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Human Resource Management

Q.1 Trace the phases of evolution of human resource management.

The historical background to the management techniques of human resources are in
vogue since ancient times. It’s only in the past 100 odd years that the techniques and
study of human behaviour at work has become formal and structured with certain basic
practices established as core and a host of other practices left to each organization to
design and implement as per their individual business driven practices. As per Fisher,
Schonfeldt and Shaw, in their book titled Human Resources Management, they have
characterised the history of HRM as having evolved through four broad phases, the Craft
system, the scientific system, the human relations approach and the prevalent
organizational science-human resources approach.

The Craft system refers to early trends noticed in Egypt and Babylon, where skills based
training was provided to people to ensure a steady flow of craftsmen required to build
huge monuments. By the 13th century, subsequently the trend was noticed in Europe and
later craft guilds evolved to ensure not only the skill acquisition but regulate the
conditions of employment, level of skill and improved production techniques. Most
relevant in the domestic industry where generations of skilled workers trained and
became experts in a particular skill.

The Scientific Management approach was a key part of the industrial revolution typical
of the nineteenth and early twentieth century. It was instilled in the principles of mass
production and organization of work – simple work skills and supervisory/managerial
skills. This rapidly emerged as the assembly line approach to managing workflow, which
later Fredrick Taylor (1856-1915) pioneered based on the philosophy that employees
wanted to be used efficiently and money being the primary motivator. Over a period of
time this was proved wrong as employee dissent grew and union issues surfaced. It was
during this phase that employee welfare as a key HR practice emerged which redressed
employee issues like recreational facilities, medical program and employee grievance

The Human Relations approach was an outcome of the famous studies undertaken by
US social scientist Elton Mayo and Fritz Roethlisberger at the Western Electric’s
Hawthorne plant in Chicago.

The Hawthorne Studies: As described in virtually every book written about management,
the human relations or behavioral school of management began in 1927 with a group of
studies conducted at the Hawthorne plant of Western Electric, an AT&T subsidiary.
Curiously, these studies were prompted by an experiment carried out by the company’s
engineers between 1924 and 1932. Following the scientific management tradition, these
engineers were applying research methods to answer job-related problems.

Two groups were studied to determine the effects of different levels of illumination on
worker performance. One group received increased illumination, while the other did not.
A preliminary finding was that, when illumination was increased, the level of
performance also increased. Surprisingly to the engineers, productivity also increased
when the level of illumination was decreased almost to moonlight levels. One
interpretation made of these results was that the employees involved in the experiment
enjoyed being the centre of attention; they reacted positively because management cared
about them. The reason for the increase in the production was not the physical but the
psychological impact of the employee’s attitude towards the job and towards the
company. Such a phenomenon taking place in any research setting is now called the
Hawthorne effect.

As a result of these preliminary investigations, a team of researchers headed by Elton

Mayo and F.J. Roethlisberger from Harvard conducted a lengthy series of experiments
extending over a six year period. The conclusions they reached served as the bedrock of
later developments in the human relations approach to management. Among their key
findings were the following:

· Economic incentives are less potent than generally believed in

influencing employees to achieve high levels of output.

· Leadership practices and work-group pressures profoundly influence employee

satisfaction and performance.

· Any factor influencing employee behaviour is embedded in a social

system. For instance, to understand the impact of pay on performance, you also have to
understand the climate that exists in the work group and the leadership style of the

Leadership Style and Practices: As a consequence of the Hawthorne Studies, worker

attitudes, morale, and group influences became a concern of researchers. A notable
development of the nature occurred shortly after World War II at the University of
Michigan. A group of social scientists formed an organization, later to be called the
Institute for Social Research, to study those principles of leadership that were associated
with highest productivity.

Finally the Organizational Sciences approach to human resources management has

brought the focus to the scientific process within organizations that can impact employee
experience, and less on just the individual. Today’s organizations focus on building their
processes and policies and compete to emerge as ‘preferred employers’ (best employer).
It is not uncommon for competing organizations to woo the employees through
advertising more and better employee-friendly initiatives like work-from-home jobs,
careers for married couples, global work assignments and internal job postings and world
class workplace infrastructures from in-campus cricket grounds to gymnasiums for
employee wellbeing. This is the HR that we now see around us.

Q.2 Explain the various techniques and methods used in selecting


There is no shortcut to fair and accurate evaluation of a candidate. As mentioned earlier,

the hiring procedures are therefore, generally long and multiple. Organizations are
constantly evaluating the selections tools they use to hire and keep innovating to ensure
they hire quality candidates.

The following are popular methods commonly used:

1 Initial or preliminary interview

2 Application blank or blanks.

3 Check of references.

4 Skill / Psychological tests.

5 Employment interview

6 Approval by the manager.

7 Medical examinations.

8 Induction or orientation.

1. Preliminary Interview: The more non-selective the recruitment program, the more
likely it is that a preliminary interview will be required. This initial interview is usually
quite short and has as its object the elimination of the obviously unqualified. In many
instances it is a over-telephone / short face-to-face interview conducted at a desk. The
facts and impressions collected are of the type generally obtained in an initial interview.
Many firms do not bother to initiate any paperwork at this early stage. If the applicant
appears to have some chance of qualifying for existing job openings, he or she is given
the application blank to complete.
2 Application Blank: An application blank is a traditional, widely accepted template for
getting information from a prospective applicant. This enables the recruiter to qualify the
candidate to the next level in the selection process and is used extensively subsequently
during the selection process. The blank aids in the interview by indicating areas of
interest and discussion. It is a good means of quickly collecting verifiable basic historical
data from the candidate. It also is a excellent document to share with the manager and
with the interviewers and is a useful device for storing information for, later reference.
These templates generally carry information on biographical data, educational attainment,
work experience, salary, personal items, and other items such as names and addresses of
previous employers, references etc.

3 Check of References: The use of references is common in most selection procedures.

It involves minimum of effort and time/money. The objective is to obtain evaluation of
prior employers and professional colleagues, who have known the candidate in a
professional capacity. Checks on references are made by mail or telephone, and
occasionally in person, and by using a reference form.

4 Skill & Psychological Tests: The next step in the procedures outlined above is that of
testing. The use of tests is common and most popular in the lower levels in an
organization. It serves as a excellent qualifying criteria and in jobs that are dependent on
a skill or a specific competency it is very useful. The objectivity of the test results make it
especially popular and a fair assessment of the individual.

Most organizations do not use psychological tests. However, there is a direct relationship
between the size and firm and the use of such tests in hiring. Most of the larger
companies that can afford to have a more detailed and accurate selection procedure do
utilize some form of employment testing. It is the smaller company that frequently does
not bother with tests, but places greater reliance upon the interview.

5 Interviewing: Interviewing is probably the most widely used single method of

selection. A substantial amount of subjectivity, and therefore, unreliability, is to be
expected from interviewing when used as a tool of evaluation.

The interview consists of interaction between interviewer and applicant. If handled

properly, it can be a powerful technique in achieving accurate information and getting
access to material otherwise unavailable. Organizations aware of the challenges of using
interviews have come up with a variety of ways to overcome the subjectivity. The use of
multiple rounds of interview (even up to 8-10 rounds) and use of panel interviews are
some common work-around.

Four kinds of interviews for selection have been identified. These are:

1. Preliminary interview: These interviews are preliminary screening of applicants to

decide whether a more detailed interview will be worthwhile. The applicant is given job
details during the interview to afford him freedom to decide whether the job will suit him.
This method saves the company’s time and money.

2. Stress interview: Stress interviews are deliberate attempts to create pressure to observe
how an applicant performs under stress. Methods used to induce stress range from
frequent interruptions and criticism of an applicant’s opinion, to keeping silent for an
extended period of time. The most important advantage of the stress interview is that
helps to demonstrate important personality characteristics which would be difficult to
observe in tension-free situations. However, stress-inducing must be done carefully by
trained and skilled interviewers.

3. Depth interview: Depth interviews cover the complete life history of the applicant and
include such areas as the candidate’s work experience, academic qualifications, health
interest, and hobbies. It is an excellent method for executive selection, performed by
qualified human resources.

4. Patterned interview: Patterned interviews are a combination of direct and indirect

questioning of the applicant. The interviewer has certain clues and guidelines to areas
which should be probed deeply and the interview also encourages the candidate to
express the relevant information freely.

After the patterned interview is complete, the interviewer should evaluate the candidate
on the basis of practical experience. According to R.N. McCurry and others, certain
factors lead to accurate predictions of the candidate’s suitability for a particular position.
The factors are: (1) basic character traits, (2) motivation, and (3) emotional maturity. One
advantage of a patterned interview is that systematic and chronological information is
obtained, and hence this yields to statistical analysis.

6. Approval by the Manager: Following the outlined procedure, we should now be of

the opinion that a candidate who has successfully completed all steps so far should be
hired. In executing the recruitment unit screening functions, the emphasis tends to be
more on formal qualifications and general suitability. When the manager takes over, the
emphasis tends to switch toward more specifically job oriented worker characteristics
such as training and relevant past experience.

7. Medical Examination: The medical examination is an employment step found in

most businesses. It can vary from a very comprehensive examination and matching of an
applicant’s physical capabilities to job requirements to a simple check of general physical
appearance and well-being. In the selection procedure the physical examination has at
least three basic objectives. First, it serves to ascertain the applicant’s physical

The second objective of the examination is to protect the company against unwarranted
claims under workers’ compensation laws, or against lawsuits for damages. And the final
objective is to prevent communicable diseases from entering the organization.

8 Induction: Induction is concerned with introducing or orienting a new employee to the

organization. Organizations could have induction programs of duration of
1-3 days and even up to 1/3/6 months. Common objectives of an Induction program can
be listed as covering:

1. Overview of the organization, its history, its hero’s and important stories in the life of
the firm so far like mergers, acquisitions, JV’s, expansion in new countries etc…

2. Organization Vision / Mission and Objectives statement, its structure, hierarchy of the
top and the senior management, structure of the teams/divisions, focus on the division the
employee/s is/are joining

3. Overview of the HR policies and processes and introduction to the Facilities team, IT
team and other relevant teams per the location of joining.

4. Handover to the manager and induction at a team level on specificities related to the
job and its responsibilities.

Organizations also build processes by which the new employee provides feedback on the
on boarding experience and use this information to improve the Induction process. In as
much as various firms report that over half of their voluntary resignations occur within
the first 6 months, proper orientation can do much to reduce this problem and its
accompanying costs.
Q.3 A company is being set up by a group of 3 professionals. The
business objective is to sell mobile phones of a Chinese company which
has come up with an inexpensive range of handset ranging from Rs.1200
to Rs.7000. They need to submit a human resource plan to their
investors. Explain the process of Human Resource Planning system for
this company, which covers all important steps needed for HRP.

Human resource or manpower planning is 'the process by which a management

determines how an organization should move from its current manpower position to its
desired manpower position. Through planning, a management strives to have the right
number and the right kind of people at the right places, at the right time, to do things
which result in both the organization and the individual receiving the maximum long-
range benefit".

Human Resource planning is the predetermination of the future course of actioin chosen
from a number of alternatives.
HR planning is the processes including forecasting, developing and controlling by which
a firm course that it has the right number of people and right kind of people at the right
places at the right time doing work for which they are economically most useful.
The characteristic of according to this company is that (HRP): They are:
1. Human resource plan most incorporate the human resource needs in the light of
organisational goals.
2. H.R. plan must be directed towards well defined objectives
3. H.R.P must ensure that it has the right number of people and the the right kind of
people at the right time, doing work for which they are economically most useful.
4. H.R.P should have the way for an effective motivational process.
5. A human resource plan should take into account the principle of periodical
reconsideration of new development and extending the plan to cover the charges
during the given long period.
HR planning is a highly important and useful activity without clear cut planning, an
estimation of the organsation’s human resource needs is reduced to more success work.
1. Planning defines future manpower needs and this becomes the basis or recreating
and developing personal
2. Employees can be trained, motivated and developed in advance and this helps in
meeting future needs for high quality employee
3. change in technology has attached more importance to knowledge and skills
resulting in surplus manpower in some areas and shortage in other areas. HR
planning helps in creating balance in such a situation.
4. Jobs are becoming more and more knowledge oriented. This has resulted in a
changed profile of H.R because of increased emphasis on knowledge, recruitment
costs have also increased.

Human Resource Planning is not only done by organizations and corporate bodies. It is a
prevalent practice at different levels:

i) At the country’s national level, it is generally done by the Government and covers items
like population projections, programme for economic development, basic and advanced
educational infrastructure and opportunities, occupational distribution across urban and
rural areas, industrial and geographical mobility of employable people.

ii) At the state level, it may be done by the state government and would include
manpower planning for the needs of the agricultural, industrial and service sector.

iii) At the specific industry level, it would include manpower needs forecast for specific
industries, such as engineering, heavy industries, consumer goods industries, public
utility industries, etc.

iv) At the level of the individual organization/ unit, it would relate to the planning of
manpower needs for each department and for various types of personnel.

Human Resource Planning System

The steps in the HRP process is a systematic set of activities carried out in a
chronological manner. Each step needs to be evaluated and debated with all possible
information gathered from the external as well as internal environment.

A. Purpose of Human Resource Planning: Human Resource Planning fulfils individual as

well as organizational goals. What it essentially amounts to is “striking a balance”
between the future human resources needs and the future enterprise needs. And this is
done with the clear objective of maximizing the future return on investment in human
resources. And this objective may be laid down for a short-term (i.e. for one year).

B. Estimating/Forecasting the future Manpower Requirements: the first step in the

process is to arrive at the desired organizational structure at a given point in time.
Mapping this structure with the existing structure helps in identifying the gap in resources
requirement. The number and type of employees needed have to be determined. In
addition to the structure there are a number of external factors that affect this
determination. They include business forecasts, competitor strategy, expansion plans,
product/skills mix changes, profit/revenue growth projections, in addition to management
philosophy and government policies. This step also includes an analysis of the external
labour/talent environment, its demographics, demand/supply of the required talent, and
cost considerations.

Forecasting provides the basic premises on which manpower planning is done.

Forecasting is necessary for various reasons, such as:

a) The challenges of the general economic business cycles have an influence on the short-
range and long-run plans of all organizations. These are inflation, wages, prices, costs and
raw material supplies.

b) An expansion / growth initiative might need the business to use additional machinery
and personnel, and a re-allocation of facilities, all of which call for adequate advance
planning of human resources.

c) Changes in management philosophies and top management leadership styles.

d) The use of new technology (such as the introduction of automatic controls, or the
mechanization of materials handling functions) requiring a change in the skills of
workers, as well as a change in the number of employees needed.

e) Very often, changes in the quantity or quality of products or services require a change
in the organization structure. Plans have to be made for this purpose as well.

C. Auditing Human Resources: Once the future human resource needs are estimated, the
next step is to determine the present supply of manpower resources. This is done through
what is called "Skills Inventory". A skills inventory contains data about each employee’s
skills, abilities, work preferences and other items of information which indicate his worth
to the company. Skills inventory are also referred to as competency dictionaries. This
information is usually retained as part of the performance management system with the
HR department. This step in the HRP system helps identify the existing profile of the
manpower and its efficiency. It helps highlight where the organization is vs. where it
ought to be. The step concludes with identifying clear gaps in the skills / manpower mix
required to meet the upcoming business objectives.

D. Job Analysis: After having decided how many persons would be needed, it is
necessary to prepare a job analysis. The recorded details of training, skills, qualification,
abilities, experience and responsibilities, etc. as needed for a job are studied. Job analysis
includes the preparation of job descriptions and job specifications.

E. Developing a Human Resource Plan: This step refers to the development and
implementation of the human resource plan, which consists in finding out the sources of
labour supply with a view to making an effective use of these sources. Some important
considerations at this point are:

F: Specific roles/disciplines being hired for, of them which roles are pivotal for the
• Competencies and capabilities needed
• Manager vs. employee hiring
• Hire internally vs. External sourcing
• Planning for new skills through training existing staff vs. hiring new teams
• In case of surpluses, planning for redeployment / reduction in workforce as
• Succession planning for key positions in the company

Q.4 Explain Thayer and McGhee ‘Assessment of training requirement’


Assessment of Training Requirement: Given the investment that organizations make

in training it is critical for organizations to ensure that the money is rightly spent.
Training needs consider both the organization’s demands and that of the individual’s.
Diversification of product lines, new technology, and hence a new kind of job, or a shift
in organizational culture or ways of conducting business are common organizational
needs that cover most employees in the company. On the other hand demands that pertain
to individual’s growth and development, including induction training for new hire’s, or
training necessitated by job rotation due to an organization’s internal mobility policies are
examples of individual need based training.

The model we shall examine here is the Thayer and McGhee model. It is based on the
following three factors:

1. Organization analysis

2. Task analysis

3. Individual analysis

1 Organization Analysis: Total Organization Analysis is a systematic effort to

understand exactly where training effort needs to be emphasized in an organization. It
involves a detailed analysis of the organization structure, objectives, human resources and
future business plans, and an understanding of its culture.

The first step in organization analysis is establishing a clear understanding of both short-
run and long-run business and people goals. Long-term objectives are the broad
directions in which the organizations would move over a long duration. These long-term
objectives are then broken down into specific strategies and short-term goals for each of
the units/departments. In an organization, the cumulative effect of all these would
ultimately lead to the long-term goal. Short-term goals are constantly in need of
adaptation to the changing environment, both external and internal.

For an organization analysis, there are three essential requirements: (1) an adequate
number of employees available to ensure fulfilment of the business operation; (2) that
employee performance is up to the required standard; and (3) that the working
environment in their units/departments is conducive to fulfilment of tasks.

In order to ensure the first two requirements a human resource inventory needs to be
made. Data regarding positions, qualifications, vacancies, replacements and training time
required for replacements have to be worked out. Job standards must also be worked out.

Various efficiency and productivity indexes, or ratios such a productivity ratios, cost per
unit etc, can be worked out to determine not only efficiency but also adequacy, in terms
of under-manning or over-manning, of the workforce.

An important dimension of organizational need-based analysis, is the diagnosis of the

state of the organization "climate" or “culture”. While rules, procedures, systems and
methods all contribute to the making of the environment, much of it is also determined by
the attitude that the "people" have in the organization-for instance, the attitude that top
management has towards its subordinate staff and the attitudes that members have
towards work, Managers and company procedures. These attitudes are learnt, they result
from the person’s experience both within and outside the organization, and training inputs
could be used to effect changes of attitude and consequently of the organizational climate.

In analyzing the organization climate, both direct and indirect methods could be used.
Direct methods are observation, use of questionnaires, and interviews. Reliance or
indirect methods would not give a clear understanding of the attitudes and predispositions
of employees. In fact, factors such as low absenteeism and low turnover are not by
themselves indicators of positive or negative attitudes, and high or low morale. It would
be better to make a careful analysis and study each indicator in a particular situation in
conjunction with more direct methods like attitude surveys. Analysis and interpretation of
the data may give clear clues not only to attitudinal training needs but possibly also to kill
training needs.

2. Task Analysis: This activity entails a detailed examination of each job, its
components, its various operations and the conditions under which it has to be performed.
The focus here is on the "task" itself and the training required to perform it, rather than on
the individual. Analysis of the job and its various components will indicate the skills and
training required to perform the job at the required standard.
Standard of Performance: Every job has an expected standard of performance (SOP).
Unless such standards are attained, not only will inter-related jobs suffer, but
organizational viability will be affected, and so will the expectations that have been set
for that particular job itself. If the standards set for the performance of a job are known,
then it is possible to know whether the job is being performed at the desired level of
output or not. Knowledge of the "task" will help in understanding what skills, knowledge
and attitudes an employee should have.

Methods: If an employee is asked to perform a job, the exact components of the job and
the standard of performance must be known. Task analysis entails not merely a simple
listing of the various job components, but also of the various sub-tasks. Conventional
methods of job analysis are usually suitable for task analysis. They are:

1. Literature review regarding the job.

2. Job performance.

3. Job observation,

4. Data Collection regarding job interviews.

For blue-collar employees, more precise industrial-engineering techniques, like time and
motion studies, could be used, and for white-collar employees, work sampling
observation, interviews, and job performance data analysis could be employed. The focus
in task analysis approach to identifying training needs is with the clear objective of
enhancing the performance standard of a given task. This information is then utilised to
establish the training programme for the employee. It helps identify the skill required,
either in terms of education or training, to perform the job, knowledge, and finally
attitudinal pre-dispositions such as the attitudes, towards safety, or interpersonal
competence that will ensure that the job is performed optimally.

3 Individual Analysis: Individual analysis is the third component in identifying training

needs. The focus of individual analysis is on the individual employee, his abilities, and
the inputs required for job performance, or individual growth and development in terms
of career planning.

The common source for this needs analysis usually forms parts of the performance
assessment process. Clues to training needs can also come from an analysis of an
individual’s or a group’s typical behaviour. The primary sources of such information are:

(1) Observation at place or work, examination of job schedules, quantum of spoilage,

wastage, and clues about interpersonal relations of the employees; (2) interviews with
superiors and employees; (3) comparative studies of good vs. poor employees, to identify
differences, skills and training gaps; (4) personnel records; (5) production reports; and (6)
review of literature regarding the job and machines used. Job-knowledge tests, work
sampling and diagnostic psychological tests also provide information about employees.

Q.5 Write short notes on:

 Succession Planning
 Career Planning

Succession planning:

It enables the organization to identify talented employees and provide education

to develop them for future higher level and broader responsibilities. Succession planning
helps to "build bench strength." Succession planning helps to decide where people belong
on the bus.

Succession planning is a process whereby an organization ensures that employees are

recruited and developed to fill each key role within the company. Through your
succession planning process, the organization recruit superior employees, develop their
knowledge, skills, and abilities, and prepare them for advancement or promotion into ever
more challenging roles.

Through the succession planning process, the organization also retain superior employees
because they appreciate the time, attention, and development that you are investing in
them. To effectively do succession planning in the organization, the organization must
identify its long term goals. It must hire superior staff.

The organization need to identify and understand the developmental needs of its
employees. They must ensure that all key employees understand their career paths and the
roles they are being developed to fill. They need to focus resources on key employee
retention. The organization need to be aware of employment trends in their area to know
the roles
Career Planning:

Career planning is a deliberate attempt by an individual to become more aware of their

skills, interests, values, opportunities and constraints. It requires an individual thinking to
identify career-related goals and establishing plans towards achieving those goals. Often
it is a self-driven process, which every professional spends some time to dwell on and
discuss it with peers or superiors and frame it. It is also viewed from time to time that the
individual looks for possible new career options. Having a career plan builds a
commitment towards achieving it and is viewed as an excellent personal goal-setting
exercise for self motivation.

Career management is considered to be an organizational process that involves preparing,

implementing and monitoring career plans undertaken by an individual alone or within
the organizations career systems. Organizations establish policies that provide for
multiple career path options that an employee can choose from and pursue. This is
supported with a lot of training and development activities that are agreed to with the
manager and planned carefully and executed.

A variety of career development activities and tools exists for use in organizations. HR
managers should be familiar with these components because the managers often serve as
internal consultants responsible for designing the career development systems. Some of
the activities described are individual career planning tools and others are commonly used
for organizational career management. In general the most effective career development
programs will use both types of activities.

Q.6 Discuss Individual evaluation methods used for performance

When it has been decided who will evaluate, when, and on what basis, the technique to be
used will be selected. A number of approaches will be described here. There are several
ways to classify these tools. The three categories used here will be; individual evaluation
methods; multiple person evaluation methods; and other methods.

Individual Evaluation Methods : There are five ways to evaluate an employee

individually. In these systems, employees are evaluated one at a time without directly
comparing them with other employees.

Graphic rating scale: The most widely used performance evaluation technique is a
graphic rating scale. In this technique, the evaluator is presented with a graph and asked
to rate employees on each of the characteristics listed. The number of characteristics rated
varies from a few to several dozen. A factor analysis of the result indicates that only two
traits were being rated: quality of performance and ability to do the present job.

The rating can be in a series of boxes, or they can be on a continuous scale (0-9) or so. In
the latter case, the evaluator places a check above descriptive words ranging from none to
maximum. Typically, these ratings are then assigned points. For example, outstanding
may be assigned a score of 4 and unsatisfactory a score of 0. Total scores are then
computed. In some plans, greater weights may be assigned to more important traits.
Evaluators are often asked to explain each rating with a sentence of two.

Forced choice: The forces-choice method of evaluation was developed because other
methods used at the time led to a preponderance of higher ratings, which made promotion
decisions difficult. In forced-choice, the evaluator must choose from a set of descriptive
statements about the employee. The two-, three-, or four-statements items are grouped in
a way that the evaluator cannot easily judge which statements apply to the most effective
Typically, personnel specialist prepare the items for the form, and supervisors or
the other personnel specialist rate the items for applicability; that is, they determine which
statement describe effective and ineffective behaviour. The supervisor then evaluates the
employee. The Personnel Department adds up the number of statements in each category
(for example, effective behaviour ), and they are summed into effectiveness index. Forced
choice can be used by supervisors, peers subordinates, or a combination of these in
evaluating employees.

Essay evaluation: In essay technique of evaluation, the evaluator is asked to describe the
strong and weak aspects of the employee’s behavior. In some enterprises, the essay
technique is the only one used; in other, the essay is combined with other form, such as
graphic rating scale. In this case, the essay summarizes the scale, elaborates on some of
the ratings, or discusses added dimensions not on the scale. In both of these approaches
the essay can be open ended, but in most cases there are guidelines on the topics to be
covered, the purpose of the essay, and so on. The essay method can be used by evaluators
who are superiors, peers or subordinates of the employees to be evaluated.

Management by objectives: Another individual evaluation method in use today is

Management by Objectives (MBO). In this system the supervisor and employee to be
evaluated jointly set objectives in advance for the employee to try to achieve during a
specified period. The method encourages, if not required, them to phrase these objectives
primarily in quantitative terms. The evaluation consists of joint review of the degree of
achievement of the objectives. This approach combines the superior and self

Critical incident technique:I this technique, personnel specialist and operating

managers prepare lists of statements of very effective and very in effective behavior for
an employee. These are critical incidents. The personnel specialists combine these
statements into categories, which vary with the job. Once the categories are developed
and statements of effective and ineffective behavior are provided, the evaluator prepares a
log for each employee. During the evaluation period, the evaluator “records examples of
critical (outstandingly good or bad) behaviours in each of the categories, and the log is
used to evaluate the employee at the end of the period. It is also very useful for the
evaluation interview, since the evaluator can be specific in making positive and negative
comments, and it avoids “recency” bias. The critically incident technique is more likely
to be used by superiors than in peer or subordinate.
Checklist and weighted checklist: Another type of individual evaluation method is the
checklist. In its simplest form, the checklist is a set of objectives or descriptive
statements. If the Rater believes that the employee possesses a trait listed, the Rater
checks the items; if not, the Rater leaves it blank. A rating score from the checklist
equals the number of checks.

A more recent variation is the weighted checklist. Supervisors or personnel specialist

familiar with the job to be evaluated prepare a large list of descriptive statements about
effective and ineffective behaviour on jobs, similar to the critical incident process. Judges
who have observed behavior on the job sort the statements into piles describing behavior
that is scaled from excellent to poor (usually on a 7-11 scale). When there is reasonable
agreement in an item (for example, when the standard deviation is small), it is included in
the weighted checklist. The weight is the average of the Raters to the checklist’s use.

The supervisor or other Raters receive the checklist without the scores, and they check
the items that apply, as with an un- weighted checklist. The employee’s evaluation is the
sum of the scores (weights) on the items checked. Checklist and weighted checklist can
be used by evaluators who are superior, peers, or subordinates, by a combination.

Behaviourally anchored rating system: Another technique which essentially is based on

the critical incident approach is the behaviourally anchored rating scale (BARS). This
technique is also called the behavioural expectation scale (BES). This is a new, relatively
infrequently used technique.

Supervisors give descriptions of actually good and bad performance, and personnel
specialists group these into categories (five to ten typical). As with weighted checklist,
the items are evaluated by supervisors (often other than those who submitted the items).
A procedure similar to that for weighted checklist is used to verify the evaluations
(outstandingly good, for example) with the smallest standard deviation, hopefully around
1.5 on a 7- point scale. These items are then used to construct the BARS.

Human Resource Management

Q.1 Explain Wage Administration policy. What are the ways by which
wages and salaries are managed in India?

Principles of Wage Determination

As the major production cost, wages affect profits, business investment, competitiveness,
and are a cost push inflationary factor.
The following principles have always been the bases of the wage determination process.
1. Preserving real income: This is the argument used by employees and Unions viewing
wages as an income. Following this principle usually results in wages being indexed to
inflation. Underlying aspects that have also impacted on real wage preservation
arguments have been a "basic" minimum wage, and comparative wage justice.
2. Labor productivity: A valid economic theory connects wages to labor productivity.
Conflict arises over the measurement of productivity. Rewarding labor with a wage
increase when technology, and/or capital investment, increases labor efficiency may not
be justified.
3. The capacity of business to afford wage increases: This emphasizes wages as a cost
of production, and the threat of wage increases to squeeze profits. This "capacity"
argument is that followed by business owners.
4. The capacity of the Economy to absorb wage increases: This "capacity" argument
views the macro impact of wage increases on inflation, competitiveness, and other
aspects of internal and external balance; as well as the affect on business profits and
investment from 3. This is the main argument of the Federal Government recognising the
macro policy potential of an Incomes Policy to address external and internal balance
goals to supplement demand management policies, and the effects on income distribution.

The Methods of Wage Determination

Generally wage determination can be through a centralized, regulated, institutionalized
system, or a decentralized system. Collective bargaining is when workers with similar
employment conditions and skills unite, usually through a union, to present their wage
demands to their employer(s). Enterprise bargaining is when workers at the same plant
bargain with the employer. An award is an agreement that sets out both wages and
working conditions. Our reliance on a centralized system, often based on indexation, has
dominated wage determination over the last century.

Q.2 Texas is a medium size, plastic manufacturing company. In this

Company, workers have developed grievances against management. For
past 2 years, in spite of making Profit, Company is not paying bonus to
the workers. It is expected that, if the grievances are not dealt, it might
lead to severe consequences. Imagine this situation and explain the
grievance handling procedure, list each steps of the procedure. Suggest
few measures to avoid grievances.

In the solution of a problem, the greater burdens rest on management. The clearest
opportunity for settlement is found at the first stage, before the grievance has left the
jurisdiction of the supervisor.
The following directions help in handling grievances properly.
i). Receive and define the nature of the dissatisfaction: The manner and the attitude
with which the supervisor receives the compliant of grievance are important. The
supervisor should assume that employee is fair in presenting the compliant or grievance.
Statements should not be prejudged on the basis of past experience with this or other
employees. The supervisors who are task oriented, as contrasted with people oriented,
tended to experience a significantly greater number of complaints being filed in their
ii). Get the facts: In gathering facts, one quickly becomes are of the importance of
keeping proper records such as performance ratings, attendance records and suggestions.
The supervisor is wise to keep records on each particular grievance. The supervisor
posses and exercise some skill in interview conference, and discussion.
iii). Analyze and Divide: With the problem defined and the facts in hand, the manager
must now analyze and evaluate them, and then come to some decision. There is usually
more than one possible solution. The manager must also be aware that the decision may
constitute a precedent within the department as well as the company.
iv). Apply the Answer: through the solution decided upon by the supervisor is adverse to
the employees, some answer is better than none. Employees dislike supervisors who will
take no stand, good or bad. In the event of an appeal beyond this stage of procedure, the
manager must have the decision and the reasons for his decisions should be properly
v). Follow up: The objective of the grievance handling procedure is to resolve a
disagreement between an employee and organization. Discussion and conference are
important to this process. The purpose is to determine whether the clash of interest has
been resolved. If the follow up reveals that the case has been handled unsatisfactorily or
that the wrong grievance has been processed, then redefinition of the problem, further
fact finding, analysis, solution and follow up are required.

The few measures to avoid grievances

Build good morale, maintains code of discipline. It Brings uniformity in handling

grievances. It develops faith of employees.
Reduces personality conflicts. It acts as a pressure valve.
Provides judicial protection to the employees. Provides avenues to present the problems.
Strengthen good corporate relationship. It detects the flaws in working conditions and
helps to take corrective measures.

Q.3 Define competency. How competency is linked to Human resource


Meaning of competency
A competency is an underlying characteristic of a person/organization which enables to
deliver performance in a given job, role or a situation1. Thus the performance of an
organization or an individual will depend on the relevant competencies they possess and
higher the level of competencies, superior will be the performance. Competencies allow
focus process-“How things are done?” not simply on outcomes.

Classification of competencies

Competencies can be broadly classified into three categories namely organizational

competencies, job related competencies and personal competencies.
Organizational competencies are unique factors that make an organization competitive.
According to C.K.Prahlad and Hamel who wrote the famous book
“Competing in the future”, organizational competencies- a) Provide potential access to a
wide variety of markets b) Make a significant contribution to perceived customer benefits
of the end product c) Are difficult for competitors to imitate. Organizations need to focus
their efforts in the area of their competencies and strengthen them and outsource the other
activities. This is very important as these competencies are fundamental to the success of
the organization. Some of the examples for organizational competencies include Sony-
miniaturization, Phillips-optical media, Honda-engines, and Intel-microchip.
Job related competencies are those competencies which are required for performing a
specific job. These are the competencies someone must demonstrate to be effective in his
job/role, task or duty. Thus these competencies are job or role specific and vary from job
to job. A competency model can be used to develop specific job related competencies and
come out with a competency dictionary. These competencies are organization specific as
roles and responsibilities may vary from organization to organization even though the job
title may be the same. Job related competencies may become the criteria for most of the
HR functions like selection, Training and development, performance appraisal,
compensation etc.
Personal competencies are aspects of an individual they include the abilities of
individuals to perform the activities within an occupation or function to the standard
expected in employment. It includes the various behavioral competencies apart from the
knowledge and skill level of an individual. These competencies include.
Personal competencies like developing oneself, taking initiative, delivering results,
showing commitment, and adaptability.
b. Interpersonal competencies like influencing, relationship building, advising, team
orientation, service orientation, cultural awareness, communication, and openness.
c. Information oriented competencies like strategic thinking, business understanding,
conceptualizing, innovation, processing, analyzing and comprehending.
d. People management competencies like leadership, directing, building teams,
facilitating performance, motivating, guiding people, and transferring knowledge.

How competency is linked to Human resource system?

The four steps may be for competency linked to Human resource system:
1. Developing a Competency model
2. Competency Mapping
3. Linking Competencies to Compensating factors
4. Designing compensation on the basis of actual competencies
Developing a competency model
The basic need for a competency based compensation management is a competency
model. A competency model is one which identifies the various competencies required
for performing a job and describing these competencies in the form of indicators, which
can be quantified. Each competency can be quantified on a scale on the basis of its
relative importance with respect to each job. This serves as a reference for all competency
management activities in the organization. Competency model is organization specific as
each organization may have its own way of defining and quantifying competencies and
competencies may be unique for each organization.
We have been working with few organizations on issues related to competency
management and this paper is based on the experience in developing the competency
model and its applications. We adopted following procedure to develop standard
1. We started with job/role analysis to identify the competencies require to perform the
job. Job descriptions and job specifications can throw a light on competency requirements
for satisfactory performance of the duties and responsibilities, which are listed in them. If
these are not available then job analysis is to be carried out. This gives us the preliminary
list of job specific competencies.
2. Job holders and immediate superiors may have better understanding of the jobs and
thus they can easily identify the critical competencies. Thus we gathered further
information with discussions and brainstorming sessions involving them. This helped us
in refining the list of preliminary competencies developed in the first step.
Competency Mapping
Once the dictionary is ready, then the actual mapping process needs to be carried out. To
do the mapping, the following steps were followed by us in mapping out competencies:
1. A structured questionnaire was designed for the employee and his immediate superior.
The same questionnaire is administered to both for getting the rating.
2. The employee whose competency is to be mapped is asked to rate his/her own
competency level in the questionnaire.
3. The immediate superior’s ratings of the employee are also collected in the same way.
4. A weighted average of the ratings is computed to get the final score. 70% weight was
given to the superior’s rating and 30% to the employee’s self rating.

Linking the Competencies to Compensation Factors

The next step in the competency based compensation model is to link the compensation
to competency mapping ratings of the employee. This is done so by computing the
“Compensation Factor” which is defined as the weighted average of the competency
ratings an employee has obtained. This compensation factor can then be used to design
compensation strategies according to the organization’s compensation policy. It can also
be used to fine tune the policy and adjust for internal and external equities which are
explored in the sections given below. Further computations and adjustments might be
required to the compensation factor depending on situations, which will be explained as
and when those situations are taken up for discussion.

Computing the Compensation Factor “F”:

Let us assume that for a given level of employees “m” competencies have been identified.
Let xp, where p = 1 to m represent the average criticality ratings of each of the
competencies identified. Let the matrix C, of the order 1 X m, represent the row vector of
criticality ratings of competencies.
Let yij, where i = 1 to m and j = 1 to n, “m” is the number of competencies and
“n” is the number of employees, represent the competence rating exhibited by jth
employee on ith competence. Let the matrix R, of the order m X n, represent the vector of
employee ratings on each competency where “m” is the number of competencies and “n”
is the number of employees. Since competencies vary across organizational units like
departments or hierarchical levels, the number “n” typically represents the number of
employees in a given unit.
Let ΣCp where p = 1 to m represent the sum of the criticality ratings.
Let the matrix F of the order 1 X n represent the row vector of each employee’s
compensation factor.
Then we can say that
F 1 X n = (1/ΣCp )* C 1 X m * R m X n --------------------- (1)
The above equation actually gives out the compensation factors, which are the weighted
average of the employee’s ratings. The row vector F can now be used to design the
compensation packages of the employees of the unit and/or the hierarchical level. The
next section uses this model to demonstrate how various compensation packages can be
designed using the compensation factor vector.
Designing Compensation Packages:
The compensation models vary across organizations. Two typical cases are very frequent.
First is the case where the organization makes changes to the “Basic” salary component
of the employee. Next is the case where the organization does not change the basic
frequently, but has an “Incentive” component to reward performances of employees
which are highly satisfactory. Below we explore both the cases sufficiently and provide
illustrations with the help of live data wherever necessary. It must be noted that while the
competency mapping data is live, several assumptions and adjustments have been made
to the compensation data, to keep the Non-Disclosure Agreement sacred.
Q.4 Think of a situation in which an employee is to be dismissed from the
organization, what will be the fair steps of dismissal followed by the

According to Article 311 of the Indian Constitution, which says that “no
person shall be dismissed or removed from service until he has been
given a reasonable opportunity to show cause as to why the proposed
action should not be taken against him?"
The Model Standing Orders, too, lay down that, "before an employee is
dismissed, he should be given an opportunity to explain the
circumstances against him."
The following steps are followed for dismissal of an employee:
a) Charge Sheet is Framed and Issued:
The first step in the procedure is to frame a written charge sheet which is
based upon a written complaint against the employee in question, and
which contains details of the offence with which he is charged and the
allegation of misconduct made against him, and indicating the time limit
within which a reply to the charge sheet should be submitted to the
The employee is called upon to show because why a disciplinary action
should not be taken against him.
The contents and implications of the charge sheet may be explained to
him in his own language and in the presence of some reputable witness,
before a copy of it is handed over to him. If he refuses to accept it, it
should be sent to his residential address "registered post with
acknowledgement due". If the employee refuses to take delivery of the
registered letter, or when it has been returned undelivered, it should be
published in a local paper to ensure its wide publicity.
b) Receipt of Explanation:
The employee may submit his explanation within the prescribed period of
time, or he may ask for an extension of time for its submission. In the
latter case, the request should be considered in good faith in accordance
with the rules of natural justice.
c) Issue of Notice of Enquiry:
If the explanation is received from the employee is found to be
unsatisfactory, a notice of enquiry, mentioning the time, date and place,
has to be given to him in which the name of the person or officer who
would conduct the enquiry would also be mentioned. The employee is
required to be present at the appointed time and place, together with his
witness, if he has any.
d) The Holding of Enquiry:
On the appointed day and at the appointed place and time, the enquiry is
held by the Enquiry Officer in the presence of the employee. The contents
of the charge sheet and an explanation of the procedure to be followed at
the enquiry are communicated to the worker. If he pleads his innocence,
the enquiry proceeds; but if he pleads guilty, unconditionally and in
writing, the enquiry is dropped.
e) The Findings:
Once the enquiry is over, the Enquiry Officer has to give his findings,
which should invariably contain the procedure which was followed, the
party’s statements, the documents produced and examined, the charges
made and the explanations given and the evidence produced. The officer
should then record his own findings on each of the charges and the
grounds on which he has come to a particular conclusion. He should
specifically mention which charges have been proved and which have not
been proved. He then submits his findings to the authorities empowered
to take a disciplinary action against the employee. He, however, is not
required to make any recommendations.
a) On receiving the report, the executive authorized to take a decision
thereon passes an order of punishment.
b) Communication of the order:
A copy of the orders is then handed over to the employee.
Discharge of an Employee
The following conditions must necessarily be satisfied before an employee
is discharged from service by way of punishment for misconduct.
a) The misconduct of the employee is of such a nature as to indicate that
his discharge or dismissal would be an appropriate punishment and that
this kind of punishment has been provided in the Standing Orders.
b) An enquiry must be held by the employer into the misconduct which an
employee has been charged with. This enquiry should be held only after a
charge sheet has been preferred against him, and he has been given due
notice of the time, place and date of enquiry.
c) The officer should be held in such a manner as to ensure that it would
be fair and proper and in conformity with the principles of natural justice.
The worker must be given an adequate opportunity to defend himself and
to present witness in support of his contention or case.
d) The officer holding the enquiry should not be one who may be
disqualified on the ground of bias, personal interest, or on the ground of
his having been on eye witness to the misconduct with which the
employee is charged.
e) At the conclusion of the enquiry, the findings, based on recorded
evidence, should be recorded by the enquiry officer.
f) The findings must necessarily be based on recorded evidence and
should not be perverse.
g) The order of dismissal or discharge against the employee must be
passed in good faith.
h) The order must be duly communicated to the employee against who it
has been passed.

Q.5 Suggest few measures to improve employee morale.

Measurement of Employee Morale

Signs of low morale are generally not noticed till it is obviously, low or when
something goes amiss. By the time the management recognizes the fact that
morale has deteriorated, it is faced with one crisis or another. Perceptive
managers are, therefore, constantly on the lookout for clues to any deterioration
in the morale of the employees.
Dale Yoder and others pointed out the following as signals of low morale:
1. Employee unrest.
2. High rate of absenteeism.
3. Tardiness.
4. High employee turnover.
5. Grievances.
6. Need for discipline
7. Fatigue and monotony.

Improving Morale

There are a number of measures which can be used to control the warning
signals of low morale.
The following are the positive measures to be taken to bring job satisfaction to
the employees and reconcile individual interests with the interests of the
1. Creation of whole jobs.
2. Job enrichment.
3. Building responsibility into a job.
4. Modifying the work environment.
5. Flexing working hours.
6. Job sharing.
7. Rotation of jobs.
8. Profit sharing.
Morale can also be improved by adapting several other measures such as
employee contest, special recognition and awards to long service employees, film
shows to employees during their lunch hour, free coffee during rest pauses, and
training the supervisors in how to handle people.
1. Under this method, complete jobs are assigned to the workers. The complexity
of a job should be increased so that it may appeal to their higher needs.
2. Job enrichment tries to deal with dissatisfaction by increasing job depth. Under
this, individual employees may be given responsibility for setting their own work
pace, for concerning their own errors, and/or for deciding on the best way to
perform a particular task.
3. Employees should be encouraged to take risk decision.
4. This can be achieved by:
i) Developing work groups;
ii) Developing the social contacts of the employees;
iii) The use of music;
iv) Regular rest breaks.
5. Flex time permits employees to arrange their work hours to suit their personal
needs and lifestyles.
This is particularly suited to situations with fluctuating workloads. Flex time
employees are responsible for coordinating their functions with other employees
and thereby have more responsibility and autonomy.
6. Two workers divide a fulltime job between themselves splitting not only the
hours of work but also the salary.
7. This reduces employee's boredom which arises out of the monotonous nature
of his work.
8. Morale can be improved by effective profit sharing schemes. In addition to its
economic aspects, profit sharing has also psychological aspects relating to
friendly move by the management in providing the workers an opportunity to
participate in the profits.

Q.6 Explain Victor Vroom’s Expectancy theory of motivation.

Vroom's expectancy theory : It assumes that behavior results from conscious choices
among alternatives whose purpose it is to maximize pleasure and minimize pain.
Together with Edward Lawler and Lyman Porter, Victor Vroom suggested that the
relationship between people's behavior at work and their goals was not as simple as
was first imagined by other scientists. Vroom realized that an employee's
performance is based on individuals factors such as personality, skills, knowledge,
experience and abilities.

The theory suggests that although individuals may have different sets of goals, they can
be motivated if they believe that:

• There is a positive correlation between efforts and performance,

• Favorable performance will result in a desirable reward,
• The rewardwill satisfy an important need,
• The desire to satisfy the need is strong enough to make the effort worthwhile.

The theory is based upon the following beliefs:


Valence refers to the emotional orientations people hold with respect to outcomes
[rewards]. The depth of the want of an employee for extrinsic [money, promotion, time-
off, benefits] or intrinsic [satisfaction] rewards). Management must discover what
employees value.


Employees have different expectations and levels of confidence about what they are
capable of doing. Management must discover what resources, training, or supervision
employees need.


The perception of employees as to whether they will actually get what they desire even if
it has been promised by a manager. Management must ensure that promises of rewards
are fulfilled and that employees are aware of that.
Vroom suggests that an employee's beliefs about Expectancy, Instrumentality, and
Valence interact psychologically to create a motivational force such that the employee
acts in ways that bring pleasure and avoid pain.