UNIT 1

1.Meaning of HAM:

Human asset Management is the process of recruiting, selecting, inducting

employees, providing orientation, imparting training and development,
appraising the performance of employees, deciding compensation and
providing benefits, motivating employees, maintaining proper relations with
employees and their trade unions, ensuring employees safety, welfare and
healthy measures in compliance with labour laws of the land. In short
Human Asset Management (HAM) is the part of the company that manages
human assets (or human capital). It is the management of employees as
assets.

1.1Objective of HAM
1. To help the organisation to attain its goals effectively and efficiently by
providing competent and motivated employees.

2. To utilize the available human resources effectively.

3. To increase to the fullest the employee’s job satisfaction and self-

actualisation.

4. To develop and maintain the quality of work life (QWL) which makes
employment in the organisation a desirable personal and social situation.

5. To help maintain ethical policies and behaviour inside and outside the
organisation.

6. To establish and maintain cordial relations between employees and

management.

7. Developing the necessary skills and right attitudes among the employees
through training, development, performance appraisal, etc.

8. Securing willing cooperation of employees through motivation,

participation, grievance handling, etc.
9. Ensuring that enterprise will have in future a team of competent and
dedicated employees

1.2Function of Human Resource Management

1- Job Analysis

2- Human Resource Planning (HRP)

3- Recruitment
4- Selection
5- Staffing
6- Human Resource Development
7- Compensation & Benefits:
8- Safety & Health

Now each function is discussed one by one.

1. Staffing:

The organization can become effective when it possess the qualified persons,
who are designated for specific position along with the proper place &
timing. This would make an organization to achieve its organizational
objectives. Organization gets such qualified employees on time when its HR
department performs effective staffing function. Following are the important
activities

 Job Analysis

In job analysis, systematic effort is made to ascertain the knowledge, skills

& duties necessary to perform certain jobs in the organization.

 Human Resource Planning (HRP)

Human Resource Planning is the systematic activity of staffing function of

HR department, in which the requirements of human resource are reviewed
in order to confirm that the required number of workers  with the require
skills & knowledge are made available when they are demanded.

 Recruitment
 Recruitment is the systematic process of attracting & encouraging relatively
large number of applicants to apply for the required jobs of the organization.

 Selection

Selection is the final systematic process through which the organization

identifies the best persons from a pool of applicants for the job that can
effectively fulfill the required criteria of performing the desired duties in the
organization.

2. Human Resource Development

Functions of human resource management include another important role of

the Hr department in which the training & development of the employees is
conducted along with the career planning. For this purpose, certain activities
including performance appraisals are performed that identifies the needs
fortraining& development of the specified employees. The training is
designed & given to provide the employees with the required skills &
knowledge for their current positions of the jobs. While development is
much broader than training in which the future aspect of employees are
covered by providing them sufficient & knowledge to perform more
complex duties of future jobs.

The individual as well as the teams of employees can benefit from

the human resource developmentwhich ultimately benefits the organization
by improving its entire performance. The human resource development is
not an optional activity but rather it the necessity of the employees as well as
organization to cover the changing skills, jobs & technology of the world.

Career planning is much more advance activity in which the employee

determine his career goals & then he try to point out the proper means to
accomplish those goals. Organizations also use career development in which
properly qualified & experienced people are made available to the
organization when needed. The performance appraisals are prepared to
check the performance level of the employees by analyzing the performed
tasked.

3. Compensation & Benefits

The HR department has also responsibility to perform the function of

compensation & employee benefits. The compensation is defined as all the
 rewards that are obtained by the employee as a result of his employment.
These rewards may take any of the following forms.

 Pay

The money received by an employee for performing his job.

 Benefits

Benefits are those extra financial rewards that are received other than pay.
Benefits include sick leaves, paid leaves, holiday& medical insurance.

 Non-financial Rewards

There are also some non financial rewards that are availed by the employees
& which are non-monetary in nature like pleasant working environment &
delightedness of work performed etc.

4. Safety & Health

Safety & health is included in the functions of human resource management

performed by the HR department of the organization. In this function the
safety of the employees form serious accidents in working environment is
ensured. Health is little different from safety in such a way that it is related
to the normal physical & mental well-being of employees that make them
free from the illness. The safety & health issue of the employees is very
crucial for the HR department because employees are asset of the
organization & their good health in a safe working environment ensures the
increased productivity & effectiveness of the organization in the long run.

5. Employees & Labor Relations

The unionism of the employees is becoming popular for many years & now
it becomes compulsory by law for the organizations to declare a union of its
employees & bargain with the union on certain matters. If the employees of
the organization wants to join the union, then the organization do not put
pressure on them for prevention. Although unionism is an earlier concept
which is also working in the private industry but still many organizations try
to keep a union free environment because unions can become harmful for
the organizations if they are not properly handled.
6. Human Resource Research

The human resource research is not nominated as a function of the human

resource management, but still it is considered to be the one of the functions
of HRM because it does not require cost for separate laboratory & provide
effective solutions for many issues of the HR department.

2 Manpower planning
Manpower Planning which is also called as Human Resource Planning
consists of putting right number of people, right kind of people at the right
place, right time, doing the right things for which they are suited for the
achievement of goals of the organization. Human Resource Planning has got
an important place in the arena of industrialization

2.1 Importance of Manpower Planning


1. Key to managerial functions- The four managerial functions, i.e.,
planning, organizing, directing and controlling are based upon the
manpower. Human resources help in the implementation of all these
managerial activities. Therefore, staffing becomes a key to all
managerial functions.
 Efficient utilization- Efficient management of personnels becomes an
important function in the industrialization world of today. Seting of
large scale enterprises require management of large scale manpower.
It can be effectively done through staffing function.

1. Motivation- Staffing function not only includes putting right men on right

job, but it also comprises of motivational programmes, i.e., incentive plans
to be framed for further participation and employment of employees in a
concern. Therefore, all types of incentive plans becomes an integral part of
staffing function.
2. Better human relations- A concern can stabilize itself if human relations
develop and are strong. Human relations become strong trough effective
control, clear communication, effective supervision and leadership in a
concern. Staffing function also looks after training and development of the
work force which leads to co-operation and better human relations.

3. Higher productivity- Productivity level increases when resources are

utilized in best possible manner. higher productivity is a result of minimum
wastage of time, money, efforts and energies. This is possible through the
staffing and it's related activities ( Performance appraisal, training and
development, remuneration)

2.2 In any Human Resource Planning model there are 4 key elements
which the management should adhere to (PROCESS OF HRP)

1. Forecasting recruitment needs: There are a number of ways in

forecasting your business needs, to know the exact number of employees
required to run the business. Factors to be considered are the economical
situation of any given country, internal and external factors of an
organization and the demand for the products.

2. Evaluate Supply: In estimating this, there are two aspects, one is the
evaluation of the internal resources and the other is the prospective or
external resources. Among the two, external factors require extra care,
these include education, unemployment rate and law that is in existence.
Evaluating these factors very closely will help the organization in filling
the right resources at the right time with the right skill set.

3. Supply and demand balance: This element of Human Resource

Planning is very important, as striking a balance between these two
forces will help the organization in understanding if there is shortage or
excess of employees available in a particular group. It also helps in
understanding as to the need of full time or part time needs of the
organization.
4. Acion planning

Human Resource Planning Process

Methods of Demand Forecasting:
There are three major methods of demand forecasting. They are as follows.
(1) Executive Judgment:
Executive or Managerial Judgment method is the most suitable for smaller
enterprises because they do not afford to have work study technique. Under
this method the executives sit together and determine the future manpower
requirements of the enterprise and submit the proposal to the top
management for approval. This approach is known as ‘bottom up’ approach.

Sometimes the members of top management sit together and determine the
needs on the advice of personnel department. The forecasts so prepared sent
for review to the departmental heads and after their consent approved the
need. This is known as ‘top down’ approach. The best way is the
combination of the two approaches. Executives at both levels equipped with
guidelines sit together and determine the human resources need of the
organization.

(2) Work Load Forecasting:

It is also known as work load analysis. Under this method the stock of
workload and the continuity of operations are determined. Accordingly the
labour requirement is determined. The workload becomes the base for
workforce analysis for the forthcoming years. Here due consideration is
given to absenteeism and labour turnover. This method is also known as
work study technique. Here working capacity of each employee is calculated
in terms of man-hours. Man-hours required for each unit is calculated and
then number of required employees is calculated.
The example is given below:
(a) Planned annual production = 2, 00,000 units

(b) Standard man-hours required for each unit = 2 Hours

(c) Planned man-hour needed for the year (a x b) = 4, 00,000 hrs.

(d) Planned annual contribution of an employee = 2000 hrs.

(e) No. of employees required ————- (c/d) = 4, 00,000/2000 = 200

This method is useful for long term forecasting.

(3) Statistical Techniques:

Long range demand forecasting for human resources is more responsive to
statistical and mathematical techniques. With the help of computers any data
is rapidly analyzed.

The following are the methods of forecasting used under this category:
(a) Ratio Trends Analysis:
Under this method the ratios are calculated for the past data related to
number of employees of each category i.e. production, sales and marketing
levels, work load levels. Future production and sales levels, work load,
activity levels are estimated with an allowance of changes in organization,
methods and jobs. The future ratios are estimated.

(b) Regression Analysis:
Regression analysis is used to forecast demand for human resources at some
point of time in future by using factors such as sales, production services
provided etc. This method is used when independent and dependent
variables are functionally related to each other. Nowadays computers are
used to solve regression equations for demand forecasting.

Supply Forecasting methods:

Supply forecasting means to make an estimation of supply of human
resources taking into consideration the analysis of current human resources
inventory and future availability.

Existing Inventory:
The first step in supply forecasting is to take a stock of existing HR
inventory as follows.

(a) Head Count:
Count of the total number of people available department-wise, sex- wise,
designation-wise, skill-wise, pay roll-wise etc.

(b) Job Family Inventory:

It consists to number and category of employees of each job family i.e. the
jobs related to same category like office staff, sales and marketing staff,
production staff, maintenance and industrial engineers, quality control
engineers etc.

(c) Age Inventory:
It consists of age-wise number and category of employees. This gives us age
composition of human resources. Dynamism, creative abilities
innovativeness is present in young employees while making of proper
judgment and display of maturity is shown by elderly employees.
Organizations prefer both young and old employees. Human resource
planning should give due consideration to age-wise human resource mixing
young and old employees in due proportions.

(d) Inventory of skill, experience, values and capabilities:

Organization should take a stock of present inventory of skill, employees
with number of years of experiences (10 yrs, 15-yrs, 20 yrs and more etc.),
values and capabilities.

(e) Inventory of Qualifications and Training:

This consists of educational qualifications of the employee’s academic and
technical and special qualifications if any and the training received by the
employees.

(f) Inventory of Salary grades:

This includes pay and allowance-wise and total emoluments-wise stock
taking.

(g) Gender wise Inventory:

Inventory of male and female employees of the organization.

(h) Local and Non-Local-wise Inventory:

It includes the stock of local employees and the employees belonging to
other areas such as different states of India.

(i) Inventory of Past Performance and Future Potentialities:

There are several human capacities or potentials required for performing
jobs at the workplace. Requirement of these along experience need to be
taken into consideration while taking stock of human resource inventory.
3 JOB ANALYSIS

Concepts:
Before we proceed to explain the concept of job analysis, let us first
understand the meaning of the term ‘job’ itself

Job:
In simple words, a job may be understood as a division of total work into
packages/positions. According to Dale Yoder ‘, “A job is a collection or
aggregation of tasks, duties and responsibilities which as a whole, is
regarded as a regular assignment to individual employees and which is
different from other assignments”. Thus, a job may be defined as a group of
positions involving some duties, responsibilities, knowledge and skills.

Each job has a definite title based on standard trade specializations within a
job. Each job is different from other jobs like peon, clerk, supervisor, and
accountant, manager, etc. A job may include many positions. A position is a
particular set of duties and responsibilities regularly assigned to an
individual.

Job Analysis:
Job analysis refers to the process of collecting information about a job. In
other words, it refers to the anatomy of the job. Job analysis is performed
upon ongoing jobs only. It contains job contents. For example, what are the
duties of a supervisor, grade II, what minimal knowledge, skills and abilities
are necessary to be able to adequately perform this job? How do the
requirements for a supervisor, grade II, compare with those for a supervisor,
grade I? These are the questions that job analysis answers.

Let us consider a few important definitions of job analysis.

Edwin B. Flippo has defined job analysis as the process of studying and
collecting information relating to the operations and responsibilities of a
specific job. The immediate products of this analysis are job descriptions
and job specifications”.

There are two major aspects of job analysis:

These are:
1. Job Description

2. Job Specification

A brief description of these follows:

Job Description:
Job description is prepared on the basis of data collected through job
analysis. Job description is a functional description of the contents what the
job entails. It is a narration of the contents of a job. It is a description of the
activities and duties to be performed in a job, the relationship of the job with
other jobs, the equipment and tools involved, the nature of supervision,
working conditions and hazards of the job and so on.

All major categories of jobs need to be spelled out in clear and compre-
hensive manner to determine the qualifications and skills required to
perform a job. Thus, job description differentiates one job from the other. In
sum, job description is a written statement of what a job holder does, how it
is done, and why it is done.

Purposes of Job Description:

Job description is done for fulfilling the following purposes:
1. Grading and classification of jobs

2. Placement and Orientation of new employees

3. Promotions and transfers

4. Outlining for career path

5. Developing work standards

6. Counselling of employees

7. Delimitation of authority

Job Specification:
While job description focuses on the job, job specification focuses on the
person i.e, the job holder. Job specification is a statement of the minimum
levels of qualifications, skills, physical and other abilities, experience,
judgment and attributes required for performing job effectively. In other
words, it is a statement of the minimum acceptable qualifications that an
incumbent must possess to perform a given job. It sets forth the knowledge,
skills and abilities required to do the job effectively.
Job specification specifies the physical, psychological, personal, social and
behavioural characteristics of the job holders. These contents of the job
specification are contained in Table

Usages of Job Specification: The usages of job specification include:

1. Personnel planning

2. Performance appraisal

3. Hiring

4. Training and development

5. Job evaluation and compensation

6. Health and safety

7. Employee discipline

8. Work scheduling

9. Career planning

Contents of Job Description and Job Specification:

The contents of job description and job specification are presented in the
following Table
Why job analysis? (Uses):
Job analysis is useful for overall management of all personnel activities.

The same is specified as follows:

1. Human Resource Planning:
The estimates the quantity and quality of people will be required in future.
How many and what type of people will be required depends on the jobs to
be staffed. Job-related information available through job analysis is,
therefore, necessary for human resource planning.

2. Recruitment and Selection:

Recruitment succeeds job analysis. Basically, the goal of the human resource
planning is to match the right people with the right job. This is possible only
after having adequate information about the jobs that need to be staffed. It is
job analysis that provides job information. Thus, job analysis serves as basis
for recruitment and selection of employees in the organization.
3. Training and Development:
Job analysis by providing information about what a job entails i.e.,
knowledge and skills required to perform a job, enables the management to
design the training and development programmes to acquire these job
requirements. Employee development programmes like job enlargement, job
enrichment, job rotation, etc.

4. Placement and Orientation:

As job analysis provides information about what skills and qualities are
required to do a job, the management can gear orientation programmes
towards helping the employees learn the required skills and qualities. It,
thus, helps management place an employee on the job best suited to him/her.

5. Job Evaluation:
The job evaluation refers to determination of relative worth of different jobs.
It, thus, helps in developing appropriate wage and salary structures. Relative
worth is determined mainly on the basis of information provided by job
analysis.

6. Performance Appraisal:
Performance appraisal involves comparing the actual performance of an
employee with the standard one, i.e., what is expected of him/her. Such
appraisal or assessment serves as basis for awarding promotions, effecting
transfers, or assessing training needs. Job analysis helps in establishing job
standards which may be compared with the actual performance/contribution
of each employee.

7. Personnel Information:
Increasing number of organizations maintain computerized information
about their employees. This is popularly known as Human Resource
Information System (HRIS). HRIS is useful as it helps improve
administrative efficiency and provides decision support^ Information
relating to human resources working in the organization is provided by job
analysis only.

8. Health and Safety:

Job analysis helps in identifying and uncovering hazardous conditions and
unhealthy environmental factors such as heat, noise, fumes, dust, etc. and,
thus, facilitates management to take corrective measures to minimize and
avoid the possibility of accidents causing human injury

Process of job analysis:

Job analysis is as useful is not so easy to make. In fact, it involves a process.

Though there is no fool-proof process of making job analysis, following are

the main steps involved in job analysis:

1. Organizational Job Analysis:

Job analysis begins with obtaining pertinent information about a job’. This,
according to Terry is required to know the makeup of a job, its relation to
other jobs, and its contribution to performance of the organisation.

Such information can be had by dividing background information in various

forms such as organisation charts i.e., how the particular job is related to
other jobs; class specifications i.e., the general requirement of the job
family; job description i.e., starting point to build the revised job description,
and flow charts i.e., flow of activities involved in a particular job.
2. Selecting Representative Jobs for Analysis:
Analysing all jobs of an organisation is both costly and time consuming.
Therefore, only a representative sample of jobs is selected for the purpose of
detailed analysis.

3. Collection of Data for Job Analysis:

In this step, job data features of the job and required qualifications of the
employee are collected. Data can be collected either through questionnaire,
observation or interviews. However, due care should be taken to select and
use the method of data collection that is the most reliable in the given
situation of the job.

4. Preparing Job Description:

The job information collected in the above ways is now used to prepare a job
description. Job description is a written statement that describes the tasks,
duties and responsibilities that need to be discharged for effective job
performance.

5. Preparing Job Specification:

The last step involved in job analysis is to prepare job specification on the
basis of collected information. This is a written statement that specifies the
personal qualities, traits, skills, qualification, aptitude etc. required to
 effectively perform a job. The job analysis process discussed above is now

delineated in Figure 5.1.

Job Evaluation:
Job evaluation is a comparative process of establishing the value of different
jobs in a hierarchical order. It allows one to compare jobs by using common
criteria to define the relationship of one job to another. This serves as basis
for grading different jobs and developing a suitable pay structure for them.

It is important to mention that job evaluation cannot be the sole determining

factor for deciding pay structures because job evaluation is about
relationships, and not absolutes. The techniques used for job evaluation
include ranking, job classification, points rating, etc.

Job evaluation methods

1. Ranking Method
This method ranks jobs in order based on each job’s perceived value in
relation to the others, says Neelman.

 Does not consider market compensation rates.

  May work well for smaller companies. In a larger organization, it is
more complex to use, but sometimes it can still work if jobs are
grouped by job families—professional level, etc.

2. Classification/Grading Method
With this approach, generic job characteristics are grouped to reflect levels
of skill/responsibility at a number of predetermined grade classifications,
says Neelman.
This is another straightforward method that is not too time-consuming.

 Individual jobs are compared to groups of job characteristics, then

matched to specific grade classification.
 Can be a challenge because one size does not fit all, so jobs may be
forcefit into a grade.
 The system is subject to grade inflation as jobs get pushed to the next
higher level.

3. Point–Factor Method
This approach identifies job factors that add value and worth to a position.
The job factors are separated into groups (i.e., skill, responsibility, effort)
and assigned a numerical or weighted point value. The points for individual
factors are added up to get a point value for the whole job.

 May not reflect market values of jobs.

 Generates a hierarchy but does not have an external component.

4. Factor Comparison Method

With this method, job factors are identified under primary groups (i.e., skill,
effort, responsibility and working conditions) typically up to five groups.
Each factor is assigned a dollar value (as opposed to point value).

 This is a complex system used only by a few organizations.

 It is hard to communicate to employees.
 There is an inherent degree of subjectivity.
job Enlargement
It is a job design technique wherein there is an increase in the number of
tasks associated with a certain job. In other words, it means increasing the
scope of one’s duties and responsibilities. The increase in scope is
quantitative in nature and not qualitative and at the same level.

Benefits of Job Enlargement

The following are the major benefits of Job enlargement

1. Reduced Monotony: Howsoever interesting the job may appear in

the beginning, sooner or later people complain of boredom and
monotony. Job enlargement if planned carefully can help reduce
boredom and make it more satisfying and fulfilling for the employees.
2. Increased Work Flexibility: There is an addition to the number of
tasks an individual performs. There is thus an increased scope of
carrying out tasks that are versatile and yet very similar in certain
aspects.
3. No Skills Training Required: Since the individual has already been
performing the task in the past, there is no great requirement for
imparting of new skills. However people and time management
interventions may be required. The job thus gets more motivational
for the one performing it.

What Is Job Enrichment?

Job enrichment is a management concept that involves redesigning jobs so
that they're more challenging to the employee and have less repetitive work.
The concept is based on a 1968 Harvard Business Review article by
psychologist Frederick Herzberg titled ''One More Time: How Do You
Motivate Employees?'' In the article, Herzberg stated that the greatest
employee motivators, based on several investigations, are (in descending
order): achievement, recognition, work itself, responsibility, advancement,
and growth. To improve employee motivation and productivity, jobs should
be modified to increase the motivators present for the employee.
 To make this concept more usable, let's imagine you're a company manager
and want to increase the satisfaction of your staff. As you walk through the
process of job enrichment, you'll need to keep in mind these goals:

 Reduce repetitive work.

 Increase the employee's feelings of recognition and achievement.
 Provide opportunities for employee advancement (as in
promotions into jobs requiring more skills).
 Provide opportunities for employee growth (as in, an increase in
skills and knowledge without a job promotion).

Unit 2

Recruitment
Recruitment: Meaning and Sources of Recruitment (with diagram)!
Whenever there is a vacancy in the organization, generally it is to be filled.
To make the candidate available for filling those vacancies, their selection
procedure and placement on a proper job comes under the purview of
recruitment.

As soon as the available vacancies are known, they are advertised through
different media and accordingly the applications are collected for the vacant
posts. A group of candidates interested in doing the job and are eligible to do,
it is created through recruitment.
In the words of Edwin Flippo, ‘recruitment is the process of searching for
prospective employees and stimulating them to apply for jobs in the
organisation’.

In short, it involves attracting and obtaining as many applications as possible

from eligible job seekers.

Sources of Recruitment:
The eligible and suitable candidates required for a particular job are available
through various sources. These sources can be divided into two categories, as
shown in Figure 5.5.

Internal Sources of Recruitment:

1. Promotions:
ADVERTISEMENTS:
The promotion policy is followed as a motivational technique for the
employees who work hard and show good performance. Promotion results in
enhancements in pay, position, responsibility and authority. The important
requirement for implementation of the promotion policy is that the terms,
conditions, rules and regulations should be well-defined.

2. Retirements:
The retired employees may be given the extension in their service in case of
non-availability of suitable candidates for the post.

3. Former employees:
Former employees who had performed well during their tenure may be called
back, and higher wages and incentives can be paid to them.

4. Transfer:
Employees may be transferred from one department to another wherever the
post becomes vacant.

5. Internal advertisement:
ADVERTISEMENTS:

The existing employees may be interested in taking up the vacant jobs. As

they are working in the company since long time, they know about the
specification and description of the vacant job. For their benefit, the
advertisement within the company is circulated so that the employees will be
intimated.

Benefits of Internal Sources of Recruitment:

1. The existing employees get motivated.

2. Cost is saved as there is no need to give advertisements about the vacancy.

3. It builds loyalty among employees towards the organization.

4. Training cost is saved as the employees already know about the nature of
job to be performed.

5. It is a reliable and easy process.

Limitations of Internal Sources of Recruitment:

1. Young people with the knowledge of modem technology and innovative
ideas do not get the chance.

2. The performance of the existing employees may not be as efficient as

before.

3. It brings the morale down of employees who do not get promotion or

selected.

4. It may leads to encouragement to favouritism.

5. It may not be always in the good interest of the organization.

External Sources of Recruitment:

1. Press advertisement:
A wide choice for selecting the appropriate candidate for the post is available
through this source. It gives publicity to the vacant posts and the details about
the job in the form of job description and job specification are made available
to public in general.

2. Campus interviews:
It is the best possible method for companies to select students from various
educational institutions. It is easy and economical. The company officials
personally visit various institutes and select students eligible for a particular
post through interviews. Students get a good opportunity to prove themselves
and get selected for a good job.

3. Placement agencies:
A databank of candidates is sent to organizations for their selection purpose
and agencies get commission in return.

4. Employment exchange:
People register themselves with government employment exchanges with
their personal details. According to the needs and request of the organization,
the candidates are sent for interviews.

5. Walk in interviews:
These interviews are declared by companies on the specific day and time and
conducted for selection.

6. E-recruitment:
Various sites such as jobs.com, naukri.com, and monster.com are the
available electronic sites on which candidates upload their resume and seek
the jobs.
7. Competitors:
By offering better terms and conditions of service, the human resource
managers try to get the employees working in the competitor’s organization.

Benefits of External Sources of Recruitment:

1. New talents get the opportunity.

2. The best selection is possible as a large number of candidates apply for the
job.

3. In case of unavailability of suitable candidates within the organization, it is

better to select them from outside sources.

Limitations of External Sources of Recruitment:

1. Skilled and ambitious employees may switch the job more frequently.

2. It gives a sense of insecurity among the existing candidates.

3. It increases the cost as advertisement is to be given through press and

training facilities to be provided for new candidates.
1. Recruitment Planning: The recruitment process begins with the planning
where in the vacant job positions are analyzed and then the comprehensive job
draft is prepared that includes: job specifications and its nature, skills,
qualifications, experience needed for the job, etc.

Here, the recruitment committee decides on the number and the type of applicants
to be contacted. The aim of any organization is to attract more candidates as some
of them might not be willing to join, or some might not qualify for the job position.
So the company has a sufficient number of candidates to choose amongst them.
The type of candidates required for the job is well specified in terms of the task
and responsibilities involved in a job along with the qualification and experience
expected.
2. Strategy Development: Once the comprehensive job draft is prepared, and
the type and the number of recruits required are decided upon; the next step is to
decide a strategy that is adopted while recruiting the prospective candidates in the
organization. The following strategic considerations should be kept in mind:

 Make or Buy Employees, which means the firm either decides to select less
skilled employees and invest in training and education programmes or hire
skilled professionals.
 Methods of Recruitment, the firm decide on the methods used for
recruiting the individuals. Such as the internet provides detailed information
about the prospective candidates and helps in shortlisting the best-qualified
individuals.
 Sources of Recruitment, there are two sources of recruitment: Internal
source (within the organization), external source (outside the organization). The
firm must decide the source from where the candidates are hired.

3. Searching: Once the strategy is prepared the search for the candidates can
be initialized. It includes two steps: source activation and selling. The source
activation means, the search for the candidate activates on the employee requisition
i.e. until and unless the line manager verifies that the vacancy exists, the search
process cannot be initiated.

The next point to be considered is selling, which means the firm must judiciously
select that media of communication that successfully conveys the employment
information to the prospective candidates.

4. Screening: The screening means to shortlist the applications of the

candidates for further selection process. Although, the screening is considered as
the starting point of selection but is integral to the recruitment process. This is
because the selection process begins only after the applications are scrutinized and
shortlisted on the basis of job requirements. The purpose of  recruitment here is to
remove those applications at an early stage which clearly seems to be unqualified
for the job.
5. Evaluation and Control: Evaluation and control is the last stage in the
recruitment process wherein the validity and effectiveness of the process and the
methods used therein is assessed. This stage is crucial because the firm has to
check the output in terms of the cost incurred.

The recruitment is a costly process as it includes the salaries of recruiters, time

spent by the management, cost of advertisement, cost of selection, a price paid for
the overtime and outsourcing in case the vacancy remains unfilled. Thus, a firm is
required to gather all these relevant information to evaluate the performance of a
recruitment process effectively.

SELECTION
Definition: The Selection is a process of picking the right candidate with
prerequisite qualifications and capabilities to fill the jobs in the organization.
The selection process is quite lengthy and complex as it involves a series of steps
before making the final selection. The procedure of selection may vary from
industry to industry, company to company and even from department to
department. Every organization designs its selection process, keeping in mind the
urgency of hiring people and the prerequisites for the job vacancy.
 Selection Process
The selection procedure comprises of following systematic steps:

1. Preliminary Interview: The preliminary interview is also called as a

screening interview wherein those candidates are eliminated from the further
selection process who do not meet the minimum eligibility criteria as required by
the organization.

Here, the individuals are checked for their academic qualifications, skill sets,
family backgrounds and their interest in working with the firm. The preliminary
interview is less formal and is basically done to weed out the unsuitable candidates
very much before proceeding with a full-fledged selection process.

2. Receiving Applications: Once the individual qualifies the preliminary

interview he is required to fill in the application form in the prescribed format. This
application contains the candidate data such as age, qualification, experience, etc.
 This information helps the interviewer to get the fair idea about the candidate and
formulate questions to get more information about him.
3. Screening Applications: Once the applications are received, these are
screened by the screening committee, who then prepare a list of those applicants
whom they find suitable for the interviews. The shortlisting criteria could be the
age, sex, qualification, experience of an individual. Once the list is prepared, the
qualified candidates are called for the interview either through a registered mail or
e-mails.
4. Employment Tests: In order to check the mental ability and skill set of an
individual, several tests are conducted. Such as intelligence tests, aptitude tests,
interest tests, psychological tests, personality tests, etc. These tests are conducted
to judge the suitability of the candidate for the job.
5. Employment Interview: The one on one session with the candidate is
conducted to gain more insights about him. Here, the interviewer asks questions
from the applicant to discover more about him and to give him the accurate picture
of the kind of a job he is required to perform.

Also, the briefing of certain organizational policies is done, which is crucial in the
performance of the job. Through an interview, it is easier for the employer to
understand the candidate’s expectations from the job and also his communication
skills along with the confidence level can be checked at this stage.

6. Checking References: The firms usually ask for the references from the
candidate to cross check the authenticity of the information provided by him.
These references could be from the education institute from where the candidate
has completed his studies or from his previous employment where he was formerly
engaged. These references are checked to know the conduct and behavior of an
individual and also his potential of learning new jobs.
7. Medical Examination: Here the physical and mental fitness of the
candidate are checked to ensure that he is capable of performing the job. In some
organizations, the medical examination is done at the very beginning of the
selection process while in some cases it is done after the final selection.

Thus, this stage is not rigid and can take place anywhere in the process. The
medical examination is an important step in the selection process as it helps in
ascertaining the applicant’s physical ability to fulfill the job requirements.
8. Final Selection: Finally, the candidate who qualifies all the rounds of a
selection process is given the appointment letter to join the firm.

Thus, the selection is complex and a lengthy process as it involves several stages
than an individual has to qualify before getting finally selected for the job.

Training Process
Definition: The Training Process comprises of a series of steps that needs to be
followed systematically to have an efficient training programme. The Training is a
systematic activity performed to modify the skills, attitudes and the behavior of an
employee to perform a particular job.
Training Process

1. Needs assessment: The first step in the training process is to assess the need
for training the employees. The need for training could be identified through a
diagnosis of present and future challenges and through a gap between the
employee’s actual performance and the standard performance.

The needs assessment can be studied from two perspectives: Individual and group.
The individual training is designed to enhance the individual’s efficiency when not
 performing adequately. And whereas the group training is intended to inculcate the
new changes in the employees due to a change in the organization’s strategy.

2. Deriving Instructional Objectives: Once the needs are identified, the

objectives for which the training is to be conducted are established. The objectives
could be based on the gaps seen in the training programmes conducted earlier and
the skill sets developed by the employees.
3. Designing Training Programme: The next step is to design the training
programme in line with the set objectives. Every training programme encompasses
certain issues such as: Who are the trainees? Who are the trainers? What methods
are to be used for the training? What will be the level of training? etc.Also, the
comprehensive action plan is designed that includes the training content, material,
learning theories, instructional design, and the other training requisites.
4. Implementation of the Training Programme: Once the designing of the
training programme is completed, the next step is to put it into the action. The
foremost decision that needs to be made is where the training will be conducted
either in-house or outside the organization.

Once it is decided, the time for the training is set along with the trainer who will be
conducting the training session. Also, the trainees are monitored continuously
throughout the training programme to see if it’s effective and is able to retain the
employee’s interest.

5. Evaluation of the Training Programme: After the training is done, the

employees are asked to give their feedback on the training session and whether
they felt useful or not. Through feedback, an organization can determine the weak
spots if any, and can rectify it in the next session.The evaluation of the training
programme is a must because companies invest huge amounts in these sessions and
must know it’s effectiveness in terms of money.

Thus, every firm follows the series of steps to design an effective training
programme that serves the purpose for which it was intended.
 On-the-Job Training
Definition: The On-the-Job Training is a technique wherein the workers, i.e.,
operative staff, is given the direct instructions to perform their jobs on the actual
work floor.

The workers can learn the skills that are required to be performed in the actual
work conditions and also gets accustomed to the working environment. Also, the
organizations need not to bear any additional cost of setting up a classroom or a
simulated setup for imparting training to the workers, away from the actual work
floor, as in the case of Off-the -Job training.

On-the-Job Training Methods

1. Coaching: Under this method, the superior or an experienced staff gives

instructions to the workers to perform a job. It is one-to-one training designed for
the workers where they can find answers to their queries through the instructions
and demonstrations given by the superior.
2. Mentoring: This training is given to the managerial level people, wherein
the senior or the manager gives instructions to the immediate subordinate to carry
out the day to day functioning.

It is again a one-to-one training method, where the manager is considered as a

mentor to the subordinate and guides him in the situations of difficulty.
3. Job Rotation: Under the job rotation, an employee is often shifted to the
other related jobs, with the intention to make him well versed with other job
backgrounds.

This helps him to escape the boredom caused by performing the same kind of work
again and again and also helps in developing a rapport with other people in the
organization.

4. Job Instructional Training: Under this training, a trainer designs a step by

step training program, wherein the worker is given the instructions to perform the
job as required. Firstly, the overview of the job along with the desired results is
explained to the trainee, and then the skills required for the job is demonstrated by
the trainer.

Then a worker is allowed to perform the job as per his acquired skills or expertise,
and then finally the workers are asked to give their feedback and ask for any query
arising out of the training program.

5. Understudy: Here, the superior gives training to the subordinate as an

understudy or an assistant who is likely to perform a superior’s job in case of the
vacancy arising out of superior’s retirement, transfer, promotion or death.
6. Apprenticeship: This type of training is generally given to the people in
crafts, trade and technical fields that require a long-term learning before they
actually gain the proficiency in their respective disciplines.

This training is a blend of classroom and on-the-job training and is conducted

under the close supervision. This can be extended up to 3 to 4 years as apprentices
need to go through the learning process till they become an expert in their fields.

E.g. The craftsmen job, mechanic, electrician, plumber, tool maker, etc. have to
undergo this type of training.

On-the-Job training is based on the principle of “learning by doing”, i.e. the

workers learn the job while performing it within the actual work environment. This
type of training is beneficial for both the workers and the organization.
 Off-the-Job Training
Definition: The Off-the-Job Training is the training method wherein the
workers/employees learn their job roles away from the actual work floor.

Simply, off-the-job training comprises of a place specifically allotted for the

training purpose that may be near to the actual workplace, where the workers are
required to learn the skills and get well equipped with the tools and techniques that
are to be used at the actual work floor.

Off-the-Job Training Methods

1. Special lectures: This is also called as classroom training wherein the

employees are given lectures about the job requirements and the necessary skills
required for implementing the job.
 There is generally a classroom or a workshop wherein the complete job knowledge
is given to the workers by the experts or specialists from the professional
institutes.The main purpose of this training is to make the employees well
informed about their job roles and discussing their queries arising out of the
lectures.

2. Simulation: Under this training, the trainee is required to learn the

operations of machines and equipment, that are reasonably designed to look similar
to those installed at the actual work floor.

This is one of the most common method of training wherein the worker learns to
operate tools and machinery that look alike to those, they would be using in the
actual work environment.

3. Vestibule Training: This type of training is specifically given to the

technical staff, office staff and the employees who learn the operations of tools and
equipment assembled at a place away from the actual work floor.

This type of training is conducted to give the real feel to the trainees, that they
would be experiencing at the actual plant.

4. Case Studies: Under this method, the trainees are given the situation or a
problem in the form of a case study, and are required to solve it as per their
learning from the training program.
5. Role playing: This type of training is essential in case of customer services.
Under this, the trainees assume roles and enact as per the given situations. It is also
called as socio-drama or psycho-drama, wherein the employees act as if, they are
facing the situation and have to solve it spontaneously without any guidance.
6. Management Games: Under this method, the trainees are divided into
groups and then they are presented with the simulated marketplace or the
situations, wherein they are required to apply their learning and solve the problems
accordingly.

Under off-the-job training, the worker concentrates only on the learning of a job
and is not accountable for the production.
 Induction
Induction is the task of introducing the new employee to the policies, procedures,
rules and regulations of the organization.

Induction Programme – An induction programme is conducted by the

organization to provide the new employee information about –

 Organization – History, current position, structure, rules, procedures,

policies, issues etc.
 Employee Benefits – Pay scale, Pay day, Holidays, Insurance, Medical,
Provident fund etc.
 Working Culture – Introduction to superiors, co-workers, trainers,
counsellors and other Key staff
 Job Duties – Job location, Job Objectives and Expectations, Job Safety, Job
tasks and its relation with other jobs.
 

It is generally done through Lectures, Seminars, Films, Handbooks, and Manuals

etc.

Objectives of an Induction programme –

(1) Remove fears of new employee – It assists the newcomer to know more about
the job, policies, rules and regulations of the organization, terms and conditions of
employment.

(2) Create a good impression – Induction helps the newcomer to adjust and adapt
to new demands of the job, get along with people, pose questions and seek
clarifications and hence creates a favourable impression of the organization in the
mind of the new recruit.

(3) Act as a valuable source of Information – Induction serves as a valuable

source of information to new recruits as it assists him/her through employee
manuals/handbooks and informal discussions about what he is supposed to do and
how is he supposed to do it.
  

Steps of an Induction Programme –

 

 Welcome the recruit to the organization

 Explain him/her about the company
 Show location and department where the new recruit will work
 Provide company manual to the recruit
 Provide details about Employee benefits
 Explain about future career prospects and training opportunities
 Entertain questions and clarify doubts
 Provide a guided tour of building, facilities etc.
 Hand the recruit over to his/her supervisor
 

Process of Induction –

 Content
 Socialization
 Follow up
 

Content – The topics covered in an Induction Programme are as follows –

 Organization – History, current position, structure, rules, procedures,

policies, issues, names and titles of key executives, employee manual,
disciplinary procedures, products/services offered etc.
 Employee Benefits – Pay scale, Pay day, Holidays, Insurance, Medical,
Provident fund, Recreation, retirement benefits, training avenues etc.
 Working Culture – Introduction to superiors, co-workers, trainers,
counsellors and other Key staff, guided tour of building, facilities etc.
 Job Duties – Job location, Job Objectives and Expectations, Job Safety, Job
tasks and its relation with other jobs.
 
Socialization – It is a process through which a new recruit begins to understand
and accept the values, norms and beliefs held by others in the organization.

Through formal and informal interaction and discussions a new comer understands
how the department/company works, who holds the Key positions, how to behave
and what is expected from them.

Follow up – To overcome any issues or challenges that the new recruit is facing
due to communication gaps in the orientation and socialization process the
supervisor may hold follow up meetings at fixed intervals on a face to face basis.
The company also obtains feedback of people involved in the induction
programme through round table discussions, in-depth interviews, questionnaire etc.

Placement
It refers to the actual posting of an employee to a specific job. It involves
assignment of a specific rank and job responsibilities to an individual. The
placement decision is taken by the line manager after comparing the job
requirements with the qualifications of the candidate.

Performance Appraisal is the systematic evaluation of the performance of

employees and to understand the abilities of a person for further growth and
development. Performance appraisal is generally done in systematic ways which
are as follows:

1. The supervisors measure the pay of employees and compare it with targets
and plans.
2. The supervisor analyses the factors behind work performances of
employees.
3. The employers are in position to guide the employees for a better
performance.

Objectives of Performance Appraisal

Performance Appraisal can be done with following objectives in mind:

1. To maintain records in order to determine compensation packages, wage

structure, salaries raises, etc.
 2. To identify the strengths and weaknesses of employees to place right men on
right job.
3. To maintain and assess the potential present in a person for further growth
and development.
4. To provide a feedback to employees regarding their performance and related
status.
5. To provide a feedback to employees regarding their performance and related
status.
6. It serves as a basis for influencing working habits of the employees.
7. To review and retain the promotional and other training programmes.

Advantages of Performance Appraisal

It is said that performance appraisal is an investment for the company which can be
justified by following advantages:

1. Promotion: Performance Appraisal helps the supervisors to chalk out the

promotion programmes for efficient employees. In this regards, inefficient
workers can be dismissed or demoted in case.
2. Compensation: Performance Appraisal helps in chalking out compensation
packages for employees. Merit rating is possible through performance
appraisal. Performance Appraisal tries to give worth to a performance.
Compensation packages which includes bonus, high salary rates, extra
benefits, allowances and pre-requisites are dependent on performance
appraisal. The criteria should be merit rather than seniority.
3. Employees Development: The systematic procedure of performance
appraisal helps the supervisors to frame training policies and programmes. It
helps to analyse strengths and weaknesses of employees so that new jobs can
be designed for efficient employees. It also helps in framing future
development programmes.
4. Selection Validation: Performance Appraisal helps the supervisors to
understand the validity and importance of the selection procedure. The
supervisors come to know the validity and thereby the strengths and
weaknesses of selection procedure. Future changes in selection methods can
be made in this regard.
5. Communication: For an organization, effective communication between
employees and employers is very important. Through performance appraisal,
communication can be sought for in the following ways:
a. Through performance appraisal, the employers can understand and
accept skills of subordinates.
 b. The subordinates can also understand and create a trust and
confidence in superiors.
c. It also helps in maintaining cordial and congenial labour management
relationship.
d. It develops the spirit of work and boosts the morale of employees.

All the above factors ensure effective communication.

6. Motivation: Performance appraisal serves as a motivation tool. Through

evaluating performance of employees, a person’s efficiency can be
determined if the targets are achieved. This very well motivates a person for
better job and helps him to improve his performance in the future.

The various methods included in each of the two categories are listed in
Table 28.4.

In the discussion that follows, each method under both categories will be
described briefly.

Traditional Methods:
Ranking Method:
It is the oldest and simplest formal systematic method of performance
appraisal in which employee is compared with all others for the purpose of
placing order of worth. The employees are ranked from the highest to the
lowest or from the best to the worst.

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In doing this the employee who is the highest on the characteristic being
measured and also the one who is L lowest, are indicated. Then, the next
highest and the next lowest between next highest and lowest until all the
employees to be rated have been ranked. Thus, if there are ten employees to
be appraised, there will be ten ranks from 1 to 10.

However, the greatest limitations of this appraisal method are

that:
(i) It does not tell that how much better or worse one is than another,

(ii) The task of ranking individuals is difficult when a large number of

employees are rated, and

(iii) It is very difficult to compare one individual with others having varying
behavioural traits. To remedy these defects, the paired comparison method
of performance appraisal has been evolved.

Paired Comparison:
In this method, each employee is compared with other employees on one-
on one basis, usually based on one trait only. The rater is provided with a
bunch of slips each coining pair of names, the rater puts a tick mark against
the employee whom he insiders the better of the two. The number of times
this employee is compared as better with others determines his or her final
ranking.

The number of possible pairs for a given number of employees is

ascertained by the following formula:
N (N-1)/2

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Where N = the total number of employees to be evaluated. Let this be

exemplified with an imaginary example.

If the following five teachers have to be evaluated by the Vice Chanceller of

a University:

(K), Mohapatra (M Raul (R), Venkat (V), and Barman (B), the above
formula gives 5 (5 -1) / 2 or 10 pairs.

These are:

Thus, the pairs so ascertained give the maximum possible permutations

and combinations. The number of times a worker is considered better
makes his/her score. Such scores are determined for each worker and
he/she is ranked according to his/her score. One obvious disadvantage of
this method is that the method can become unwieldy when large numbers
of employees are being compared.

Grading Method:
In this method, certain categories of worth are established in advance and
carefully defined. There can be three categories established for employees:
outstanding, satisfactory and unsatisfactory. There can be more than three
grades. Employee performance is compared with grade definitions. The
employee is, then, allocated to the grade that best describes his or her
performance.

Such type of grading is done is Semester pattern of examinations and in the

selection of a candidate in the public service sector. One of the major
drawbacks of this method is that the rater may rate most of the employees
on the higher side of their performance.

Forced Distribution Method:

This method was evolved by Tiffen to eliminate the central tendency of
rating most of the employees at a higher end of the scale. The method
assumes that employees’ performance level confirms to a normal
statistical distribution i.e., 10,20,40,20 and 10 per cent. This is useful
for rating a large number of employees’ job performance and promo
ability. It tends to eliminate or reduce bias.

It is also highly simple to understand and easy to apply in appraising

the performance of employees in organisations. It suffer from the
drawback that improve similarly, no single grade would rise in a
ratings.
Forced-Choice Method:
The forced-choice method is developed by J. P. Guilford. It contains a
series of groups of statements, and rater rates how effectively a
statement describes each individual being evaluated. Common method
of forced-choice method contains two statements, both positive and
negative.

Examples of positive statements are:

1. Gives good and clear instructions to the subordinates.

2. Can be depended upon to complete any job assigned.

A pair of negative statements may be as follows:

1. Makes promises beyond his limit to keep these.

2. Inclines to favour some employees.

Each statement carries a score or weight, which is not made known to

the rater. The human resource section does rating for all sets of
statements— both positive and negative. The final rating is done on
the basis of all sets of statements. Thus, employee rating in this
manner makes the method more objective. The only problem
associated with this method is that the actual constructing of several
evaluative statements also called ‘forced-choice scales’, takes a lot of
time and effort.

Check-List Method:
The basic purpose of utilizing check-list method is to ease the
evaluation burden upon tthe rater. In this method, a series of
statements, i.e., questions with their answers in ‘yes’ or ‘no’ are
prepared by the HR department (see Figure 28-2). The check-list is,
then, presented to the rater to tick appropriate answers relevant to the
appraisee. Each question carries a weight-age in relationship to their
importance.

When the check-list is completed, it is sent to the HR department to

prepare the final scores for all appraises based on all questions. While
preparing questions an attempt is made to determine the degree of
consistency of the rater by asking the same question twice but in a
different manner (see, numbers 3 and 6 in Figure 28-2).

However, one of the disadvantages of the check-list method is that it is

difficult to assemble, analyse and weigh a number of statements about
employee characteristics and contributions From a cost stand point
also, this method may be inefficient particularly if there are a number
of job categories in the organisation, because a check-list of questions
must be prepared for each category of job. It will involve a lot of
money, time and efforts.
Critical Incidents Method:
In this method, the rater focuses his or her attention on those key or
critical behaviours that make the difference between performing a job
in a noteworthy manner (effectively or ineffectively). There are three
steps involved in appraising employees using this method.

First, a list of noteworthy (good or bad) on-the-job behaviour of

specific incidents is prepared. Second, a group of experts then assigns
weightage or score to these incidents, depending upon their degree of
desirability to perform a job. Third, finally a check-list indicating
incidents that describe workers as “good” or “bad” is constructed.
Then, the check-list is given to the rater for evaluating the workers.

The basic idea behind this rating is to apprise the workers who can
perform their jobs effectively in critical situations. This is so because
most people work alike in normal situation. The strength of critical
incident method is that it focuses on behaviours and, thus, judge’s
performance rather than personalities.

Its drawbacks are to regularly write down the critical incidents which
become time-consuming and burdensome for evaluators, i.e.,
managers. Generally, negative incidents are positive ones. It is rater’s
inference that determines which incidents are critical to job
performance. Hence, the method is subject to all the limitations
relating to subjective judgments.

Graphic Rating Scale Method:

The graphic rating scale is one of the most popular and simplest
techniques for appraising performance. It is also known as linear
rating scale. In this method, the printed appraisal form is used to
appraise each employee.

The form lists traits (such as quality and reliability) and a range of job
performance characteristics (from unsatisfactory to outstanding) for
each trait. The rating is done on the basis of points on the continuum.
The common practice is to follow five points scale.

The rater rates each appraisee by checking the score that best
describes his or her performance for each trait all assigned values for
the traits are then totaled. Figure 28-3 shows a typical graphic rating
scale.
This method is good for measuring various job behaviours of an
employee. However, it is also subjected to rater’s bias while rating
employee’s behaviour at job. Occurrence of ambiguity in design- mg
the graphic scale results in bias in appraising employee’s performance.

Essay Method:
Essay method is the simplest one among various appraisal methods
available. In this method, the rater writes a narrative description on an
employee’s strengths, weaknesses, past performance, potential and
suggestions for improvement. Its positive point is that it is simple in
use. It does not require complex formats and extensive/specific
training to complete it.

However, essay method, like other methods, is not free from

drawbacks. In the absence of any prescribed structure, the essays are
likely to vary widely in terms of length and content. And, of course, the
quality of appraisal depends more upon rater’s writing skill than the
appraiser’s actual level of performance.

Moreover, because the essays are descriptive, the method provides

only qualitative information about the employee. In the absence of
quantitative data, the evaluation suffers from subjectivity problem.
Nonetheless, the essay method is a good start and is beneficial also if
used in conjunction with other appraisal methods.

Field Review Method:

When there is a reason to suspect rater’s biasedness or his or her
rating appears to be quite higher than others, these are neutralised
with the help of a review process. The review process is usually
conducted by the personnel officer in the HR department.

The review process involves the following activities:

(a) Identify areas of inter-rater disagreement.

(b) Help the group arrive at a consensus.

(c) Ensure that each rater conceives of the standard similarity.

However, the process is a time-consuming one. The supervisors

generally resent what they consider the staff interference. Hence, the
method is not widely used.

Confidential Report:
It is the traditional way of appraising employees mainly in the
Government Departments. Evaluation is made by the immediate boss
or supervisor for giving effect to promotion and transfer. Usually a
structured format is devised to collect information on employee’s
strength weakness, intelligence, attitude, character, attendance,
discipline, etc. report.

Modern Methods:
Management by Objectives (MBO):
Most of the traditional methods of performance appraisal are subject
to the antagonistic judgments of the raters. It was to overcome this
problem; Peter F. Drucker propounded a new concept, namely,
management by objectives (MBO) way back in 1954 in his book.

The Practice of management. The concept of MBO as was conceived by

Drucker, can be described as a “process whereby the superior and
subordinate managers of an organization jointly identify its common
goals, define each individual’s major areas of responsibility in terms of
results expected of him and use these measures as guides for operating
the unit and assessing the contribution of each its members”.

In other words, stripped to its essentials, MBO requires the manager

to goals with each employee and then periodically discuss his or her
progress toward these goals.

In fact, MBO is not only a method of performance evaluation. It is

viewed by the Practicing managers and pedagogues as a philosophy of
managerial practice because .t .s a method by wh.ch managers and
subordinates plan, organise, communicate, control and debate.

An MBO programme consists of four main steps: goal setting,

performance standard, comparison, and periodic review. In goal-
setting, goals are set which each individual, s to attain. The superior
and subordinate jointly establish these goals. The goals refer to the
desired outcome to be achieved by each individual employee.

In performance standards, the standards are set for the employees as

per the previously arranged time period. When the employees start
performing their jobs, they come to know what is to be done, what has
been done, and what remains to be done.

In the third step the actual level of goals attained are compared with
the goals agreed upon. This enables the evaluator to find out the
reasons variation between the actual and standard performance of the
employees. Such a comparison helps devise training needs for
increasing employees’ performance it can also explore the conditions
having their bearings on employees’ performance but over which the
employees have no control.

Finally, in the periodic review step, corrective measure is initiated

when actual performance deviates from the slandered established in
the first step-goal-setting stage. Consistent with the MBO philosophy
periodic progress reviews are conducted in a constructive rather than
punitive manner.
The purpose of conducting reviews is not to degrade the performer but
to aid in his/her future performance. From a motivational point of
view, this would be representative of McGregor’s theories.

Figure 28.4 present the MBO method of performance appraisal

presently used by an engineering giant i.e., Larsen and Turbro
Limited.
Limitation of MBO:
MBO is not a panacea, cure for all organisational problems.

As with other methods, it also suffers from some limitations

as catalogued below:
(i) Setting Un-measurable Objectives:
One of the problems MBO suffers from is unclear and un-measurable
objectives set for attainment. An objective such as “will do a better job
of training” is useless as it is un-measurable. Instead, “well have four
subordinates promoted during the year” is a clear and measurable
objective.

(ii) Time-consuming:
The activities involved in an MBO programme such as setting goals,
measuring progress, and providing feedback can take a great deal of
time.

(iii) Tug of War:

Setting objectives with the subordinates sometimes turns into a tug of
war in the sense that the manager pushes for higher quotas and the
subordinates push for lower ones. As such, goals so set are likely to be
unrealistic.

(iv) Lack of Trust:

MBO is likely to be ineffective in an environment where management
has little trust in its employees. Or say, management makes decisions
autocratically and relies heavily on external controls.

Behaviourally Anchored Rating Scales (BARS):

The problem of judgmental performance evaluation inherent in the
traditional methods of performance evaluation led to some
organisations to go for objective evaluation by developing a technique
known as “Behaviourally Anchored Rating Scales (BARS)” around
1960s. BARS are descriptions of various degrees of behaviour with
regard to a specific performance dimension.

It combines the benefits of narratives, critical incidents, and quan-

tified ratings by anchoring a quantified scale with specific behavioural
examples of good or poor performance. The proponents of BARS claim
that it offers better and more equitable appraisals than do the other
techniques of performance appraisal we discussed so far.

Developing BARS typically involves five steps:

1. Generating Critical Incidents:
Critical incidents (or say, behaviours) are those which are essential for
the performance of the job effectively Persons who are knowledgeable
of the job in question (jobholders and/or supervisors) are asked to
describe specific critical incidents of effective and ineffective
performance. These critical incidents may be described in a few short
sentences or phrases using the terminology.

2. Developing Performance Dimensions:

The critical incidents are then clustered into a smaller set of
performance dimensions, usually five to ten. Each cluster, or say,
dimension is then defined.

3. Reallocating Incidents:
Various critical incidents are reallocated dimensions by another group
of people who also know the job in question. Various critical incidents
so reallocated to original dimensions are clustered into various
categories, with each cluster showing similar critical incidents. Those
critical incidents are retained which meet 50 to 80% of agreement
with the cluster as classified in step 2.

4. Scaling Incidents:
The same second group as in step 3 rates the behaviour described in
each incident in terms of effectiveness or ineffectiveness on the
appropriate dimension by using seven to nine points scale. Then,
average effectiveness ratings for each incident are determined to
decide which incidents will be included in the final anchored scales.

5. Developing Final BARS Instrument:

A subset of the incidents (usually six or seven per cluster) is used as a
behavioural anchor for the final performance dimensions. Finally, a
BARS instrument with vertical scales is drawn to be used for
performance appraisal, as in Figure 27-5.

How BARS is developed can be exemplified with an example of

grocery checkout clerks working in a large grocery chain.

A number of critical incidents involved in checking out of

grocery can be clustered into seven performance
dimensions:
1. Knowledge and Judgment
2. Conscientiousness

3. Skill in Human Relations

4. Skill in Operation of Register

5. Skill in Bagging

6. Organisational Ability of Check stand Work

7. Skill in Monetary Transactions

8. Observational Ability

Now, a BARS for one of these performance dimensions, namely,

“knowledge and judgment” can be developed, as in Figure 28-5. Notice
how the typical BARS is behaviourally anchored with specific critical
incidents.
BARS method of performance appraisal is considered better than the
traditional ones because it provides advantages like a more accurate
gauge, clearer standards, better feedback, and consistency in
evaluation. However, BARS is not free from limitations.
The research on BARS indicates that it too suffers from distortions
inherent in most rating scales. The research study concluded that “it is
clear that research on BARS to date does not support the high promise
regarding scale independence In short, while BARS may outperform
conventional rating techniques, it is clear that they are not a panacea
for obtaining high interrater reliability”

Assessment Centres:
The introduction of the concept of assessment centres as a method of
performance method is traced back in 1930s in the Germany used to
appraise its army officers. The concept gradually spread to the US and
the UK in 1940s and to the Britain in 1960s.

The concept, then, traversed from the army to business arena during
1960s. The concept of assessment centre is, of course, of a recent
origin in India. In India, Crompton Greaves, Eicher, Hindustan Lever
and Modi Xerox have adopted this technique of performance
evaluation.

In business field, assessment centres are mainly used for evaluating

executive or supervisory potential. By definition, an assessment centre
is a central location where managers come together to participate in
well-designed simulated exercises. They are assessed by senior
managers supplemented by the psychologists and the HR specialists
for 2-3 days.

Assessee is asked to participate in in-basket exercises, work groups,

simulations, and role playing which are essential for successful
performance of actual job. Having recorded the assessee’sbehaviour
the raters meet to discuss their pooled information and observations
and, based on it, they give their assessment about the assesee. At the
end of the process, feedback in terms of strengths and weaknesses is
also provided to the assesees.

The distinct advantages the assessment centres provide include more

accurate evaluation, minimum biasedness, right selection and
promotion of executives, and so on. Nonetheless, the technique of
assessment centres is also plagued by certain limitations and
problems. The technique is relatively costly and time consuming,
causes suffocation to the solid performers, discourages to the poor
performers (rejected), breeds unhealthy competition among the
assessees, and bears adverse effects on those not selected for
assessment.

360 – Degree Appraisal:

Yet another method used to appraise the employee’s performance is
360 – degree appraisal. This method was first developed and formally
used by General Electric Company of USA in 1992. Then, it travelled to
other countries including India. In India, companies like Reliance
Industries, Wipro Corporation, Infosys Technologies, Thermax,
Thomas Cook etc., have been using this method for appraising the
performance of their employees. This feedback based method is
generally used for ascertaining training and development
requirements, rather than for pay increases.
Under 360 – degree appraisal, performance information such as
employee’s skills, abilities and behaviours, is collected “all around” an
employee, i.e., from his/her supervisors, subordinates, peers and even
customers and clients.

In other worlds, in 360-degree feedback appraisal system, an

employee is appraised by his supervisor, subordinates, peers, and
customers with whom he interacts in the course of his job
performance. All these appraisers provide information or feedback on
an employee by completing survey questionnaires designed for this
purpose.

All information so gathered is then compiled through the

computerized system to prepare individualized reports. These reports
are presented to me employees being rated. They then meet me
appraiser—be it one’s superior, subordinates or peers—and share the
information they feel as pertinent and useful for developing a self-
improvement plan.

In 360 – degree feedback, performance appraisal being based on

feedback “all around”, an employee is likely to be more correct and
realistic. Nonetheless, like other traditional methods, this method is
also subject to suffer from the subjectivity on the part of the appraiser.
For example, while supervisor may penalise the employee by
providing negative feedback, a peer, being influenced by ‘give and take
feeling’ may give a rave review on his/her colleague.

Cost Accounting Method:

This method evaluates an employee’s performance from the monetary
benefits the employee yields to his/her organisation. This is
ascertained by establishing a relationship between the costs involved
in retaining the employee, and the benefits an organisation derives
from Him/her.

While evaluating an employee’s performance under this

method, the following factors are also taken into
consideration:
1. Unit wise average value of production or service.

2. Quality of product produced or service rendered.

3. Overhead cost incurred.

4. Accidents, damages, errors, spoilage, wastage caused through

unusual wear and tear.

5. Human relationship with others.

6. Cost of the time supervisor spent in appraising the emp

 Unit 3

Industrial Relation
The Industrial Relations or IR encompasses the relationship between the
management and workmen and the role of a regulatory body to resolve
any industrial dispute.
As the name implies, Industry Relations comprises of two words,
Industry, and Relations. Where industry covers the production activity in
which the group of workmen is engaged in, while the relations show the
relationship between the management and the workers within the
industry. IR plays a significant role in today’s working scenario where
the harmonious relationship between the employers and employees is
needed to have an uninterrupted production. The Industrial Relations
mainly cover the following:

Regulatory body to resolve industrial disputes.

Collective Bargaining.
The role of management, unions and government.
Labor Legislation
Worker’s Grievance Redressal system.
Disciplinary policy and practice.
Industrial Relations Training.

Importance of Industrial Relations

Increased Productivity: With amicable industrial relations both the
workers and managers continue to work on their respective position and
contribute towards the overall productivity of the firm. Thus, IR ensures
the continuity of production.
Reduced Industrial Disputes: An effective IR helps in the reduction of
industrial disputes as both the management and the workers maintain
harmonious relations with each other and work in unison towards the
accomplishment of production objective.
Increased Morale: The peaceful industrial relations boost the morale
level of the employees as they feel that their interest coincides with that
of the employer’s, and their efforts will result in the overall profitability
of the firm.
Minimization of Wastage: A good IR ensures reduced wastage as the
resources – Man, Machinery, Material are fully utilized and are
effectively contributing towards the overall productivity of the firm.
Thus, an effective IR is required to ensure higher production at less cost
and increased profits. It covers the system, rules, and procedures to
protect the interest of the workmen and the employers and to regulate
the behavior of the employer i.e. the way he treats his workmen.
Objectives of IR:

The primary objective of industrial relations is to maintain and develop good and
healthy relations between employees and employers or operatives and
management. The same is sub- divided into other objectives

Thus, the objectives of IR are designed to:

1. Establish and foster sound relationship between workers and management by

safeguarding their interests.
2. Avoid industrial conflicts and strikes by developing mutuality among the
interests of concerned parties.

3. Keep, as far as possible, strikes, lockouts and gheraos at bay by enhancing the
economic status of workers.

4. Provide an opportunity to the workers to participate in management and decision

making process.

5. Raise productivity in the organisation to curb the employee turnover and

absenteeism.

6. Avoid unnecessary interference of the government, as far as possible and

practicable, in the matters of relationship between workers and management.

7. Establish and nurse industrial democracy based on labour partnership in the

sharing of profits and of managerial decisions.

8. Socialise industrial activity by involving the government participation as an

employer.

Approaches to Industrial Relations.

Approaches to IR
Unitary Approach: The unitary approach is based on the notion that all the
members of the organization Viz. Managers, workers, and other staff have a
common set of objectives, purposes and interests and, therefore, work in unison
towards the accomplishment of shared goals. Here, the conflict is seen as a
temporary divergence which is caused due to the poor management or the
negligence on the part of the employees to understand and mix with the
organizational culture.

The unitary approach is based on the assumption that the overall profitability of the
firm could be increased if everyone in the organization has the common
interest/purpose and works unanimously towards its completion thereby
establishing the harmonious relations. Here the strikes are considered as
destructive.

Pluralistic Approach: The pluralistic approach is just the opposite of unitary

approach which is based on the assumption that an organization is an alliance of
powerful and divergent sub-groups (management and trade unions), having
different competing interests are mediated by the management. The management
and the trade unions (association of workers) are the powerful sub-groups that may
not agree with certain terms and conditions prevailing in the organization and to
resolve those management tries to mediate the interest of both the groups.

During mediation, if the management pays less attention to the needs of the
workers then they form unions in order to protect their interest and influence the
management decision. The unions so formed helps in balancing the power between
the management and employees. Thus, it is based on the notion that the conflict
between the management and the employees is inevitable and is viewed as
instrumental in the innovation and growth.

Marxist Approach: The Marxist approach is based on the basic assumption that the
conflict is regarded as the product of a capitalist society. This means that conflict
arises not just because of the rift between the employee and the employer, but also
because of the division in the society between those who owns the means of
production (capitalists) and the ones who have only labor to offer. The ultimate
objective of the capitalists is to increase the productivity by paying possible
minimum wages to the workers due to which the latter feels exploited.

To overcome such situation workers form unions so as to safeguard their interests.

These trade unions are considered as a weapon to bring about a revolutionary
social change that focuses on improving the overall position of the workers in the
capitalist system and not to overthrow. Unlike the pluralist approach, the Marxist
believes that the state intervention via legislation and industrial tribunals work in
the interest of the management and do not ensure a balance between the competing
groups. Thus, according to this approach, the pluralist supports the capitalism, and
the unitary approach is anathema.

Human Relations Approach: The Human relations approach is propounded by

Elton Mayo, who is a humanist and believes in the positive nature of the
employees. According to him, given human initiatives from management, the
employees positively listens and responds properly to them and hence there is no
room left for the conflict to arise. But however Marxists and Pluralists did not
appreciate too much stress on the positive nature of the workers.

Thus, these approaches to industrial relations must be properly understood by the

HR managers as these offer a solid foundation for much of the role of human
resource management.

Employee welfare
Welfare includes anything that is done for the comfort and improvement
of employees and is provided over and above the wages. Welfare helps
in keeping the morale and motivation of the employees high so as to
retain the employees for longer duration. The welfare measures need not
to be in monetary terms only but in any kind/forms. Employee welfare
includes monitoring of working conditions, creation of industrial
harmony through infrastructure for health, industrial relations and
insurance against disease, accident and unemployment for the workers
and their families.

Labor welfare entails all those activities of employer which are directed
towards providing the employees with certain facilities and services in
addition to wages or salaries.

Labor welfare has the following objectives:

To provide better life and health to the workers
To make the workers happy and satisfied
To relieve workers from industrial fatigue and to improve intellectual,
cultural and material conditions of living of the workers.
The basic features of labor welfare measures are as follows:
Labor welfare includes various facilities, services and amenities
provided to workers for improving their health, efficiency, economic
betterment and social status.
Welfare measures are in addition to regular wages and other economic
benefits available to workers due to legal provisions and collective
bargaining
Labor welfare schemes are flexible and ever-changing. New welfare
measures are added to the existing ones from time to time.
Welfare measures may be introduced by the employers, government,
employees or by any social or charitable agency.
The purpose of labor welfare is to bring about the development of the
whole personality of the workers to make a better workforce.
The logic behind providing welfare schemes is to create efficient,
healthy, loyal and satisfied labor force for the organization. The purpose
of providing such facilities is to make their work life better and also to
raise their standard of living.

A grievance is any dissatisfaction or feeling of injustice having

connection with one’s employment situation which is brought to the
attention of management. Speaking broadly, a grievance is any
dissatisfaction that adversely affects organizational relations and
productivity. To understand what a grievance is, it is necessary to
distinguish between dissatisfaction, complaint, and grievance.

1. Dissatisfaction is anything that disturbs an employee, whether or not

the unrest is expressed in words.
2. Complaint is a spoken or written dissatisfaction brought to the
attention of the supervisor or the shop steward.

3. Grievance is a complaint that has been formally presented to a

management representative or to a union official.

According to Michael Jucious, ‘grievance is any discontent or

dissatisfaction whether expressed or not, whether valid or not, arising
out of anything connected with the company which an employee thinks,
believes or even feels to be unfair, unjust or inequitable’.

In short, grievance is a state of dissatisfaction, expressed or unexpressed,

written or unwritten, justified or unjustified, having connection with
employment situation.

Features of Grievance
1. A grievance refers to any form of discontent or dissatisfaction with
any aspect of the organization.

2. The dissatisfaction must arise out of employment and not due to

personal or family problems.

3. The discontent can arise out of real or imaginary reasons. When

employees feel that injustice has been done to them, they have a
grievance. The reason for such a feeling may be valid or invalid,
legitimate or irrational, justifiable or ridiculous.

4. The discontent may be voiced or unvoiced, but it must find expression

in some form. However, discontent per se is not a grievance. Initially,
the employee may complain orally or in writing. If this is not looked into
promptly, the employee feels a sense of lack of justice. Now, the
discontent grows and takes the shape of a grievance.

5. Broadly speaking, thus, a grievance is traceable to be perceived as

non-fulfillment of one’s expectations from the organization.

Causes of Grievances:
Grievances may occur due to a number of reasons:

1. Economic:
Employees may demand for individual wage adjustments. They may feel
that they are paid less when compared to others. For example, late
bonus, payments, adjustments to overtime pay, perceived inequalities in
treatment, claims for equal pay, and appeals against performance-
related pay awards.

2. Work environment:
It may be undesirable or unsatisfactory conditions of work. For example,
light, space, heat, or poor physical conditions of workplace, defective
tools and equipment, poor quality of material, unfair rules, and lack of
recognition.

3. Supervision:
It may be objections to the general methods of supervision related to the
attitudes of the supervisor towards the employee such as perceived
notions of bias, favouritism, nepotism, caste affiliations and regional
feelings.

4. Organizational change:
Any change in the organizational policies can result in grievances. For
example, the implementation of revised company policies or new
working practices.

5. Employee relations:
Employees are unable to adjust with their colleagues, suffer from
feelings of neglect and victimization and become an object of ridicule
and humiliation, or other inter- employee disputes.

6. Miscellaneous:
These may be issues relating to certain violations in respect of
promotions, safety methods, transfer, disciplinary rules, fines, granting
leaves, medical facilities, etc.
Effects of Grievance:
Grievances, if not identified and redressed, may adversely affect
workers, managers, and the organization.

The effects are the following:

1. On the production:

a. Low quality of production

b. Low productivity

c. Increase in the wastage of material, spoilage/leakage of machinery

d. Increase in the cost of production per unit

2. On the employees:

a. Increase in the rate of absenteeism and turnover

b. Reduction in the level of commitment, sincerity and punctuality

c. Increase in the incidence of accidents

d. Reduction in the level of employee morale.

3. On the managers:

a. Strained superior-subordinate relations.

b. Increase in the degree of supervision and control.

c. Increase in indiscipline cases

d. Increase in unrest and thereby machinery to maintain industrial peace

Steps in grievance handling

STEP 1: In the first step the grievance is to be submitted to departmental

representative, who is a representative of management. He has to give
his answer within 48 hours.
STEP 2: If the departmental representative fails to provide a solution,
the aggrieved employee can take his grievance to head of the
department, who has to give his decision within 3 days.
STEP 3: If the aggrieved employee is not satisfied with the decision of
departmental head, he can take the grievance to Grievance Committee.
The Grievance Committee makes its recommendations to the manager
within 7 days in the form of a report. The final decision of the
management on the report of Grievance Committee must be
communicated to the aggrieved employee within three days of the
receipt of report.
An appeal for revision of final decision can be made by the worker if he
is not satisfied with it. The management must communicate its decision
to the worker within 7 days.

STEP 4:
If the grievance still remains unsettled, the case may be referred to
voluntary arbitration.
settlement-of-grievance
Benefits of Grievance Handling Procedure:
Benefits that accrue to both the employer and employees are as follows:

1. It encourages employees to raise concerns without fear of reprisal.

2. It provides a fair and speedy means of dealing with complaints.

3. It prevents minor disagreements developing into more serious

disputes.

4. It serves as an outlet for employee frustrations and discontents.

5. It saves employer’s time and money as solutions are found for

workplace problems. It helps to build an organizational climate based on
openness and trust.