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HRM CONCEPTS

1) HRM: HRM is a Management function concerned with hiring, motivating, &
Maintaining people in an Organisation. It focuses on people in an Organisation.
Organisations are made up of people & functions through people. People constitute the
most significant resource of Organisation. HRM is the manpower employed in an
Organisation.
For Example: The Companies Following HRM:-
i. TCS (Tata Consultancy Services) is truly a global company. TCS adopt the
unique system of hiring people. It starts its Human Resource right at college
level. TCS funds many events like conferences, seminars etc to increase the
knowledge. TCS finds it easy to hire the best talent in campus recruitment.
ii. Wipro has excellent Human Resource policies & practices one such is the way a
potential Job-hopper is handled.
2) Personnel Philosophy : Management’s Attitude towards Employees is one major area
which relates to the personnel philosophy of the company. The personnel philosophy of
management is reflected in its outlook as regards the manner in which work is completed.
Here management may force people to work to achieve the results. Autocratic leadership
will be opted & the targets can be achieved by force. The other that can be done is by
Democratic leadership which means that involvement of Employees in Decision Making
Motivation of Employees & get the work done.
“Personnel Philosophy of Management will be reflected in the personnel policies
introduced by the management from time to time”.
3) Personnel Manual : A Document/Booklet containing the details of personnel policies of
an Organisation is called as personnel manual. It serves as a guide or reference book to
employees. All the line & staff manager can use such manual as a ready reckoner for
quick and consistent Decision making on various personnel matters. Reputed companies
publish personnel policies manuals for the convenience of their managers Supervisors &
employees. A personnel policy manual is companion volume to the employee handbook.
4) HRP: HRP is the process of forecasting an Organisation’s future demand for and supply
of the right type of people in right number. HRP is the sub-system in total Organisation
planning. HRP is integrated part of strategic management. HRP is variously called
strategic manpower planning or for Employment Planning.

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Mahindra and Mahindra offer VRS to employees. carelessness. Blue star . 2 . relevant and timely information about human resources and their functioning in the most cost effective way. For Example: Bharat Heavy Electricals and ONGC have developed in house HR software for HR Decision-making. Pink slip means dismissal or dismission. the need for off-loading. 7) Outsourcing: Outsourcing means getting the work done by outside agencies on payment basis. HRIS may be defined as “a systematic procedure for collecting.It is a drastic step and should be taken after careful thought. In the USA. Such action needs support of sufficient reasons. 8) Pink slip: Pink slip is an American term that refers to being fired or laid off from one’s job. VRS involves separation of employees from the Organisation on the basis of mutual agreement between the two. Outsourcing is regular feature both in Public as well as Private sector. 5) HRIS : Human Resource Information System has been derived from the concept Management Information System (MIS). companies used to dismiss employees by distributing notices printed on pink slips of paper. HRP mainly Includes- Manpower Allocation Manpower Utilisation Human Resource Development. Most organisations have surplus labour and they do not want to worsen the problem by hiring more people. It is also called as GOLDEN HAND SHAKE PLAN. It means termination from the service.Sandoz . The objective of HRIS is to provide accurate. maintaining and retrieving data needed by an Organisation about its human resources and various activities that are relevant for their management”. 9) Termination: Discharge or termination is a permanent sepration of employee from the organisation for violation of Organisational rules ( dishonesty. Several Organisations outsource part of their work to outside parties either in the form of sub-contracting or ancillarisation. 6) VRS: Voluntary Retirement Scheme is a type of voluntary separation of old and unproductive employees from the Organisation. 10) Retrenchment: Retrenchment is sort of permanent separation by an employer with due notice as per statutory provisions. Hence. For example: companies like ACC. drunkenness. It is an unofficial notice sent to an employee informing him that you have been fired from your job.etc). storing. The employees is also paid compensation. VRS is used as a method for downsizing of manpower employed.

Contracting is an agreement whereby the contractor undertakes to complete a piece of work or perform a service for the commissioning party. HR department needs cooperation of managers and trade unions for the execution of downsizing strategy in an orderly and peaceful manner. Japan Airlines has plans to cut 4200 jobs. The industrial dispute act 1947 defines retrenchment as the “termination by the employer of the services of workmen for any reason”. Ford motors has plan to cut 2000 jobs initially. 12) Separation: Separation is step ahead of demotion. Downsizing is one challenging job before HR personnel. in return for a financial payment. status and salary to an employee. contracting and sub- contracting are two methods used for transferring certain jobs to outside agencies on contract basis. Promotion is rightly described as “advancement within the Organisation”. so that the latter does the work or performs the service which the first contractor has undertaken to provide for the commissioning party. It is complicated as management wants downsizing and while employees oppose to such downsizing as it leads to retrenchment of staff. For Example: Downsizing plans in selected firms:- i. However. organizing his or her own resources and managing the work at his or her own risk. iii. It involves cessation of services of personnel from an Organisation. The contractual relationship comes to an end. Subcontracting is a contract agreed between the contractor and another contractor. Nearly 7000 employees of Motorola will lose their jobs. ii. Promotions are normally given after few years of service and also when posts are vacant at the higher level. Retrenchment of employee is quite common in India. 14) Promotion: Promotion of an employee means giving higher position. The Employment relationship between an Organisation and its employee comes to an end. 11) Downsizing: Downsizing means trimming of excess/surplus manpower. separation is also possible before the expiry of the period of contract. 15) Transfer: In business Organisation employees are shifted from one post to other or from one department to the other or from one unit/plant/branch of the company to the other. Retrenchment creates a sense of fear and insecurity among industrial employees. 13) Contracting & Sub-contracting: Along with outsourcing. Promotions are normally given in business enterprise and also in banks and government departments. This is called job transfer or transfer of an employee. A person retires ( at age of sixty) from the service and this is one of type of sepration. This brings internal mobility of 3 .

It reduces boredom and disinterest through diversifying the employees’ activities. experience. government departments. 20) Job Design: “Job design involves continuous efforts to organize tasks. the employee would be moved to another job at the same level that has similar skill requirements. tools and equipment. Job enlargement attempts to add somewhat similar tasks to the existing job so that it has more variety and be more interesting. When an activity is no longer challenging. training. duties & Responsibilities in to a unit of work to achieve certain objectives job design follows job analysis”. responsibilities etc. physical effort. But individuals are consulted”. An enlarged job can motivate an individual for five reasons:  Task variety  Meaningful work modules  Ability utilization  Worker-paced control  Performance feedback 4 . The focus is on the job not on the individual holding the job. Such transfers are also common in the case of banks. 17) Job Description: Job description contains items such as job title. supervision given or received. physical skills. Job design is the process of deciding the contents of job. 21) Job Enlargement: Job enlargement refers to the expansion of the number of different tasks performed by an employee in single job. location . “job analysis involves collection of job related information. human resources within the Organisation. machines. initiative. working conditions. 19) Job Rotation: Job rotation refers to moving employees from job to job to add variety and reduce boredom by allowing them to perform a variety of tasks. 16) Job Analysis: Clearly understanding of job is called as job study or job analysis. judgment. job summary. It is the process of collecting all relevant info relating to the nature of job and the qualities and qualifications required for performing the same efficiently. materials and forms used. manufacturing companies and other service organisations. 18) Job Specification: Job specification is statement of human qualifications necessary for to do the job it contains items such as Education. Finally it may be pointed that transfer is neither promotion nor demotion but merely a horizontal or lateral movement of an employee from one job to another in same Organisation. duties.

material data. Recruitment involves attracting as many applications as possible from eligible job seekers. The importance of selection of staff is now accepted in the business world. Application Blank is the prescribed form issued by the company for the collection of required information from interested candidates. Theoretically it is said to end up with the receipt of applications but in real the activity extends to the screening of applications. 5 . hobbies etc. Selection is picking the right candidate from pool of applicants. Recruitment is the process of searching for and obtaining applicants for jobs. It seeks to eliminate as many unqualified applicants as possible in order to identify the right candidates. employment data. from whom the right people can be selected. In job evaluation the jobs are ranked not the job holder. It is the process of analyzing and assessing the available jobs. For example: wage/ salary hierarchy is based on evaluation of job. challenging and creative or gives the job holder more decision making. 26) Application Blank: Application Blank is most commonly used to collect information from the applicants. “Right man for Right job”. educational data. a job is enriched when the nature of job is exciting. To be specific. planning and controlling powers.” Induction is designed to provide information to new employees so that the new employees needs to function comfortably & effectively in the Organisation. For example:- Recruitment boards for railways.22) Job Enrichment: Job enrichment means adding a few more motivators to job to make it more rewarding. physical data. Proforma of an Application Blank is normally given along with the advertisement for recruitment. 27) Induction/orientation: “Induction is systematic and planned introduction of employees to their jobs their co-workers and the Organisation. campus recruitment from b schools. 24) Recruitment: HRP helps to determine the type of people a firm needs. 23) Job evaluation: Job evaluation means determining the relative worth of job in an Organisation by comparing it with other jobs within the Organisation & with the job market outside. The information can be personal data. banks & other Organisations. It suggests the comparative importance of different jobs. Selection is the process of choosing the suitable candidates. 25) Selection: Selection is the process of picking individuals with requisite qualifications and competence to fill jobs in the Organisation. It is planned introduction of new hires to their jobs. Job evaluation helps in establishing job hierarchy.

“Assessment should not be confined to past performance alone potential of an employee for future performance must be assessed. The standard of living status in the society. motivation depends upon the compensation he / she receives. The firm conducts market studies regularly & brings out comprehensive reports on the findings. 32) Participative Management: Participative Management is yet another motivational tool used by managers to motivate employees.” 6 . quality & quantity of output. It occupies an important place in the life of an employee. Career planning & development is the responsbilty of hr department. initiative. The other possibility of providing the orientation is to reduce the anxiety of new employees. Career planning stands for forward looking employment policies of Organisation. The series titled “India compensation Report” is brought out annualy and aims to provide info on compensation across a wide spectrum of Indian industry. and leadership abilities. It refers to association of workers and their representatives with the decision making process. 28) Training: “Training & Development may be understood as any attempt to improve current or future employee performance by increasing an employees’ ability to perform through learning usually by changing the employees’ attitude or increasing the employees skills & knowledge. The compensation that an employee receives is return for the contribution to the Organisation. 29) Performance appraisal :“Performance is an objective assessment of an individuals performance against defined benchmarks. It spends $155 million on training each year. Each employee spends 4 to 6 weeks a year in compulsory training.” For example: FEDEX Corporation is the company which takes training seriously. For example : India compensation report 1998. the resultant concept is Participative Management. “When subordinates are involved in decision making at all levels.” 30) Compensation: Compensation is frequently directly tied to the labor market.” Performance appraisal may be understood as the assessment of individual’s performance in a systematic way. 31) Career Planning & Development: Career planning is the systematic process by which one selects career goals and the path to reach these goals. The performance appraisal being measured against factors such as job knowledge.” The need for training & development is determined by the employees performance deficiency computed as follows:- Training & Development = “Standard performance –Actual Performance. their peers & the company. Watson wyatt (India) is a reputed consulting firm having its office in Mumbai.

Difference between a policy and procedure. It includes initial assignment of new employees and promotion. Employees feel responsible & if they feel responsible they are more initiative towards their work. With the objectives of representing the workers interest to coordinate the activities of all labor Organisations in country.33) Industrial Relations: It is concerned between the relationship between management and workers & the role of regularity mechanism in resolving any industrial dispute. GE plastics India & Philips are empowering Employees and Wipro too which is nowhere left behind. For example: Titan. Tata information system. They help motivate and build loyalty. 37) Employee Empowerment: Empowerment is the process of enhancing feelings of self- efficacy and a sense of “owning a job” Empowerment is something that young job aspirants are looking for in Organisation more than monetary rewards it is the feeling that Employee owns the job that motivates him/her.” For example: The all India trade union council in 1920. Policies becomes benchmarks to compare & evaluate Performance. It is the system where Assessment of several individuals is done by various experts using various techniques such as role playing. Empowerment occurs when power goes to employees who then experience a sense of ownership and control over their jobs. 35) Personnel policy: “Policies are plans of actions Organisation need to evolve HR policies as they ensure consistency and uniformity in treating people. 38) Assessment centers: Assessment centers is one of modern methods of performance appraisal of supervisory staff. TATA Steel completed 75 years of industrial harmony and this fact has contributed to the competitive edge of steel makers. For Example: on May 19. The selected employees work together on a similar assignment. It is the assignment or reassignment of an employee to a new or different job. Reliance. “A process of enhancing feelings of self- efficacy among Organisation members that foster powerlessness. It is a group of employees drawn from different work units. Another relative term is “Employee Relations or Human Relations”. A policy should be broad enough for it to be applicable in varying situations. 34) Trade Unions: “ Trade unions are voluntary Organisations of employees or employers formed to promote and protect their interest through collective action. case study etc. 36) Empowered teams: Empowering refers to passing an authority and responsibility. If the no of individuals is large 7 . 2004. transfer or demotion of present employees.” A policy does not spell out the detailed procedure by which it has to be implemented. 39) Placement: It refers to allocation of people to jobs.

But the word incentives is most appropriate because of its motivational content. the number of people & no of jobs determine the placement process of company. the job. or remain intact. making him/her highly competent. or member turnover and increase productivity and engagement. sustaining performance. in relation to the available jobs. 41) ESOPS: An employee stock ownership plan (ESOP) is an employee-owner method that provides a company's workforce with an ownership interest in the company. often at no up-front cost to the employees. however. More so. when more jobs are available optimal placement is possible thus. Often it is informal. The initial T&D effort designed for employees is Socialization. 43) Socialization: In order to reduce the anxiety that new employees may experience. an Organisation can use the results from exit interviews to reduce employee. improving innovation. only the best qualified jobs can be selected and placed. Some examples of the value of conducting exit interviews include shortening the recruiting and hiring process. the guided adjustment of new employees to the company. thus reducing the high costs associated with turnover. 44) On the job training: Majority of industrial training is of on the job training type. 8 . It is the most effective method as the trainee learns by experiencing. are part of employees' remuneration for work performed. this occurs between an employee and an Organisation. An Organisation can use the information gained from an exit interview to assess what should be improved. 42) Exit interviews: An exit interview is a survey conducted with an individual who is separating from an Organisation or relationship. Most commonly. OJT is conducted at the work site and in context of the job. and the work group. In an ESOP. The other name of incentives is “PAYMENY BY RESULTS”. a student and an educational institution. student. companies provide their employees with stock ownership. It is important for each Organisation to customize its own exit interview in order to maintain the highest levels of survey validity and reliability. as when an experienced worker shows a trainee how to perform the jo task. changed. and reducing possible litigation if issues mentioned in the exit interview are addressed. Shares are allocated to employees and may be held in an ESOP trust until the employee retires or leaves the company. The shares are then sold. or a member and an association. 40) Incentives: “Incentives are variable rewards granted to employees according to variations in their performance”. ESOP shares. reducing absenteeism. On the other hand. attempts should be made to integrate the person into the informal Organisation.

For example : a male worker may assume the role of female supervisor. Training may be provided by specialist trainers working for National Grid or by an outside company hired to help with training. supervisory staff and executives such training is called as Management development or executive development. 46) Management development: In addition to training of operating staff. as employees can use these across different areas of the company. and the supervisor may assume the role of male worker. Sensitivity training results in increased ability to empathize with others. usually fewer than 12 in group. Management development programme (also called as Human Resource development HRD programme) acts as key factor for the survival and growth of a business unit. 48) Simulation: Any training activity that explicitly places the trainee in an artificial environment that closely mirrors actual working conditions can be considered a Simulation. They meet with a passive trainer and gain insight to their own and others behavior. management games & role-play.It’s just like acting out a given role as in a stage play. 9 . For example: activities of an Organisation may be simulated and the trainee must be asked to make a decision in support of those activities. Off-the-job training includes more general skills and knowledge useful for work.45) Off the job training: This is any form of training which takes place away from the immediate workplace. the trainees are required to enact defined roles on the basis of oral or written description of a particular situation. as well as job-specific training. greater openness. 49) Role Play: . Meetings have no agenda and held away from work places and questions deal with here and now of the group process. vestibule training. Then both may be given a typical work situation and asked to respond as they expects others to do. In this method of training. The consequences is better understanding between individuals. an Organisation has to take steps for training its managers. increased tolerance of individual differnces. Simulation activities include case experiences. 47) Sensitivity training: Sensitivity training uses small number of trainees. experiential exercises. The results of those decisions are reported back to trainee with an explanation of what would have happened had they actually been made in the workplace. Off-the-job training is particularly effective for non-technical skills. improve listening skills . The trainee learns from this feedback and improves his/ her subsequent simulation and work place decisions.

Trainees study the cases to determine the problems and develop alternative solutions select the best one and implement it. Total compensation includes regular income and all of these paid benefits. 52) HR Demand Forecasting and HR supply Forecasting: Refer notes of HRP process by aswathappa. Taken from the actual experiences of the organisations these cases attempts to describe as accurately as possible real problems that mangers have faced. vacation pay. Common examples of fringe benefits include medical a insurance. housing allowance. sick pay. need to decide what is going on what the situation really is or what the problems are and what can and should be done. meals and employee discounts. educational assistance.50) Case study: Case study is written description of actual situation in business which provokes in the reader. 51) Fringe benefits: Fringe benefits are forms of compensation you provide to employees outside of a stated wage or salary. “HARD WORK BEATS TALENT WHEN TALENT FAILS TO WORK HARD” 10 . use of a company car.