miscellaneous External Sources:
(1) Giving extension to existing executives after reaching the age of retirement.
(2) Use of professional meetings and conventions for the selection of executives.
(3) Use of executive placement agencies.
(4) Assistance from professional associations.



DEFINITION: Selection is the process of differentiating between application in order to indentify and hire those
with a greater likelihood of success in a job.
Selection is the processes of picking individual with requisite qualifications and competence to fill jobs in
an organisation.
1. Preliminary interview
2. Selection test
3. Employment interview
4. Reference & background analysis
5. Selection decision
6. Physical examination
7. Job offer
8. Employment contract
9. Evaluation


Selection is influenced by several factors among them are supply and demand of specific skills in the labour
market, unemployment rate, labour market conditions, legal and political considerations, companys image,

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companys policy etc. These are some of the environmental factor affecting selection process.
The purpose of preliminary interview is more or less the same as scrutiny of applications that is elimination
of unqualified applications. Preliminary interview on other hand helps to reject misfits for reasons, which
did not appear in the application form. It is also called as Courtesy Interview
Job seekers who pass the screening and the preliminary interview are called for selection tests. Selection
test may be conducted depending on the job and the company. Generally selection test is conducted to
determine applicants ability, aptitude and personality. Company can adopt many selection tests like
aptitude, personality test, graphology test etc.
The next step in the selection process is employment interview. An interview is conducted at the beginning
and at the end of the selection process. Interview is a formal, In-depth conversation conducted to evaluate
the applicants acceptability. It is considered to be an excellent selection device. Interview can be adapted
to unskilled, skilled, managerial and professional employees. It allows a two- way exchange of information,
the interviewers learn about applicants, and the applicant learns about the employer.
Many employers request names, addresses and telephone numbers or references for the purpose of
verifying information and, perhaps gaining additional background information on an applicant. References
are not usually checked until an applicant has successfully reached to this stage. Previous employers are
preferable because they are already aware of the applicants performance.
After obtaining information through the selection decision- the most critical of all steps- must be made.
Selections process has been used to narrow the number of candidates. The final decision has to be made
from the pool of individuals who pass the tests, interview and reference checks.
After the selection decision and before the job offer is made the candidate is required to undergo a physical
fitness test job offer is often contingent upon the candidate being declared fit after the physical
examination. The results of medical fitness test are recorded in a statement and preserved in the personal
Job offer is given to the candidates who have crossed all the previous steps. Such a letter generally contains
date by which the appointee must report on duty. The appointee must be given reasonable time for
reporting. This is particularly necessary when he or she is already in employment, in which case the
appointee is required to obtain a relieving certificate from the previous employer.
After candidates accept the offers, certain documents need to be executed by the employers and the
candidates. One such document is attestation form. The same will be valid for future reference. There is also
need for preparing a contract of employment. Which may contains job title, duties, allowances, holidays
agreement etc.
The broad test of the effectiveness of the selection process is the quality of the personal hired.
An organisation must have competent and committed personnel. The selection process, if properly done,
will ensure availability of such employees. Audit must be conducted by people who work independent of
the HR department.
(1) Intelligence test: Intelligence test is useful for judging the intelligence of a candidate. According to the
industrial psychologist, General intelligence is the capacity of a person for comprehension and logical

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(2) Vocational aptitude test: Vocational aptitude has been defined as the capacity or latent ability of an
individual to learn a job, given the necessary training. It has been claimed that vocational aptitude is as
important and perhaps more important than general intelligence for success on a job. It is, therefore
necessary to ascertain the vocational aptitude of a candidate before final selection.
(3) Analytical test: For the purpose of analytical tests, a job is first analyzed in terms of such qualities as speed,
dexterity, observation, etc. Terms are then devised to measure the degree to which a candidate possesses
these qualities.
(4) Synthetic test: In case of jobs which are complex and so cannot be analyzed and for which analytical tests
cannot be developed, synthetic tests have been evolved. The essence of these tests is that the candidate is
presented a complex situation, more or less similar to the one which he will have to face in his job but
on a miniature scale and he is asked to handle the situation. His performance in such attest indicates his
aptitude for the job.
(5) Trade test: Trade test is necessary and useful in the case of jobs which involve technical work. For example,
a stenographer or a typist should be given suitable test in order to judge his ability to take dictation or type.
Workers can be given such tests in order to find out their capacities for the types of job for which they are
being considered.
(6) Personality test: Personnel managers have come across many individuals with the necessary intelligence
and the vocational aptitude, and yet did not prove successful in the jobs for which they are selected. Its
essential feature is that it induces a candidate to reveal his inner or real personality.


Application blank is most commonly used to collect information from the applicants. The information sought
and information provided will facilitate the selection process. The information sought in application blanks may
vary according to the position and the organisation. Mostly application blank seeks the following information
like 1) Personal data 2) Martial Status 3) educational Data 4) Physical data 5) Employment Data 6) references
When the applicant submits his application blank, he provides the brief bio-data about himself to the
organisation. It facilitates comparison among the applicants. It serves as a basic to initiate a dialogue in the
interview...In brief application blank is prescribe form issued by the company for the collection of required
information from experienced candidates.

adequate and required information is collected from all candidate

It provides an input to interview

It facilitates easy and quick rejection of candidates

It is easy way to store the candidate data.

(1) Individual interview: In this interview, the interviewer has direct contact (one-to-one) with the candidate. It
I a direct talk between two parties. There is face-to-face interaction between the interviewer and the
candidate. Questions may e asked to the candidate as regards his qualifications, skills, experience and so
on. Final decision on selection is taken after the completion of all individual interviews.
(2) Panel/Board interview: This interview is opposite to individual interview. Here, the interviewers may be
two or more. It is an interview by a pane/board of interviewers. Panel means a selection committee or
interview committee appointed for interviewers. Panel means a selection committee or interview
committee appointed for interviewing the candidates. The panel may include three or five members.

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They will ask questions to candidates on different aspects and give marks to each candidate. His final
decision will be taken by all members collectively through rating of candidates.
Group interview: Here, all candidates or candidates in small groups will be brought together for the purpose
of interview. It is a group interview and not individual interview. It is like study of performance of
candidates in group discussion. The time of the executive is saved and judgment of candidates is possible by
observing the manner in which the candidates react to and against each other.
Stress interview: Stress interview is designed to test the candidate and his behaviour by putting him under
conditions of stress and strain specially created. Here, a series of harsh and rapid fire questions are asked
with an intention of offsetting the candidate and to find out his ability to deal with the situation calmly,
correctly and without any mental pressure.
Patterned/Structured interview: Such interview is well planned in regard to accuracy and precision. Here,
list of questions to be asked is decided before the interview. Procedure is pre-decided. In brief, the
structure of the interview is decided in advance. It is a well planned, well directed and properly guide
Non-directive/unstructured interview: Here, the details of interview producer are not pre-planned. He is
not disturbed by short questions in between. The idea is to give candidate complete freedom to speak and
express freely.
In-depth interview: The purpose of in-depth interview is to examine intensively the candidates background
and thinking power and to go into considerable detail on particular subjects of important nature and of
special interest to the candidate. The purpose of depth interview is to get true picture of the candidate
through deep probing into the mind of the candidate.

Definition: Induction or Orientation is planned introduction of employees to their jobs, co-workers and the
organisation. It is designed to provide a new employee with the information he or she needs to function
comfortably & effectively in the organisation.
A few needs to make four strategic choices before designing its orientation programme
Formal ------------------------Informal
Collective ------------------------- Individual
Serial ------------------------- Disjunctive
Investiture ------------------------ Divesture
In formal orientation, the management has structured programme which is executed when new employees
join the firm. In informal orientation, new employees are directly put on the jobs and they are expected to
acclimatize themselves with the work and the company.
Another choice which management can make is whether the new employees should be inducted
individually or in groups. Individual induction is more likely to preserve individual perspective and individual
differences. Orienting each person separately is an expensive and time consuming process. Most large
organisation follows the collective method for induction. This method saves time and it is less expensive and
even beneficial from employees point of view.
3. SERIAL OR DISJUNCTIVE: Orientation becomes serial when a new hire is inducted by his senior experienced
employee. The experienced employee act as tutor and model for the new hire. The advantage of serial

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orientation is that it helps to maintain the traditions and customs. When a new hire dont have any senior to
guide them in orientation programme than the orientation programme becomes Disjunctive. The advantage
of this orientation is employees become more creative and inventive as they arent burdened by traditions.
4. INVESTITURE OR DIVESTITURE: Investiture orientation helps to identify the usefulness of distinct features a
person brings to new job. Most high level appointment follows this approach. Divestiture orientation on
other hand makes a minor change in the characteristics or features of a new hire, though he or she was
selected based on his or her potential for performance.
1. Programme is for new employees
2. Determine the information new employees need to know
3. Determine how to prevent information & how to present the information
4. Completion of paper work


Induction for a candidate is done when the candidate has accepted the offer letter and ready to join the
organisation. Induction simply means introducing the new employee to the organisation. It is simply done so
that candidate becomes aware of the organisational culture, values, belief, policies followed, work nature, work
environment, and most importantly subordinate he is going to work with.

The purpose of induction is to make the new employees feels at home in the new environment. It is a
familiarization programme.

Finally, they are very much concerned about how well they will get along with their co-workers.
Induction is a welcoming of a new worker and creating sense of understanding and confidence in his
mind. The idea is to make the newly appointed employee feel at home in the new environment.

The purpose is to provide various types of information to new employees. Such informations are:
General information about the daily work routine and the terms and conditions of employment

Detailed information of the organisations policies, work rules and employees benefits. This information
is given in a brochure and a copy of the same is supplied to newly appointed employees.

To communicate to newly selected employee the details of job requirements.

To help him in gaining confidence in his work and the organisation he has joined. In other words, to
make him feel comfortable and at home in the new organisation.

Good induction programmes create favourable impression on newly appointed employees. It creates
affinity for the job and company among new employees. It also develops a sense of belonging among
new managers.

It creates favourable impression of the organsiation and its work.

A new employee finds it easy to adjust with co-workers or supervisor and also with the work assigned
due to induction/orientation programme.

A good orientation programme reduces the rate of labour turnover. It also reduces grievances and
complaints of newly appointed workers.

New employees get exposure to all areas of the organisation. This creates a sense of confidence among

A worker gets psychological satisfaction that the company is taking interest in him and wants him to
work with satisfaction and pleasure.

Induction develops good public image/ public relations building of the company and it remains the same

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for a long period.

Placement refers of allocation of people to jobs. It includes initial assignment of new employees, and
promotion, transfer, or demotion of present employees.
After an employee has been hired and oriented, he or she must be placed in his/her right job. Placement is
understood as the allocation of people to jobs. It is the assignment or re-assignment of an employee to a new or
different job. Placement includes initial assignment of new employees and promotion, transfer, or demotion of
present employees.
The employers advertise inviting applications from candidates for a specified post. The advertisement
contains job description and job specification in details. When a candidate has been selected, it is logical that he
or she is placed in the position that was advertised earlier.
If an individual fails to meet minimal requirements in one job, he or she will be considered for other
available jobs and will probably be offered employment in one of them. From a managerial perspective, the task
is to understand and capitalize on each persons individuality.
Meaning: Training is the process of imparting specific skills. Training is the process which helps to impact the
skills of an employee. Training helps to develop the basic skills to perform the task its not only the workers who
need training but also the supervisors, managers, executives etc also need the training.
1. Training is vital for the growth of organisation.
2. It strives to improve employees performance of the current job.
3. Training always helps in improving the employees performance and provides efficiency to perform the task.
4. It helps employees to satisfy personal goals.
5. Training always gives a quality employee to an organisation.
Business Environment
Changes & Challenges
Learning & Implementation
Business Excellence
1. Needs Assessment:
Needs Assessment identifies present problems and future challenges to be met thorough training and
development. Organisation spends sums money on training and development. Hence before spending
huge resources there should be a proper study done on the needs of training.
Needs assessment can be done at two levels a) group b) individual
An individual obviously needs training when his or her performance is not at standard level.
2. Deriving instructional objectives:
This is the next stage to identify instructional objectives.
Need assessment helps to prepare the blueprint that describes the objective to be achieved on the
completion of training programme. Instructional objective provides the inputs for designing the training

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programme as well as for the measures of success that would help assess effectiveness of the training
Designing Training & Development Programme
A training Programme should be very well designed and should considerer the vital issues
A training programme must be designed considering the issues like who is going to train? What are the
methods used? Where is the training conducted? etc
Implementation of the training programmed:
After designing training programmed the same should be implemented. Company should organize training
and other facilities and monitor the progress of trainee & Training Programme as well.
Evaluation of training process:
This is the last step or stage in training process. Since huge amount of money is spent on training process,
how far the programme has been useful must be determined. Evolution help determine the result of the
training and development programme.
Training Methods


a) Coaching
Sensitivity Training
b) Understudy assignment
In Basket
c) Job Rotation
Role Playing
d) Junior Boards
Case Study
e) Appointment As Assistant
TV Video
f) Project Assignment
g) Promotions & Transfer
h) On-Job Training
This involves a continuing flow of instructions, comments and suggestion from manager to the
subordinates. Often, a trainee works directly with a senior manager who is responsible for coaching the
Normally the understudy relieves the executive of certain responsibilities, giving the trainee a chance to
learn the job.
C) JOB ROTATION: job rotation involves shifting the person from one department to another so that he is able
to understand and learn the different function of the organisation. Job rotation is of great help for them to
understand the basic of business.
Junior boards are the group of junior executive working in the organisation. The major problems are
discussed by these juniors and all reported to board of directors because of this they all trained on decision
making. The overall is to trained executive as the tomorrows managers.
A junior executive may be appointed as assistant to senior executive. For the purpose of training and
practical experience. Here junior executive learn and trained or the new technique to provide assistance to
his senior.
In this method a trainee manager is given a project that is closely related to the work of his department.
Here the executive is trained on the project management skills such training provides valuable experience
and develops problem solving attitude.

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Promotions & transfers are two more internal methods for training the employees. Promotions gives an
opportunity to manager to acquire new skills required for a job at higher level. Transfers give an opportunity
to work in different or new atmosphere.
1. Proper attention is given during the training as the training is performed during the job.
2. Senior is always to guide and to assist.
3. More of practical knowledge than theory.
4. Trains on better decision making.
5. Motivates the employee and makes him self-dependent.
6. Develops co-ordination among the employees and helps to judge the performance level.
Sensitivity training is also called as the group or lab training. In this training method the trainees are made
to discuss themselves on certain topics and the discussion is guided by an expert. It`s more a face -face
interaction. This method gives a chance to come out with different ideas and beliefs.
In this method the trainees are provided with tray of paper and files related to their function. They all are
expected to find out the effective solution of a problem. In this training method trainee develops the
problem solving skills.
It is a method of human interaction which involves realistic behavior in imaginary situations. It is more
effective in learning leadership and human resource training. It`s objective is to raise trainee manager while
dealing with others.
This is the most useful technique of management development. Case study uses a written description of a
real decision making situation in an organisation. Managers are asked to study the case to identify the
problems, analyze them for their significance, propose solution, choose the best solution and implement it.
TV & video Instructions are used for training and management development programmes. This is the
easiest method to employee to understand the problem and their solution.
It is any attempts to improve current or future employee performance by increasing an employees ability to
perform through learning, usually by changing the employees attitude or increasing his or her skills and

Training and development need = Standard performance - Actual performance

Actions on the following lines need to be initiated to make training practice effective:

Ensure that the management commits itself to allocate major resource and adequate time to training.

Ensure that training contributes to competitive strategies of the firm. Different strategies need different
HR skills for implementation. Let training help employees at all levels acquire the needed skills.

Ensure that a comprehensive and systematic approach to training exists, and training and retaining are
done at all levels on continuous and ongoing basis.

Make learning one of the fundamental values of the company. Let this philosophy percolate down to all
employees in the organisation.

Ensure that there is proper linkage among organisational, operational and individual training needs.

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Create a system to evaluate the effectiveness of training.



Improves efficiency: Training raises the efficiency and productivity of workers and managers. This leads
to more production and profit to employer.

Improves quality of production: Training improves the quality of production. It also reduces the volume
of spoiled work and wastages of all kinds. This reduces cost of production along with improvement in
the quality.

Reduces expenditure on supervision: Training reduces expenditure on supervision as trained

employees take more interest in the work and need limited supervision.

Provides stable labour force: Training brings stability to labour force by reducing labour turnover
among workers and managerial personnel.

Creates cordial industrial relations: Training moulds attitudes of employees and develops cordial
labourmanagement relations. In fact, scientific recruitment and selection as well as employee training
play a useful role in developing and maintaining cordial industrial relations

Reduces labour absenteeism: Training reduces absenteeism among workers as trained employees find
their job interesting and prefer to remain present on all working days. Training creates attraction for the
job and work environment. An employee prefers to remain in the same organisation over years because
of promotion and other benefits.

Creates a pool of capable employees: Training creates a pool of trained, competent and capable
personnel form which replacements can be drawn to fill up the loss of key personnel due to retirement,
resignation, etc. training and development act as a source of competitive advantage.

Creates confidence among employees: Training creates a feeling of confidence in the minds of
employees. It gives personal safety and security to them at the work place. Due to training, managers
can motivate their subordinates and get the things done as per the requirements of the organisation.

Develops skills among employees: Training develops skills which act as a valuable personal asset of
employees. They remain permanently with the employees for use.

Quick Promotion: Training provides opportunity for quick promotion and self-development to

Offers monetary benefits: Training provides attractive remuneration and other monetary benefits to
employees. Trained workers draw more salary than untrained workers.

Facilitates self-management: Training develops positive attitude towards work assigned and thereby
creates interest and attraction for the job and the work place. Employees look after their duties on their
own and not due to external force i.e. supervision.

Develops co-operative outlook: Training creates an attitude of mutual co-operation and understanding
among the managers. Such attitude of co-operation is useful not only at the work place but also in the
social life.


Creates positive attitude: Training develops positive attitude towards work and creates attraction for
the workplace.

Improves internal communication: Training ensures improved communication between groups and

Provides better orientation: Training provides orientation for new employees and also those taking new

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jobs through transfer or promotion.

Provides information to employees: Training provides information on opportunity in employment,

governmental laws and administrative policies and so on. It facilitates career planning of employees and
also facilitates self-development.

Creates healthy work atmosphere: Training provides a good climate for learning and growth. It makes
organisation a better place to work and enjoy.

Improves employee morale: Training improves interpersonal skills. It builds up a group of employees
with high morale.

DEFINITION: Career planning is a systematic process by which one selects /decides career goals and the path to
achieve or reach the same. Rapid improvements in education, training facilities and job opportunities have
encouraged people to plan their career. Career planning provides suitable promotional opportunities. Career
planning improves and develops motivation and moral of the employees.
Stages & steps in career planning:
This is the first step which needs to be completed before the introduction of career planning programme.
This relates to the future from which career planning is to be introduced. Here, the base line will be
purchased to help the planner to make projections for the planning period and to help the planners to make
projections for the planning period and to help in the evaluation of plans. The information collected on
these aspects serve as base for the preparation of career development plan for the future period.
In this second step an attempt is being made to find out the situation likely to develop after the completion
of career development plan. This can be done on basic assumption which can predict what is likely to
happen at the close of the career development plan.
In this third step of career development plan, efforts are made to find out precisely the career development
needs of the future period. It is possible to identify the slope and limitation of career development needs on
the basis of the data collected. Identification of career needs of the organisation creates proper background
for the preparation of career development.
It is rather difficult to meet all the needs of the employees and the organisation for career development
immediately; i.e., through one career development plan. Naturally there is need to select the urgent
problems of employees and organisation. In addition, other factor such as technical, financial and
administrative must be taken into consideration while finalizing the priorities.
5) DEVELOPMENT OF CAREER PLAN: It is the most important step.
This step decides:
a) What is to be achieved
b) In what extent it is to be achieved
c) The employees involved
d) The length of time required to achieve
e) Facilities to achieve etc.
After deciding the priorities of career development plan, next major step is to prepare write up of the career
plan. This write up should contain all necessary details such as schedule, procedures and other details so
that the evaluation of the plan will be easy and meaningful.
Monitoring is essential for effective execution. Expected results will be available only when plan is
implemented properly. Because of monitoring the shortfalls can be easily identified. Monitoring ensures

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that targets are achieved as per prepared schedule.

Implementation of plan is an integral aspect of planning process. For effective implementation co-operation
and co-ordination at all levels is necessary. Implementation needs proper monitoring so as to avoid possible
shortfalls. Career development plan has to be implemented by HRD department, however financial and
administrative support is also necessary.
A plan needs periodic reviews. Such evaluation avoids mistakes, deficiencies during implementation stage. It
is inbuilt device to measure the effectiveness of the plan. Actual benefits available will be known only
through such reviews and evaluations. Such evaluations should be done by experts. It is also desirable to
review the benefits available from career development plans to the individual employees and the
This is the last stage in career development. Here on the basis of achievement of the current plan, the
future career needs are estimated. New priorities are decided and details of the new career development
plans are prepared.
Career stages become applicable to such employees who are competent, competitive, aggressive and career
Career stages are as follows:
1) Exploration stage
2) Establishment stage
3) Mid-career stage
4) Late career stage
5) Decline stage
1) Identification of employees needs & aspiration:
The organisation has to analyze the aspiration of different categories of employees. It is necessary to
identify the career goals, aspirations and career anchors of the employee. Information of this type is useful
in guiding the employee. It also can be used by the organisation for promoting some employees. In this way
organisation can identify needs and aspiration of employee and helps them in their career planning.
2) Analysis of career opportunities & supplying information to employee:
The organisation can analyze the career opportunities presently available within. The career opportunities
in the future period can also be estimated. This information can be used while guiding employees in regards
to their career planning. Employees will be able to select suitable area for their career development because
of the details available or career opportunities.
3) Career counseling:
Career counseling is one major method by which organisation can help an employee in his or her career.
Employee need guidance in their career paths and the direction in which they can walk from this is
described as career counseling. Such counseling is required when employee have to plan their own careers
and develop themselves for career. Counseling is possible by HR manager and also by departmental
manager. The employee can select career most suitable to his or her potential and aptitude with the help of
such career counseling.
4) Motivation of employees:
An organisation can create environment favourable to career planning. It has to take active interest in the
development and well being of its employees. They should be motivated to take special interest in their
career planning. The likely benefit should be brought to their notice. Thus motivating employee in right

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direction is one way by which an organisation can help an employee in his or her career development.
5) Internal publicity to career information:
Many employees lack information about career options. An organisation can help an employee in his or her
career by giving wide publicity to career opportunities available within the organisation.
6) Making career opportunities as regular activity:
Career training and development should be carried out as continues activity of the organisation. This is
necessary to take care of changing needs of both employees and the organisation. This is one method by
which an organisation can help an employee in his or her career development.
7) Providing service of experts:
Organisation can provide the service of experts for career counseling of its employees. Such experts can
guide employee in their career planning more effectively. Experts can remove unrealistic expectations and
set realistic career goal for the employees.
8) Career development workshops:
Organisation can conduct career development workshops for interested employees. Such workshops help
for resolving misperceptions. Organisation can help its employee in their career development.
9) Continuing education and training:
Continuous education and developments are essential for career planning and development. The
organisation should provide training facilities to interested and deserving employees and help them in their
career development.
10) Periodic job changes: The organisation can introduce the job rotation technique in the department. This
helps employees to acquire the organisational knowledge and knowledge of different jobs and
departments. The employee also gets confidence of work efficiently under any environment. The
organisation can introduce the periodic job rotation technique and prepare the employees for their future
1) Exploration stage
2) Establishment stage
3) Mid-career stage
4) Late career stage
5) Decline stage
Almost all candidates who start working after college education start around mid-twenties. Many a times
they are not sure about future prospective but take up a job in anticipation of rising higher up in the career
graph later from the point of view of organisation. This stage is of no relevance because it happens prior to
the employment.
This career stage begins with candidate getting the right job. Getting hold of the right job to commit
mistakes and learn from their mistakes. Slowly and gradually they become responsible towards the job.
Ambitious candidates will keep looking for more challenging jobs. This may either results in migration to
another job or he or she will remain with the same job because of lack of opportunity.
This stage represent fastest and gainful leap for competent employees who are commonly called
Climbers. There is continuous improvement in performance. On the other hand, employees who are
unhappy and frustrated with job there is deterioration in their performance. Climbers must go on improving
their own performance. Authority, responsibility, rewards and incentives are highest at this stage.
This career stage is pleasant for the senior employee who like to survive or the pass glory. There is no desire
to improve performance and improve past records. Such employee enjoys playing the role of elder state

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person. They are expected to train younger employees and earn respect from them.
This career stage represents the completion of ones career usually into retirement. After decades of hard
work such employees have to retire. Employees who were climbers and achievers will find it hard to
compromise with the reality.

In simple terms, performance appraisal may be understood as the assessment of an individual`s
performance in a systematic way, the performance being measured against such factors as job knowledge,
quality and quantity of output , initiative , leadership abilities, supervision, dependability, co. Operation,
judgment, versatility, health and the like.

Traditional techniques or methods

Modern techniques or method
Ranking method
1) Psychological appraisals
2) Grading method
2) Appraisal by results or management by objectives
3) Group appraisal
3) Assessments centers
Checklist method
4)360 degree appraised
Critical incident method
Essay method
Behavioral anchored rating scale
Traditional techniques: traditional method are applicable for ranking and grading and are mostly used in
government offices
1) Ranking Methods: Ranking method is oldest but simplest method for rating the employees. In this method
the performance of the employee is judged and employees are compound each other for ranking purpose.
The rank is given in best to the worst order.
Merits or advantage
It is simple to understand and easy to used.
It is less expensive and less time consuming.
Employees are judged on their performance so injustice doesnt arise.
Demerits or Disadvantage

Ranking methods rank is given to all employees. However it doesnt tell how much one employee is
superior then other.
Ranking methods is based on mantle assessment, proofs are not available why the rate as rank superior.
2) Grading method:
In the grading method greats or classes are first established and carefully define the raters evaluate. The
grades are given to employees on their performance of during the job. The grades may be like, O
(Outstanding) A (excellent), B (very good), C (for good), D (for fair) and E (poor).

Very simple Method to apply.

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Not time consuming.

Grades are classis are already decide and carefully defined
Lacking of accuracy. The rating given may not be so accurate
This can cause the internal conflicts
3) Group appraisal: In this method a group of evaluators assess the group of employees. A group can be
composed of
a) Supervisor
b) Head of the departments
c) Personal experts of the group evaluate and judge the performance an employees
There are superior and experienced person to judge.
It improves the level of performance of an employee.
The cause of poor performance is analyses and suggestion is given to employee for improving the same.
As the judgment is done by a known person or superior there are the chance of partiality.
4) Check list method: A check list Method is the method of preparing list consisting of number of statements
about the qualities of employees and his behavior is prepared.
STATEMENT OR QUESTIONS may be noted as follows:
a) Does the employee works best under tension ... ( )
b) Does the employee makes mistakes frequently ( )
c) Does he keeps ahead of schedule ............... ( )
d) Does he follows the instruction of is superior . ( )
While rating the employee, the rater is asked to place (+) sign or (-) sign which ever applies for a particular

The rating of employees by this method is impartial as the raters reports only the facts but value are
assigned separately.
The question makes cover all the important aspect.
It is difficult to construct always a affective, good check list.
Separate check list is needed for each category of job.
The role of the rater is ether possessive then active.
The method is costly and lengthy.
5) Critical incident method:
The concept behind this method is that there are certain keys acts of behavior which makes different
between success and failure. This act arises out of when incident occur while performing the job. The
superior act as rater and this require making the note of such incident. Examine the performance of the
candidate and record his rating.
An experienced person or supervisor is to judge and rate the employees. An experienced supervisor knows
what type of action or behaviour leads to success and which leads to failure.

Study of the action of the candidate in the critical incident over period of time enable the supervisor to
raters the employee correctly.

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6) Essay Method
This method is extremely useful in filling information gap about the employee that often occur in the better
structured checklist method. The strength of the essay depends on the writing skills and analytical ability of
the rater.
1) The strengths can be more developed and weakness can be copied.
2) Potential can be raised than the present level.
Comparison of performance of one employee against another is not possible under these methods.
7) Behaviorally Anchored Rating Scales (BARS): It is modern method of performance appraisal. Behaviorally
anchored rating scales whose scales points are determine by statement of effective and ineffective
Behaviors. Rater must indicate which behaviour on each scale describes the performance of an employee.
Rater who will use the scale will identify and define the areas of performance to be evaluated.
The scales are anchored by description of actual job behaviour.
It is quite costly and time consuming method.
Modern methods of performance appraisal are more superior to the traditional. The modern method puts
emphasis on improvement of employee performance through special efforts by management and employee
1) Appraisal by result or Management by objectives:
This method is also called goal setting method. In this method the subordinate employees are required to
set their own standard of performance along with their superiors. Thereafter the actual performance of an
employee is evaluated against its supervisors performance. Then the judgment is fairly done on the basis of
one performance. This is a much advanced and better method than any other traditional appraisal method.
This appraisal method is not imposed on the employees but introduced with their co-operation and
participation. An actual performance can be discussed personally in an appraisal interview and the superior
can explain the weakness of the subordinate and the manner in which it can be removed and minimized.
This method is participative appraisal method which ensures better team work.

This method is not suitable for the entire job in the all organisations.
Jobs with little flexibility such as assembly line work are not computable with this concept.
When the results of such performance appraisal are used to allocate organisational rewards, employees
may be less likely to accept challenging goals.
This method is time consuming.
2) Assessment centers:
Assessment centers are now being used for evaluating the executive or supervisory potential. An
assessment centers is a central location where managers may come together to have their participation in
job-related exercise evaluated by trained observers. The characteristics assessed in a typical assessment
centre include assertiveness, persuasive ability, communicating ability , panning and organisational ability ,
self confidence, resistance to stress, energy level, decision making , sensitivity to the feeling of others,
administrative ability, creativity , and mental alertness.

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Not only work performs but also Inter personal skills, communicating skills and assertiveness is judge.
Increase the level of confidence to perform job.
It also ensures that wrong person are not selected and promoted.
It is costly and time consuming method of performance appraisal.
The results are mainly drawn by considering the interpersonal skills.
If the result are poor than the employee may react in the negative manner.
3) 360 appraisal:
When multiple raters are involved in evaluating performance, the technique is called as 360 degree
appraisal. This technique is understood as the systematic collection of performance data on an individual or
group, derived from a number of stakeholders. It is the method where the employee is evaluate by superior,
peers, subordinate and clients.
As there are multiple rater involve it is less biased.
There is systematic collection of data from the immediate supervisor, peers and concerned employee.
It is the time consuming method.
Multiple raters can be demerits because we cant judge that every rater is best or honest.
4) Psychological Appraisal:
Psychological appraisals focus on future potential and not actual performance. Industrial psychologists are
employed for conducting the appraisal. Large organisations employ full-time industrial psychologists. When
psychologists are used for evaluations, they assess an individuals future potential and not past
This evaluation, placement and development decision may be made to shape the persons career.
This appraisal method may increase the employees potential.

This is the slowly and time consuming method.

The quality of appraisal depends largely on the skills of the psychologists.

35. Define Performance Appraisal. State its objective and purpose or importance?
Performance appraisal is an objective assessment of an individuals performance against well defined
Performance appraisal is an objective assessment of an individuals performance in a systematic way, the
performance being measured against such factors as job knowledge, quality and quantity of output, initiative,
leadership abilities, supervision, dependability, co-operation, judgment, versatility, health and like. Potential of
the employee for future performance must also be being assessed.
A formal definition of performance appraisal is:
It is the systematic evaluation of the individual with respect to his or her performance on the job and his or
her potential for development.
A)Purpose of Performance Appraisal
Data relating to performance assessment of employees are recorded, stored and used for several purposes. The
main purposes of employee assessment are:

To effect promotions based on competence and performance.

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To confirm the service of probationary employees upon their completing the probationary period

To assess the training and development needs of employees.

To decide upon a pay raise here regular pay scales have not been fixed.

To let the employees know where they stand insofar as their performance is concerned and to assist
them with constructive criticism and guidance for the purpose of their development.

To improve communication. Performance appraisal provides a format for dialogue between the
superior and the subordinate, and improves understanding of personal goals and concerns.

Finally, performance appraisal can be used to determine whether HR programmes such as selection,
training and transfers have been effective or not.
Performance appraisal serves four objectives:
1) Development uses
2) Administrative uses/decision
3) Organisational maintenance/objective
4) Documentation purpose
Multiple Purpose of Performance Assessment
General Applications
Specific Purpose
Development al Uses
Identification of individual needs
Performance feedback
Determining transfers and job assignments
Identification of individual strengths and developmental needs
Administrative Uses/Decisions
Retention or termination
Recognition of individual performance
Identification of poor performers
Organisational Maintenance/Objectives
HR Planning
Determining organisation training needs
Evaluation of organisational goal achievement
Information for goal identification
Evaluation of HR system
Reinforcement of organisational development needs
Criteria for validation research
Documentation for HR decisions
Helping to meet legal requirements
Objectives of Performance Appraisal

Establish Job Expectations

Design an appraisal Programme


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Appraise Performance

Performance Interview

Performance management

Archive Appraisal Data

Use appraisal




Objectives of Appraisal
Objectives of appraisal, as stated above, include effecting promotions and transfers, assessing training needs,
awarding pay increase, and the like. The emphasis in all these is to correct the problems. These objectives are
appropriate as long as the approach in appraisal is individual. Appraisal, in future, would assume systems
orientation. In the system approach, the objectives of appraisal stretch beyond the traditional ones.
In the systems approach, appraisal aims at improving the performance, instead of merely assessing it.
Towards this end, appraisal system seeks to evaluate opportunity factors. Opportunity factors include the
physical environment such as noise, ventilation and lightings, available resources such as human and computer
assistance; and social processes such leadership effectiveness.
Establishment Job Expectations
The second step in the appraisal process is to establish job expectations. This includes informing the employee
what is expected of him or her on the job. Normally, a discussion is held with his or her superior to review the
major duties contained in the job description. Individuals should not be expected to begin the job until they
understand what is expected of them.
Design an appraisal Programme
Designing an appraisal programme poses several questions which needs answers. They are

Formal versus informal appraisal

Whose performance is to be assessed?

Who are the raters?

What problems are encountered?

How to solve the problems?

What should be evaluated?

When to evaluate?

What methods of appraisal are to be used?

Appraise the Performance
Performance is essentially what an employee does or does not do. Employee performance common to most
jobs include the following elements:

Quantity of output

Quality of output

Timelines of output

Presence at work

Performance measurement needs to be based on the benchmarks listed above. These benchmarks vary from

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job t o job.
Performance Interview
Performance interview is another step in the appraisal process. Once appraisal has been made of employees,
the raters should discuss and review the performance with ratees, so that they will receive feedback about
where they stand in the eyes of superiors. Feedback is necessary to effect improvement in performance,
especially when it is inadequate. Specifically performance interview has three goals.
1. To change behaviour of employees whose performance does not meet organisational requirements or their
own personal goals?
2. To maintain the behaviour of employees who perform in an acceptable manner.
3. To recognize superior performance behaviour so that they will be continued.
Archiving Performance Data
Organisation need to archive or store the appraisal data so that at any point in future, the information can be
retrieved and used. For example, if an employee has been told that he or she was not promoted because of
below average performance and he or she would be considered favourably for a jump in status and
remuneration provided the performance improves. The HR manager should have those details to convince the
employee concerned when he or she joins issue with the management on matters relating to promotion.
Use of appraisal Data
The final step in the evaluation process is the use of evaluation data. The data and information generated
through performance evaluation must be used by the HR department.
In one way or another, data and information outputs of a performance-appraisal programme can critically
influence these coveted employer-employee reward opportunities. Specifically, that data and information will
be useful in the following areas of HRM:

Remuneration administration

Validation of selection programmes

Employee training and development programmes

Promotion, transfer and lay-off decisions

Grievance and discipline programmes

HR planning

Performance appraisal offers competitive advantages to a firm by improving performance, helping make correct
decisions, ensuring legal compliance, minimizing job dissatisfaction employee turnover and ensuring consistency
between organisational strategy and behavior.
Performance appraisal and competitive advantage
What needs emphasis is that performance evaluation contributes to firms competitive strength. Besides
encouraging high levels of performance, the evaluation system helps identify employees with potential, reward
performance equitably and determine employees need for training.
a) Improving Performance
An effective appraisal system can contribute to competitive advantage by improving employee job
performance in two ways- by directing employee behavior towards organisational goals and by monitoring
that behavior to ensure that the goals are met.
b) Making Correct Decisions
As stated above, appraisal is a critical input in making decision on such issues as pay rises, promotion,
transfer, training, discharges and completion of probationary periods. Right decision on each of these can

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contribute to competitive strength of an organisation.

c) Ensuring Legal Compliance
Promotions made on factors other than performance might land up a firm in legal battle, thus diverting its
focus on non-productive areas. Organisations can minimize costly performance-related litigation by using
appraisal systems that give fair and accurate ratings.
d) Minimizing Job Dissatisfaction and Turnover
Employees tends to become emotional and frustrated if they precise that the ratings they get unfair and
inaccurate. Such employees find that the efforts they had put in became futile and obviously get demotivated.
Dissatisfaction in the job sets in and one of the outcomes of job dissatisfaction is increased turnover


(1) Time-consuming: Performance appraisal is a yearly exercise in many organisations. Superiors have to do this
work within the time limit fixed. For such appraisal, forms are to be filled in and various observations are
required to be noted. This increases the paper work of supervisors.
(2) Limited stress on self-improvement: Performance appraisal is basically for self-improvement and selfdevelopment of employees. For this, the evaluation needs to be systematic and the appraisal interview
should be problem solving in character. In many organisations, this aspect is not given adequate attention.
As a result, the very purpose of performance appraisal is defeated.
(3) Ineffective communication: Information relating to rating needs to be communicated to the employee soon
after the completion of appraisal work. Ineffective and delayed communication between the rater and the
rate is one major limitation of performance appraisal.
(4) Absence of uniform standards: The standards used for appraisal purpose are not uniform within the same
organisation. The standards used in different departments or by different raters vary. As a result, rating
becomes unscientific and employees suffer. Similarly, the rating is done on overall impression, which is not
(5) Absence of effective participation of employees: In performance appraisal, effective participation of
concerned employee is essential as it is basically for his improvement/development. However, in many
appraisal techniques or even in the post-appraisal interviews, he is given a passive role. His participation is
(6) Resistance of employees to appraisal: Performance appraisal is resisted by the employees as well as by the
managers and supervisors. Employees oppose the system as they feel the system is only for showing their
defects and for punishing them. The managers resist the system, as they are not willing to criticize their
subordinates or identify their mistakes. Even trade union resists performance appraisal on the ground that it
leads to discrimination among its members/workers.
(7) Halo effect: It refers to the tendency to rate an individual rather consistently high or low, depending on
whether the raters overall impression is favourable or unfavorable.
(8) Horn effect: It is the tendency of a superior to rate a subordinate lower then his performance justifies e.g.,
the recent failure of the subordinate may wipe out good work done in the past many years.
(9) Personal bias: Bias refers to subjective opinion. When a subordinate is closely known to the superior, he
rates him very high and vice-versa.
(10) Leniency in rating: The superior provides lenient rating to avoid controversy and gives the benefit of doubt
to the subordinates.
(11) Problem of confidentiality: It is not always possible to keep the findings of performance appraisal secret.
The subordinates come to know about their appraisal report in advance.


Wage is a monetary payment/compensation made by the employer to his employee for the work done or
services rendered.
Normally, compensation payable to an employee (Employee Compensation Package) includes the following

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three components:
(a) Basic compensation for the job (wage/salary) plus D. A.;
(b) Supplementary compensation paid to employees (fringe benefits such as housing, medical aid, paid leave,
(c) Incentive compensation for the employee on job (performance linked incentives)
Compensation may be defined as money received in the in the performance of work, plus other benefits and
services that organisations provide to their employees (direct and indirect compensation).
Details of compensation package (components of salary slip) are as given below:
(1) Wage/Salary: Wage is the payment as per the pay scale decided by the employer. Wage represents hourlyrate of pay while salary refers to the monthly rate of pay, irrespective of the number of hours put in by an
employee. Salary payment includes dearness and other approved allowances payable to employees. There is
a provision of annual increment in the pay scale given the employees.
(2) Fringe benefits: These are monetary benefits provided to employees. They include the benefit of: (a)
Provident Fund, (b) Gratuity, (c) Medical care, (d) Hospitalization Payment, (e) Accident relief, (f) Health and
Group insurance, (g) Subsidized Canteen facility, (h) Recreation facilities, and (I) Provision of uniforms to
employees, etc.
(3) Perquisites: There are special benefits offered to managers/executives. The purpose is to retain competent
executives by offering them special benefits. Perquisites include the following: (a) Companys car for
travelling, (b) Club membership, (c) Paid holidays, (d) Furnished house/accommodation, (e) Stock option
schemes, etc.
(4) Incentives: Monetary incentives are offered as a supplement to regular wage payment. They are also called
performance linked incentives. The benefit of such incentives is linked with actual performance of an
employee. An employee has to show superior performance and he become eligible for the incentive
benefit/payment. Thus, incentives are linked with better performance. The basic purpose behind incentives
is to encourage/motivate employees to take more interest/initiative in the work, show concrete results
in terms of actual performance and collect extra incentive payment as per rules. Incentives are payments
by results. Incentive payment is in addition to regular wage payment. Incentives depend on productivity,
actual production given, cost reduction efforts of employees and so on. This includes bonus, profit sharing
and other performance linked incentive payment.
(5) Non-monetary benefits: They include comfortable working conditions, provision of housing and medical
facilities, impartial promotions, and support to workers facing special problems, provision of welfare
facilities to employees and so on.


Minimum Wage
Minimum wage is the one which provides not merely for bare sustenance of life, but also for the preservation of
the efficiency of the worker. For this purpose, the minimum wage must also provide for some measure of
education, medical requirements and amenities. Minimum wage may be tied by an agreement between the
management and the workers, but is usually determined through legislation. This is more so in the unorganized
sector where labour is unionized. In the fixation of minimum wages, besides the needs of workers, other factors
like ability of the concern to pay, nature of the jobs, and so on, are also considered.
Fair Wage
Fair wage is understood in two ways. In a narrow sense, wage is fair if it is equal to the rate prevailing in the
same trade and in the neighborhood for similar work. In a wider sense, it will be fair if it is equal to the
predominant rate for similar work throughout the country and for trades in general. Irrespective of the way in
which fair wage is understood; it can be fixed only by comparison with an accepted standard wage. Such a
standard can be determined with reference to those industries where labour is well organized and has been

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able to bargain well with employers.

According to William B. Weather and Keith Davis, fringes embrace a broad range of benefits and services that
employees receive as part of their total compensation package pay or direct compensation... is based on
critical job factors and performance. Benefits and services, however, are indirect compensation because they
are usually extended as a condition of employment and are not directly related to performance.1
Features of Fringe Benefits:
(1) Different from regular wages: Fringe benefits are different from regular wages as such benefits are those
payments which an employee enjoys in addition to wages. It is a supplementary payment and provides
support to an employee.
(2) Useful but avoidable expenditure: Fringe benefits constitute a labour cost for the employer, it is a useful
expenditure but also an avoidable one as compared to wages which must be paid regularly.
(3) Not directly linked with efforts: Fringe benefit is not a direct reward for the efforts made or the production
given by an employee. It is given on considerations such as length of service, sickness and hazards of life
which he encounters.
(4) Beneficial to all employees: Fringe benefit is made available to the entire labour force and not to a small
group of employees. For example, subsidized canteen facility is a fringe benefit but subsidizing nonvegetarian thali need not be treated as a fringe benefit as it is available only to vegetarian employees.
(5) Voluntary in character: Fringe benefits should not be imposed on employees nor offered as charity. The
purpose should be to meet genuine needs of employees. Wide publicity should be given to such benefits so
that majority of workers will take the benefit.
Types of Fringes/Fringe Benefits:
(1) Payment for time not worked by the employee i.e. Payment without work: (a) Holidays. (b) Vacations. C)
Leave with pay and allowances.
(2) Contingent and deferred benefits: a) Pension payment. (b) Group life insurance benefit. (c) Group health
insurance (d) Sick leave, maternity leave, child care leave, etc. (e) Suggestion/service award. (f) Severance
(3) Legally required payments: (a) Old age, disability & health insurance. (b) Unemployment compensation. (c)
Workers compensation.
Miscellaneous benefits: (a) Travel allowances/Travel grants. (b) Company car and membership of clubs, etc. (c)
Moving expenses. (d) Child care facilities. (e) Tool expenses and meal allowances, etc.
In addition to regular wages, allowance and bonus payment, industrial workers are given other benefits and
services called fringe benefits. They are called so because they are offered by the employer as a fringe. This
means such benefits are supplementary to regular wages and allowance. They also support regular wage
payment to employees.
The purpose of fringe benefits is to retain efficient/ capable people in the organisation. Fringe benefits
may be defined as broad/wide range of benefits and services that employees receive as an integral part of their
total compensation package.
Fringe benefits include such as provident fund, gratuity, medical care, hospitalization, accident relief, health
and group insurance, canteen, uniform. Such benefits are based on critical job factors and performance. They
institute indirect compensation as they are usually extended as a condition of employment and not directly
related to performance of concerned employee. Fringe benefits are supplements to regular wages received by

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Objectives of Fringe benefits

To supplement direct remuneration: Fringe benefits supplement regular pay of employed. It raises the total
earnings of an employee and provides better welfare to him. Employees prefer such indirect remuneration
as regular salary income is taxable but such benefits are not taxable. Such benefits protect employees
against certain hazards of life.

Employers prefer fringe benefits: Employers prefer this indirect remuneration to direct pay increase. Such
benefits can be offered economically and can be explained to the shareholders as the social responsibility of
business. Moreover, such benefits give quick result in the form of employee satisfaction, increase in the
efficiency and productivity of employees and high employee morale.

To retain competent employees: Fringe benefits create satisfied labour force. In addition, the management
can attract and retain competent personnel in the organisation by offering liberal packet of fringe benefits.

To develop good corporate image: Fringe benefits help to develop a good corporate image. Such benefits
creates attraction for the organisation, there is social recognition to organisations which provide
educational, medical and other facilities to their employees.

To motivate employees: Fringes benefits motivate employees to take more interest and initiative in the
work. They are always co-operative and are willing to offer helping hand to the management as when


Meaning of incentive Plan
The wage plan should be highly incentive. It may be noted here that incentive payments are over and above
regular wages and allowances.
The features of performance linked incentive(performance related compensation)
Payment are:
(a) It is an extra payment (different from regular wages) made to employees/workers.
(b) This incentive payment is essentially for exceptionally good performance in terms of quantity, quality, etc.
Advantages of Performance Linked Incentive Plan:
(1) Motivation of employees for better performance: The primary advantage of performance linked incentive
plan is the inducement and motivation of employees for higher efficiency and greater output. With fixed
wage payment, it is difficult to motivate employees to show better performance. The response of
employees will be positive when incentives are linked with fix wage payment.
(2) Benefits of extra (incentive) payment: The normal earnings of employees would be enhanced due to
incentive payment which acts as an extra payment to them. Ass a result, the standard of living of
employees will improve and they will enjoy better life and health.
(3) Improve productivity of employees: Due to incentive plans, the productivity of workers will improve. The
number of units produced will be more for given inputs. As a result, the total cost as well as the unit cost of
production will come down. This will give benefits to the employer/organisation.
(4) Full utilization of production capacity: Due to incentive payment, workers will work with full capacity i.e.
efficiently. As a result, the available production capacity will be utilized fully and the quantity of production
available will be optimum.
(5) Attractive and profitable to company management: Performance linked incentive packages are attractive
and profitable for managements. The extra amount payable (as incentive payment) is recovered from extra
production given by workers. The available production capacity is utilized fully and this is beneficial to the
management. In short, incentive package is profitable proposition to the management.
Disadvantage of Performance Linked Incentive Plan/Package:
(1) Quality of production may be affected: There is a possibility of deteriorate in quality of production under
incentive package. This is because the workers work with speed and give more attention to quantity and not
to the quality. The employer will have to spend more on supervision and the rejected products/production

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will increase.
(2) Introduction of new techniques difficult: Introduction of new methods and machines will be difficult due
to the opposition by workers. They may get a feeling that their incentive payment may go down due to such
(3) May lead to disputes in the long run: Due to incentive payment, the total earnings of workers increase.
Gradually, they start demanding increase in their regular wage payment as they feel that their present
earnings should be made regular wage payment. In addition, they should be given performance linked
incentive payment. This may lead to industrial dispute.
(4) Possibility of accidents in production unit: Workers paid by results concentration attention on the quantity
of production alone. They may neglect security regulations while working on machines. This may lead to
accidents or fire in the production unit and the employer will suffer huge loss. Even the health of workers
is badly affected when they work beyond their physical capacity merely for earning more.
(5) Unity among employees may be affected: Unity and good relations among workers are affected due
performance linked incentive plan. The incentive payment is not uniform to all employees when individual
incentive plans are introduced. This leads to jealousies and quarrels among the workers and the atmosphere
of co-operation and team spirit is adversely affected.


Career Planning is the systematic process by which one selects/decides career goals and the path to
achieve/reach these goals.
Career planning and development is the responsibility of the HR Department of the organisation. Career
planning stands for the forward-looking employment policies of the organisation.
Definition of Career Planning:
According to Wrether and Davis Career planning is the process by which one selects career goals and the path
to these goals.
Essentials To Make Career Planning Successful:
(1) Support from top management: Support and co-operation of the top management is essential for the
formulation and execution of career planning of employees. Top management has to create enthusiasm
among executives and encourage them to take interest and initiative in this useful activity. In addition,
funds and infrastructure facilities should be provided by the top management for career planning activity
within the organisation.
(2) Large size of the organisation: Large size organisation is one essential requirement of successful career
planning. Moreover, career planning is feasible in large organisations. Here, long term manpower
projections can be made and this facilitates career planning as per the future needs of an organisation.
(3) Proper selection of employees: Selection of right type of employees is essential for the success of career
planning programmes. The employee selected should be fit for the job. In addition, he needs to have
enough potential and genuine desire to develop himself and grow in his career.
(4) Fair promotion policy: Fair promotion policy is essential for successful career planning. Employees will take
interest in career planning only when they are sure that promotions will be given on merits and without any
partiality and favoritism.
(5) Publicity to career development opportunities: Adequate internal publicity to career plan is essential for
the success of career planning. Such publicity will create awareness about career development among
the employees as well as the career paths available to them for selection.
(6) Continuity in the process: Career planning and development should be carried out on regular and
continuing basis. This will provide manpower as per the need of an organisation from time to time. Carrier
planning and development programmes can be adjusted as per the need of the organisation and also of


Meaning: An organisation prefers to have efficient and stable manpower. Such manpower provides different
benefits to the organisation is the form of efficient production, cordial industrial relations, low labour

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turnover, team spirit among workers, limited accidents and market reputation.
Such measures may be a package for long term stay of employees.
Retention Techniques:
Important techniques for employee retention are as briefly explained below:
(1) Provision of retention bonus: Retention bonus is a kind of ad hoc payment to best performers to retain
them in the organisation. Such retention bonus is offered to mid-level and rank-and-file employees along
with top executives. This technique is used when any change like merger and acquisition or organisational
restructuring takes place.
(2) Package of incentives for long-term stay: Here, the organisation designs a suitable long term package
for employees which will discourage employees from leaving the organisation for some short term benefit.
The employees leaves the organisation mainly because he feels that his market value is more than what
his organisation mainly because he feels that his market value is more than what his organisation is giving
at present.
(3) Matching jobs and employees: One important reason of labour turnover is mismatch between employees
and their jobs. This problem develops because of wrong placement, faulty career path decided for an
employee, transfer to the department or work disliked by an employee, promotion to a position not liked by
an employee. Retention of such unsatisfied and disturbed employees is possible by introducing suitable
strategy under which proper matching of an employee and his job will be achieved.
(4) Provision of Intangible benefits to employees: Organisations offer intangible benefits for the retention
of employment in foreign branches of the organisation, holiday trips for employees and their families, etc.
Some MNCs use overseas training and employment abroad as carrots for retaining their best performers.
(5) Encouragement to employee relationship management: Employee relationship management (ERM) acts as
one employee retention strategy. This facilitates purposeful communication between employer and
employees and avoids labour turnover. Research studies show that changing job is painful to employees as
it affects his life as well as familys stability, childrens education, social network and employment.
(6) Persuasion of employees: Organisations can use persuasion as one method for the retention of key
employees. If key employees can be brought in the organisation from outside through persuasion, they can
also be retained through effective persuasion. Here, the persuasive skills of the chief executive or HR
personnel play an important role.
(7) Stay interviews: Stay interviews are also held to understand the issues employees may be facing. Such
interviews focus on what is going right in the organisation rather than what went wrong. Stay interviews are
an employee sensing exercise. Such interviews defect early warning signals as regards expectations of


Succession refers to position fallen vacant or likely to fall vacant in near future. A succession of persons to fill up
key positions over a period of time is essential for the survival and success of an organisation. The basic purpose
of succession planning is to identify and develop human resource development to replace current incumbents in
key positions in case of resignation, retirement and creation of new positions in an organisation. Succession of
people from within the organisation is desirable as this provides opportunities to employees for progress in
their careers.


Career planning and career counseling are closely related. An employee needs guidance for planning his career
in the right field and in the right direction. Such advising and guiding in career planning is called career
counseling. Such counseling is needed when employees plan their own careers and develop themselves for
career progression in the organisation. The purpose of such counselling is providing guidelines to employees for
their career development in the right direction.


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Introduction and Meaning:
Participative management refers to the process of involving employees or employee representatives at all levels
of decision-making; Co-determination is another term of participative management.
Employee participation in management is nothing new. It is as old as the institution of owners and
workers. Participative management refers to the constitution of consultative councils and committees,
comprising representatives of employees and employers, to recommend steps for improving productivity,
machine utilization, job loading; for effecting savings in power, light; for identifying lazy workers, safety, so on
and so forth.
Workers participation in management is synonymous with co-determination-a term popularly used in
former East Germany to describe this participation. Participation management is also called employee
Levels Of Participation:
Normally, the levels of participation are three. These are as explained below:
(a) Participation at Shop floor Level: Actual production activity is conducted by workers at the shop floor.
Here, participative management is possible through works committees in which workers elect their
representatives. In such matters committee meetings relating to day-to-day working/functioning at the
shop floor level are discussed and joint decisions are taken.
Regular meetings of works committees enable workers to get their day-to-day problems solved promptly.
For this, meeting of committees should be arranged regularly and constructive decisions should be taken.
This will benefit employees and will lead to better understanding at the shop floor level.
(b) Participation Level: Joint Management Councils (JMCs) function as consultative agency at the plant level.
JMCs are concerned with the activities at the plant level. In the JMC, equal representation is given to
management and workers. The maximum membership of JMC is 12.JMC is necessary where five hundred or
more workers are employed.
(c) Participation at the Corporate Level: This is participative management at the highest level. Here, the Board
of Directors is the apex body in the administration and decision-making at the corporate level. The
representative of workers is taken on the Board of Directors. He looks after the protection of interest of
workers. This also improves employer-employee relations and ensures higher productivity. The workers
representative can play a useful role in safeguarding the interests of workers.
The concept of participative management is a progressive one and is universally accepted as a fair to employers
and workers. This concept gives higher status to workers. They are made responsible partners in the production
process. Workers participation leads to industrial democracy in practice. The present trend is favourable to the
concept of participative management. Even governments in different countries support participative
management and encourage employers to introduce participative management schemes in their organisations.
In India, legal and other provisions are made for the introduction of participative management. For this,
various agencies such as works committees joint management councils, etc. are also established in many
organisations. Such participation exists in banks, private and public sec tor organisations and so on. However,
the trend in India is not favourable to such participation. We have labour participation in management more in
theory and less in practice. Employees, employers and trade unions, in general, are not interested in such
participative management.
1. Participation through the Board Level:
The board of directors is the apex body in the administration of a corporate establishment. A representation
of workers on the board would, it is believed, usher in industrial democracy, ensure improved employer-

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employee relations, and guarantee better productivity. The workers representative on the board can play a
useful role in safeguarding the interests of workers. He or she can serve as a control; element and guide to
the management in its exercise of personnel and social functions. He or she can prevail upon the top
management not to take measures that would be unpopular with the employees. He or she can guide the
board members on matters of investment in employee benefit schemes like housing, and so forth.
Participation through Ownership:
Workers may become more involved in industries by making them shareholders of the company. This may
be done by inducing them to buy equity shares. The management may promote the scheme by allowing the
workers to make payments in installments. It may also advance loans or even give financial assistance to
such workers to enable them to buy equity shares.
Participation through ownership has the distinct advantage of making the worker committed to the job and
to the organisation. But its effect on participation is limited because ownership is different from
management in the company form of ownership.
Participation through Complete Control:
Workers acquire complete control of the management through elected boards. The system of complete
control ensures the identification of the workers with their organisation. Industrial disputes disappears
when workers develops loyalty to the organisation. Trade unions welcome this type of participation. But
complete control by workers is not an answer to the problem of participation because the workers do not
evince interest in management decisions.
Participation through Staff or works Councils:
Staff councils or works councils are bodies on which the representation is entirely of the employees. The
councils have different functions in the management of an enterprise, ranging from eliciting information on
the managements intension to a full share in decision making. They are a right step in the direction of
industrial democracy.
Participation through Joint Councils and Committees:
Joint councils are bodies comprising representatives of employers and employees. The function of these
bodies may range from decision- making on some issues, to merely advising the management as
consultative bodies.
Being mostly consultative bodies, the joint councils indicate a loose type of participation because their
suggestions are not binding on the management. These councils serve no useful purpose. They only provide
a platform to employers and employees from whom they may give free vent their complaints and
grievances without making any attempts to find remedies and solutions.
Participation through Collective bargaining:
The principle of collective bargaining confers on the management and the workers the right, through
collective agreements, to lay down certain rules for the formulation and termination of the contract of
employment, as well as the conditions of service in an establishment. Such agreements are normally binding
on parties and have the force of the law. Collective bargaining is no-substitute for workers participation in
management. Participation brings both the parties together and develops appropriate mutual
understanding, and brings about mature and responsible relationship. Collective bargaining, on the
contrary, is based on the crude concept of power and its exercise for sectional bargaining which may end up
in mistrust, withholding of information and use of pressure tactics.
Participation through Job Enlargement and Job Enrichment:
Job enlargement means expanding the job content-adding task elements horizontally. Job enrichment
means that additional motivators are added to the job so that it is more rewarding.
However, this form of participation provides only limited freedom to a worker concerning the method of
performing his/her job. It will not give him or her any say in some of the vital questions he or she may be
interested in, such as job and income security, welfare schemes and other policy decisions of the company

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which affect him/her directly.

Participation through Suggestion Schemes:
Employees viewer on such matters as machine utilization, waste management energy conservation and
safety measures are invited, and reward is given for the best suggestion. This procedure enables the
management to arouse and maintain the employees interests in the problems of their concern and its
Participation through quality Circles:
A quality circle consists of seven to ten people from the same work area who meet regularly to define,
analyses, and solve quality and relate problems in their area.
Quality circles are credited with producing quick, concrete an impressive result when correctly
implemented. Their advantages are as follows:
o Employees are involved in decision making. This privilege makes them acquire communication and
analytical skills and improve the efficiency at the workplace.
o Savings-to-costs ratios generally are higher than those achieved with other productivity improvement
o Because the programme is voluntary, employees and unions generally do not view them as another
cost-control effort. Circle members enhance their chances of promotion to supervisory positions.
Participation through Empowered Teams:
Empowering refers to passing on authority and responsibility. Empowerment occurs when power goes to
employees who then experience a sense of ownership and control over their jobs.
Empowered individuals know that their jobs belong to them. Given a say on how things are done,
employees feel more responsible. When they feel responsible, they show more initiative in their work, get
more done, and enjoy the work more.
Participation through Total Quality Management:
Total Quality Management (TQM) refers to the deep commitment of an organisation to quality. TQM is
classified as participative method because every employee in the organisation is involved and is expected to
take responsibility for improving quality, everyday. It is a formal programme which involves direct
participation by all employees.
Participation through Financial Participation:
Financial participation differs from other forms of employee involvement in that it is less likely to involve
employees in consultation or decisional processes. The general purpose of financial participation is to
enhance commitment to the organisation by linking the performance of the firm to that of the employee.
There are many schemes of financial participation, but the more prominent of them are the profit linked
pay, profit sharing and employee stock option scheme, workers co-operatives, management buyouts,
pension fund participation and wage earner funds.


1) Strong trade unions: Existence of strong trade unions with creative and enlightened leadership is necessary
for participative management. Worker and their unions must have genuine desire and interest in such
participation. They also need information, proper training and ability to participate in the discussion in an
effective manner.
2) Favourable attitude of management: The attitude of the management should be progressive and
democratic. He must be mentally willing to associate with his workers on equal level and discuss the
problems freely and frankly with them. Management has to accept due importance of employees and their
status as partners and not merely as wage earners.
3) Mutual trust and confidence: Existence of atmosphere of mutual trust and confidence is a must o

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participative management. Fair participation is not possible when mutual confidence is absent. Both parties
must agree to stay together on an atmosphere of understanding. This facilitates participative management
in practice.
Genuine urge for co-operation: Genuine desire on the part of employer and workers to discus, understand
the views and come to certain acceptable decisions is necessary for the success of participative
management. This must be supplemented by genuine desire to share authority and responsibility in
mutually agreed spheres.
Peaceful atmosphere: Labour-management relations should be cordial or at least there should be no
tension in the relations. Active participation of workers in management is possible under such peaceful
atmosphere. It is just not possible when there are disputes and strikes in the industrial unit.
Clear understanding of objectives: Employers and workers must understand clearly the objectives of such
participation. The objectives must be clearly defined and complementary in character. Employer should
not take such participation as an imposed liability and workers should not use it merely for expressing
their grie3vances and demands.
Meaningful sharing of information: Workers representative should be having adequate technical, financial
and managerial knowledge and information. This will make labour participation effective.
Participation of supervisory staff: Supervisory staff should be given a place on the joint management
councils. Similarly, subject earmarked for collective bargaining must be kept outside the scope of the joint
Education and training of workers: Workers education and training make a significant contribution to
meaningful participative management. Trade unions and government should provide such education and
training to workers. This will make participative management popular among the workers and ensure its
Voluntary character desirable: Participative management should not be made compulsory but should be
kept voluntary in character it should not be government sponsored. It will not work fruitfully if it is imposed
on both the parties. Thus voluntary character is one pre-condition for the success of participative
management. The need of such participation must be felt by both the parties.


Quality circle is a revolutionary management technique introduced in Japan to upgrade quality, productivity and
employee morale in an organisation. This technique is developed by Dr. Isihikawa Kaoru who is popularly
known as Father Of Quality Circles.
QCs consist of a small number of employees who come together on voluntary basis with one item on the
agenda i.e. to improve quality or to raise productivity or to avoid wastages, etc. this form of participation is
voluntary. As a practice meetings are held once in a week lasting for about in an hour. Members of quality circle
are given free hand to solve problems relating to quality and if they fail they can request management to
depute an expert to sort out the problem. These circles have proved to be highly successful because problems
are solved by the members themselves through two way communication and brain storming sessions.
In short concept of QC is useful for raising efficiency, for cost control, for removing wastages and so on. In India,
such QCs are functioning in many industrial units (e.g. BHEL, Mahindra and Mahindra, Godrej and so on.) QCs
lead to participative management in actual practice.


Employee empowerment is one of the most important techniques of participative management. It is an active,
multidimensional process which should develop confidence and enable a period to take independent decisions
and follow up actions. Companies like Wipro, InfoTech, ABB and reliance are empowering their employees and
are getting encouraging results. Empowered teams are also known as self directed teams. They function
independently with the authority and responsibility given. Such teams include managers who are matured,
experienced and well trained. They take more initiative in their work, enjoy the work and give results much

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more than expected from them.

They possess the following features:
(a) They set their own goals and review their own work
(b) They plan, control and improve their own work process
(c) They prepare their own budgets and co ordinate their work with other departments.
For the success of empowered teams the management must encourage subordinates to take initiative freely.
For this unnecessary hurdles must be removed. Secondly, subordinates should be given easy access to
information and resources needed for executing their initiatives and new ideas. Lastly they should be made
accountable for the results.


In any business organisation there should be adequate staff as per the need. Excess employees or inadequate
employees are undeniable as both the situation is harmful. The term downsizing is used to indicate reduction of
excess manpower by suitable measure. Downsizing of an organisation means reducing the number of
employees and adjusting the manpower as per need of the organisation so that the problem of excess
manpower will be solved smoothly/ peacefully. In order to overcome the problem of surplus staff, downsizing
strategy is used extensively.
The excess manpower in an organisation may due to:
1. Faulty human resource planning because of which assessment of manpower requirement proves faulty.
2. Change in the man-machine ratio due to technological advance. Use of computer technology creates the
problem of surplus manpower in many service organisations including banks.
3. Outsourcing of certain business function leads to surplus manpower in an organisation.
1. Who is to be made redundant and where and when
2. Plans for re-training where this has not been covered in the re-development plan,
3. Steps to be taken to help redundant employees find new jobs,
4. Policy for declaring redundancies and making redundancy payments, and
5. Programme for consulting unions or staff associations and informing those likely to affect.
6. For reducing surplus employees, some other method can also be sued, such method are:
7. To certain all existing employees but to reduce the work hour for reduction in the total salary payment.
8. To transfer or reassign employees in other units of the organisation where there is need of additional
9. To offer incentives for early retirement in the form of VRS.
10. To declare lay-off for dealing with surplus staff.
In brief, downsizing is a term used to indicate the measurement to be taken for removing/ reducing surplus/
redundant employees. In India, recently downsizing was introduced in nationalized banks and in organisations
such as SAIL, fiat India, Motorola and Hyundai Elect.


Several organisations outsource part of their work to outside parties either in the form of sub-contracting or
ancillarisation. Outsourcing is a regular feature both in public sector and private sector. Most organisations have
surplus labour and they do not want to worsen the problem by hiring more people. Hence, the need for offloading.
By transferring or outsourcing non-critical HRM functions, the organisation can concentrate on critical HRM
functions and perform them efficiently.
A Performing non-critical HRM function internally is not cost effective as such functions prove costly.
Outsourcing results into higher return on investment through significant savings in operational and capital

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It helps to undermine the power of trade unions.

In business organisation, employees are shifted from one post to the other or from one department to the other
or from one unit/plant/ branch of the company to the other. This is called job transfer of an employee. This
brings internal mobility of human resource within the organisation. Such transfers are quite common in the case
of banks, government departments, manufacturing companies and other business and service organisations.
A transfer is defined as a change in job where the new job is substantially equal to the old in terms of
pay, status and responsibilities. Transfer is neither promotion nor demotion but merely a horizontal or lateral
movement of an employee. Secondly, transfers are regular and frequent but promotions are infrequent.
Transfers are not easily acceptable as they create new problems and incontinences before employees
Purpose/ reasons for Job transfers:
1. Variation in the volume of work: Transfers are necessary due to variation in the volume of work in different
departments/ sections. Shortage of employees or increase in the work load in one department leads to
transfer of employees.
2. Providing training to employees: Transfers are made for providing opportunities to employees for training
and development.
3. Rectification of poor placement: Transfers are necessary for the rectification of poor placement made in
the initial period. Similarly, transfers are necessary in order to utilize the service of an employee in the best
possible manner.
4. Satisfying personal needs of employees: Transfers are necessary on order to satisfy the personal needs of
the employees. They include family problems, sickness, and education of children and so on. Such transfers
take place especially among female employees.
5. Meeting mutual needs of employees: Transfers are sometimes, made in order to meet the mutual needs of
two employees. It is a type of mutual exchange and is usually accepted by the management.
6. Meeting organisational needs: Transfers are necessary in order to meet the organisational needs developed
out of expansion programmes or fluctuations in work requirements or changes in the organisational,
structure or dropping of existing product lines. For example, experienced workers and supervisors are
transferred to new plants/ factories in order to manage the work smoothly.
7. Solution to poor performance: Transfers are sometimes, made when the workers fails to perform his job
efficiently. He is transferred to new place or post and is given an opportunity to improve his performance at
a new place. Here, transfer is treated as a better alternative to outright dismissal.

IR is concerned with the relationship between management and workers and the role of regulatory mechanism
in resolving any industrial dispute.
Specifically, IR covers the following areas:

Collective bargaining.
Role of management, unions, and government.
Machinery for resolution of industrial disputes.
Individual grievance and disciplinary policy and practice.
Labour legislation.
Industrial relations training.
Another related term is employee relations or human relations. This term is more comprehensive and

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includes all those aspects of HRM where employees are dealt with collectively. Human relations include, in
addition to IR, such aspects as participative management, employee welfare, employee developments,
employee remuneration, employee safety and health, and the like.







1. Unitary Approach
Under unitary approach, IR is grounded in mutual co-operation, individual treatment, and team-work and
shared goals. Work placed conflict is seen as a temporary aberration, resulting from poor management,
from employees who do not mix well with the organizations culture. Unions co-operate with the
management and the managements right to manage is accepted because there is no we-they feeling. The
underlying assumption is that everyone benefits when the focus is on common interest and promotion of
harmony. Conflict in the form of strikes is not only regarded as unnecessary but destructive.
2. Pluralistic Approach
The pluralistic approach totally departs from the unitary approach. The pluralistic approach perceives:
1. Organizations as coalitions of competing interests, where the managements role is to mediate amongst
the different interest groups.
2. Trade unions as legitimate representatives of employee interests.
3. Stability in IR as the product of concessions and compromises between management and unions.
Legitimacy of the managements authority is not automatically accepted. Conflict between the management
and workers is understood as inevitable and, in fact, is viewed as conducive for innovation and growth.
Employees join unions to protect their interests and influence decision-making by the management. Unions
thus balance the power between the management and employees. In the pluralistic approach, therefore, a
strong union is not only desirable but necessary. Similarly, societys interests are protected by state
intervention through legislation and industrial tribunals which provide orderly process for regulation
and resolution of conflict.
3. Marxist Approach
Marxists, like the pluralists, regard conflict between employers and employees as inevitable. However,
pluralists believe that the conflict is inevitable in all organizations. Marxists see it as a product of the
capitalist society.
Adversarial relations in the workplace are simply one aspect of class conflict. The Marxist approach thus
focuses on the type of society in which an organisation functions. Conflict arises not just because of
competing interests within the organisation, but because of the division within society between those who
own or manage the means of production and those who have only their labour to offer. Industrial conflict is

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thus seen as being synonymous with political and social unrest.

(1) Industrial relations are the relations between two parties connected with industrial/manufacturing activity,
Employer and employees are two major parties to such relationship. Such relations should be cordial i.e.
away from tensions as both parties are inter-related and inter-dependent.
(2) The concept of industrial relations is complex and multi-dimensional. It is also a dynamic and developing
(3) In the olden days, industrial relations were cordial and peaceful. However, at present, they are not so due
to increase in the number of industrial workers, growth of trade unions, growing demands of workers,
political leadership to unions, rapid industrial growth and exploitation of workers by employers.
(4) Industrial relations are influenced by varied factors and forces. They include economic factors,
technological factors, social and cultural factors, political factors and governments labour policy, labour
laws, industrial policy and so on.
(5) Industrial relations do not function in a vacuum. The attitude and approaches of employers, employees and
trade unions are directly related to industrial relations. In addition, economic and social factors have their
influence on industrial relations. For maintaining cordial industrial relations, managements and unions.
Have to understand, adjust and co-operate with each other.
(6) Industrial relations lead to industrial peace or Industrial unrest. Both the terms are used in relation to
industrial relations. Cordial industrial relations ring industrial peace i.e. a period when industrial disputes,
strikes, lock-outs, etc. are absent ad production activity is being conducted in a regular and continuous
manner. On the other hand, industrial unrest is a period when industrial relations in many industrial
units are not cordial leading to large number of disputes and strikes. Poor industrial relations may be due
to economic, social psychological, political and organisational causes. Industrial unrest is undesirable and
should be replaced by industrial peace which is an ideal situation for industrial and economic growth.
(7) Cordial industrial relations are always beneficial to all concerned parties whereas absence of such relations
is harmful to all parties and the national economy.
(8) Shri V.V.Giri has rightly noted the importance of industrial peace and suggested that such peace is possible
if employers and workers adopt more liberal, democratic and peaceful outlook. He suggested that mutual
settlement of disputes is the best method for solving the demands, complains and problems of workers.
This approach is the best method which can promote cordial labour management relations at all levels.
The following benefits suggest the importance of harmonious industrial relations:
(1) More production: Due to cordial industrial relations, employees take keen interest in their production
activities and work efficiently. As a result, high production is available. Cordial industrial relations create
favourable atmosphere for rapid economic growth, large scale production and large scale exports.
(2) Industrial peace: Cordial industrial relations bring harmony and remove causes of disputes. This leads to
industrial peace which is an ideal situation for industrial growth and prosperity.
(3) Encouragement to collective bargaining and labour participation in management: cordial industrial
relations are extremely helpful for long term agreement as regards various issues between labour and
management. Such collective bargaining agreement and association of employees with decision making
process are easily possible due to cordial industrial relations.
(4) Better treatment to workers: Due to cordial industrial relations,, workers take interest in the work and
bring more production and profit. As a result, management usually acts in a liberal manner and offers
various facilities and monetary benefits to workers. Thus employees get more benefits from cordial labour
management relations rather than through disputes and strikes.

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(5) Prosperity to employer and employees: Cordial industrial relations lead to regular and continuous
production to the full capacity. This raises the productivity and profitability of the business unit. In the long
run such unit moves towards growth and diversification. Similarly, the employees get monetary and non
monetary benefits. They get the share in the profits and prosperity of their company. Unfair practices are
avoided by employees, their union and management.
(6) Miscellaneous benefits of cordial industrial relations:
(a) Cordial industrial relations lead to the introduction of industrial democracy.
(b) Cordial industrial relations bring rapid industrial and economic growth of a country.
(c) Cordial industrial relations raise morale of the employees.
Parties to industrial relations system are ass shown below:
Parties to Industrial Relations













Courts and

Brief Details of Parties to Industrial Relations:

(1) Employees:
Employees constitute main party to industrial relations. They are large in number working in the organized
industrial sector. They get employment and regular income from the employer. Employees consider
industrial relations in terms of opportunity to voice their grievances (individual and collective), improve
their conditions of employment, participation in management or decision-making particularly on matters
relating to employees and exchange views with the management. In this regard, adequate opportunities
should be given to them. This ensures cordial industrial relations.
(2) Employee Associations:
Such associations are called trade unions which operate at plant level or at industry level. They play a
crucial role in maintaining cordial industrial relations. Trade unions function at two levels at two levels at
the plant level. Unions participate actively for national, local and plant level agreements for meeting
the demands of workers and also for maintaining cordial industrial relations. For this, unions need
constructive and non-political leadership.
(3) Government:
Government is not directly involved in industrial relations but has a moral and social responsibility to
maintain cordial industrial relations through suitable preventive measures. This is possible through official
intervention, assistance and regulation of working conditions. This is necessary for industrial growth,
promotion of employment and also for raising national income and large scale exports. Government has to
take suitable measures for promoting industrial peace and harmony.
The approach of the government should be impartial and fair. It has taken preventive and positive
measures for avoiding industrial disputes and also for maintaining cordial industrial relations.
(4) Employers:

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Employers constitute the main party relating to industrial relations. Employers appoint large number oaf
workers for orderly conduct of production activity. They pay regular wages to employees for services
rendered. At the same time, they are endowed with certain rights in relation to workers employed. Such
rights and powers can be used by employers for exploitation of workers. This leads to conflicts. They can
introduce many unfair practices for cheating the workers or for breaking their unions or strikes.
For maintaining cordial industrial relations, employers have to accept major responsibility. They have
to pay attractive wages, provide healthy working conditions, liberal welfare facilities and other incentives to
workers so that they will be satisfied. In addition, employers should give attention to the demands and
grievances of workers and solve them promptly.
(5) Employers Associations:
Such associations are started by the employers at local, industry and all India levels. They are voluntary in
character. The Confederation of Indian Industries (CII) is a powerful body which operates at the national
level and is playing a positive role in protecting and promoting the legitimate interests of industries. In
addition to CIL, there are other all India employers associations such as ASSOCHAM, FICCI, AIMO, and FIEO
and so on. The objectives of employers associations are:
(i) To represent employers in collective bargaining,
(ii) To develop appropriate machinery for avoiding/limiting industrial disputes,
(iii) To represent members on national issues, and
(iv) To provide information on employee relations and to give advice.
(6) Courts and Tribunals:
Courts (i.e. Legal machinery for dealing with industrial disputes) act as authority to settle legal disputes and
thereby facilitate cordial industrial relations. Laws are made for preventing industrial disputes. Even positive
measures are provided in the legal machinery. Courts use this machinery for solving the disputes. The
powers of judiciary are useful to settle the dispute. This improves industrial relations.
Trade unions are voluntary organisations of employees or employers formed to promote and protect their
interests through collective action. Though the terms employees and employers are used, when we say trade
unions they generally refer to employees.
Trade unions are voluntary organisations of workers or employers formed to promote and protect their
interests through collective action. The Trade Unions Act, 1926 defines a trade union as a combination,
whether temporary or permanent, formed (I) primarily for the purpose of regulating the relation between (a)
workmen and employers or (b) between workmen and workmen, or (c) between employers and employers, or
(ii) for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of
two or more trade unions.
An analysis of the above definition reveals that a trade union must be:
1. A combination of workers or employers,
2. Such a combination could be permanent or temporary,
3. Could include federation of two or more unions, and
4. To regulate relations among workmen, between workmen and employers or among employers themselves.
The concept mentioned above highlight the following features of trade unions:
1) Voluntary associations of workers: Trade unions re voluntary associations of workers (a combination of
workers) in one or more occupations. Seven or more workers can form a trade union. A worker can join or
leave any trade union as per his wish/desire. However, it is relatively permanent combination of workers.
Membership of a trade union is voluntary. Large number of workers is away from any trade union. Workers
are also free to join any union as per their choice. A union acts as the representative of workers.
2) Operate for the pursuit of common interests of members: They protect the interests of members and

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promote their welfare. Secondly, workers join unions to seek protection against unfair practices such as hire
and fire policies, inhuman working conditions and low wage rates.
Operate collectively: Trade unions act collectively i.e. through unites actions of members. Community of
interest motivates them to unite and act collectively
Wide coverage of functions: Trade unions are concerned with economic, cultural, political and social life of
Include unions of workers and employers: In India, trade unions include unions of workers and unions of
employers as employers can register their unions under the trade unions act, 1926.
Function on democratic principles: Trade unions function on democratic principles. They have democratic
set up. Office bearers are elected by members and major decisions are taken in the union meetings after
discussions and voting.
Acts as collective bargaining agents: A trade union acts as a collective bargaining agent for its members. It
acts as an instrument of defense against injustice and exploitation.
Basically deal with the problems and demands of workers: Trade unions are basically concerned with the
problems of workers. A trade union is rightly described as an organized expression o the needs, aspirations
and attitudes of the working class.

56. Why do Employees Join Unions?

1) Dissatisfaction
When an individual takes a job, certain conditions of employment (security, wages, hours of work, and type
of work) are specified in the employment contract. A psychological contract also exists between employer
and employee, consisting of the unspecified expectations of the employee about reasonable working
conditions, requirements of the work itself, the level of effort that should be expended on the job, and
the nature of authority the employer should have in directing the employees work. These expectations are
related to the employees desire to satisfy certain personal preferences in the workplace. The degree to
which the organisation fulfils these preferences determines the employees level of satisfaction.
Dissatisfaction with either the employment contract or the psychological contract will prompt employees to
attempt to improve the work situation, often through unionization.
2) Lack of Power
Unionisation may not be the first recourse a dissatisfied employee will take. First, the employee seeks to
remove the dissatisfaction by his or her own effort. How far the employee shall succeed in removing
dissatisfaction depends on the essentiality and exclusivity of the job Essentiality refers to the importance of
the job holder and exclusivity implies the ease with which the employee can be replaced. Power of the
employee to remove dissatisfaction is high when his or her position in the organisation is extremely
important and it is difficult to replace him or her. His or her position in the organisation is extremely
important and it is difficult to replace him or her. His or her power is less when the employees services are
not indispensable and it is easy to find a substitute too. In the latter case, the employee seeks other means,
including unionization, to influence the management.
In considering whether collective action is appropriate, employees are also likely to consider whether a
union could obtain the aspects of the work environment not provided by the employer and to weigh those
benefits against the costs of unionization. In other words, the employees would determine union
3) Union Instrumentality
Employees perceive unions as being instrumental in removing their dissatisfaction. The more the employees
believe that a union can obtain positive work aspects, the more instrumental the union is for the

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employees. The employees then weigh the value of the benefits to be obtained, through unionization,
against its costs such as the lengthy organizing campaign and the bad feelings among supervisors,
managers, and other employees who may not relish unionization. Finally, the employees weight the costs
and benefits against the likelihood of a union being able to obtain the benefits-the perceived union
instrumentality. When the benefits exceed the costs and union instrumentality is high, employees will be
more willing to unionize.