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We start with defining what you mean by human resources?

According to Leon C. Megginson, the term human resources ca be

thought of as, “the total knowledge, skill, creative abilities, talent
and aptitudes of an organization’s workforce, as well as the value,
attitudes and beliefs of the individuals involved”

Human resources are also regarded as human factor, human asset,

human capital and the like.

Nature and Scope of Human Resources in Organization

People in any organization manifest themselves, not only through

individual sections but also through group interactions. When
individuals come to work place, they come with not only technical
skills, knowledge etc. But also with their personal feelings,
perception, desire motives, attitude, values etc. Therefore employee
management in an organization does not mean management of not
only technical skills but also other factors of the human resources

Complex Dynamism

The handling of human resource is entirely different from that of

other resources. If human factor is properly utilizes, it may even
prove a dynamic motive force for running an organization.
Otherwise it becomes a passive and destructive force.

A Social System

The personnel manager involves himself in administering a social

system. In this process, the manager has to see that the economic

satisfaction for a reasonable livelihood, the social satisfaction of
working together as members of a group and individual job
satisfaction of a worker are attained.

The nature and significance of personnel management have

undergone rapid changes recognizing the people not as a cost
center but as a profit center.

Meaning of Human Resource Management

In simple sense, human resources management means employing

people, developing their resources, utilizing, maintaining and
compensating their services in tune with job and organizational

Michael J. Jucius defined Personnel Management as “the field of


Personnel Management as “the field of management which has to

do with planning, organizing, directing and controlling the functions
of procuring, developing, maintaining and utilizing a labor force,
such that the :

a) Objectives for which the company is established are attained

economically and effectively,

b) Objectives of all levels of personnel are served to the highest

possible degree,

c) Objectives of society are dully considered and served

Human Resource Management can be defined as managing

(planning, organizing, directing and controlling) the functions of
employing, developing and compensating human resources
resulting in the creating and development of human relations with a
view to contribute proportionately (due to them) to the
organizational individual and social goals.

Significance of Human Resource Management (HRM)

Today the apparel industry has become very competitive with the
removal of quotas more and more buyers are coming into India.
Human resources are the lifelines of any organization.

Human Resources System is a central subsystem of the


Human resources system in an organization is not only unique sub-

system but also a principle and central sub-system and it operates
upon and control all other systems (as shown in the following figure.

Organisation System


Financial Human Marketing

Sub- Resources Sub-
System Sub-System System


Thus in the words of Wendell L. French, “ Personnel management is

a major pervasive sub-system of all organizations”. Whatever I the
environment affects the organization like economic, social, cultural,
legal, political, historic, competitors, consumers etc. as a whole also
affects the personnel system. The resource system receives inputs
from the organization in the form of objectives and it results in

individual and organizational performance that may be viewed as
individual and organizational output. Both the personnel system and
the entire organizations operate under the same cultural, economic,
social, legal, political and other constraints. Hence, greater the
effectiveness and productivity of personnel, the more will be the
effective functioning of an organization. Peter F. Drucker has rightly
observed the significance of personnel as, managers are fond of
repeating the truism that the only real difference between one
organization and the other is the performance of the people”. In
essence the survival, development and performance of an
organization although not solely but heavily _ depends on the
equality of personnel.

Environmental Influence

The external environment is comprised of those factors, which

affect an organization’s human resources from outside the
organization. Important among them are, economic, social, political,
Governmental and legal, technological, manpower, in the country,
tradition and culture, customers, other organizations and trade
unions in other organizations. Each of these external factors
separately or in combination can influence the HRM function of any
organization. Further, changes in these factors make the personnel
manager’s job a challenging one.

Environmental Scanning of HRM



Governmental Customers
Marketing Organizational

Trade Unions
in other
Organizational Organizations

Finance Organizational
Economic Structure Human
Environment in Country

Social Including

The internal environment also affects the job of a personnel


The internal environmental factors include organization objectives,

policies, organizational structure, the functional areas of the
organization with which the personnel managers works continuously
like finance, marketing and production. Impact of internal
environmental factors is profound as they frequently and closely

interact with HRM function in an organization. For instance, the
objectives of HRM are formulated based on the organizational
objectives. Jobs are designed and analyzed based on the
organizational structure. The personnel manager works closely with
other functional (line) managers in solving their personnel problems
through counseling, advising, providing information etc. The levels
of wage salary, various allowances – incentive compensation etc.,
are highly influenced by the level of finance and success of
marketing functions. Most of the personnel problems are linked with
the production function of an organization. Thus the internal
environment of an organization influences heavily the HRM.

Technological Factors: Just as necessity is mother invention,

competition and a host of other reasons are responsible for the
rapid technological changes and innovations. In consequence of
these changes, technical personnel, skilled workers and machine
operators are increasingly required while the demand of the other
categories of employees has declined. But it is found that the supply
of former category of employees has dwindled in relation to the
demand for the same. Hence procurement of skilled employees and
their increase in numbers to match the changing job requirements
has become a complicated task. In addition, not only new
organizational relationships and different motivational techniques to
satisfy the changed relationships but also to retain technically
skilled and efficient personnel will be required.

Changes in the Structure of Employment

There has been a significant change in the structure of employment

with the entry of

a) Candidates belonging to the scheduled cast, scheduled tribe

and backward communities, thanks to government’s
reservation policy and with

b) More female employees, due to increase carrier orientation
among women to the suitability of women for certain jobs and
to women becoming more acclimatized to the working climate
and higher level commitment.

These changes in workforce have naturally complicated the task of

HRM as the personnel manager has to deal with the employees with
different backgrounds.

Changes in Employee Role and their Values

It was the opinion of the management that it was the boss and the
employees had to follow obediently management’s decision. But
gradually this relationship has been replaced by the relationship in
which employees and management are partners in the

It has become imperative for the management to provide various

fringe benefits to improve morale, to introduce negotiating
machinery to reduce grievance; to encourage employee
participation indecision making and the like to pave the way for
industrial democracy to meet the situations of workforce.

Further, employees prefer flexible working hours to fixed time


Changing Demands of Employers

The technological revolution and neck to neck marketing

competition of most of the organizations demand that the existing
employees adopt to the ever changing work situations and learn
new skilled, knowledge etc., to cope up with the new changes.


After knowing the meaning and importance of human resource

management, how do we define the function of HRM in Mystic Monk
Designs Pvt. Ltd.?

Managerial Functions

Planning: It is a pre-determined course of action. Planning is

determination of personnel programmes and changes in advance
that will contribute to the organizational goals. In other words it
involves planning of human resources, requirements, recruitment,
selection, training etc. It also involves forecasting of personnel
needs, changing, changing values, attitudes and behavior or
employees and their impact on organization.

Organizing: An organization is a means to an end. It is essential to

carry out the determined course of action. In the words of
J.C.Massie, an organization is a “structure and a process by which
co-operatives groups of human beings allocated its task among its
members, identifies relationships and integrates its activities
towards common objective”.

Directing: The next logical function after completing planning and

organizing is the execution of the plan. The basic function of
personnel management at any level is motivating, commanding,
leading and activating people. The willing and effective co-operation
of employees for the attainment of organizational goals, is possible
through proper direction.

Controlling: After planning, organizing, directing the various

activities of the personnel management. At this point the
performance is to be verified in order to know that the personnel
functions are performed in conformity with the plans and directions.
Controlling also involves checking, verifying and comparing of the

actual with the plans, identification of deviations if any and
correcting of identified deviations.

Operative Functions

Employment: Employment is connected with securing and

employing the people possessing required kind and level of human
resources necessary to achieve the organizational objectives.

Job analysis

a) Collection of data, information, facts and ideas relating to

various aspects of jobs including men, machines and

b) Preparation of job-description, job specification, job

requirements and employee specification, which will help
identifying the nature , levels and quantum of human

c) Providing the guides, plan and basis for job design and for all
operative functions of HRM.

Human Resource Planning: It is process of determination and

assuring that the organization will have an adequate number of
qualifies persons, available to proper times, performing jobs
which would meet the needs of the organization and which
would provide satisfaction for the individuals involved.

Recruitment: It is the process of searching for prospective

employees and stimulating them to apply for jobs in an

Selection: It is the process of ascertaining the qualifications,

experience, skill, knowledge etc., of an applicant with a view to
appraising his/her suitability to a job appraising.

Placement: It is the process of assigning the selected candidate
with the most suitable job in term of job requirements. It is
matching of employee specifications with job requirements.

Induction and Orientation: Induction and orientation are the

techniques by which a new employee is rehabilitated in the changed
surrounding and introduced to the practices, policies, purposes and
people etc., of the organization.

Human Resource development

It is the process of improving molding and changing the skills,

knowledge, creative ability, aptitude, attitude, values, commitment
etc., based on present and future job and organizational
requirements. This function includes:

Performance Appraisal :It is the systematic evaluation of

individuals with respect to their performance on the job and their
potential for development.

Training; It is the process of imparting the employees the technical

and operating skills and knowledge.

Management Development: It is the process of designing and

conducting suitable executive development programmes as to
develop the managerial and human relations skill of employees.

Career Planning and Development; It is the planning of one’s

career and implementation of career plans by means of education,
training, job search and acquisition of work experiences. It includes
internal and external mobility.

It takes care of transfer, promotion, demotion etc.

Compensation: It is the process of providing adequate, equitable

and fair remuneration to the employees. It includes job evaluation,

wage and salary administration, incentives, bonus, fringe benefits,
social security measures etc.

Effectiveness of Human Resources Management

Effectiveness of various personnel programmes and practices can

be measured or evaluated by means of organizational health and
human resources accounting etc.

Organizational Health: The result of the employee satisfaction

can be understood by labor turnover, absenteeism, commitment
and the like. Low rate of absenteeism and specific and high rate of
employee commitment most probably indicate employee –
satisfaction about the job and the organization.

Human Resource Accounting, Audit and Research:

Effectiveness of human resources management can also be found
out through human resource accounting, audit and research.

Human Resource Research: It is the process of evaluating the

effectiveness of human resources policies and practices and
developing more appropriate ones. It includes;

a) Conducting morale, attitude, job satisfaction and behavior


b) Collecting data and information regarding wages, cost-benefit

analysis of training, benefits, productivity, absenteeism,
employee turnover, strikes, accidents, operations, working
hours, shifts etc.

c) Tabulating, computing and analyzing of the data and


d) Report writing and submission to the line managers

e) Finding pout defects and shortcomings in the existing policies,
practices etc.

f) Developing of more appropriate policies, procedures,

programmes of personnel.

Objectives of Human Resource Management

The objectives of HRM may be as follows:

a) To create and utilize an able and motivated workforce, to

accomplish the basic organizational goals.

b) To establish and maintain sound organizational structure and

desirable working relationships among all the members of the

c) To secure the integration of individual and groups goals with

those of the organization.

d) To create facilities and opportunities for individual or group

development so as to match it wit the growth of the

e) To attain an effective utilization of human resources in the

achievement of organizational goals.

f) To identify and satisfy individual and group needs by

providing adequate and equitable wages, incentives,
employee benefits and social security and measures for
challenging work, prestige, recognition, security status etc.

g) To maintain high employee morale and sound human relations

by sustaining and improving the various conditions and

h) To strengthen and appreciate human assets continuously by

providing training and developmental programmes.

i) To consider and contribute to the minimization of socio-
economic evils such as un-employment, under-employment,
inequalities in the distribution of income and wealth and to
improve the welfare of the society by providing employment
opportunities to women and disadvantaged section of the
society etc.

j) To provide an opportunity for expression and voice in


k) To provide fair, acceptable and efficient leadership.

l) To provide facilities and conditions of work and creation of

favourable atmosphere for maintaining stability of


Job design process has to start from what activity needs to be in

order to achieve organizational goals. It requires the use of
techniques like work-study, process planning, organizational
methods and organizational analysis.

Job Design Options:

Personnel departments use a variety of methods to improve jobs

such as job rotation, job enlargement and job enrichment.

Job Rotation: Job rotation refers to the movement of an employee

from one job to another. Job themselves are not actually changed;
only the employees are rotated among various jobs. An employee
who works on a routine/respective job moves to and works on
another job for some hours/day/months and backs up to the first
job. This measure relieves the employee from boredom and
monotony, improves employee’s skill regarding various jobs and
prepares the competent employees to meet the contingencies. This
measure also improves worker’s self-image and provides personnel

Job Enlargement: Job enlargement means adding more and

different tasks to a specialized job to provide greater variety.

Job Enrichment: Job enrichment loads the job vertically. Job

enrichment means adding duties and responsibilities that will
provide for skill variety, task identity, task significance, autonomy
and feedback on job performance. It tries to deal with dissatisfaction
by increasing job depth as work activities from a vertical slice of the
organization unit are combined in one job.

Job Analysis

Need of Job Analysis

Procurement is the first operative function of personnel

management, which can be sub-divided into various sub-functions
like human resource planning, recruitment and selection.
Management should determine the kind of personnel required for a
job in right time. Thorough knowledge of the job is essential to
perform these functions.

Job Terminology

Description of technical terminology is highly essential in order to

facilitate the study of a job analysis.

Task: A task is an action or related group of action designed to

produce a definite outcome or result.

Position: A position is a group of similar tasks and responsibilities

assigned to one individual.

Job: A job is “a group of positions that are similar as to kind and

level of work”.

Occupation: An occupation “is a group of job that are similar as to

kind to work and are found throughout an industry or the entire

Job Analysis: The U.S. Department of Labor defined job analysis as

“the process of determining, by observation and study, and
reporting pertinent information relating to the nature of a specific

Job Description: A job description is “ an organized, factual

statement of the duties and responsibilities of a specific job”.

Job Specification: A job specification is “a statement of the
minimum acceptable human qualities necessary to perform a job

Job Specification: Employee specification is a statement of

minimum required employee qualifications”.

Job Classification: A job classification is “a grouping of jobs on

some specified basis such as kind of work or play”.

Process of Job Analysis

Jobs can be analyzed through a process, which consist of six basic


i. Collection of Background Information

ii. Selection of Representative Position to be analyzed

iii. Collection of Job Analysis of Data

iv. Developing a Job Description

v. Developing a Job Specification

vi. Developing Employee Specification

Job Analysis Information: This analysis provides the following


1. Job Identification

2. Significant Characteristics of a Job

3. What the Typical Worker Does?

4. Job Duties

5. What Materials and Equipment the Worker Uses?

6. How a Job is performed?

7. Required Personal Attributes

Job Relationship:

This includes opportunities for advancement, patterns of

promotions, essential cooperation etc.:

Sources of Job Analysis Information:

a. From the employee who actually perform a job.

b. From other employees such as supervisors and foremen who

watch the workers while doing a job and thereby acquire
knowledge about it; and

c. From outside observers specially appointed to watch

employees performing a job. Such outside persons are called
the trade job analysis. Sometimes, special job reviewing
committees are also established.

Job Description

Characteristics of Good Job Description: It should indicate the

scope and nature of the work including all-important relationships.

The job description should be clear regarding the work of the

position, duties etc. More specific words should be selected to show

a. The kind of work

b. The degree of complexity

c. The degree of skill required

d. The extent to which problems are standardized

e. The extent of worker’s responsibility for each phase of the
work and

f. The degree and type of accountability.

The Content of Job Description: The job description normally

contains the information on the following line

Job title

Organizational location of the job

Supervision given and received

Materials, tools, machinery and equipment worked with

Designation of the immediate superiors and subordinates

Salary levels: Pay, D.A., other allowances, bonus, incentive wages,

method of payment, hours of work, shift, and break.

Complete list of duties to be performed separated accordingly to daily,

weekly, monthly and casual, estimates times to be spent on each duty.

Definition of unusual terms

Conditions of work: Location, time, speed of work, accuracy, health

hazards, accident hazards

Training and development facilities

Promotional chances and channels

The content of job description are defined in Mystic Monk Designs

Pvt. Ltd.but they are done only for the top level or middle level jobs.
Our recommendation is that job should clearly defined for all the
workers in the organization. It helps in clearly defining the authority
responsibility relationship of superior and subordinate. It also helps
in job evaluation and giving the right feedback to the worker.

Major Steps of Job Description: Job analyst has to write the job
description after consulting the worker and the supervisor. After
writing the preliminary draft, the job analyst has to get further

comments and criticism from the worker and supervisor before
preparing the final draft. The following modes may be used in
writing job description:

i. Get the questionnaire filled in by immediate supervisor of the


ii. Job analyst has to complete the job description form by

observing the actual work being done by the employee.

iii. All the information pertaining to the job should be secured

from the worker.

The job analyst has to finalize the job description and write the final
draft by using any one or a combination of two or more of the above
methods. The job description should be reviewed and updated after
the final draft is prepared.

Keeping the Job Description Up-to-date: Job requirements have been

undergoing continuous change. The job analyst has to secure the
information about the changes as and when it is reported or when a
grievance is ventilated claiming that a given job should be
reclassified into a higher group or class carrying the higher rate of
pay. The job analyst has to check the information that is received
and he has to change the job description accordingly.

Job Specification

It is a written statement of qualifications, traits, physical and mental

characteristics that an individual must possess to perform the job
duties and discharge responsibilities effectively.

Job Specification Information: This includes:

i. Physical specifications

ii. Mental specifications

iii. Emotional and social specifications and

iv. Behavioral specifications

Job Specification Form (this should be maintained for all the

job positions in Mystic Monk Designs Pvt. Ltd.)



Educational Qualifications


Physical Specification: Height, weight etc.

Social Back ground

Family Back ground

Extra-curricular activities


Employee Specifications: Job specification information must be

converted into employee specification information in order to know
what kind of person is needed to fill a job. Employee specification is
useful to find out the suitability of particular class of candidates to a
particular job.

Recommended model of employee specification form to be

maintained in Mystic Monk Designs Pvt. Ltd.

Job Grade

Job Title



Educational Qualifications

Training received


Physical specification

Social specification

Uses of Job Analysis

Employment: Job analysis is useful as a guide in every phase of

employment process like manpower planning, recruitment selection,
placement, orientation induction, and in performance appraisal as it
gives the information about duties, tasks and responsibilities etc.

Organization Audit: Job information obtained by job analysis often

reveals instances of poor organization in terms of the factors
affecting job design.

Training and development Programs: Description of duties and

equipment used is of great help in developing the content of
training and development programs.

Performance Appraisal: Instead of rating an employee on

characteristics such as dependability there is now a tendency
toward establishing job goals and appraising the work done toward
those goals.

Promotion and Transfer; Job description helps I charting the

channel of promotion and in showing lateral lines of transfer.

Preventing Dissatisfaction and Settling Complaints: Job

information can be used as a standard in preventing and settling
complaints related to work load nature of work, work procedures
etc. alteration or revisions of job description etc.

Disciple; Job information can be used as a standard when discipline
is being considered for standard performance.

Restriction of Employment Activity for Health Reasons and

Early Retirement

When employees are unable to maintain the standard job

performance due to old age or health hazard they may opt for early
retirement for the organization may retrench their services.

Wage and Salary Administration

Job analysis is the basis for job evaluation. Basically wage and salary
levels are fixed on the basis of job evaluation, which takes into
consideration the content of the job in terms of tasks, duties,
responsibilities, risks, hazards, etc.

Health and Safety

Job description provides the information about hazardous and

unhealthy conditions, accident-prone areas etc.


Objective: The important objectives of manpower planning in an

organization are:

i. To recruit and retain human resources of required

quality, quantity and foresee the employee turnover and
make the arrangement for minimizing turnover and
filling up of consequent vacancies

ii. To meet the needs of the programme of expansion,

diversification etc.

iii. To foresee the impact of technology on work, existing

employees and future human resource requirements

iv. To improve the standard, skill, knowledge, ability

discipline etc.

v. To asses the surplus or shortage of human resources

and take measure accordingly

vi. To maintain congenial industrial relations by

maintaining optimum level and structure of human

vii. To minimize imbalances caused due to non-availability

of human resources of right kind, right number in right
time and right place

viii. To make the best use of its human resources and

ix. To estimate the cost of human resources.

What is Human Resource Planning?

E.W/ Vetter viewed human resource planning as “ a process by

which as organizations should move from its current manpower to
its desired manpower position.

According to Leon C. Megginson human resource planning is “ an

integrated approach to performing the planning aspects of the
personnel function in order to have a sufficient supply of adequately
developed and motivated people to perform the duties and task
required to meet organizational objectives and satisfy the individual
needs and goals of organizational members”.

Need of Human Resource Planning

Every organization has to plan for human resource due to:

i. The shortage of certain categories of employees and/or

variety of skills despite the problem of unemployment.

ii. The rapid changes in technology, marketing, management

etc. and the consequent need for new skills and new
categories of employees.

iii. The changes in organization design and structure affecting

manpower demand.

iv. The demographic changes like the changing profile of the

workforce in terms of age, sex, education etc.

v. The government polices in respect to reservation, child labor,

working conditions etc.

vi. The labor law affecting the demand for the supply of labor.

vii. Pressure from trade unions, politicians, robots etc.

viii. Introduction of computers, robots etc.

ix. The involvement of lead-time in maintaining the job with most
suitable candidate.

Benefits of Human Source Planning

i. It checks the corporate plan of the organization.

ii. It offsets uncertainty and change. But the HRP offsets

uncertainties and changes to the maximum extent possible
and enables the organization to have right men at right time
and the right place.

iii. It provides scope for advancement and development of

employees through training, development etc.

iv. It help to anticipate the cost of salary enhancement, better

benefits etc.

v. It helps to anticipate the cost of salary, benefits and all the

cost of human resources facilitating the formulation of
budgets in an organization.

vi. To foresee the need of redundancy and plan to check it or to

provide alternatives employment consultation with trade
unions, other organizations and government through
remodeling organizational, industrial and economic plans.

vii. To foresee the changes values, aptitude and attitude of

human resources and to change the techniques of
interpersonal, management etc.

viii. To plan for physical facilities, working conditions and the

volume of fringe benefits like canteen, schools, hospitals,
conveyance, child care centers quarters, company stores etc.

ix. To give an idea of type of tests to be used and interview

techniques in selection based on the level of skills,

qualifications, intelligence, values etc., of future human

x. It causes the development of various sources contributions in

the form of increased productivity, sales, turnover etc.

xi. It facilitates the control of all the functions, operations,

contribution and most of human resources.


Analyzing the Organization Plans

The process of human resource planning should start with analyzing

the organizational plan into production plan, technological plan, plan
for expansion, diversification etc., marketing plan, sale plan,
financial plan,. Each plan can be further analyzed into Sub-units.
Detailed programmes should be formulated on the basis of unit-wise
plans. Practicability of each programme should be ensured. Analysis
of organizational plan and programmes helps in forecasting the
demand for human resources as it provides the quantum of future
work activity.

Forecasting the Overall Human Resource Requirements

The existing job design and analysis may thoroughly be reviewed

keeping in view the future capabilities, knowledge and skills of
present employees. Job analysis and forecasting about the future
components of human resource s facilitates demand forecasting.
One of the important aspects of demand forecasting is the
forecasting of the quality of human resources (skill, knowledge
values, capabilities etc.) in addition to the quantity of human
resources. Important forecasting methods are:

i. Managerial judgment

ii. Statistical techniques and

iii. Work-study techniques.

Managerial Judgment:

How Mystic Monk Designs Pvt. Ltd.forecasts its overall human

resource requirement?

Mystic Monk Designs Pvt. Ltd. resorts to the management-judgment

approach. Under this method the managers or supervisors who are
well acquainted with the work load, efficiency and abilities of the
employees, think about their future workload, future capabilities of
employees and decides on the number and type of human resource
to be required. This is done by the supervisors concerned who send
the proposals to he top official for approval. Under this bottom-up
approach, the management at the top compares the proposals with
the organizational plan, makes necessary arrangements and
finalizes the plan. Alternatively this exercise can also be done by the
top management which in turn sends the information at the top
prepare the organizational plan, departmental plans and human
resource plan.

Recommendation: In today’s competitive world work-study

analysis is must for any export house.

Work Study Techniques

These techniques are more suitable where the volume of work is

easily measurable. Under this method, total production and
activities in terms of clear units are estimated in a year. Man-hours
required to produce/perform each unit is calculated. Work ability of
each employee is estimated in terms of man-hours after giving due
weight age to absenteeism, rest etc. Then the required number of
employees is calculated.

After an order comes from the buyer and before it goes for
production, planning control and work-study analysis should be

1. Order 50,000 shirts

2. Standard man hour needed to 1.2 hr

produce each unit

3. Plan man hour needed 40,000 hr

4. If order has to dispatch in 2 416 working hours (i.e. 52

months i.e. (52 working days) working days x 8 hr shift / day)

5 Number of men required 96 employees (40,000/416)

Work-study analysis enables an export manufacturing to

know the exact details of the number of employees required
to complete the task.

Supply Forecasting

Existing Inventory

The data relating to present human resources inventory in terms of

human resources components, number, designation-wise and
department-wise should be obtained. Principal dimensions of human
resources inventory are:

i. Head counts regarding total, department-wise, designation-

wise, skill-wise, pay roll-wise.

ii. Job family Inventory: It includes number of category of

employees of each job family, i.e. all jobs related to same
category like merchandising, production quality etc.

iii. Age Inventory: It includes age-wise number and category of

employees. It indicates age-wise imbalances in present

inventory which can be correlated in future selections and

iv. Inventory of skill, experience, values, capabilities.

v. Inventory of qualifications and training including minute

qualifications and training.

vi. Inventory of salary grade-pay-wise, allowances-wise, and total


vii. Sex-wise inventory.

viii. Local and non-local-wise inventory.

Potential Losses

Potential losses to the organization include voluntary quits, deaths,

retirements, dismissals, lay-offs, disablement due to ill health or
involvement in accident, loss of values, aptitude etc. due to changes
in the attitude of existing employees towards the job, department
and organization. Potential losses to a particular department or sub-
unit include factors like promotions out, transfers out and demotions
out in addition to the above factors relating to the organization. The
reasons for the potential losses can be classified as:

i. Permanent total loss

ii. Permanent partial loss

iii. Temporary total loss and

iv. Temporary partial loss.

(a) Permanent total loss is due to labor turnover. Labor turnover is

measured by the following formula:

Labor turn over rate = No. of employees left during a specified period X

Average No. of employees during the same period

Management has to calculate the rate of labor turnover, conduct

exist interviews regarding dismissal etc. This helps to forecast
the rate of potential loss, reason for loss, etc. and reduce loss.
Management also calculates labor stability index (rate of
employees with certain period of experience to total number of
employees), survival rate ( the proportion of employees who are
engaged within a certain period who remain with the firm after so
many months or years of service) which help the management to
encourage a stability and minimize undesirable turnover.

(b) Permanent partial loss consists of wages of skills, capabilities


(c) Temporary total loss of human resource is due to

absenteeism and deputations out.

(d) Temporary partial loss include consultancy, advisory and

other services offered by the employees to others.

Potential Additions

a) Permanent loss

b) Permanent partial

c) Temporary total and

d) Temporary partial.

Permanent total additions to the organization consist of new hires.

Permanent total additions in case of departments include
promotions, demotions and transfers within the organization.

Permanent partial addition consists of acquisition of new skills,
knowledge, values, aptitudes etc. by the existing employees.

The difference between the potential loss and potential additions is

to be added or subtracted as the case may be to the present
inventory of human resource in order to forecast the supply of

Future supply of Present inventory

the difference between the
Human Resources = of human resources ±
potential additions and potential
loss of human Resources


Present inventory of + Potential additions _ Potential Loss

Human Resources

Estimating the Net Human Resource Requirements

Net human resource requirements in terms of number and

components are to be determined in relation to the overall human
resource requirements (demand forecast) for a future date and
supply forecast for that date.

Action Plan for Redeployment, redundancy/Retirement

If future surplus is estimated, the organization has to plan for

redeployment, redundancy etc. If surplus is estimated in some
jobs/departments, employees can be redeployed in other
jobs/departments where the deficit of employees is estimated.
Organization should also plan for training or reorientation before
redeployment of employees. Redeployment takes place in the form
of transfers. If the deficit is not estimated in any job/department and
surplus is estimated for the entire organization, the organization, in
consultation with the trade unions, has to plan for redundancy or

Forecast Future Supply from All the Sources

Action Plan for Recruitment, Development etc.

The promotion plan includes establishing of the ratio of internal

promotion to external recruits, basis for promotion, promotional
channel, and reservations in promotions etc. The transfer plan
includes channel, company rules regarding organization initiated
transfers and employee initiated transfers.

The training and development plan covers areas to be developed,

training techniques, training programmes, training time, availability
of trainer, in plant training or institute training, new courses to be
developed or changes made to the existing courses, cost benefit
analysis of training, development of the employees and matching of
their improved skills with future job requirements etc.

The productivity plan includes maximization of productivity or

minimization of labor cost per unit of output through technological
changes, improving / streamlining methods, procedures and
systems, productivity bargaining, training, financial incentives,
developing various schemes, motivation, commitment, organization
development programmes, job enrichment/ enlargement,
participation etc. It also includes improving of productivity

Recruitment and selection plans cover the number and types of

employment required, when they are required for the job, time
necessary for recruitment and selection process, recruitment
sources, recruitment techniques to be used, selection procedures to
be adopted, selection techniques to be used to select the required
candidates. It also covers the time factor for induction, preliminary
training and placement.

Modify the Organizational Plan

Retention Plan

Control and Review Mechanism


REQUIRMENT FOR THE NEXT YEAR (this is a recommended
model which can be applied in Mystic Monk Designs Pvt.

Particular Skill Knowle Aptitude Speciali Age Number

dge zation



1.Number required at
the beginning of the

2. Changes during the


3. Total requirements
at the end of the year


4. Present inventory

5. Additions:
Permanent total

i. New hires

ii. Promotions in

iii. Transfers in

Demotions in

Permanent partial

Temporary: Deputation

Loss: Permanent total

6.i. Voluntary quits

ii, Deaths

iii. Dismissals

iv. Retirements

v. Promotions out

vi. Transfers out

vii. Demotions out

Permanent partial

Deputations out

7. Future net supply

New Recruitments

8. Deficit/ Needed


10 Net Additional
Human Resources



Recruitment is defined as, “a process to discover the sources of

manpower to meet the requirements of the staffing schedule and to
employ effective measures for attracting that manpower in
adequate numbers to facilitate effective selection of an efficient

Edwin B. Flippo defined recruitment as “ the process of searching for

prospective employees and stimulating them to apply for jobs in the

Recruitment Policy

Recruitment policy of any organization is derived from the personnel

policy of the same organization. In other words the former is the
part of the latter. However, recruitment policy by itself should take
into consideration the government’s reservation policy, policy
regarding sons of soil etc. personnel policies of other organizations
regarding merit, internal sources, social responsibility in absorbing
minority section, women etc. Recruitment policy should commit
itself to the organization’s personnel policy like enriching the
organization’s human resources or serving the community by
absorbing the weaker sections and disadvantaged people of the
society, motivating the employees through internal promotions,
improving the employee loyalty to the organization by absorbing the
retrenched or laid-off employees or casual/temporary employees or
dependents of present/former employees etc.

The following factors should be taken into consideration in

formulating recruitment policy. They are:

a. Government’s policies;

b. Personnel policies of other competing organization;

c. Organization’s personnel policies;

d. Recruitment sources;

e. Recruitment needs;

f. Recruitment cost;

g. Selection criteria and preference etc.

Centralized Vs. Decentralized Recruitment

Merits of Centralized Recruitment

i. Average cost of recruitment per candidate/unit should be

relatively less due to economies of scale.

ii. It would have more expertise available to it.

iii. It can ensure broad uniformity among human resources of

various units/zones in respect of education, skill, knowledge,
talent etc.

iv. It would generally be above malpractices, abuse of power,

favoritism, bias etc.

v. It would facilitate interchangeability of staff among various


vi. It enables the line managers of various units and zones to

concentrate on their operational activities by relieving them
from the recruitment functions.

vii. It enables the organization to have centralized selection

procedure, promotional and transfer procedure etc.

viii. It enables the organization to have centralized selection
procedure, promotional and transfer procedure etc.

ix. It enables centralized training programmes, which further

brings uniformity and minimizes average cost of staff.

Merits of decentralized Recruitment

i. The unit concerned concentrates only on those sources/places

where it normally gets the suitable candidates. As such the
cost of recruitment would be relatively less.

ii. The unit gets most suitable candidates as it is well aware of

the requirements of the jobs regarding cultural, traditional,
family background aspects, local factors, social factors etc.

iii. Units can recruit candidates as and when they are required
without any delay.

iv. The units would enjoy freedom in finding out, developing the
sources, in selecting and employing the techniques to
stimulate the candidate.

v. The unit would relatively enjoy advantage about the

availability of information, control and feedback and various
functions/processes of recruitment.

vi. The unit would enjoy better familiarity and control over the
employees it recruits rather than on employees selected by
the central recruitment agency.

Both the system of recruitment would suffer from their own

demerits. Hence, the management has to weigh both the merits and
demerits of each system before making a final decision about
centralizing or decentralizing the recruitment. Alternatively the
management may decentralized the recruitment of certain
categories of employees preferably middle and top level managerial

personnel and centralize the recruitment of the other categories of
the employees preferably lower level positions in view and the
nature of the jobs and suitability of those systems for those
categories of positions. The management has to find out and
develop the sources of recruitment after deciding upon centralizing
or decentralizing the recruitment function.

In Mystic Monk Designs Pvt. Ltd.recruitments for higher-level jobs

are decentralized whereas recruitments for lower level jobs
such as operators, pattern masters, assistants to merchants,
fabric chasers are all done centrally through employment


The sources of recruitment are broadly divided into internal sources

and external sources. Internal sources are the sources within an
organizational pursuits. External sources are the sources outside
organizational pursuits.

Internal Sources

Internal sources include:

a. Present permanent employees;

b. Present temporary/casual employees;

c. Retrenched or retired employees;

d. Dependents of deceased. Disabled, retired and present


In Mystic Monk Designs Pvt. Ltd.lots of operators in the production
department are given opportunities to become inline quality
checkers. This provides a lot of motivation to the operators to
improve their efficiency.

Why Do organizations Prefer Internal Sources?

Organizations prefer this source to external source to some extent

for the following reasons:

i. Internal recruitment can be used as a technique of motivation;

ii. Morale of the employees can be improved;

iii. Suitability of the internal candidates can be judged better

than the external candidates as “ known devils are better than
unknown angles”;

iv. Loyalty, commitment, a sense of belongingness, and the

security of the present employees can be enhanced;

v. Employees’ psychological needs can be met by providing an

opportunity for advancement;

vi. Employees economic needs for promotion, higher income can

be satisfied;

vii. Cost of selection can be minimized;

viii. Cost of training, induction, orientation, period of adaptability

to the organization can be satisfied;

ix. Trade unions can be satisfied;

x. Social responsibility towards employees may be discharged;

xi. Stability of employment can be ensured.

External Sources

i. The suitable candidates with skill, knowledge, talent etc. are

generally available;

ii. Candidates can be selected with out any pre-conceived notion

or reservations;

iii. Cost of employees can be minimized because employees

selected from this Latest knowledge, skill, innovative or
creative talent can also be flow source are generally placed in
minimum pay scale;

iv. Expertise, excellence and experience in other organizations

can be easily brought into the organization;

v. Human resources mix can be balanced with different

background, experience, skill etc.;

vi. Latest knowledge, skill, innovative or creative talents can also

be flowed into the organization;

vii. Existing will also broadens their personality;

viii. Long-run benefit to the organization in the sense that

qualitative human resources can be brought.

External Sources include;

a. Educational and training Institutes;

b. Private employment agencies/consultants;

c. Public Employment Exchanges;

d. Professional Associations;

e. Data banks;

f. Casual Applicants;

g. Similar Organizations;

h. Trade Unions.

In Mystic Monk Designs Pvt. Ltd.a lot of middle level and higher-level
personnel are recruited from similar organizations or through
consultants. Juniors merchants and production in charges may be
recruited from education or training institutes. The lower level
recruitments are made from employment agencies and also from
casual applicants.


Recruitment techniques are the means or media by which

management contracts prospective employees or provide necessary
information or exchanges ideas or stimulate them to apply for jobs.
Management uses different types of techniques to stimulate internal
and external candidates.

Techniques useful to stimulate internal candidates are:

a. Promotions; and

b. Transfers

Techniques useful to stimulate external candidates:

a. Present employees;

b. Scouting;

c. Advertising.

(i) Promotions

(ii) Transfers

(iii) Recommendations of the Present Employees

(iv) Scouting

(v) Advertising


The guiding policy in selection is the intention to choose the best-

qualified and suitable candidate for each unfilled spot and to avoid
commitment to those who will not work well. The selection to
procedure is the system of functions and devices adopted in a given
company to ascertain whether the candidates’ specifications are
matched with the job specifications and requirements or not. The
selection procedure cannot be effective until and unless:

a. Requirements of the job to be filled have been clearly

specified (job analysis etc.)

b. Employee specifications (physical, mental, social, behavioral

etc.) have been clearly specified;

c. Candidates for screening have been attracted.

Essentials of Selection Procedure

a. Some one should have the authority to select. This authority

comes from the employment requisition, as developed by an
analysis of the workload and work force.

b. There must be some standard of personnel with which a

prospective employee may be compared, i.e., there should be
available before hand a comprehensive job description and job
specification as developed by a job analysis.

c. There must be sufficient number of applicants from whom the

required number of employees may be selected.

Organizational Relationship

Before designing a selection procedure, the manner in which task

and responsibilities for accepting or rejecting candidates should be
shared by line and staff executives. They must be laid down. The

personnel department should eliminate all unsuccessful candidates,
so that the time of the line executives need not be spent on such
people. Secondly, candidates who can meet job requirements
should be made available promptly. Line executive is ultimately
vested with the authority either to accept or to reject a candidate.
However, the personnel officer has a duty to see that the right types
of personnel are selected and placement done wisely. If he is not
satisfied in this regard, he should give his views to the superior and
should avoid involving himself in argument with departmental head
on methods of selection.

Factors Affecting Selection Decisions in Apparel Industry

Organizational and Social Environment; Some candidates who are

eminently suitable for the job, may fail as successful employees due
to varying organizational and social environment. Hence,
candidates’ specifications must match with not only job
specifications but also with organizational and social environmental

Selection Procedure

(1)Job Analysis: Job analysis is the basis for selecting the

right candidate. Every organization should finalize the
job analysis, job description, job specification and
employee’s specifications before proceeding to the next
step of selection.

(2)Recruitment: Recruitment refers to the process of

searching for prospective employees and stimulating
them to apply for jobs in an organization. It is the basis
for the remaining techniques of the selection and the
latter varies depending upon the former.

Application Form

Personnel background Information:

Educational Attainments:

Work Experience:


Personal Items:


Options of Interviews Available for Apparel Industry

Preliminary Interview

The preliminary interview is to solicit necessary information from

the prospective applicants and to assess the applicant’s suitability
to the job. An assistant in the personnel department may conduct
this. The information thus provided by the candidate may be related
to the job or personnel specifications regarding education,
experience, and salary expected, aptitude towards the job, age,
physical appearance and other physical requirements etc. If the
information supplied by the candidate is below/above the
availability of number of suitable candidates. Thus, preliminary
interview is useful as a process of eliminating the undesirable and
unsuitable candidates. If a candidate satisfied the job requirements
regarding most of the areas, he mat be selected for further process.

The preliminary interviews are short and known as stand-up

interviews or sizing-up of the candidates or screening interviews.
However, certain required amount of care is to be taken to ensure
that the desirable workers are not eliminated. This interview is also
useful to provide the basic information about the company to the

Core Interview

It is normally the interaction between the candidate and the line

executive or experts on various areas of job knowledge, skill, talent,
etc. This interview may take place various forms like:

(a) Background information interview: This interview is

intended to collect the information which is not available
in the application blank and to check that information
provided in the application blank regarding education,
place of domicile, family, health, interest, hobbies, likes,
dislikes, extracurricular activities of the applicant.

(b) Job and probing interview: This interview aims at

testing the candidate’s job knowledge about duties,
activities, methods of doing the job, critical/problematic
areas, methods of handling those areas etc.

(c) Stress interview; This interview aims at testing the

candidate’s job behavior and level of withstanding
during the period of stress and strain. Interviewer tests
the candidate by putting him under stress and strain by
interrupting the applicant from answering, criticizing his
opinions, asking questions pertaining to unrelated areas,
keeping silent for unduly long period after he has
finished speaking etc. Stress during the middle portion
of the interview gives effective results. Stress interview
must be handled with utmost care and skill. This type of
interview is often invalid, as the interviewee’s need for a
job; his previous experience in such type of interviews
may inhibit his actual behavior under such situations.

(d) Panel Interview: Interviewing of candidates by one

person may not be effective as he can not judge the

candidates in different areas/skills owing to lack of
knowledge and competence in multiple disciplines and
areas. Hence, most organizations invite a panel of
experts, specialized in different areas/fields/disciplines,
to interview candidates. A panel of experts interviews
each candidate, judges his performance individually and
prepares a consolidated judgment based on each
expert’s judgment and weight age of each factor. This
type of interview is known as panel interview, which is
more effective as an expert in relevant areas prepares
each candidate. Experts should be cautioned against
over accuracy, excessive weight age to a particular
factor, domination of other experts etc.

At what level of the What takes place in Recommendations

organization? Mystic Monk
Designs Pvt. Ltd.?

Top level selection There are generally There should be a

two interviews. The panel interview. The
first interview takes panels should
place with the comprise of general
General manager and manager, department
the second interview head and the human
takes place with the resource manager of
department head. the company. It is
important to know the
human resource
management skills of
a top-level employee.

Middle level selection The selections are There should be two

generally made on round of interviews.
the basis of one The first should be a
interview with the preliminary interview

respective with the human
department head. resource manager of
that level and the
second should be with
the respective
department head.

Lower level selection There are generally A preliminary

no interviews for their interview may be a
selection; they are good option to know
selected on the basis about the basic
of recommendation qualification, technical
made by the skills, and attitude. A
employment list can be maintained
agencies, employees for the employees
of the export house. who have future
prospects of growth,
who are willing to
undertake additional
responsibilities ,who
are very enthusiastic.

Interview Process

Interview is not a single step. It is a process consisting of several

steps. The major steps are grouped into four categories;

(a) Preparation for the interview •Appropriate type of interview

•The areas to be tested

•Type and number of interviews

•Review the information

(b) Conduct the interview •Open the interview

•Get complete and accurate


•Record observations and impressions

•Guide the interview

•Check the success of the interview

c) Close the interview

(d) Evaluate interview results

A panel of interview is preferable to individual interview. The

number of interviewers is to be decided on the basis of number and
nature of areas to be covered by the interview, number of
candidates to be interviewed and the time available for

Evaluation of Interview Results

The interviewer/the board of interviewers evaluate (s) the

candidates strengthens and weaknesses against the job and
organizational requirements. The evaluation is generally based on
the observations, impressions and information collected during the
course of interview. However, the final decision about the suitability
of candidate to the job is made on the basis of the results of all
selection techniques. But the interview results influence the
selection decision much more than any other technique. The
evaluation may be in descriptive form or grading form or rating
form. The interviewer has to strike a fine balance between the job
requirements and the employee values skills, knowledge etc.

Reference Checks

After completion of the final interview and medical examination, the

personnel department will engage in checking references.
Candidates are required to give the names of reference in their
familiar with the candidate’s academic achievement or from the
applicant’s previous employer, who is well versed with the
applicant’s job performance, and sometimes from co-workers. In
case the reference check is from the previous employer, information
for the following areas may be obtained.

They are: job title, job description, period of employment, pay and
allowances, gross emoluments, benefits provided, rate of absence,
willingness of the previous employer to employ the candidate again

Final Decision by the Line Manager Concerned

The Line manager concerned has to make the final decision whether
to select or reject a candidate after soliciting the required
information through different techniques discussed earlier. The Line
manager has to take much care in taking the final decision not only
because of economic implications and of the decisions but also
because of behavioral and social implications.


Thus, after taking the final decision the organization has to intimate
this decision to the successful as well as unsuccessful candidates.
The organization sends the appointment orders to the successful
candidates either immediately or after sometimes depending upon
its time schedule.


The organization, generally, decides the final placement after the

initial training is over on the basis of candidate’s aptitude and
performance during the training/probation period. Probation period
generally ranges between sic months and two years. If the
performance is not satisfactory, the organization may extend the
probation or ask the candidate to quit the job. If the employee’s
performance during the probation is satisfactory, his services will be
regularized and he will be placed permanently on a job.


“Induction is the process of receiving and welcoming an employee

when he first joins a company and giving him the basic information
he needs to settle down quickly and happily and start work”.

Lecture, handbook, film, group seminar are used to impart the

information to new employees about the environment of the job and
the organization in order to make the new employee acquaint
himself with the following heads:

a. About the company’s history;

b. About the department;

c. About the superiors, subordinates etc.

About the company

a) History, growth, organization and management, products,

market, customers etc. of the company;

b) Basic conditions of employment-hours of work, shift, holidays,

retirement benefits;

c) Pay, allowances, deductions;

d) Sickness rules, information-pay-sick leaves;

e) Leaves rule-casual, special, earned-holidays, vacation;

f) Work rule, work-load, use of materials, equipment, machine

g) Disciplinary rules and procedures;

h) Grievance procedure;

i) Career path, promotion channel;

j) Unions, negotiation channel;

k) Education, training and development facilities;

l) Health, safety, medical are arrangements;

m) Canteen and restaurant facilities;

n) Social benefits and welfare measures;

o) Telephone calls and correspondence;

p) Traveling and subsistence expenses;

q) Uniform, clothing;

r) Various employees- their designations – position in the


About the Department

The departmental head concerned introduces the new employee to

the important employees and describes briefly about the
department and the job. Then the supervisor concerned introduced
the employee to all the employees in the section/unit, describes in
detail the job or work, process of the production, place of the
employee’s job and its significance in the process of production, his
position in the departmental organization structure, work

distribution, assignment, working hours, shift, quality/standard to be
maintained, customers/users of the product/services etc.

Advantages of Induction

a. First impression matters a good deal and results in less


b. Newcomer adjust himself to the work quickly, and it saves the

time of the supervisor;

c. Reduces employee dissatisfaction and grievances;

d. Develops a sense of belongingness and commitment.


Performance appraisal is a method of evaluating the behavior of

employees in the workspot, normally including both the quantitative
and qualitative aspects of job performance. Performance refers to
the degree of accomplishment of the tasks that make up an
individual’s job. Performance is always measured in terms of results
and not efforts.

Advantages of Performance Appraisal:

In order to find whether

 The employee is worthy of continued employment or not

 Whether he should receive a bonus, a pay rise or

promotion, his performance needs to be evaluated from
time to time.

 When properly conducted performance appraisals not only

help the employee know how well he is performing but
should also influence the employee’s future level of effort,
activities, results and task direction.

Features of Performance Appraisal:

 Performance Appraisal is the systematic description of an

employee’s job-relevant strengths and weaknesses

 To find out how well the employee is performing the job and
establish a plan of improvement

 Appraisals are arranged periodically according to a definite


 It is a continuous process in every large scale organization

The major difference between Performance Appraisal and Job
Evaluation is that the performance appraisal refers to how well an
employee is doing the assigned job; and how a job is worth to the
organization, and, therefore, what range of pay should be assigned
to the job is determined by Job Evaluation.

Uses of Performance Appraisals

1. Performance Improvement: Performance feedback allows

employee, manager, and personnel specialists to intervene
with appropriate actions to improve performance.

2. Compensation Adjustment: Performance evaluations help

decision-makers determine who should receive pay raises.
Many firms grant part or all of their pay increases and
bonuses based upon merit, which is determined mostly
through performance appraisals.

3. Placement Decisions: Promotions, transfers, and demotions

are usually based on past or anticipated performance. Often
promotions are a reward for past performance.

4. Training and Development Needs: Poor performance may

indicate the need for retraining. Likewise, good performance
may indicate untapped potential that should be developed.

5. Career Planning and Development: Performance feedback

guides career decisions about specific career paths one
should investigate.

6. Staffing Process Decisions: Good or bad performance implies

strengths or weaknesses in the personnel department’s
staffing procedures.

7. Job Design Errors: Poor performance may be a symptom of ill-

conceived job designs. Appraisals help diagnose these errors.

8. Information Inaccuracies: Poor performance may indicate

errors in job analysis information, human resource plans, or
other parts of the personnel management information

system. Reliance on inaccurate information may have led to
inappropriate hiring, training, or counseling decisions.

9. Feedback to Human Resources: Good/bad performance

throughout the organization indicates how well the human
resource function is performing.


Performance Appraisal is a continuous process in every large scale

organization but unfortunately not so structured in Mystic Monk
Designs Pvt. Ltd.. With the company in the expansion mode having
two plants and one upcoming there is the need of taking placement
decisions like promotions, transfers and good staffing decisions.

The Mystic Monk Designs Pvt. Ltd.follows the Supervisor

Appraisal System. The supervisors include only the superiors of
the employee and the top management. The other superiors having
knowledge about the work of the employee and other department
heads or managers are not included in the Supervisor Appraisal
system. General practice is that immediate superiors appraise the
performance, which in turn is reviewed by the department
head/manager. This is because supervisors are responsible for
managing their subordinates and they have opportunity to observe,
direct and control the subordinate continuously. Moreover, they are
responsible for successful performance of their subordinates. The
Human Resource Manager is not even consulted by the top


For Mystic Monk Designs Pvt. Ltd.the Performance Appraisal by

Consultants is the best-suited model:

The appraiser may be any person who has thorough knowledge

about the job content, contents to be appraised, standards of
contents, and who observes the employee while performing the job.

The appraiser should be capable of determining what is more
important and what is relatively less important. He should prepare
reports and make judgments without bias. Out of the typical
appraisers as Supervisors, Peers, Subordinates, Employees
themselves, Users of service and Consultants; the use of
consultants is best suited for the company. The top
management should focus on strategic planning and somehow
minor issues for hiring of labor or line managers should be given to
the consultant. However the top management must be well aware
and take help of consultants while keeping employees at middle or
top management levels.

The Consultants are engaged for appraisal when employees or

employers do not trust supervisor appraisal and management does
not trust the self appraisal or peer appraisal or subordinate
appraisal. In this situation, consultants are trained and they observe
the employee at work for sufficiently long time for the purpose of

Performance Appraisal Model for Mystic Monk Designs Pvt.

Ltd.- Assessment Centre Model

In this approach individuals from various departments are brought

together to spend two or three days working on an individual or
group assignment similar to ones they would be handling when
promoted. Observers rank the performance of each and every
participant in order of merit. The assessment centers are basically
meant for evaluating the potential of candidates to be considered
for promotion, training or development; they offer an excellent
means for conducting evaluation processes in an objective way. All
assesses get an equal opportunity to show their position talents and
capabilities and secure promotion based on merit. Since evaluators
know the position requirements intimately and are trained to
perform the evaluation process in an objective manner, the

performance ratings may find favor with majority of the employees.
A considerable amount of research evidence is available to support
the contention that people chosen by this method prove better than
those chosen by other methods. The centre enables individuals
working in low status departments to compete with people from well
known departments and enlarge their promotional chances. Such
opportunities, when created on a regular basis, will go a long way in
improving the morale of promising candidates working in less
important positions. This will also help top management to find
out the real talents who can be well utilized in the new plant
and can be delegated with higher responsibilities.

Obtain Top Conduct

Manageme Design Program
nt Physical
Commitme Facilities

Do Detailed
Job Analysis Select

to Be Train
Assessed Assesso
Program rs


and Centre
Against Job
Key Elements of Performance Appraisal

Human Performance Employee

Performance Appraisal Feedback



Human Resource Employee

Decisions Records



It is the set of activities that provide the opportunity to acquire and

improve the job related skills.

It is defined as the systematic modification of behavior through

learning, which occurs as a result of education, instruction, and
development and planned experience. Training is learning process-
learning is defined as more or less permanent change in behavior,
which occurs as a result of the influence of external, environmental
stimuli on the inherent, genetic disposition of the individual.

Importance of Training

Training is the most important technique of human resource

development. Organizational efficiency, productivity, progress and
development to a greater extent depend on training.

Benefits of Training

1. How training benefits the Organization

• Leads to improved profitability and/or more positive

attitudes toward profit orientation

• Improves the job knowledge and skills at all levels of

the organization

• Improves the morale of the workforce

• Aids in organizational development

• Provides information for future needs in all areas of the


• Creates an appropriate climate for growth,

2. Benefits to the Individual which in Turn Should Benefit The


• Increases job satisfaction and recognition

• Helps eliminate fear in attempting new tasks


It is observed that employees are given some sort of On-The-Job

Training which can not be called as a proper training method. Mystic
Monk Designs Pvt. Ltd.conducts no structured training programs for
the employees. The reasons behind it are the following:

1. They find the training programs as wastage of time.

2. The labor is on the contract basis so if they are given any

training there is no surety that they will stay forever.

3. There is limited capacity to adjust them in the company.


The need for training is for every organization big or small, old or
newly established should provide training to all employees
irrespective of their qualification, skill, and suitability for the job etc.
Thus, no organization can choose whether or not to train
employees. Training is used continuously in every well run

The need for training arises in Mystic Monk Designs Pvt. Ltd.due to
the following reasons:

1. Organizational Viability and Transformation Process: In the

post quota scenario there is high competition for this export

manufacturing of high fashion apparels so if the company does not
adapt itself to the changing factors in the environment; it will lose
its market share.

3. Technological Advances: Every organization in order to survive

and to be effective should adopt the latest technology, i.e.,
mechanization, computerization and automation. Adoption of latest
technological means and methods will not be complete until they
are manned by employees possessing skills to operate them. So
Mystic Monk Designs Pvt. Ltd.must take advantage of software like
ERPS and should train the employees to enrich them in the areas of
changing technical skills and knowledge from time to time.

4. Organizational Complexity: With the emergence of increased

mechanization and with the extension of operations to various
regions of the NCR, and extension in new overseas markets the
company must have a structure to train its employees.

Training Methods Recommended For Mystic Monk Designs Pvt. Ltd.:

1. Job Rotation: This type of training involves the movement of

the trainee from one job to another. The employees in
departments like production and quality should be trained
about all the processes in the particular departments.

2. Job Instruction: This method is also known as training through

step by step. Under this method the trainer explains the
trainee the way of doing the jobs, job knowledge and skills
and allows him to do the job. The line manager can teach the
assembly line operator and similarly the senior merchandiser
may direct the assistant merchandiser.

3. Conference or Discussion: It is an Off-the-Job training method

to train the professional and supervisory personnel. This
method can be beneficial in Mystic Monk Designs Pvt.
Ltd.where people can pose ideas to improve quality and

productivity. It can be a good platform for both merchandising
and production personnel to solve problems existing amongst.

4. Training Aids: Films, slides, Projections, Movies, Stills can be

shown to all the employees to improve their personality and
working styles.


The Company Mystic Monk Designs Pvt. Ltd.based in Gurgaon follow

the pay structure broadly on the following occupational groupings:

• Managerial and Professional: Top, middle and junior

• Technical/supervisory

• Administrative and clerical

• Manual (workers): Highly skilled, unskilled

By definition the wage means all remuneration (express or implied)

capable of being expressed in terms of money including all
allowances, prerequisites, concessions and commissions. The wage
structure is divided into three components:

• The basic wage

• The variable dearness allowance

• he other allowances and incentives

The basic wage of 60%, 25% house rent allowance and 15% of
conveyances are provided by the company. The basic wage is fixed
as price for labor/services rendered. The following is the set of
criteria, which the company follows for basic wage as per the Fair
Wages Committee (1948)

• The experience involved

• The degree of skill

• The responsibilities undertaken and also

• The salary and incentives provided by the previous company.
This last criterion is for recruiting the Senior Merchandisers
and Senior Production Managers.

For the Technical and Worker class the technical knowledge is the
primary criteria of deciding the payment. The Payment by Results
is another system of linking workers' earnings to a measure of

The salaries to all the occupational groupings are paid on the

monthly basis.

The company provides the following allowances: Car, Cellular

phone, Conveyance/Transport, Medical allowances, Overtime,
Provident Fund, ESIS, Family, and Uniform. The ESIS provides
benefits to employees in case of sickness, maternity, employment
injury and related matters. These allowances have been
recommended by the Fourth Central Pay Commission (1986) and
the High Powered Pay Commission (1988).

The Provident Fund is given to people with salary below Rs. 6500
and the ESI given is to those with salary above Rs.7500.

Social Security Legislation Abided by the Company and

Additional Benefits.

Pay and benefit are important elements in Human Resource

Management. The policies and programs are affected by the
theoretical, public policy, labour market situation, and pressure from
unions and strongly by legal framework.

The additional benefits or Fringe Benefits are the non-wage

benefits offered by the company to its employees. They represent a
"substantial cost expense to the employer and a cost saving to the
employee". The key consideration is to attract and retain

• Attendance Bonus: to encourage punctuality and reduce

• Concern for Security: As individual has been progressively

replacing Joint Family System with the nuclear family so for
old age and other emergencies Provident Fund, Gratuity and
Pension are provided by the company.

• Social Security

• Hazards of Industrial Life: To avoid occupational disease

caused by the very fine fibers during cutting of fabric the
masks are provided.

• For minor accidents there is a clinic in the manufacturing unit

and for major accidents the workers are taken to nearby
hospital and are given compensation for the loss.

• For Senior Merchandiser and the Sr. Production Manager the

company provides car, cellular phone, travel allowance and
house rent.

Methods adopted for fixation of salary

Various factors affecting wages/salary level

1 Remuneration in comparable industries

2 Firms ability to pay

3 Cost of living

4 Productivity

5 Union pressure and strategies

6 Government legislations

Firm’s ability to pay

• Productivity in organization

• Expenses industry has to bear

• Certain trend in price of product/services-charged by industry.

• Total cost of employees (salaries, allowances, cost of fringe


The strong financial situation is directly related to the higher wages

for the employee

Cost of living

• Purchasing power maintained at same level. Wages have to

be fixed-cost of living


The major factor for increase in the productivity is increase in the

employee’s satisfaction, which brings about an increase in their
contribution to organization.

Government legislation

Minimum Wage Act 1948 provides the following:

• Minimum wages in certain employment

• Minimum time rate

• Minimum piece rate

• Guaranteed time rate

• Over time rate

• Basic pay and DA (Dearness Allowance)

Method adopted for fixation of Salary

1 Time wages

Where basic wage is linked to time for which the worker works, it is
called time rate wage.

The wage becomes payable the moment the worker puts in work for
a given period of time. In the case of operatives, the time generally
is a day of eight hrs while for staff it is one month.

Observed advantages of using time wage system

• Time wage gives the worker a sense of security

• Worker can devote themselves to the job with great care and

• When the workers are paid some fixed time rate, they will try
to avoid over speeding and consequent damage to the

• It is simple to calculate.

• If the production is standardized the productivity of individual

worker can be measured.

When production is not carried on in a large scale and modern

techniques of production are not employed time wage system is not

Time wage –generally acceptable to trade unions

Disadvantage of time wage system

1 Efficiency and payment are not correlated

2 There is no motivation

3 There will be variation the average cost of production which

create difficulties in calculating cost of production

4 Job security offered to the employees may lead to lesser


Components of wages

1 Basic wage

2 Dearness allowance

3 Incentive wages

4 Other allowances

Basic wage is dependent on the nature of one’s work if that

determine wage fixation:

1 Education

2 Skill

3 Experience

4 Stress strain

5 Hazard

The amount of wages has a direct relationship with the stress and
strain involved in a job. In some cases, basic wages are fixed for
every job, while in others these are fixed for groups like unskilled,
semiskilled, skilled etc. In all cases generally a minimum wage is
fixed for the lowest category of unskilled work and others are fixed
correlating it. Minimum wages are also fixed on bases of minimum
requirement of family.


• Employee pay and benefits make up a considerable proportion

of most organizations' total costs, and is one of the main
attractions for job seekers. It can also be a main motivating or
de-motivating factor for current employees. As such, devising
and running a reward strategy to attract and retain the right
caliber of employees should be one of the most important roles
for the HR department.

One of the components of pay is incentives and benefits. Incentives

play an important role for motivating an individual to perform his
job. The basis upon which incentives are determined and the way in
which they are administered can have a significant impact upon
employee morale and productivity and thus the achievement of the
organizational goal. Incentives attempt to relate rewards directly to
performance. Rewarding for merit not only improves the morale and
productivity of the employees but it also helps to retain them in the
organization. Monetary as well as non-monetary rewards are useful
for motivating the employees. Some people who are money
motivated especially lower level employees, monetary incentives
can play an important role to increase their efficiency in terms of
both quantity and quality. Mystic Monk Designs Pvt. Ltd.,
however, does not follow any incentive plan for its
employees. They just pay bonus to the employees once a year.

• One of the major requirements of all the export houses is to

deliver their goods on time. For this they require to produce
goods at a faster rate. For that the piece rate system could
work well for the export house. However the lower level

workers that are tailors are paid on the monthly basis. But if
they are paid on the basis of piece rate the output could be

Suggestive Improvements

• Comparing pay to the labor market. Salaries are also

decided according to the demand and supply of the labour in
the market. Before fixing the pay rolls it would prove to be
beneficial for the company to take these factors into
considerations and also compare their salary structure with
the other similar organizations. They will usually be happy to
tell you because they want to have the benefit of your data
just as much as you would like theirs.

• Manage internal equity. Managing internal equity is more

important than external equity. An employee is much more
likely to know the salary of the person in the office next to him
or her, than the salary of a person at another company. Also,
the employee will have a better basis for salary comparison
because he or she has a better idea of what that employee's
job and job performance is. All this creates a much higher
potential for morale problems and turnover. You manage
internal equity by paying people within a salary range, and by
paying for performance. Sometimes internal equity will tell
you not to provide an employee with a salary increase, but
business necessity (the employee is leading a key project and
is threatening to leave) may lead you to decide to provide the
salary increase. In the short run this may be the right answer,
but in the long run it can be costly.

• Link pay with job performance. Those employees who

perform their jobs better should receive larger salary

increases than those who do not. The organization needs to
do is establish an adequate performance appraisal system and
establish a merit pay system. There are many good examples
of merit pay systems in the marketplace ranging from
structured to informal. Variable pay systems are growing in
popularity and can provide an excellent link between pay and
job performance.

• Giving incentives to improve quality. Mystic Monk Designs

Pvt. Ltd.doesn’t provide for any incentives. However the
company can put an incentive program like paying more to
the workers who produce less defected garments. Also the
upper level employees can be given incentive for proper and
timely execution of each order.

• Gain sharing. The company can put such plan to improve

productivity and efficiency. Gain sharing plans will allow
employees to share in productivity gains in accordance with a
pre-determined target. Typically the plans can be established
with participant involvement and are can be designed for
specific work groups (production department or
merchandising department), but company-wide programs can
also exist.


Importance of Understanding Human Relations

Every employee is different from other so a manager must

understand what causes this difference and how to cope with
certain problems created because of the association of all these
different individuals.

Human Relations has been rightly defined in the words of Lee,

“human relations are the medium through which both employees
and the company mutually cooperate for the maximum satisfaction
of the economic, social, psychological wants of the people having
relation with an organization which has the objective of increasing

Measures to Maintain Sound Human Relations

• Frankness clears the misunderstanding and restores the good


• Effective communication improves the relations among

people. Disputes can be effectively handled only when
manager is effective in communication.

• By developing sensitivity to others’ feelings and an ability to

appreciate others’ ideas.

• By becoming a good leader the manager can bring cohesion in

the group he leads and thus can contribute to the
improvement of human relations.

• By praising the subordinates publicly even for the slight

improvement. But do not do this with over ambition.

• By helping the people perform their duties.

Understanding People: In order to understand people one must
know the fundamentals of human behavior. This knowledge helps
the manager to understand that why people react in a certain way,
their wants and drives.

Concept of Personality

The behavior of any person partly depends on what he feels and

thinks about him and partly on how he views the world and others.
Thus Personality is sum total of all the physical, mental, emotional
and social characteristics of a person.

Human Behavior Is Caused

Every human action has a cause. The cause of a person’s action is

the result of an interaction between a stimulus and the person’s
perception of that stimulus. This perception is determined by his
background, personality, circumstances that he is in and his earlier
experience in life.

If the manager understands all these factors, he can be rational in

his behavior instead of being emotional.



Motivation is derived from the word motive. A motive is an inner

state that energizes, activates or moves and directs or channels
behavior towards goals.

It is defined as the degree of readiness of an organization to pursue

some designated goal and implies the determination of the nature
and locus of the forces, including the degree of readiness.

Needs Drives Goals/Incentives

(Deficiency) (Deficiency with Direction) (Reduction of

The Basic Motivation Process

Types of Motives

Primary Motives: These motives are unlearned and physiologically

based. They include hunger, sleep, and avoidance of pain, sex, and
maternal concern.

General Motives: These motives are unlearned but not

physiologically based. They include curiosity, manipulation and
activity motives and the affection motive.

Secondary Motives: These are closely tied to the learning concept. A

motive must be learned in order to be included in the secondary
classification. Important among them are: achievement, affiliation,
power, security, status and immediate feedback.


In today’s fast paced and cut throat competition world every person
is bothered with some kind of depression and frustration. The work
culture in Mystic Monk Designs Pvt. not deprived of it too.
Being the suppliers of High fashion garments the employees are
under constant pressure of meeting the deadlines of shipment.
Though the company pays well to all its employees meeting their
Physiological and Security needs but it need to provide all its
employees Acceptance or Affiliation and Esteem Needs (Maslow’s
Theory of Hierarchy of Needs).


In order to motivate people positively the employees at all the levels

of management can be rewarded financially. Monetary motivation

may include different incentives, wage plans, productive bonus
schemes etc.

Non monetary motivation may include praise of work, participation

in management and social recognition in form of annual family
gatherings in the company.

Organizational Communication

Raymond V. Leisker has described four factors that influence the

effectiveness of communication.

1. The formal channels of communication

2. The organizations’ authority structure

3. Job specifications, and

4. Information Ownership

The organizational communication can be formal or informal.

Formal communication is an official communication having
official support and sanction. Formal communication flows
through the authority and responsibility channels of an
organization which exists in order to:

• Measure and control outputs

• To coordinate complex activities in the system and relate

the sub system to the total systems

• To regulate response to external environment

• Coordinate resource allocations

• Create a climate within which the organization can adjust

its output as it receives; and process feedback

The advantages of formal communication include:

• Providing correct information

• Having official support with authority

• Handling of message efficiently

The drawbacks include:

• Delay in sending immediate information to official


• Absence of immediate feedback

• Lack of ability to communicate upward

Similarly Informal Communication suffers from various


• It sometimes spread wrong information and rumours

• It distorts information

• It overlooks superiors


Mystic Monk Designs Pvt. Ltd.lacks proper software to integrate the

whole value chain right from shop floor to the cabin of the top
management. The intra communication is aided by Local Area
Network, e-mail between the merchandising department.


There is need to have an Enterprise Resource Planning System to

know about the profile of every employee of the company right from
gateman to top manager. Such a system also helps in knowing the
requirement of candidates at any post.


The term fringe benefits refer to various extra benefits provided to

employee, in addition to the compensation paid in the form of wage
or salary. Balcher defines these benefits as, “any wage cost not
directly connected with the employees’ productive effort,
performance, service or sacrifice”. Cockmar, defined fringe benefit
as, “ those benefits which are provided by an employer to or for the
benefit of an employee and which are not in the form of wages,
salaries and time related payment”.

Fringe benefits are those monetary and non9monetary benefits

given to the employees during and post-employment period, which
are connected with employment but not to the employees’
contribution to the organization.

List of Fringe Benefits that should be offered by “Mystic Monk

Designs Pvt. Ltd.”

(Though the company offers most of the fringe benefits the

following list contains all the fringe benefits that are supposed to be
offered by the company:

1. For Employment Security: Benefits under this head include

unemployment insurance, technological adjustment pay,
leave travel pay, overtime pay, leave for negotiation, leave for
maternity, leave for grievances, holiday, cost of living bonus,
call back pay, lay-off pay, retiring rooms, jobs to
sons/daughter of the employees and the like.

2. For Health Protection: Benefits under this head include

accident insurance, disability allowance, health insurance,

hospitalization, life insurance, medical care, sick benefits sick
leave etc.

3. For Old Age and Retirement:

4. For Personnel Identification, Participation and


5. Payment for Time Not Worked,

6. Extra Pay for Time Worked

Payment for Time not Worked: This category includes:

a. Hours of work:

b. Paid holiday;

c. Shift premium;

d. Holiday pay;

e. Paid vacation.

Employees Security: Physical and job security to the employee

should be also provided with a view to promoting security to the
employee and his family members:

a. Retrenchment Compensation: Industrial disputes Act 1947

provides for the payment of compensation in case of lay-off
and retirement.

b. Lay-off compensation :In case of lat-off, employees are

entitled to lay0off compensation at the rate of 50% of the total
of the basic wage and dearness allowance for the period of
lay-off except weekly holidays.

Safety and Health: Employee’s safety and health should be taken
care of in order to protect the employee against accidents,
unhealthy working conditions and to protect worker’s capacity.

Workmen’s Compensation: In addition to safety and health

measures, provision for the payment of compensation has also been
under Workmen’s Compensation Act, 1923.

Health Benefits: Today various medical services like hospital,

clinical and dispensary facilities are provided by organization not
only to employees but also to their family members. Employees
State Insurance Act 1948, deals comprehensively about the health
benefits to be provide. These include:

i. Sickness benefit;

ii. Maternity benefit;

iii. Disablement benefit;

iv. Medical benefit.

Voluntary Arrangements: Most of the large organizations provide

health services over and above the legal requirement to their
employees free of cost by setting up hospitals, clinics, dispensaries
and homoeopathic dispensaries.

Welfare and Recreational Facilities: These include

a. Canteens;

b. Consumer societies;

c. Credit societies;

d. Housing;

e. Legal aid;

f. Employee counseling;

g. Welfare organization;

h. Holiday homes;

i. Educational facilities;

j. Transportation;

k. Parties and picnics; and

l. Miscellaneous.

Old Age Retirement Benefits

Industrial life generally breaks family system. The saving capacity of

the employee is very low due to lower wages, high living cost and
increasing aspirations of the employees and his family members. As
such, employer provides some benefits to the employees, after
retirement and during old age, with a view to create a feeling of
security about old age. These benefits include:

a. Provident fund;

b. Pension;

c. Deposit linked insurance;

d. Gratuity and

e. Medical benefit.


We conclude this report by providing our model of organization

structure. There will be all together twelve people working in the
human resource department. Human resource department is
pervasive at all levels of the organization. There will be four junior
human resource managers taking care of all the role and
responsibilities in relation to lower level job position and the

Human Relations has been rightly defined in the words of Lee,

“human relations are the medium through which both employees
and the company mutually cooperate for the maximum satisfaction
of the economic, social, psychological wants of the people having
relation with an organization which has the objective of increasing

Such an organization structure will enable “Mystic Monk Designs
Pvt. Ltd.” to grow in a very harmonious way.


 Human Resource
Management C.B.Gupta

 Human Resource
Management T.N.Chabra

• Exporting garments from India by Nair,

Pradeep Kaul and Rajesh.

• The Abolition of MFA and its impact by

Martin and Will.

• India’s Garment sector- a policy analysis

by Mishra and Sanjeev.

• Newspapers: Economic Times, Times of
India, Hindustan times, Magazines:

• India Today (May 13, 1995)

• Export Import Trade Flash (June 1997)

• Business World.


Submitted by:

Roll No. K6BBA052



Sr. no. Topics Page No.

1. Introduction 1

2. Objectives 2

3. Scope and Limitations 3

4. Research Methodology 4

5. Literature Review 5

6. Company Profile 6

7. Problem Definition 7

8. Introduction to Human Resource Management 8

9. Functions of HRM 15

10. Job Design 21

11. Human Resource planning 30

12. Recruitment 42

13. Selection 49

14. Performance appraisal 60

15. Training 66

16. Wages and salary and incentive structure of the 70


17. Human Relations 79

18. Conclusion 88

19. Bibliography 89


I have had considerable help and support in making this project

report a reality.

First and foremost a gratitude goes to Mr. Rahul Rajpal (Director),

who provided me all the guidance and support in realizing the

I must thank the employees of the Mystic Monk Designs Pvt. Ltd.

I am grateful to all those who obliged me with their support and

helped me in converting my collection of data and information into a
research study.

At the end I would like to thank God who was always there with me
& will always be supporting me in our work.